Tuesday, July 28, 2015

The Senate’s wrongheaded IRS proposal

Apparently the Senate (and I assume that's Republicans in the Senate) want to privatize federal debt collection because everyone hates the IRS and obviously the market can do everything more efficiently. Catherine Rampell explains the insanity in The Senate’s wrongheaded IRS proposal,

The IRS has actually tried outsourcing tax collection activities to private debt collectors before, at Congress’s behest. Twice, in fact, over the last two decades.

Both times, the experiment was a disaster.

Privatizing delinquent tax collections led to complaints from taxpayers who got harassed and bullied by an industry known for rampant harassment and bullying, particularly of low-income people who don’t know their rights. In one oft-cited case, a private debt collector made 150 calls to the elderly parents of a taxpayer even after the collection agency learned that the taxpayer was no longer living at that address.

Perhaps more important, at least from a fiscal responsibility perspective, both times the program was scrapped because it actually cost taxpayers money on net, despite assurances ahead of time of the huge bounty it would lasso in."

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