Imprudent Budget Cutting, Ctd.
Republicans want to cut the IRS budget:
Every dollar the Internal Revenue Service spends for audits, liens and seizing property from tax cheats brings in more than $10, a rate of return so good the Obama administration wants to boost the agency’s budget.
House Republicans, seeing the heavy hand of a too-big government, beg to differ. They’ve already voted to cut the IRS budget by $600 million this year and want bigger cuts in 2012.
IRS Commissioner Doug Shulman told the committee Tuesday that the $600 million cut in this year’s budget would result in the IRS collecting $4 billion less through tax enforcement programs. The Democrat-controlled Senate is unlikely to pass a budget cut that big.
So here, cutting $600 million out of the Federal budget results in a loss of $4 billion. If you care about reducing deficits, how can this make sense?
I get that there are concerns about the intrusiveness of the IRS. But if you want to cut the IRS’ budget, I have a better idea: simplify the tax code. The simpler the tax code is, the easier it is to enforce, and the harder it is to cheat. Accordingly, you can shrink the IRS without costing the government revenue.
And simplifying the tax code also helps reduce the billions of dollars wasted every year on tax preparation every year. The fewer deductions, credits, and everything else there is, the less money and manhours need to be spent accounting and figuring out what taxes are owed.