The big day for Swiss cheese

By Wesley Pruden
PrudenPolitics.com

Life is unfair, as John F. Kennedy famously observed. That might not have been the most memorable thing he ever said, but it’s probably the most quoted, and when better to repeat it than on the last day for Americans to file their federal income tax returns.

Jimmy Carter, who has mercifully all but disappeared down the memory hole, called the U.S. tax code “a disgrace to the human race.” Hitler, cancer, and the designated hitter follow closely, but we take Mr. Jimmy’s point. How the government confiscates our money, like a root canal without anything to kill the pain, is not very nice. But like a village dentist armed with only a pair of greasy pliers, the government gets the job done.

This is not a good year for a taxpayer to cut corners in calculating how much he owes, because the new director of the Internal Revenue Service decreed no more Mr. Nice Guy.

The word “service” in a title is a favorite euphemism of government plunderers and purloiners, recalling the most terrifying words a citizen can hear: “We’re from the government, and we’re here to help.” Hurricane Katrina was bad enough, and then the feds arrived. “Service” is something rendered to the government, not the unarmed citizen. Douglas Shulman, the director of the IRS, describes his federal fiefdom as “a financial services institution,” as if it were the friendly bank on the corner of Main and Elm. “I am a firm believer that the true progress of an institution such as the IRS is achieved by standing on the shoulders of those who have preceded us,” Mr. Shulman told a Washington audience. You could almost hear the contrived catch in his throat.

However, the accountants who prepare millions of tax returns hear something else. They see the IRS standing not on “the shoulders of those who have preceded us,” but on the necks of everyone else. “We’ve been instructed to show no mercy this year, to disallow everything,” says one IRS compliance officer. “It’s frightening.”

Stung by the reluctance of Congress to raise taxes, the Obama administration has obviously set out to use the Internal Revenue Service to do the dirty deed. President Obama has big plans for expanding the federal government once he achieves “flexibility” after the November election.  The coming schemes will cost money. Since Congress won’t co-operate and the Treasury is overdrawn at the Bank of China, the only solution is confiscation. There’s still standing room on the necks of taxpayers—even widows, orphans, the disabled and the infirm, some even sick unto death.

One avenue to more revenue (more a boulevard, actually, than an avenue) is the closing of loopholes in the tax law. Everyone in Congress – Republicans and Democrats, liberals and conservatives – agrees this is a good idea, as far as it goes. The tax code, as Jimmy Carter said, resembles Swiss cheese, with holes for handouts, carve-outs, subsidies and loopholes for the many, and justice and mercy for the few. Mr. Obama made a show of declaring war on loopholes months ago. “Get rid of loopholes,” he demanded in his State of the Union address last year. “Level the playing field.”

Loopholes are the evasions that everybody in Congress loves to hate, but Congress creates new ones in every tax bill. It’s the love that dare not speak its name, but it’s the way of Washington, where inconsistency is a virtue. Some loopholes are cuter than others, and anyone who wants one must hire an effective (and expensive) lobbyist. An author, poet, sculptor or screenwriter, for an artistic example, must pay taxes on “ordinary income” at rates up to 35 percent. The Nashville Songwriters Association knows how to lobby, and a songwriter who sells a catalog of songs gets a better deal. He can report the income as a capital gain and claim a rate of 15 percent. Sobbing, singing and sighing about disappointment, blighted hopes and hard times is only a pose.

Congress and the IRS are dancing partners in a carefully choreographed ballet. Occasionally a congressional committee will call in a commissioner to make him squirm like a man in damp skivvies about abuses of taxpayers, arrogance of the agency and its high-handed interpretation of tax law. But it’s only a ballet, and the IRS is eager to perform a passable pas de chat. The ballet terrifies taxpayers like “Peter and the Wolf” terrifies small children, and there’s a spike in compliance, craven or otherwise.  So be grateful for that helpful foot on your neck, and hurry down to the post office.

Wesley Pruden is editor emeritus of The Washington Times.