Moral­ity and the IRS

The Washington Times Weekly - - Commentary -

Would you con­sider tak­ing a job with a gov­ern­ment agency that: Un­nec­es­sar­ily strikes fear into the hearts of tens of mil­lions of your fel­low cit­i­zens, caus­ing such an­guish and de­spair that some are driven to sui­cide each year.

Re­quires cit­i­zens to know 10 mil­lion words of rules and reg­u­la­tions be­cause the fail­ure to do so may re­sult in dra­co­nian fines and even jail, while at the same time no one in the agency has a full un­der­stand­ing of all the rules and reg­u­la­tions it re­quires oth­ers to know.

Rou­tinely ig­nores the con­sti­tu­tional pro­tec­tions against self-in­crim­i­na­tion and the right to the pre­sump­tion of in­no­cence.

Seizes the as­sets of cit­i­zens without ob­tain­ing court judg­ments. Pe­nal­izes mar­riage. Dis­crim­i­nates against many of the na­tion’s most pro­duc­tive cit­i­zens.

De­stroys in­cen­tives to work, save and in­vest, and un­der­mines job cre­ation.

Rou­tinely pro­tects agency per­son­nel who have en­gaged in ci­ti­zen in­tim­i­da­tion, mis­rep­re­sen­ta­tion or worse?

No, I am not re­fer­ring to the Nazi SS or the Soviet KGB, but the IRS, which is guilty of all of the above and more.

It is, of course, true that no one loves the tax col­lec­tor and that taxes are the price we pay for a civil so­ci­ety. But, as with any­thing else, there are proper and im­proper taxes and tax col­lec­tion pro­ce­dures and meth­ods. Ac­cord­ing to news ac­counts, at­tacks and threats against IRS per­son­nel are ris­ing, and un­for­tu­nately, this trend is likely to con­tinue un­til there is a fun­da­men­tal change in our tax laws and col­lec­tion meth­ods. Peo­ple who do not have ac­cess to the me­dia and can­not af­ford ex­pen­sive tax lawyers some­times reach such a level of frus­tra­tion with the IRS that they re­sort to vi­o­lent or ir­ra­tional be­hav­ior. IRS of­fi­cials and work­ers will say the tax code is not their fault — it is the fault of Congress — and they are only do­ing their jobs.

It is un­am­bigu­ously true that the tax code and IRS are crea­tures of Congress, with all of its self-deal­ing, cor­rup­tion, ig­no­rance and in­com­pe­tence. But it also is true, and was made ex­plicit at the Nurem­berg tri­als, that those who carry out or­ders that they know to be wrong or should know to be wrong are not ab­solved of per­sonal re­spon­si­bil­ity.

The county tax col­lec­tor who is re­spon­si­ble for the col­lec­tion of prop­erty taxes is en­gaged in a nec­es­sary ac­tiv­ity be­cause it is through his or her ef­forts that the lo­cal po­lice, fire de­part­ments and schools are funded. In most places, all pay the same tax rate, with those hav­ing more ex­pen­sive prop­er­ties pay­ing pro­por­tion­ally more and vice versa. The tax, and how it is ap­plied, is read­ily un­der­stood by most peo­ple. Even though many may com­plain about the tax rate, the tax it­self is gen­er­ally con­sid­ered fair.

Sim­i­larly, those who work in a state sales-tax col­lec­tion of­fice are ad­min­is­ter­ing a tax whose pro­ceeds go for pur­poses that are gen­er­ally un­der­stood — schools, roads, parks, etc. The tax it­self is nondis­crim­i­na­tory and is easy to com­pre­hend. As a re­sult, there tends to be lit­tle gen­eral hos­til­ity against prop­erty-and sales-tax col­lec­tors, most peo­ple view­ing their job as a nec­es­sary func­tion.

Un­like the lo­cal prop­erty and sales taxes, the fed­eral in­come tax and the IRS have per­verted the law, which is sup­posed to en­sure equal jus­tice, into an in­stru­ment of plun­der through leg­is­la­tion (as con­trasted with con­sti­tu­tional law) and reg­u­la­tion. The Con­sti­tu­tion gives the fed­eral gov­ern­ment the right to tax for the “com­mon De­fense” and “gen­eral [not spe­cific] wel­fare” (e.g., the Cen­ters for Dis­ease Con­trol and Preven­tion). Many of the cur­rent de­part­ments of gov­ern­ment (e.g., the De­part­ments of Hous­ing, En­ergy, Ed­u­ca­tion and Health and Hu­man Ser­vices) seem to have no con­sti­tu­tional ba­sis, and nowhere does the Con­sti­tu­tion give the fed­eral gov­ern­ment the power to en­gage in in­come re­dis­tri­bu­tion.

Most of the Found­ing Fathers were stu­dents of the Scot­tish En­light­en­ment, and the most in­flu­en­tial book on their think­ing was Adam Smith’s “The Wealth of Na­tions,” pub­lished in 1776. (Smith and Ben Franklin were per­sonal friends.) In his sec­tion on tax­a­tion, Smith said: “The sub­jects of ev­ery state ought to con­trib­ute to­wards the sup­port of the gov­ern­ment [. . .] that is, in pro­por­tion to the rev­enue which they re­spec­tively en­joy un­der the pro­tec­tion of the state.” In mod­ern par­lance, Smith was en­dors­ing a pro­por­tional or “flat tax,” or VAT, or sales tax. Smith went on to say, “The tax which each in­di­vid­ual is bound to pay ought to be cer- tain, and not ar­bi­trary. Where it is oth­er­wise, ev­ery per­son sub­ject to the tax is put more or less in the power of the tax gath­erer. [. . .]” Fi­nally, Smith noted: “Ev­ery tax ought to be so con­trived as both to take out and to keep out of the pock­ets of the peo­ple as lit­tle as pos­si­ble, over and above what it brings into the pub­lic trea­sury of the state.” The in­come tax and IRS fail on all ac­counts, and nei­ther Smith nor the Amer­i­can Founders would have ap­proved.

The French po­lit­i­cal and eco­nomic philoso­pher Fred­eric Bas­tiat cor­rectly said, “No so­ci­ety can ex­ist un­less the laws are re­spected to a cer­tain de­gree, but the safest way to make them re­spected is to make them re­spectable. When law and moral­ity are in con­tra­dic­tion to each other, the ci­ti­zen finds him­self in the cruel al­ter­na­tive of ei­ther los­ing his moral sense, or of los­ing his re­spect for the law.” The tax law could be made fair, cer­tain and ef­fi­cient. The tragedy is that too many at the IRS and in Congress have lost their moral sense, caus­ing their fel­low cit­i­zens to lose re­spect for the law.

Richard W. Rahn is a se­nior fel­low at the Cato In­sti­tute.

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