Americans are about to learn there is something just as scary as an Internal Revenue Service that is overzealous in chasing tax cheats, often stomping on people guilty of nothing more than being bewildered by a tax code that Congress has written to drive people crazy trying to comply with it.
And this would be an IRS that is reviled as a toothless joke. A warmer, fuzzier IRS is also likely to be one that can be flouted and manipulated by taxpayers who can hire expensive lawyers to drive dump trucks through loopholes.
A tax system that is less threatening to rich taxpayers while remaining hopelessly complex is also one in which wage earners, whose taxes are deducted before they ever see the money, are likely to end up being the chumps.
There are disturbing signs this is happening since Congress passed "reforms" designed to make the IRS more customer friendly. In the last fiscal year, the IRS collected $1.3 billion less in evaded taxes by going after delinquents with liens and property seizures. The IRS attached 504,403 levies on bank accounts and wages in fiscal 1999. This compared with 2.5 million levies in 1998 and 3.1 million in 1997. Collections from major delinquent cases totaled $6.5 billion, down from $7.8 billion in the previous year.
The IRS reforms were largely driven by anecdotal hearings held by the Senate Finance Committee. Its chairman, Sen. William Roth, trotted out tearful taxpayers to give supposedly typical horror stories of IRS enforcement abuses. Some of them turned out to be true. But they also included the testimony of a Virginia taxpayer who said his son was knocked to the floor at gunpoint by male IRS agents who also leered at his 14-year-old daughter while she was getting dressed.
But at hearings in a civil suit this year stemming from the same IRS raid, the son said agents did not draw their guns and did not knock him down. The leered-at daughter testified she closed her door to IRS agents before getting dressed. Even the Wall Street Journal concluded that "the case against the Internal Revenue Service is crumbling."
Oh well, it made a better story in the original version. Besides, nobody likes the IRS. Still, if this sort of news gets around, people are going to get the idea that IRS agents are about as threatening as a bunch of clerks. And legislation by anecdote is a sloppy way to reform anything as complex as the tax code.
Meanwhile, when it declawed the IRS, Congress did little to make the tax code more intelligible, any less of a thicket of rules, interpretations and exceptions that invite evasion, of forms so obtuse as to drive millions of ordinary taxpayers to professional preparers who, as often as not, are as confused by the tax code as the people they advise.
There is, of course, an alternative to this madness, and it needn't involve embracing Steve Forbes' idea of a flat tax, a deceptively simple solution that would radically shift tax burdens onto the middle class and off the shoulders of the richest taxpayers.
Simply stripping the tax code of its mind-numbing complexity while maintaining progressive taxation of higher incomes would retain its essential fairness while making it as accessible and understandable as, say, an ordinary telephone bill or the postal rates for mailing letters and packages. Most people can handle these transactions without going to a professional.
When paying income taxes becomes simple, we will have removed one of the great irritants in American life and given all Americans less reason to despise their government and distrust its agents.