Show 10A Stanriatj-Exane- 7 1&53 Saturday r Opinion IRS: Collect late taxes dent deficit We are continually reminded about the nation’s budget deficit and how its existence leads to borrowing interest paments and shortfalls to agencies and projects that really need the money' The debate generally points to two options: cutting spending or raising taxes The House Ways and Means Oversight subcommittee recently learned of a third option — and members of the panel weren’t very happy about it when they found out 9 IRS Commissioner Fred Goldberg told the subcommittee recently that there is $87 billion in uncontested past-du- e taxes waiting to be collected The federal budget deficit is projected at S631 billion in 1991 About $54 billion of the uncollected taxes is owed by just 17 taxpayers including corporations Goldberg explained that about $26 billion of the money probably will never be collected because the taxpayer is bankrupt or payments would create a hardship case Another $20 billion may not be received by the Treasury for other similar reasons the IRS reported Still that leaves more than $40 billion that can be collected That would put a serious dent in the deficit figure The IRS lists three major reasons it has so much difficulty collecting on delinquent accounts: WE IN CONGRESS want to do something to pQOVtDG CHILD CARE The agency’s technology is a dinosaur by today’s standards Much of the processing and checking of tax returns is done by hand The number of returns has increased drastically without a corresponding increase in staffing The agency said that from 1984 to 1989 the number of returns filed increased from 132 million to 151 million — about a 15 percent upturn During that same time bankruptcies increased by 80 percent Lawmakers have directed the IRS to take an increasing role in other tasks a major one being the federal government’s war on illegal drugs It’s estimated that the effort increased by 20 percent a workload for the anti-dru- g year Meanwhile the IRS collection staff didn’t grow in 1989 and will shrink by 27 percent in 1990 chairman of the oversight Rep JJ Pickle subcommittee that received the IRS report said he plans to conduct hearings on reported underpayment of taxes by US subsidiaries of foreign companies He should expand his committee’s mission to include receiving information on other related areas For starters Pickle should lead the fight to give the IRS the tools to do its job The agency should be directed to nail the deadbeats who have the means to pay but haven’t Incidentally regarding the 17 taxpayers that owe $54 billion: We’ll never know who they are — federal law prohibits the IRS from disclosing their names The IRS collects more than $1 trillion every year Most of us arc taxpayers who do the best we can to wade through the confusion offered by Form 1040 It isn’t right that a few deadbeats can cause in a multitude of worthy programs to take budget cuts Lawmakers should see to collecting what’s due before cutting programs or raising taxes as law-abidi- tJwUSSuK GobPv pproach to deficit reduction comes under fire Gramm-Rudma- bill n no longer suffices for Hollings co-auth- or for Scopps Howard News Service After more than four years in a shotgun marriage I filed for “dicalled vorce” last year The grounds: infidelity and irreconcilable differences Back in the autumn of 1985 Senators Phil Warren Rudman and I Gramm went to the altar with the best of intentions In the deficit and a federal teeth of a $230 billion-plu- s was “a bad idea budget process run amok whose time had come" The concept was simple and shackle Congress and the president to a timetable of annual deficit-re- d ucuon targets and back up the law with a doomsday device called “sequestration" cuts ie the threat of automatic honeyTrue enjoyed a blissful two-yemoon Congress and the White House stopped cheating and fibbing and settled down to cut the budget deficit from $221 billion in 1986 to $150 billion in 1987 This bnef period of budget responsibility did not last of course And since then the budget games has e become more sophisticated and more damaging to our nation's financial health This fiscal 1991 budget now emerging from Congress is like its predecessor a spectacular jamba-lay- a of tricks and dodges all designed to allow the president and Congress to claim we have done our targets But you can see job by meeting the con this game by following the Viashington through we do not what we what “watch rule of simple Gramm-Rudman-Holhn- gs R-N- H as tough-minde- d: across-the-boa- rd ar G-R-- H G-R-- say" For example when Sen Pat Moynihan D-N- Y Ernest Hollings caught the administration with its hand in the (Social Security) cookie jar he exposed a major part of the fiscal fraud And while the White House and chaCongress have been engaged in a rade — “Read our lips we are against taxes!” — federal spending has soared through the roof The sad fact is that we have fiscal cuncer The only way to excise it is to cut the deficit with taxes Like it or not the president and Congress will be supporting an increase in taxes this year The Social Security tax went up Jan 1 and Bush’s own budget proposal calls for $14 billion in new revenues It will cither be that hike in Social Security taxes to mask the general deficit while increasing the Social Security deficit or a replacement of the Social Security tax increase with other taxes to eliminate both deficits The latter proposal makes sense we should cancel the increase in Social Security taxes and institute a value added tax Our economy needs an infusion of up to $100 billion annually that a VAT would bring A 5 percent VAT — exempting food housing and health care — would bnng in that amount by the fifth year Rather than increasing payroll taxes on the workers we should levy a consumption tax on everyone — the more you consume the more you pay In international trade the VAT is rebated on exports so we can start eliminating both the fiscal and the trade deficits As for Gramm Rudman and Hollings that marriage is obviously on the rocks But let me offer some "child support" may be lousy budget policy yet it stands as the last vestige of fiscal constraint It’s simply all we’ve got but we can and must do better (Sen Hollings of South Carolina ts the Democrat on the Senate Budget G-R-- H second-rankin- g Spending restraints needed to maintain control of budget Fx Saipps Ho watfd Having tired News Service of the difficult and often painful decisions associated with deficit reduction some members of Congress are now trying to wriggle out from under the fiscal discipline imposed by the deficit reduction law Critics suggest the law — which has introduced an clement of fiscal restraint by forcing deficit reduction upon a recalcitrant Congress — be scraped because deficit targets have been missed and accounting gimmicks used to avoid tough decisions But as Woodrow Wilson once observed “the way is to arrest the driver to stop financial not the automobile" And in this case it’s Congress with its hands fixed firmly on the wheel n seek to jettison the Critics of which has inserted real discipline into measure only the federal budget process by forcing federal lawmakers to meet fixed deficit targets Absent such a fiscal governor on to the engines of government there’s no doubt deficit spending would once again accelerate speeding us lurching back toward $200 billion deficits For Congress to renege on its commitment to and gradual annual reductions in federal red ink would represent a sorry surrender to the deficit and an admission that our representative institutions are mired in fiscal gridlock unable to establish fiscal priorities A review of the law’s relatively brief history underscores the beneficial impact it has had on the budget process The basic fact is both the federal budget deficit and federal spending are lower than they would have been without Gramm-Rudma- n joy-ridi- Gramm-Rudma- Gramm-Rudma- n Gramm-Rudma- n Sen Warren B Rudman This year the federal deficit will be almost half of n was enacted what it was when five years ago Average real growth in federal spending dropped from 4 percent in the years pren to 16 percent since And ceding the deficit when measured against the Gross National Product (which many economists consider to be more important than the actual dollar amount) will be 60 percent lower than it was four years ago This has been accomplished by slowing the growth in federal spending — including the defense budget — reducing foreign aid increasing user fees disposing of some government assets freezing a va- riety of domestic accounts and judicious pruning of others True Congress and the administration have red sorted to saving money through numerical e actions that do not address and deficit problem Such creative ac- the long-tercounting techniques are regrettable but existed in n Washington long before Still critics who have grown weary of laboring under its restraints and fixed deficit targets argue that since the law has not achieved theoretical perfection it should be discarded They appear to be status quo thirsting for the when no choices were made no fiscal priorities established and the resulting failure poured into an Gramm-Rudma- Gramm-Rudma- sleight-of-han- one-tim- m Gramm-Rudma- deficit But that dog won’t hunt The time when the administration and Congress can utilize fiscal smoke and mirrors to meet the Gramm-Rudma- n targets is near an end We’ve run out of wriggle room And now like a family that's cut out the frills and ever-expandi- must decide how to meet next month’s mortgage we face the tough choices and are forced to establish fiscal priorities (Sen Rudman a Sew Hampshire Republican is a member of the Senate Budget Committee) ' |