Anyway, I got to thinking about privatizing the IRS. Ted Cruz and others go around saying we need to “abolish the IRS”. Well, no matter how much we cut the budget, the Federal government will still need money. Somebody has to pay for the aircraft carriers and welfare cheats. I have never called for the abolition of the Federal government, and have pointed out repeated that there is no point in a Constitution if there is no point in national government. Thus, revenues need to be collected, but there is space within which to debate how and by whom.
My first thought was to allow private corporations–debt collectors, effectively–to bid for the right to collect taxes, something like the process in Jesus’ time under the Romans. On the plus side, you could collect data on efficiency and customer service, and factor them in whenever you periodically rebid the contract, with poorly performing companies losing the contract.
But there is an issue of scale. The IRS has 95,000 employees, give or take, and no company can scale up and down that much with anything approaching speed or efficiency. At least, I don’t think so. This is a question of logistics I am not presently qualified to evaluate, or willing to investigate. I suspect a transition would be a cluster fuck.
But here is an idea I like: what if the primary income collection were done by the States? They have an existing tax apparatus and are already collecting money from their residents. They would simply take more–usually nationally generalized percentages and procedures dictated by Congress–and remit them to the Federal government.
Some huge benefits would flow from this.
1) Most obviously, the money is ALREADY coming from the States, so we simply ratify and simplify the existing situation. There are no Federal income taxes paid by people not living in a State or Washington DC. What happens is the money is collected via a separate pathway, and then money used to bully and coerce the States into doing things the Federal government wants them to do.
How did they get a national speed limit of 55? By threatening to withhold highway funds.
Medicaid in most cases is partially funded by Federal money, which again was simply taken first from the States, but in a great many cases this money is redistributive, since differing States have more or less generous Medicaid programs. Roughly a third of the “Stimulus” (does anyone remember that? Do you remember how passing it was “urgent”, and couldn’t wait for a thorough debate? Do you remember it was supposed to keep unemployment under 8%?) went to bail out incompetently run Medicaid programs. That money was taken from people in States who were responsible, and given to people who were profligate (to the extent the money was paid in taxes: obviously about half of it was borrowed outright).
So if the States collect the money it doesn’t flow the Federal Government, and then some of it trickle back. No money flows from the Federal government to States at all. They simply keep what they need.
2) If the Federal government is being abusive–as is clearly the case under Obama–then they can go on tax strikes. They can refuse to pay. This creates huge leverage, and redistributes in a major way the balance of power.
3) The taxing authority becomes more local, and thus more vulnerable to–and accountable to–the will of the voters. Customer service gets better.
4) We are able to eliminate an entire agency. Imagine the inefficiency of filing both State and Federal returns. All we do is add some line items to the existing returns, and we could do the same or better with perhaps a third more people than already exist at the State level, and are able to give 95,000 people who exist at the expense of the tax-payers–who reduce by a vast amount the capital available for investment–their walking papers.
5) There will then be no agency at the Federal level which can be abused for political purposes.
6) This would directly support my contention that the locus of social welfare should be the States, each of which was always empowered in theory to be the principle center of decisions about morality, about issues which are intrinsically ambiguous and open to multiple solutions: abortion, prostitution, drugs, euthanasia, and to the point, the extent and form of using public monies to secure some form of basic protections against hunger, sickness, homelessness, and other ills.
I have to say, this is one of my better ideas in a while. I think. I am smoking on it–I have a lit cigar next to me–but other than the obvious fact that 95,000 people, AT LEAST–who are unionized at the tax-payer expense–will oppose it with every inch of their bureaucratic beings, I see no down side.
Researching this, we would likely need to abolish the 16th Amendment, which would require a Constitutional convention, but it was created, and could possibly be stricken down. This would be the best and surest means of reigning in the Federal government.