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NO IT DOESN'T

March 20, 2008

Professor Maule asks the question, "Does It Make Sense to Overload the IRS and the Tax Code?" He examines Senator Obama's proposed $4000 college tax credit:

Turning to the tax question, does it make sense to add yet another credit to a tax code already stuffed with tax credits and other provisions? If the goal is to reward college students for providing services, why not simply issue a check to the student? If there is concern that the money would not be used for tuition, then why not simply issue a voucher? If there is concern that the student would somehow not get the voucher to where it should go, why not simply issue a check to the student's college? Ought this not be administered by the Department of Education? Why bring the IRS into the picture? Could it be that Congress, elected officials, and candidates have far more faith in the IRS to get the job done properly than they do in some other agency? If that is the answer, then why do we tolerate the existence of agencies that cannot do what they ought to be doing and that need to be bailed out by the IRS?

Dr. Maule raises an important point. Each time Congress enacts tax credits to do this or that good thing, the IRS becomes less a revenue-collection arm and more a super-bureaucracy, with tasks including (just off the top of my head) encouraging research and manufacturing, supervising pensions and benefit plans, funding higher education, policing executive compensation, encouraging energy-efficient remodeling, and providing cash grants to the poor. A full list would be much longer.

It's hard enough just to measure income and determine the correct tax. Yet the Congresscritters continue to pile on other things for the IRS to do, and then they act surprised that billions of tax dollars go uncollected.

Tags: tax administration.tax policy.