Since at least the end of World War II, foreign governments — some friendly, some not so much — have come to the U.S. for advice. And also usually money too. But the advice was often even more important.

They wanted to know how to raise the cash to run their countries. Not always in a democratic sense. Their questions were more like how to get citizens, for whom tax avoidance is a time-honored tradition to pay what they owe. And on time.

Finance ministers and Inland Revenue types, big shots from Italy, Chile, Greece and numerous other countries came to figure out why so many Americans paid their share more or less willingly. It’s called voluntary compliance. Many think it’s the basis of our system. The foreign feds came from places where not paying taxes is even more popular than football (soccer) or, in some places, sex. They sought advice from pros at our Internal Revenue Service. They did. Learned (some better than others) and went home. Most improved their VC systems, but ours — stupid laws, lawmakers and loopholes notwithstanding — is still the gold standard for a big system.

One of the primary things they learned is that citizen taxpayers must be convinced that the system is basically fair and that it paid to pay. And as a backup the threat of jail time!

Many people think that the budget choke Congress has on the IRS (for real or alleged political shenanigans) is dangerous. Workers are being asked to do much more with less support. Some people fear it threatens the voluntary compliance system.

A column here last week on the IRS budget problem prompted lots of comments that were published in the comments section. Here’s one that came direct to me. It’s worth reading whether you are with the IRS, Homeland Security (which may be next), the Interior Department or are “just” a taxpayer:

For those of you outside the Beltway,

Mike Causey at Federal News Radio had an excellent piece on the IRS Thursday, Jan. 22. You can click on Mike’s piece IRS’ tale grows legs, and you may also want to click on the embedded link at the end of the piece for some additional comments. As Mike points out, some of the mainstream media has recently caught on to the resulting adverse impacts on service to the American public and the decreasing revenue to the U.S. coffers as a result of IRS budget actions in Congress.

Over the years, I have observed that as part of their itinerary, many foreign delegations to the U.S. have visited IRS. In my previous organization, we hosted many of them (including some from what at that time was behind the “Iron Curtain”) to discuss statistics as they relate to our nation’s operations of the tax laws. This was in addition to visits to other federal agencies during their trip, and the technical advisory services at Treasury and the experienced personnel that we sent to some of those countries to assist them in their taxation/revenue efforts.

When I first came to IRS as a Revenue Officer in the Washington Area Office of the Baltimore District, one such visit in the early ‘70s still stands out in my mind. There was a delegation from an eastern country visiting Treasury/IRS. One of the comments from the visitors during their visit was amazement that we relied upon the citizens of the U.S. to voluntarily participate in our tax collection system (the voluntary compliance rate at that time was probably what it is today, in the 80 percent range).

I gave it some thought at that time and considered other countries where the system is not voluntary; some where it appears that the national pastime is to avoid and evade, where effective individual rates approached 90 percent and in some cases exceeded 100 percent, and what effect it has had on people living in those countries. In many of those countries, the opportunities to “get ahead”, own a business, own a home or get an education, just didn’t/doesn’t exist.

Personally, I don’t want to live in such a place, and I don’t want my posterity to look forward to living in such a place. So, hopefully before it is too late and we exceed the point of no-return, those making the tough decisions on federal operations will want to reconsider and realize that throwing the baby out with the bathwater may not be the approach we want to take.

        Read more: Mike Causey

Michael R. Leszcz
President
Professional Managers Association

NEARLY USELESS FACTOID:

By Michael O’Connell

In coming up with the pen name “Abigail Van Buren” for her “Dear Abby” advice column in 1956, Pauline Phillips combined a biblical name from the Book of I Solomon with the last name of the eighth President of the United States, Martin Van Buren.

Source: Wikipedia

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