PRESIDENT’S CORNER | BY CHARLES J. DURANTE, ESQUIRE
A Tax System As Good As Its People
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s Jimmy Carter receives worldwide salute for his life of humanity and activism, it is time to revisit his description of the tax system. Americans can take pride in the basic principles of the federal tax system. Higher incomes are taxed at a higher level. Good things — home ownership, charities, state and local government — are subsidized. Outsized inheritances are curbed. Citizens report their own tax liability, and the vast majority do it honestly. In its application, however, the tax system is, in candidate Carter’s 1976 phrase, a disgrace to the human race. Tilted to industries and constituents whose lobbyists are nestled in the inner circle of each party, its administration and enforcement starved of resources for over a decade, a federal tax code that should engender pride instead breeds cynicism. The public is not getting a tax system which, in another Carter phrase, is as good as its people.
Taxes aren’t supposed to be fun, but they’re critical to the common mission of organized societ y. Reflexive denigration of government, its processes and financing, is bad for democrac y, breeding indif ference to the principles of self- government and the lessons of histor y. governance. If people can be convinced that elections don’t matter, they’ll be less inclined to vote. If people think the Internal Revenue Service is incompetent because its response time is lugubrious, they will become indifferent to the defunding of the revenue department. If they think the tax laws are unfair, noncompliance will increase, as Michael Hoeflich, future dean of Syracuse and Kansas Law Schools, showed 40 years ago. Some are delighted with those results. As Professor Jim Maule, who taught many Delaware lawyers in his decades at Villanova Law School, pungently observed in 2016, “Why does Congress cut the IRS budget when it ought to be increasing it? The answer is simple. The people who control the Congress want to kill the IRS, eliminate federal tax revenues, eliminate federal spending, and eliminate the federal government.”
Taxes aren’t supposed to be fun, but they’re critical to the common mission of organized society. Reflexive denigration of government, its processes and financing, is bad for democracy, breeding indifference to the principles of selfgovernment and the lessons of history. With authoritarianism spreading worldwide in ways and locations unimaginable 30 years ago, citizens, and especially lawyers, must brace against slouching into alienation.
The result has stifled the federal government’s accounts receivable department. By 2021, the IRS had one staff person for every 16,000 incoming calls. At the beginning of this month, over two million individual income tax returns remained unprocessed. A decade-long Congressional war on the IRS reduced its budget by 20 percent entering 2021. Chiselers and cheats have friends in elected office. New committee chairs want to undercut the landmark 140-nation global tax deal to impose a 15 percent minimum tax on multinational corporations.
Cynicism is poison, which is why it is nurtured by opponents of effective
A recent proposal may be bold enough to spur serious discussion to change this inertia. The Fair Tax Act of 2023, recently introduced in the U.S. House of
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While the chronic under-funding of the IRS was reversed in 2022 legislation, the bigger fight has not been joined. The public yearns for a fair tax system, but neither party has taken the lead since the 1980s. Few elected officials discuss taxation, apart from rote denunciations of the source of their power. Bringing the federal system closer to its founding principles is a second-tier priority.