Friday, August 25, 2006

Congress, Bush share in IRS outsourcing sham


Those supposedly hardheaded business minds that came to Washington in the Republican upheaval seem to have gone soft.

Rather than allow the Internal Revenue Service to hire more agents to collect back taxes, President Bush and GOP allies are beginning a broad outsourcing of collection duties to private debt collectors.

The president and congressional Republicans have a cultural hostility to government and an affection for cronyism with business. That's understood.

What is not easy to digest is that this outsourcing is being done in the face of evidence that private debt collectors will generate a paltry return to Uncle Sam, while adding new IRS agents would produce a bonanza of collections.

Bush-appointed IRS Commissioner Mark Everson even admitted that in testimony to Congress.

By his estimation, turning over collection of taxes to private firms would yield $1.1 billion to the government over 10 years, while hiring more IRS agents to do the job would produce $87 billion.

Costs of collection also will skyrocket with private firms—22 to 24 cents on each collected dollar for private collectors, versus 3 cents for the cost of IRS agents.

Critics have already raised the specter of abuses—con men finding ways to pose as collectors and use of threatening techniques by unaccountable private collectors, to name just two possible problems.

The program is off to a bad start already. An employee of a private Texas firm hired to collect taxes went to jail in 2002 for bribing officials in San Antonio to obtain a contract.

What possibly goes through the minds of congressmen who complain, usually during re-election campaigns, about the cost of government, then either approve or are indifferent to contracts with private firms that drive up the costs of government?

Have they forgotten the no-bid shenanigans of Vice President Cheney's former company, Halliburton, in overcharging taxpayers tens of millions of dollars on a no-bid contract? And the millions of misspent dollars by the Pentagon on other private firms that failed to deliver on contracts to build schools and hospitals, and that've been fired by the Pentagon?

How about the jet tanker lease deal with Boeing that landed several executives in jail for trying to fleece the government?

Much as taxpayers dislike or resent the Internal Revenue Service, they should truly be offended by decision to farm out debt collection to private companies that will be the only ones to reap a windfall on the misery of taxpayers, all of whom will be hurt by this misbegotten plan.




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