Ted Cruz Reflects Confusing GOP Attitude Toward Acronyms

Tue May 05, 2015 14:42:22PM | Categories: Taxes, Ted Cruz & Internal Revenue Service (IRS)

Ted Cruz speaking to Tea Party Express supporters at a rally in Austin, Texas.By: Gage Skidmore

So Ted Cruz is running for President, and wants to abolish the IRS.

Back in the wake of the “IRS Scandal”—that is, when the public became aware that the IRS was selectively targeting nominally conservative or Tea Party-associated groups for tax audits, Cruz’s solution was to eliminate the federal body altogether.

Cruz, and his fellow candidates cheering for the demise of the IRS, are not off the mark in much of their commentary about the IRS and the U.S. tax code: the system is untenably complex, presenting a hassle for citizens and federal accountants alike. The threat of an audit hangs over the heads of individuals and businesses, while endless loopholes—whatever their intended purpose—put a massive wall between statutory rates (that is, what people or companies are supposed to pay, according to their earnings) and the effective rates (that is, how much they dole out after accounting for various breaks, incentives, deductions, and other such programs).

Because of the complexity of the code, it is virtually impossible for Congress or its accounting body, the CBO, to guess with any confidence how a given policy will impact the economy.

And quite apart from the difficulty of pulling apart the obscenely long, dense code to root out loopholes (without appearing—accidental or otherwise—to favor any of the various groups who benefit from exemptions and breaks), there is the matter of the federal government’s favorite tool for managing public behavior: tax penalties and incentives.

There is broad bipartisan support for reforms; there is virtually no bipartisan agreement on how to reconcile the effects of removing loopholes and programs to prevent the effective tax rate from leaping back into line with statutory rates overnight.

And the sad punchline to Cruz’s whole “abolishment” set-up, is that he is not anti-tax, just anti-IRS. Even with the modest, simple plan he proposes to replace the broken modern system, there would need to be some accounting done by the feds to collect taxes and preserve even the simplest, fairest rules. So Cruz would eliminate the IRS—then replace them with a strikingly similar group, under a different name.

As The Who said: Meet the new boss—same as the old boss.

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