Democratic Rep. Gerry Connolly has an exchange with IRS Commissioner John Koskinen regarding the real problem facing the IRS…budget cuts:
Mr. Connolly’s faux outrage aside, there is a deeper question here regarding what the IRS is supposed to do, and what resources are required to carry out that responsibility. The Tax Foundation’s Scott Hodge gives us a bit of perspective:
Over the past two decades, lawmakers have increasingly asking the tax code to direct all manner of social and economic objectives, such as encouraging people to: buy hybrid vehicles, turn corn into gasoline, save more for retirement, purchase health insurance, buy a home, replace the windows in that home, adopt children, put them in daycare, take care of grandma, buy bonds, spend more on research, purchase school supplies, take out huge college loans, invest in historic buildings, and the list goes on.
In too many respects, the IRS has become an extension of, or substitute for, every other cabinet agency – from Energy and Education to HHS and HUD. But perhaps the most troubling development in recent years is that the efforts of lawmakers to use the tax code to help low and middle-income taxpayers has knocked millions of taxpayers off the tax rolls and turned the IRS into an extension of the welfare state.
The U.S. tax system is in desperate need of simplification and reform. The relentless growth of credits and deduction in the code over the past 20 years had made the IRS a super-agency, engaged in policies ranging from delivering welfare benefits to subsidizing the manufacture of energy efficient refrigerators.
I would argue that were we starting from scratch, these are not the functions we would want a tax collection agency to perform. Tax reform would return the IRS to its core function—simply collecting revenues to fund the basic operations of government.
I strongly doubt that anyone in Congress, and certainly not Mr. Connolly, has ever thought about these points, primarily because they tend to serve as an indictment of both parties in Congress.
