Why Not Have The IRS Calculate Taxes for You?

The White House's agenda is getting a little scary:

• Government-run health plan (an organization that also manages social security, medicare, medicaid, and the US Postal Service),
• Trying to control the press (isolating Fox News),
• Is having the IRS send taxpayers a tax form with amounts already filled in next on the agenda?

Per the NSAlert - October 23, 2009

Why Not Have IRS Calculate Taxes for You?

One of the Speakers at the CERCA conference on October 14 also addressed the idea of “simplicity,” which in this instance took the form of the IRS sending taxpayers a tax form with amounts already filled in. Ian Liddell Grainger, a member of the United Kingdom's Parliament, and chairman of the U.K. All Party Parliamentary Group on Taxation, vehemently opposed this idea, which is similar to the U.K. system in which the government calculates employees' taxes and employers withhold those amounts from employees' paychecks. He said the IRS system, in which individuals figure out their own taxes and submit them to the government voluntarily is far superior.

One of its many problems, Grainger said, is that taxpayers are unaware of the codes that revenue officials use to designate their tax liability and are afraid to challenge the government when they think their taxes are wrong. The assumption is that prepopulating tax returns reduces the compliance burden for individual taxpayers. “That's not really the case,” he said. “What it actually does is encourage the taxpayer to be absent from compliance activities—in other words, you are taking the taxpayer out of the loop.”

NSAlert readers may remember that Austan Goolsbee, the president's economic adviser, said in July that a tax reform commission is seriously considering this prepopulated return idea, but that the president was not close to proposing it yet. Grainger said he is hoping to meet with government officials to dissuade them from the idea.