Sep
26
2024

Let's Get Fiscal

Robert Reich joins in on some IRS-cheerleading from "Americans for Tax Fairness":

MILLION in uppercase! And apparently it's being trumpeted as a huge IRS win.

Just some fiscal perspective: The CBO estimates that federal spending in FY2024, which is winding up in a few days, runs to $6.88 trillion.

Yes, in one swell foop, the IRS has recovered enough money to pay for 0.0038% of FY2024 federal spending. If you imagine that money flowing out 24 hours/day, every day, … check my arithmetic, but it works out to be about 20 minutes worth.

And note that $263 million figure was spread out over (reportedly) 15 years.

Unmentioned by Reich and "Americans for Tax Fairness", but noted in even the most IRS-sympathetic news stories (example) the "whistleblowers" involved are getting $74 million right off the top of that recovered $263 million. (That WaPo story relies on the law firms representing the whistleblowers for information, but doesn't reveal how much of the award they're getting.)

I could not easily find information on how much it takes to operate the IRS Whistleblower Office.

But I suspect that if it paid for itself, they would loudly trumpet that fact. As near as I can tell, they do not.

As far as Reich's partisan shot at Republicans goes, let's take a look at Cato's recent recommendations for Transforming the Internal Revenue Service.

The 2022 Inflation Reduction Act (IRA) authorizes $80 billion in additional funding over 10 years for the Internal Revenue Service (IRS), with the lion’s share going to increased enforcement. The Biden administration claims that the funding—enough to double the IRS workforce—will lead to the collection of hundreds of billions of dollars of unpaid taxes.

Even if those higher revenues are realized, they would come at a high cost to the private sector. Although increased enforcement is often characterized as combating tax cheats, more-aggressive IRS enforcement would likely mean strong-armed actions against millions of individuals and businesses who are either blameless or who have made good-faith efforts to comply with the federal tax code, including middle- and lower-income Americans who are the least able to defend themselves.

Instead of giving more money for enforcement with little or no accountability, policymakers should transform IRS operations and management. Oversight agencies and think tanks have proposed technological and structural reforms to improve IRS administration while reducing the economic losses that federal tax rules impose on individuals and businesses and supporting civil liberties protections for taxpayers.

Good ideas abound therein.

Also in the news is (another) defeat for fiscal restraint: Rand Paul's Plan To Balance the Budget Highlights Congress' Addiction To Borrowing. Reason's Eric Boehm reports:

As he does every year, Sen. Rand Paul (R–Ky.) asked the Senate on Wednesday to balance the federal budget by trimming a few pennies from every dollar that the government spends.

Yep, it's actually that easy.

The predictable result: a 39-56 vote that probably overstates the popularity of Paul's proposal—how many would vote for it if they believed it actually had a chance of passing, one must wonder.

If it had passed, Paul's "Six-Penny Plan" would balance the budget within five years by cutting six pennies off every dollar the government spends. That translates to a $329 billion cut for the new fiscal year that begins on October 1—a fiscal year that seems likely to begin without a real budget having passed Congress. It would make the 2017 tax cuts permanent (and would account for the decline in future revenue that would result from that change), would preserve Social Security, and would otherwise leave Congress to determine the specifics.

That's the spending side. Also making sense at Reason is J.D. Tuccille on the intake side: Instead of Vote-Buying Tax Promises, Let’s Have Real Plans for Tax Relief. He looks at the campaign proposals on tips, overtime pay, state/local tax deductions, and says: whoa, enough.

People are entitled to keep the money they earn, and lower taxes are better taxes. But like all uses of state power, proposals for tax relief should be more than candy tossed to the crowd in hopes of winning favor. They should be thought through as part of a larger plan to fund whatever about the government needs funding (not so much, I would suggest), without driving businesses, organizations, and individuals into contortions to take advantage of poorly conceived changes to the tax code.

Maybe federal officials and those aspiring to the job could even fit their tax ideas into a larger framework that matches revenues to expenditures and pays down debt. Wouldn't that be a refreshing change?

By all means, let's see more proposals for tax reform, especially tax reduction. Perhaps exempt overtime and tips as part of an overall plan. But let's see these ideas proposed as policy, not just payoffs for votes.

Indeed. But fiscal sanity is not a realistic prospect for FY2025.

Also of note:

  • Oh, yeah. If Pun Salad goes off the air… It could be due to a little problem mentioned in this Slashdot story: Critical Unauthenticated RCE Flaw Impacts All GNU/Linux Systems.

    Quoting a report:

    A critical unauthenticated Remote Code Execution (RCE) vulnerability has been discovered, impacting all GNU/Linux systems. As per agreements with developers, the flaw, which has existed for over a decade, will be fully disclosed in less than two weeks. Despite the severity of the issue, no Common Vulnerabilities and Exposures (CVE) identifiers have been assigned yet, although experts suggest there should be at least three to six. Leading Linux distributors such as Canonical and RedHat have confirmed the flaw's severity, rating it 9.9 out of 10. This indicates the potential for catastrophic damage if exploited. However, despite this acknowledgment, no working fix is still available. Developers remain embroiled in debates over whether some aspects of the vulnerability impact security.

    Back when I was a Linux sysadmin at the University Near Here, I occasionally wanted to reply to panicky email about such reports: "We're doing everything we can, which is nothing."

    That's exactly my position here. Eagerly awaiting to apply system updates for my local machines. Desperately hoping the good folks at Reliable Webs Hosting (where punsalad.com resides) are doing the same.