Commentary Magazine


Topic: regulations

Everything Wrong with Big Government in One IRS Quote

One of the most loathsome features of the administrative state is the way the taxpayers so often lose no matter which way certain disputes end up. This happens because the instruments of bureaucratic menace have too much power. That power costs taxpayers greatly, and if they elect a government to reduce that power, the affected bureaucracies have enough power left over to punish them for it. What’s worse, they know it. And, as the IRS’s comments to Politico today make clear, they don’t feel the need to veil their threats anymore.

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One of the most loathsome features of the administrative state is the way the taxpayers so often lose no matter which way certain disputes end up. This happens because the instruments of bureaucratic menace have too much power. That power costs taxpayers greatly, and if they elect a government to reduce that power, the affected bureaucracies have enough power left over to punish them for it. What’s worse, they know it. And, as the IRS’s comments to Politico today make clear, they don’t feel the need to veil their threats anymore.

The Politico story is on the Republican Party’s plans to rein in the regulatory state in the next Congress. Up to now, House Republicans have mostly centered their efforts at holding the government accountable on oversight, leaning heavily on hearings. Though the GOP already had much of the “power of the purse” through its House majority, having a majority in the Senate expands the party’s ability to actually pass certain spending priorities. And they appear intent on doing so.

The GOP put cuts in the IRS budget in the so-called “CRomnibus” spending bill being debated today. And the IRS is warning them not to come one step closer–or the taxpayer gets it:

IRS watchers warn that the agency is spiraling toward a rocky future that will rival some of its darkest days in its history, when whistleblowers blew the lid off IRS agents abusing power and thousands of tax returns were lost in the mail.

“Unless we are able to correct this, very bad things will happen to taxpayers,” said Nina Olson of the National Taxpayer Advocate, at a November tax preparer conference — over a month before the latest budget cuts even came to light.

Ahem: the National Taxpayer Advocate isn’t exactly an “IRS watcher”; it’s the IRS. That is some brazen sleight of hand from Politico. Now to be fair, the NTA is a sort of consumer advocate within the agency, a cross between an ombudsman and a customer service hotline. But this is actually a great example of how even aspects of the government that ostensibly exist to help the taxpayer really underline the problem with the system to begin with.

Why do we need a taxpayer advocate within the IRS? Well, two reasons. First because agencies with no oversight and the power to confiscate your money tend to abuse that authority–as we saw with the revelations about the IRS targeting scandal. And second, because the sheer size and complexity of tax law means even well meaning citizens will run afoul of the law.

What’s the solution to these two problems? The obvious, and sensible, one is to give the IRS less power and to reduce the tax burden and simplify the tax code. The regulatory state’s answer is to keep those problems unsolved but hire a couple thousand more employees to deal with it, at taxpayer expense. Heads they win, tails you lose.

The same holds true for the impending “crisis” for the IRS this tax season. Back to Politico:

Spending negotiators this week froze most agency budgets but reduced the IRS funds to $10.9 billion, a 3 percent cut over last year and $1.5 billion below the president’s request. Appropriators bragged in a release that the level is even lower than the IRS’s 2008 budget.

Those new cuts come atop more than a $1 billion reduction to the IRS budget since 2010, which has forced the tax-collecting agency to shed 13,000 employees while it serves an additional 7 million taxpayers, according to IRS Commissioner John Koskinen.

Those reductions are about to manifest in what Olson is predicting will be the “worst filing season” in years. For the first time, the agency will be administering Obamacare and another massive international tax law.

So ObamaCare is costing families more in health insurance, and now it’s costing them more–at least if the IRS has its way–in associated implementation costs. And you just have to love the last part of that quote: “another massive international tax law.” Allow me to suggest that the agency enforcing “another massive international tax law” is not the victim here.

The IRS wastes money. That’s not the taxpayer’s fault, but now it’s the taxpayer’s problem. Welcome to the administrative state. And what is the IRS’s priority for next year? Cutting back? Nope: “The IRS early in 2015 is expected to release a draft rule to clarify how much political activity these 501(c)(4) groups can legally engage in while keeping their tax-exempt status.”

So it’s going to go after nonprofits again, and will spend its time and (your) money hassling and harassing citizens in order to curb their political speech. All this tells you Republicans are exactly right to go down this route, despite the sympathetic press the IRS will get in Politico and other Beltway outlets. The American people should not be blackmailed and treated as hostages by their own government. The agency’s response to the threat of budget cuts shows just how necessary it is to carry them out.

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The Right Climate to Torpedo the Economy?

You might think that with a historically weak recovery and, as John Steele Gordon wrote this morning, worries about the Federal Reserve’s actions affecting the stock market, this is a time when President Obama would be focusing like a laser beam on the economy. But you’d be wrong about that. As Ross Douthat noted yesterday in the New York Times, the administration’s second term priorities are at odds with those of the public. Instead of dealing with health care costs and entitlement reform (the issues most Americans consider the highest priorities), the president spent the start of his term hyperventilating about gun control. After switching to immigration reform for a while (something that I think is worth doing but is certainly not as important as cleaning up the mess that ObamaCare is about to create or reforming entitlements), tomorrow he will perform another pivot and unveil a major plan to lessen the effects of climate change in a speech at Georgetown University.

As he said over the weekend in a video released by the White House, it will include far-reaching measures that will introduce new limits on carbon dioxide emissions from power plants among other unspecified ideas that will largely be put into force by executive order rather than legislation. In one fell swoop, Obama will not only gratify his liberal base by pandering to their obsessions, he will also undertake a vast expansion of executive power in which the executive branch will assume near dictatorial proportions under the rubric of regulation. Whatever one may think about the science behind this plan—and there is very little sign that the president is operating on anything but on the basis of his ideological biases—there is no question that any plan that will hamper power production on this scale will have a deleterious impact on the chances that the country can sustain its economic recovery by raising the costs of energy and killing jobs. That he will do so in a manner that ought to set off alarm bells about the separation of powers and will generate a blizzard of lawsuits that could tie up his plan for years only illustrates the poor judgment being exhibited by the president.

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You might think that with a historically weak recovery and, as John Steele Gordon wrote this morning, worries about the Federal Reserve’s actions affecting the stock market, this is a time when President Obama would be focusing like a laser beam on the economy. But you’d be wrong about that. As Ross Douthat noted yesterday in the New York Times, the administration’s second term priorities are at odds with those of the public. Instead of dealing with health care costs and entitlement reform (the issues most Americans consider the highest priorities), the president spent the start of his term hyperventilating about gun control. After switching to immigration reform for a while (something that I think is worth doing but is certainly not as important as cleaning up the mess that ObamaCare is about to create or reforming entitlements), tomorrow he will perform another pivot and unveil a major plan to lessen the effects of climate change in a speech at Georgetown University.

As he said over the weekend in a video released by the White House, it will include far-reaching measures that will introduce new limits on carbon dioxide emissions from power plants among other unspecified ideas that will largely be put into force by executive order rather than legislation. In one fell swoop, Obama will not only gratify his liberal base by pandering to their obsessions, he will also undertake a vast expansion of executive power in which the executive branch will assume near dictatorial proportions under the rubric of regulation. Whatever one may think about the science behind this plan—and there is very little sign that the president is operating on anything but on the basis of his ideological biases—there is no question that any plan that will hamper power production on this scale will have a deleterious impact on the chances that the country can sustain its economic recovery by raising the costs of energy and killing jobs. That he will do so in a manner that ought to set off alarm bells about the separation of powers and will generate a blizzard of lawsuits that could tie up his plan for years only illustrates the poor judgment being exhibited by the president.

Obama signaled that he would prioritize his beliefs about the climate in his second inaugural speech, so no one should be surprised by his decision to gamble his dwindling supply of political capital on an issue that is liable to hurt rather than help the economy. The president will, of course, argue that his green plan is good for the economy in the long run and tout his belief that more regulations will help transform the country and create jobs in industries that provide alternatives to the burning of fossil fuels. But the country has already been down this road in the first term as Obama’s stimulus boondoggle provided cash for Solyndra and other “green” corporations that proved to be cash cows for the president’s major contributors but a disaster to the taxpayers that were fleeced to bolster companies that couldn’t stand on their own.

The administration’s defense of this decision to bypass Congress will be to claim that the legislative branch has failed to act. But there is a reason why both Republicans and Democrats have been reluctant to implement the sort of Christmas tree of regulations that will be presented tomorrow: it is likely to hurt an already skittish economy. The high-minded gloss of idealism and gloom and doom predictions about our future that fuel the president’s climate push will be used by liberals to dismiss objections about the impact on the economy of this project. But Obama and his cheerleaders in the liberal media—who have been urging him to usurp power in this manner to further the global warming agenda for years—the danger that adding on new layers of federal regulations to an industry already sinking under the weight of government rules is real.

It should also be noted that given the anger on Capitol Hill and among the electorate about a trio of scandals that center on abuse of government power, the notion that the president would seek to govern on his own in this manner is curious. One would think the administration would be wary of feeding suspicions about extra-constitutional usurpation of power right now. But, like worries about the economy, concerns about the Constitution are always going to run second to ideology in the Obama White House.

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