We, the Citizens for Tax Complexity, hereby declare June 28, 2012 to be an annual day of celebration. Never before in our history has so much been done by so few (the Supreme Court of the United States) to advance the cause of Tax Complexity.
According to the National Taxpayer Advocate, Nina E. Olson, the IRS will need billions of dollars and thousands of new employees to fulfill its newest responsibility as national health care benefits administrator. Ms. Olson brilliantly anticipated this expansion of IRS responsibilities in her 2010 Annual Report to Congress:
Just think of it. The Supreme Court has determined that the "health care legislation", mentioned by Ms. Olson and known collectively as Obamacare, is constitutional as a tax to be appropriately administered by the Internal Revenue Service (IRS). The IRS will need to hire and train thousands of new employees with the skills to implement the new provisions or transfer employees from tax enforcement duties to do these new jobs.... In recent years, however, Congress has directed the IRS to administer
a host of new benefit programs:■■ In 2007, Congress directed the IRS to make Economic Stimulus Payments (ESPs) to most U.S. taxpayers and some non-taxpayers. Among the consequences, the IRS was overwhelmed with phone calls, receiving more than double the typical number. This increase caused the percentage of calls getting through to a customer service representative to drop sharply, from 82% in fiscal year (FY) 2007 to 53% in FY 2008.■■ In 2008, Congress directed the IRS to administer the first of several versions of the First-Time Homebuyer Credit (FTHBC). Among the consequences of the various versions of the FTHBC provisions were: taxpayers claiming the credit could not electronically file their returns to comply with strict documentation requirements; significant IRS processing and enforcement resources were diverted from the IRS’s core work to administer the credit; and returns claiming the credit have been subject to a high audit rate and substantial delays in the delivery of legitimate refund claims.■■ In 2009, Congress directed the IRS to administer the Making Work Pay (MWP) Credit for working individuals and to coordinate MWP credits with Economic Recovery Payments to certain non-working individuals. Among the consequences, IRS processing resources were again diverted from core work, and more than seven million returns were not processed timely.■■ In 2010, Congress passed major new health care legislation and has directed the IRS to administer large portions of it, including the Premium Assistance Credit, the Individual Penalty for Lack of Coverage, the Employer Penalty, and the Small Business Tax Credit. The Congressional Budget Office (CBO) has estimated that the IRS will need between $5 billion and $10 billion over ten years to implement these provisions.
According to Ms. Olson, the expansion should cause the IRS to, "Create a program office, headed by a new deputy commissioner position, to provide strategic direction for all social benefit programs." This will bring the total number of Deputy IRS Commissioners to three... an increase of 50% in commissioners and a commensurate increase in all of the administrative overhead that goes with it.
The resulting organization chart for the IRS will be more complex. The increase in complexity will cause the government to spend a lot of money (read stimulate the economy) and hire a lot of people (read lower unemployment). Stimulating the economy and lowering unemployment are worthy ends in and of themselves. So much so, that any examination of the federal government's ability to afford either the new healthcare benefits or the bureaucracy necessary to administer them should be considered at least unpatriotic. It is our opinion that the IRS should find a way to penalize any such examinations. The country could use the money.
COMPLEXITY IS GOOD!
Thank you for your attention,
Citizens for Tax Complexity