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The Income Tax: Burdens and Benefits
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10099 |
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CURRENT ISSUES
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| Issue
Date : |
4 / 1993 |
2,060 Words |
| Author
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James L. Payne
James L. Payne, currently a visiting scholar at the Social
Philosophy Center, Bowling Green State University, has taught
political science at Yale, Wesleyan, Johns Hopkins, and Texas
A & M. This article is based on his forthcoming book, Why
Nations Arm. |
Most birthday parties are happy occasions, but few will celebrate 80 years of the Sixteenth Amendment to the U.S. Constitution, the 1913 measure that allowed income taxation.
Fraught with errors and contradictions, the federal income tax has evolved way beyond the intentions of its founders and become an institution that has managed to earn almost universal disapproval. For one thing, the tax rates, which at the initial 7 percent were little more than a nuisance, have today climbed through the roof. Furthermore, the income tax was politically well calculated. Aimed only at the rich, it was a "class tax" that nicely pandered to John Q. Public's sentiments of envy.
But as the welfare state grew, politicians realized that the rich did not have nearly enough money to finance it, and John Q. Public had to pay the income tax himself! Today, the middle classes can pay as much as 48 percent in combined wage and income taxes, with state and city income taxes on top of that. Even those at the bottom of the income scale are not exempt. The poorest worker now pays a wage tax, and retired people of modest means have to file income tax returns even when they owe no tax. What started out to soak the rich now soaks without discrimination.
ENEMIES BY THE MILLIONS
The pain of the income tax is further exacerbated by the notoriously inept administration of the IRS. Perhaps understandably so. The IRS does not attract high caliber of employees: Newly hired accountants score in the bottom fifth of a standardized entry level test, and beginning lawyers come from the bottom half of their law school classes. The capable few are quickly hired away by private firms. And the uncooperative ones cannot be discharged because of civil service restrictions. As such, poor service and taxpayer abuse are not surprising.
Every enforcement program of the service is laden with error. In the under reporter program, the IRS sends out about four million computer-generated letters yearly that assert that the tax-payer has underpaid his tax and threaten eventual collection action if he fails to clear up the matter. General Accounting Office (GAO) studies and independent polls reveal that most of these accusations are incorrect. In another program, the IRS sends some three million notices annually to taxpayers whom it claims have not filed a tax return. About 90 percent of these notices are wrong.
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