It isn’t often this page disagrees with Sen. Charles E. Schumer, but his proposal for putting private debt collectors in charge of squeezing money from long-delinquent taxpayers is a cause for concern.
Schumer, D-N.Y., has long been a champion for jobs in the state and especially Western New York. Because of that concern for jobs, Schumer has inserted language in a tax bill that would require the Internal Revenue Service to outsource most delinquent tax collections after a year of failed government attempts.
Such a move would benefit the four private debt collectors that the IRS has authorized to do such work, including two that are located in Western New York: Pioneer Credit Recovery, which employs 900 people in Arcade, Wyoming County, and ConServe of Fairport, southeast of Rochester.
We are all for solidifying employment at local companies, but turning one of government’s most disagreeable tasks over to private businesses another step removed from oversight is not the way to do it. If the IRS is falling short in collecting back taxes, then it should figure out how to shore up its own ranks.
We understand the need to collect money owed to the government, and on that ground Schumer’s proposal, which has bipartisan support, is defensible. The nonpartisan Joint Tax Committee has estimated that it could increase government revenues by $4.8 billion over the next decade. Half that money would go to extending a research and development tax credit for new companies. The IRS would get $1.2 billion for its operations and the debt collectors would share $1.2 billion – a quarter of all the money collected.
Privatization has been tried twice before, in the late 1990s and again between 2005 and 2009, and failed both times. Schumer says his proposal would fare better than those failures because it would be supervised to ensure no taxpayers are harassed and there would be sufficient resources to guarantee the program would be better managed than it has been in the past.
Collections agencies routinely go right up to the line of what is a legal practice in their line of work. Human nature being what it is, sometimes the line is crossed. The News and other media have devoted many stories to the abuses of private debt collectors.
Collins’ district includes Pioneer Credit Recovery’s facility. Reed, who serves on the tax-writing Ways and Means Committee, wants to make sure the proposal has addressed previous problems.
Schumer constantly has his eye on what he does best: serving his constituents and doing his best to maintain and grow jobs. For that, we applaud him and remain grateful. This proposal just may not be the best way to accomplish that goal.