Hate him, or love him as an issue, the taxman may be too big to tame

The Outlook

September 15, 1996|By Bill Atkinson

IN THEIR BID to oust President Bill Clinton, Republican presidential contender Bob Dole and Reform Party nominee Ross Perot are taking aim at a ready target -- the IRS.

Perot has revealed few specifics, but he says he wants to dismantle the Internal Revenue Service and replace it with a modern system that is paperless and fair to rich and poor alike.

Dole, on the other hand, has a laundry list of changes. He says he'll slash the agency's staff by 30 percent, cut back on audits and make "taxes fairer, flatter and simpler." He's even proposing to eliminate tax-return filing for millions of low- and middle-income taxpayers. By the time he's finished, he says, he'll end the IRS "as we know it."

How likely are such drastic changes? Are they desirable?

D. French Slaughter 3rd

Tax lawyer and taxation lecturer at the University of Virginia, Charlottesville

If you did away with the IRS, the only people left who could tell you what the rules are would be Congress, and they don't even know what the rules are themselves. I'd rather stick with the big green eye-shade crowd at the IRS.

To do away with the IRS as we know it is a bit optimistic because the IRS does provide a legitimate service. They do a real good job of trying to take a very business-like approach of giving people the answers.

On the other hand, I don't think any of us would weep to see some of the bad parts of the IRS go away, like paperwork, rising taxes on wages and unfair collection tactics.

Perot's plan is pure fantasy. Dole's plan, while the jury is still out at least is in the realm of reality. I applaud any of the candidates' plans to make income tax compliance simpler.

The idea that most taxpayers could file over the telephone or by index cards is great.

It is silly when Joe Six-pack has to hire a CPA to do his tax return.

Joel Slemrod

Professor of business and economics, University of Michigan, Ann Arbor, Mich.

The IRS is just a natural target for general dissatisfaction.

With the tax system as it is now, we need something like the IRS. They have to implement a pretty complicated system. How can we collect $750 billion a year without it?

Other countries have some aspects of the tax system that Bob Dole has picked up on. Dole claims that if the tax system were simplified, 40 million people wouldn't have to file a return at all.

This kind of system is simple enough that your employer would have withheld exactly what you owe and that's it. It's done in different forms in the U.K. [United Kingdom] and Japan.

If there are fundamental changes to the tax system then the IRS will look very different. If we had a flat tax, the IRS would have less to do. The flat tax is just a lot simpler because you just have to report your labor income. Rents, royalties, capital gains are not part of your income.

Andrew Lyon

L Professor of economics, University of Maryland, College Park

For the majority of individuals, taxes aren't that complicated. Most taxpayers do not itemize so they are not required to keep records of mortgage payments. Slightly more than 1 percent of all taxpayers face an audit, and the IRS audits higher income individuals at a greater rate than lower income individuals.

I don't think we should do away with the IRS. It's a little like saying that our laws are enforced imperfectly so we should do away with the police.

They talk about reinventing or changing the IRS as we know it, but it largely seems that they are talking about significant cuts to the IRS staff. This idea that the IRS is looking under everybody's mattress is really not appropriate.

Perhaps a better solution to the problems we face is to ask Congress to write simpler tax laws, which are easier to enforce.

Tom Ochsenschlager

Tax partner

Grant Thornton LLP,

Washington

H. L. Mencken said for every complex issue there is a simple answer and it is usually wrong. In this instance, I think he's got it right. You can't do away with the IRS. Someone has to be looking over your shoulder so you can't claim your dog as a dependent.

Perot is very naive about it and Dole should know better. He should know he can't do this. I just can't figure how it [Dole's plan] is possibly going to work.

When they talk about eliminating the IRS as we know it they are building up expectations in the minds of people that there will be no IRS.

I've always thought that the real impetus behind the reforms are the people who just hate the federal government. The most intrusive part of the federal government is the Internal Revenue Service, and there is just an enormous amount of people out there who believe in states' rights, and that is a very vocal group. I think it is that group that is really pushing the idea.

Pub Date: 9/15/96

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.