Friday, October 12, 2007

And that is why I vote against taxes.

WASHINGTON — What if the government tried to give American taxpayers some of their money back, but the taxpayers didn't seem to want it?
That's what happened this year, as taxpayers collected only about half the $8 billion the IRS expected to pay them in its phone tax refund, the most far-reaching refund in the agency's history. The telephone excise tax was created in 1898 to fund the Spanish-American War. After losing several lawsuits disputing the legitimacy of the tax, the IRS created a program to refund the 3 percent tax paid on long distance or bundled service from March 2003 to July 2006.
The tax agency estimated the one-time refund would affect 145 million to 165 million taxpayers.
But, as of August, the IRS had repaid just over half of the over collected tax, according to the Treasury Inspector General for Tax Administration.
The inspector general report cited two main reasons for the lower-than-expected refunds:
_Many taxpayers, following the advice of the IRS, didn't want to bother searching for old phone bills to calculate exactly how much they were owed, and took the standard $30 to $60 refund instead, refunds that were based on the number of exemptions claimed.
_Despite what the report said were generally good efforts by the IRS to communicate the program to taxpayers, many remained uninformed. As of June 9, about 87.6 million, or 71.5 percent, of the 122.6 million individual income tax returns filed had made a phone tax refund claim.
The report recommended that the IRS identify demographics that had relatively low rates of claims and provide additional information to these taxpayers on how they might still claim the refund.
Separately, the Government Accountability Office issued a report concluding the IRS loses money because of problems in managing its paper case files.
The GAO, the investigative wing of Congress, cited several District Court cases where the IRS lost more than $40,000 in revenue because it could not locate the case file.
It said the IRS could not find 10 percent to 14 percent of case files requested in two prior GAO audits, and that the IRS could not come up with 19 percent of the case files when the Treasury Inspector General, in an audit, asked for a random sample of tax records.
"This is not a new problem," said Senate Finance Committee ranking Republican Charles Grassley of Iowa, who requested the study with committee Chairman Max Baucus, D-Mont. "The GAO's findings should be an embarrassment to the agency."

http://news.yahoo.com/s/ap/20071012/ap_on_go_ot/irs_phone_tax


Generally speaking taxes are a necessary evil. The government does need an operating budget of some kind or nothing would be accomplished. I highlighted this article to demonstrate the long-term destructive power that taxes can have on our society. While voting for the telephone excise tax in 1898 to fund the Spanish-American War was probably very patriotic at the time; it should be a strong lesson to those with voting power that just because it feels good doesn't mean it is good. This tax, although very small in comparison to may other taxes, has over stepped the bounds by which it was created. Why then is it so hard to remove such a tax? Once the overall purpose is served a reasonable person would conclude the "government" would repeal the tax and pay back the money not used. In our country it is my opinion that we do NOT have a tax collection problem we have a tax spending problem. I sure wonder what other taxes I am currently paying that are not going toward their originally designed purposes. Is it really responsible to vote for tax increases? Now let's stretch this discussion a little further and see where we end up. The modern day application of this tax should worry many of you. Originally only the rich had phones and thus a tax on the rich equals a tax on only a few. However, now everyone has a phone, and if you are poor, on government assistance, desperately seeking a job you MUST have a phone. Therefore, a poor person paid this tax for many years. Where were the Democrats on that one?

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