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What if United Way ran the IRS?

Profile photo of cincinnatus 92 By cincinnatus
June 24th, 2012

Launch Blog, Category 3: Taxes and Economy

 

What if United Way ran the IRS?

After getting shunned and booed at Occupy Wall Street protests, we recently have been treated to sit-ins of billionaires and Hollywood-types starting their own populist Movement, “Raise our taxes!” It’s a pretty easy thing to say when already you have five paid-off homes, a slew of trust funds, and enough sheltered non-taxable income for yourself, your great-great-great-great grandchildren, and everyone else living on your private island.

For the rest of us struggling to keep our jobs, while keeping pace with mortgages, car payments, and our kids college’ tuition, a tax increase sounds pretty much like the dumbest thing we’ve ever heard. So here’s a suggestion for the “Raise our taxes,” crowd: go to the IRS website at http://www.treasurydirect.gov/govt/reports/pd/gift/gift.htm and, after you’ve paid your taxes, donate as much money as you want directly to the IRS.

The fact that these billionaires donated a paltry $3,277,369.23 in 2011 – less than half the price of a decent racehorse – tells us that they aren’t really interested in helping to address the Federal Debt… they’re just trying to look like they care about something other than what their accountants, agents, and PR people tell them.

Maybe it would entice these billionaires to make huge donations and help pay the down the Federal Debt, if they could designate which government agency would be the beneficiary of their largesse… like the rest of us do our United Way pledge cards at work? Or better still, what if all of us could check a box on our tax returns that said “Pay to U.S. Government General Fund,” or select one that said, “Designate my taxes to (fill in the Government agency)”

OK, we’ll concede that, like all human endeavors, the United Way is an imperfect institution; but so is the human race, all governments, all religions, and anything else people get involved with and muck up.  But this time, they are on to something: one of the things many people like about the United Way is the freedom to contribute to their general fund serving your area – and supporting a ton a charities – or to designate your pledge to a specific cause.

You can also list organizations who you don’t want to receive a dime of your money… so depending on your personal feelings about Planned Parenthood, the Boy Scouts of America, or other groups, you can either support them (and often, have your employer match your gift) or boycott them.

It’s a stroke of genius. If we applied the United Way approach applied to the Federal budget – in effect, allowing taxpayers to “vote with their dollars” on issues of national importance – lawmakers would get an annual reminder of taxpayer priorities… including how we want our money spent, and what programs we feel aren’t worth keeping.

Admittedly, it would have to be implemented in a non-binding way, lest some necessary but really unpopular programs be financially starved to death… but it would be fun to see the fallout when the “returns” were tallied and published.

No one – other than tax accountants, tax attorneys, and the folks who make TurboTax – disputes the need to reform U.S. tax code. By some accounts, it has been reported that today’s tax code is now 3.8 million words long, and consumes some 7.6 billion hours of Americans’ time… an average of more than 24 hours per person. (And that is on top of the 107 days that you already spent working just to earn the money to pay your tax bill, according to the Tax Foundation.)

Of course, the only thing worse than how they bring money into The Treasury, is how they take it out… borrowing 43 cents of every dollar they spend to maintain the Federal Lifestyle. If you ever wondered why Washington D.C. needs all that money and where it goes, a group called Third Way (www.ThirdWay.org) made huge headlines a couple of years ago, by producing a restaurant-style receipt detailing what the Federal Government does with the tax dollars you send in. (See below).

When you are done hyperventilating over the tab – and remember, almost half of every dollar spent is borrowed – skip over to their ingenious new calculator at that http://www.thirdway.org/taxreceipt to get a very close approximation of how your tax dollars are getting spent in Washington.

A interesting take on this type of approach comes from Congressman Eric Cantor (R-VA), House Majority Leader, with his program, “You Cut.” http://majorityleader.gov/YouCut/ Cantor’s website encourages taxpayers of every persuasion to nominate wasteful government spending that should have its funding curtailed. Proposals are presented to the Internet community and voted upon; if proposals are approved, many are drafted as official House Bills, and presented to the House floor for a formal. Taxpayers can log into the site to check on the status of any bill, e.g. “Introduced,” “Committee Hearing,” “Passed by Committee,” and “Passed by the House.”

Cantor’s approach is a good first step towards voted-inspired Federal spending. While it does not address taxes for local government services, it can start the conversation about exactly why we need the Federal government involved in so many aspects of our day-to-day lives, doing things that appear to have little or no impact. It seems the farther our tax dollars go from the zip code in which they were earned, the less wisely they get spent.

And once we’re asking those types of questions, maybe we’ll put some focus on the hardest question of all: if our local cities and states provide 90% of the services we use on a day-to-day basis – schools, police, fire, maintaining roads, etc. – and the things that Washington D.C. does seem so detached from our daily lives, why are our Federal taxes four or five times what we pay to the states we actually live in?

Shouldn’t we flip the formula, and let the States manage their own financial affairs, free of Federal interference…. as the 10th Amendment to the Constitution says? Shouldn’t the bulk of your taxes stay local, with Washington D.C. receiving funding from the states for only the things the states cannot do for themselves, like maintain a global military, conduct national medical and scientific research, explore outer space, etc?

While it’s doubtful that we would ever see the “Designate your tax dollars” approach, it’s fun think about how would you divvy it up. Say you could select three categories; would you choose education, the EPA, and healthcare research? Or would you choose law enforcement, Homeland Security, and the FBI? I’d be willing to bet that for many Americans, the answer is NASA, the Center for Disease Control, and the Department of Defense. Here’s why:

  • NASA: Think about the most likely scenarios for the Earth being destroyed: they include the sun cooling; the sun expanding to the point that it consumes the Earth’s orbit; Earth being struck by a giant meteor; our solar system passing through a cosmic dust cloud; a problem with the Earth’s magnetic field; etc. Assuming those doomsday scenarios are valid, who but NASA do you want working the problem?
  • The CDC: Many experts agree that if we aren’t blasted out of existence by something from outer space, mankind will be killed by a pandemic; something along the lines of airborne strains of Ebola, cholera, or HIV. If that occurs, we’ll need a massive, nationwide research effort to contain the virus and come up with a cure. Need to save the Earth from the Zombie-A virus? No one better than the CDC.
  • Department of Defense: Barring solar flares and airborne flesh-eating viruses, maybe the newest threat to mankind is one of the oldest ones: a nuclear threat, waged by an old foe, a rough state, religious extremists, or any of a number of James Bond foes. That being the case, no one is better equipped to preempt, repel, and retaliate for such villainy than the U.S. military. Our special forces, high-tech weaponry, and rapid deployment capabilities lead the world; give these guys the equipment they need, and they’ll stack up the bodies of bad guys like firewood.

Oh, and if you work for the Departments of Energy, Education, or Commerce… you might want to update your Linked-In profile. Even Texas Governor Rick Perry figured has you figured out.

This entry was posted on Sunday, June 24th, 2012 at 7:58 PM and is filed under Category 3 : Taxes & Economy, Launch Blog.

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One Comments to “What if United Way ran the IRS?”

  • Profile photo of Jim Pease Jim Pease says:

    The IRS was founded in 1913, at the same time as the FED and is a branch of the FED, if truth were known. the FED is so close to the IRS that many FED workers move to the IRS and Back at various times. One old friend was head of currency circulation at the FED for years, last I heard he was now high up in the IRS.
    it is troubling to realize that our tax enforcement is tied to privately owned credit banks that control our currency.