We all know that our federal witholding has been increased this year, thanks to Obama’s “no new taxes” promises. But now Congress is looking to raid your pocketbook even more, again without having to actually pass legislation to do so.
Today’s Wall Street Journal talks about this latest Democratic fundraiser.
We’re guessing that when Americans think of outlaw industries, tax preparers aren’t the first rogues that come to mind. But lo, the nation’s green eyeshades are now destined to come under the regulatory rule of the Internal Revenue Service as part of the Obama Administration’s latest revenue grab.
Under the plan, which would begin with the 2011 tax season, anyone who takes money to help people with their taxes will have to register with the IRS, and eventually pass competency tests and sign up for continuing education. So having made tax filing so complicated that most Americans need help with their forms, Washington now wants to raise the price of such counsel by regulating advisers in a way that may reduce their supply.
While the progressive liberals favorite slur is to claim profitable private enterprise are evil “corporate oligarchies”, they are only too glad to hop into bed with them when it suits their purposes of ursurping the Rights of American citizens. The excuse being bantied about this time is that undocumented IRS claim of $290 billion/year in alleged “unreported income”.
Cheering the new regulations are big tax preparers like H&R Block, who are only too happy to see the feds swoop in to put their mom-and-pop seasonal competitors out of business. Kathryn Fulton, senior vice president for government relations, told the Washington Post the company was glad to support rules that meant H&R Block “won’t be competing against people who aren’t regulated and don’t have the same standards as we do.” With fewer tax preparers in the market, H&R Block will find it easier to raise prices.
It might also live to regret that. The new IRS blueprint is already in play in California, whose rules for regulating tax preparers seem to have inspired Commissioner Shulman, including his new education and registration requirements. To get taxpayers away from preparers and off-the-shelf software, the state is pushing programs like CalFile, which allows voters to file returns through a state run electronic program. Under the ReadyReturn program, the state will even scour your W-2 for the year and send you a return for your signature already filled out. The eventual goal seems to be to have the government do everybody’s state tax return, like the French do.
The feds are now getting in on this act, with Montana Democrat Max Baucus and Iowa Republican Chuck Grassley supporting a free e-file portal at the IRS Web site that would compete directly with private tax preparation software. In March, Treasury Secretary Timothy Geithner told a Ways and Means Committee hearing that he’d also like the IRS to begin sending taxpayers pre-completed returns.
We can certainly understand why Mr. Geithner wants government to do his returns, but please spare the rest of us. By insourcing tax preparation to the government, the IRS would shift the burden of objecting to any error onto the taxpayer instead of the IRS. That would change the dynamics of U.S. tax compliance, trending away from a voluntary system in which taxpayers are expected to be honest about declaring income and deductions—subject to audit. Instead, the feds would apply their standards, and a taxpayer would have to appeal for an exception to the same efficient folks at the IRS you can’t get on the phone at tax time.
This is yet another reason to tell the progressive liberals to K.I.S.S. it and flush Washington’s “baffle ’em with bullshit”. It’s long past the time for at least a modicum of common sense. Like simply streamlining the tax code.