We Must Act Now to End the $646-Toilet-Seat Tax!

Melanie Colburn | June 16, 2005

Federal contractors owe more than $3 billion in taxes. The Government Accountability Office cites "abusive and potentially criminal activity" among approximately 33,000 federal contractors who have already cashed their checks.

According to The Washington Post the GAO found:

One contractor that furnishes temporary workers to the Department of Housing and Urban Development has owed back taxes for nearly two decades, simply closing businesses and starting new ones when the bills get too high.

The Senate Governmental Affairs' permanent subcommittee on investigations will review the data today. On Thursday some senators urged the federal government to avoid doing business with tax-deadbeat contractors.

Comments

|6.16.05 @ 4:46PM|#

Hey, what if we all stop paying taxes? When the IRS comes after us we can create new identities and forge death certificates for the old ones!

I wonder if I can keep my NIH postdoc position while doing that?

|6.17.05 @ 7:24AM|#

Dr. T-

If I may ask, will you have a contract position, or will you be a permanent?

|6.17.05 @ 7:33AM|#

This is only news to people who haven't been paying attention for the past 30 years. The only people in this country who pay their proper share of taxes are those who get a paycheck and can't do anything about the withholding (unless they conspire with their employer). Almost everybody else cheats, particularly small businesses. The best argument for switching to a consumption tax, such as a credit-invoice VAT, is simple fairness, or what is referred to as "horizontal equity" (there are huge problems with implementation, though). After following tax policy for over two decades, I am convinced that the tax system has reached the crisis point. People other than wage earners have largely ceased to comply with the laws, partly because the laws are too complex, and more importantly because there is virtually no IRS enforcement outside of a handful of large urban areas. Admittedly, my evidence for this is largely anecdotal, but I've been following this for a long time in different parts of the country.

I believe that the Republicans in the House (particularly certain individuals from Oklahoma, which probably has the highest per capita litigation activity against the IRS of any place in the country) have been deliberately underfunding IRS enforcement activity to precipitate a crisis--they have lowballed every request for funding made by the Bush administration, while giving him carte blanche on everything else he wants. Coincidence?

At this point, I'm ready to start over, but I have no confidence that our political system can come up with anything better.

|6.17.05 @ 12:37PM|#

MNG-

It's a 3 year position. Very few postdocs are invited to stay past 3 years.

|6.19.05 @ 7:14PM|#

"Almost everybody else cheats, particularly small businesses."

That might be true for small cashed-based businesses only.

Otherwise, for tax purposes, there is absolutely no difference whatsoever between running a small business or big business.