Originally published on Forbes.com Jan 16th, 2014
I was going to skip writing about the IRS budget, as it has been pretty well covered. I was also thinking about being done with Bridgegate. I thought I had done my duty as one of the native cliff dwellers who look down on Manhattan, by pointing out several important historic facts about Fort Lee, NJ that may help rescue it from being remembered as the site of a politically motivated traffic jam. I was thinking of doing a follow-up to explain Fort Lee’s significance in the birth of the film industry, but that will wait. I’ve just been thinking about the supposed connection between the IRS Tea Party Targeting Scandal and Bridgegate. I guess it is a matter of “So’s your old man”.
Both Pretty Stupid Conspiracies
I am agnostic on whether the IRS was targeting right-wing groups or just doing a bad job at an inappropriate assignment. My blogging buddy Joe Kristan grew up in Chicago and tells me that selective enforcement of that sort is Chicago style politics, which inclines him to the conspiracy side. I have to take that pretty seriously. I will argue, though, that you could have gotten the same result without the conspiracy. Here is why.
The main job of the IRS is to collect revenue. It collects quite a lot – over 2.5 trillion dollars. It does that job with just over 90,000 people. Of those 90,000 there are just over 20,000 who you would think of as enforcers mainly revenue agents and also revenue officers and special agents. Without those 20,000 people, the entire system would entirely rely on people being public-spirited and just wanting to obey the law, because it is the law. The basic education requirement for a revenue agent is a degree in accounting, which is pretty sensible for the basic job of enforcing tax laws designed to bring in money.
Unfortunately, Congress has decided to make the IRS the Swiss army knife of social policy and tasked it with a wide variety of functions. Among those was figuring out whether advocacy organizations were actually political. That is not a job for accountants. Maybe accountants who dropped out of graduate history programs, but we are pretty thin on the ground. What is really bad about it is that there really was not any revenue to be had from the whole enterprise. Task a group of 20,000 accountants with collecting 2.5 trillion dollars and then give them side jobs that don’t bring in money and expect them to put the first team on the side jobs? I don’t think so.
If I was in charge the way I would punish the IRS for 501(c)(4)gate, or whatever it is we should call it (Teapartygate?), by taking all the side jobs away from them. The people who were freed up would be given a year or two to see if they could earn their keep by catching people breaking the tax laws and bringing in more money.
If not, then I would fire them. But what do I know? Congress in its wisdom has instead decided to cut the IRS budget to punish the agency for screwing up a job that it is ill-suited to perform. Here is my question If the correct response to TeaPartygate is punishing the IRS with a budget cut, what is the correct response to Bridgegate? Obviously, what we should do is punish the Port Authority with budget cuts.
What Is The Port Authority?
Among the cliff dwellers across the Hudson River from Manhattan and the more dispersed meadow dwellers, they look down on “The Port Authority” is a very large bus terminal in mid-town Manhattan. Commuter buses go through the Lincoln Tunnel and fan out from there to various parts of New Jersey. The other side of the tunnel is a major choke point as the incoming buses, along with cars and trucks converge on the tunnel.
When I was a kid the only practical way to go from Fairview NJ to visit my friend who lived in Irvington was to go into Manhattan and back out again. Fortunately, Fairview was only a few miles from the choke point so at the right intersection, a magical place called Nungessers, a bus to Manhattan would be passing by every five minutes either from the north or the west. We should be thankful that the mayors of Weehawken and Union City did not offend Governor Christie. That traffic jam from partially plugging the Lincoln tunnel would have been epic.
At any rate, “The Port Authority” is not just the massive bus terminal. The Port Authority of New York and New Jersey is a bi-state agency responsible for many pieces of critical infrastructure. Among them are the George Washington Bridge, the Lincoln Tunnel, JFK Airport, Newark Airport, LaGuardia Airport, the port facilities, and the eponymous bus terminal. It has its own police force with officers who can go between the two states. The Port Authority also had responsibility for the World Trade Center
The Port Authority lost 84 people on 9/11.
So you can really see how an organization that important and powerful should not be used to settle petty political scores. Apparently, that is what happened with Bridgegate as aides of Governor Christie arranged for his minions inside the Port Authority to close lanes on the George Washington Bridge to spite the mayor of Fort Lee, NJ. Using the Teapartygate logic being applied to the IRS, the Port Authority needs to be punished. To be fair though, I think you need to go easy on the cliff dwellers in the tightly packed towns between the George Washington Bridge and the Lincoln Tunnel. Focus the cuts on the airports, so everybody in the country can appreciate them. That’s the approach Congress taking with the IRS.
Of course, the damage done by gutting tax enforcement is subtler than plugging bridges and tunnels, which is why budget cuts to the IRS can seem like a good idea. And of course, some people don’t think we should have much in the way of taxes. They can’t change the tax laws, but they can gut enforcement. If they take it far enough, the income tax, for example, may become entirely voluntary in a practical sense.
Reading every Tax Court decision and federal appellate decision concerning taxes along with a certain level of street knowledge inclines me to think that we are fast approaching that state at least with regard to people who have hopeless credit ratings and no money in the bank. Maybe the people who think we should have a much smaller government with much more restricted functions are right. Getting to that point through allowing some of the people to avoid most of their taxes most of the time through lax enforcement is probably less than ideal.
You can follow me on twitter @peterreillycpa.
Afternote
The scores of readers who were delighted by my appreciation of Fort Lee history are probably lusting to learn even more about the region especially my home town of Fairview. Probably the two most famous people with Fairview connections are Father Charles McTague who is famous inter alia for dropping in on Albert Einstein and explaining transubstantiation to him. Father McTague was the type of priest that Pope Francis is looking for. Boys and young men in his parish were constantly called on to assist in corporal works of mercy to the countless refugees he helped settle. Then there is John Scarne who was a noted authority on spotting people cheating at cards. There’s more, but that will do for now.