May 15 2013

IRS: TMI

Charlotte Hays

One of the most appealing aspects of the flat tax is that we could abolish the IRS and file our taxes on a postcard.

Unlike the Internal Revenue Service, the postcard would not be able to conduct surveillance of conservative organizations. Nor would the postcard be equipped to feed privileged information demanded from these conservative organizations to liberal media. The postcard couldn't accomodate a U-Haul truck of private information, even if it could ask for it.

If you aren't sold on the superiority of the post card, you should read James Bovard's piece in today’s Wall Street Journal. It shows that the IRS has a history of political targeting. The IRS scandal now threatening to engulf the Obama administration isn't the mighty agency's first.

What makes the current IRS scandal particularly troubling, however, is that the Obama administration is vastly expanding the power and reach of the already too powerful IRS.

As Byron York writes this morning in a column headlined “IRS Scandal Raises Fears about Enforcing ObamaCare:”

The Internal Revenue Service scandal would be bad enough if the IRS just handled issues like collecting income taxes and granting nonprofit status. But the immensely powerful federal agency is about to become even more powerful with the arrival of national health care, and that makes the still-unfolding scandal even more troubling….

The IRS is critical to Obamacare. The structure created by the Affordable Care Act requires the government to know about both the health care coverage (or lack of it) and the financial resources of every American. The IRS, which already knows the latter, was the only agency with the reach to do the job.

A look at the text of the health care law reveals that much of it consists of amending the Internal Revenue Code to give the IRS more power. When Obamacare goes fully into effect in January, every American will have to prove to the IRS that he or she has "qualifying" health coverage, meaning coverage with a list of features approved by Health and Human Services Secretary Kathleen Sebelius. That will be done by submitting a document to the IRS, something like a W-2, to confirm coverage.

The IRS will also decide who is, and who is not, eligible for Obamacare's subsidies. The law authorizes the IRS to share confidential taxpayer information with the Department of Health and Human Services for the purpose of determining those subsidies. And since subsidies don't just apply to a relatively small number of the nation's poorest citizens -- under the law, they can go to a family of four with a household income of nearly $90,000 -- they will affect a huge segment of the population.

In addition, the IRS will keep track of even the smallest changes in Americans' financial condition. Did you get a raise recently? You'll need to notify the IRS; it might affect your subsidy status. Have your hours been reduced at work? Notify the IRS. Change jobs? Same.

Is this kind of power even appropriate for a governmental entity in a democracy?

I don’t know about you, but I prefer the postcard.

 

 

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