Sunday, October 21, 2007

Tax Collection Responsibility Act of 2007 - Walberg Votes No

As I continue to try to catch up with the Walberg Voting Record...

On October 10, 2007, the House of Representatives voted on HR 3056, the Tax Collection Responsibility Act of 2007. A summary of the bill may be found here.

From my read of it, it looks like most of the bill is filled with simple, fairly uncontroversial reforms. For instance:
Section 4 -
Treats income tax returns filed with the U.S. Virgin Islands by an individual claiming to be a bona fide resident of the Virgin Islands during the entire taxable year as filed with the United States for tax administration purposes.
Since the U.S. Virgin Islands is an American possession (obviously), this seems to make sense. I'm sure there are arguments for and against, but I've got to think that this wasn't too controversial a move.

Other portions of the bill included increasing taxes on American expatriates who renounce their citizenship (apparently, that's an issue) and increasing penalties on individuals and companies that file incorrect information or fail to file certain forms.

The controversial bit of the bill comes here:
Section 2 -
Repeals the authority of the Internal Revenue Service (IRS) to enter into private debt collection contracts. Exempts contracts entered into before July 18, 2007, if such contracts are not renewed or extended after such date. Nullifies any contract entered into, extended, or renewed on or after July 18, 2007.
At first glance, this doesn't make sense. We want our government to collect its taxes, and debt collection agencies could help to squeeze the money out of folks trying to cheat the system. Right?

Well, Speaker Nancy Pelosi's website explains why that hasn't worked out very well:
Repeals IRS authority to enter into private debt collection contracts. The provision would repeal the 2004 provisions that give the IRS’s authority to enter into contracts with private companies to collect federal income taxes. Numerous cases have been identified that illustrate taxpayer harassment, abusive calling, and violations of taxpayer rights, the Fair Debt Collection Act, and taxpayer return disclosure protections. For example, one elderly couple was called 150 times, including five times a day, asking for a taxpayer. Within the first five calls, the debt collector knew that the taxpayer did not reside at the home. Calls continued for 27 more days with 1-7 calls per day. Other cases involve people in nursing homes, those serving in Iraq, innocent spouses and those subject to identity theft. The Federal Trade Commission has 130 complaints likely to involve the private tax debt contractors, and the Taxpayer Advocate has many more. With bipartisan support, the House has twice passed legislation to stop the private collection of federal taxes, most recently in the Roth amendment to the fiscal year 2007 Treasury Appropriations bill.
A blog called taxgirl has more, from a 2006 post:
Obstensibly, the idea for this move towards privatization is to save taxpayer dollars. However, IRS officials claim that the move will actually be more expensive (up to 8 times moreso) and will result in fewer dollars collected (approximately 5 times less). The net difference to taxpayers? A projected $1.1 billion collection from private companies versus $87 billion from IRS revenue officers - if only they could hire more revenue officers. However, despite the economics, which are undisputed, Congress has refused to allow IRS to hire more revenue officers.
So, private collection companies cost us more money and harass innocent people. It's probably best if we not give them any more contracts.

Now, since I don't know much about tax law, there's a chance that I might have missed some key element of the bill, or misrepresented something. If so, please speak up in the comments and educate me.

Until then, I'll go ahead and conclude that for the most part, it was probably a reasonable and fair piece of legislation.

Most of the House of Representatives seems to have agreed with me, too, because the bill passed, by a vote of 232 to 173.

Congressman Tim Walberg voted No.

I know that Congressman Walberg doesn't like the IRS and would rather replace all other taxes with a 23 percent sales tax. But besides that, is there a reason he voted against this bill?

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Do liberal Democrats loves taxes even more than they love democracy? Why should someone who lives in the Virgin Islands -- a colonial possession -- be treated the same, tax-wise, as a mainland American who gets to vote in congressional and presidential elections? Ever heard of "no taxation without representation?" How about we end the occupation of the Virgin Islands and Puerto Rico, etc., along with Iraq?

And now you say that corporate welfare for debt collectors sounds like a good idea, it just didn't work out well? Yes, let's steal tax money from me to pay a debt collector to steal tax money from someone else. Luckily, you at least admit -- once given permission by Madam Pelosi -- that this isn't working out. The idea itself is entirely immoral, though.

Why did Walberg vote against this bill? Because he is part of the corporate-welfare-industrial complex. Even if he did not receive bribes from the bill-collecting lobby, his Gestapo partymates did, and he's in Washington to do their bidding.

I do like how you touch on Mullah Walberg's 23% sales tax proposal. This is where he's vulnerable, in my opinion, if someone were to attack him from the limited-government side. Walberg is not a constitutionalist, he is a National Socialist.

I love your blog!
If passed by the Senate, and signed by President Bush, this act will require persons who give up U.S. citizenship or long-term residence to pay a tax on all unrealized gains of their worldwide estate that exceed US$600,000. The gains will be assessed based on the fair market value of the assets and the tax due within 90 days of expatriation.

While I may understand the intent of the legislators to punish un-patrioctic US citizens wanting to abandon the United States for tax reasons, I do find any logical justification to impose the same "exit tax" on foreigners who have worked and paid taxes in the United States, and have never become US citizens as they have always intended to return to their country of origin. Furthermore, how can the US legislator assume that a foreigner returning "home" would do it for tax reasons? Repatriating is a sacrosanct right of every human being and it should be respected by US legislators and not made prohibitive by the imposition of an exit tax that would force foreigners to liquidate any assets the own worldwide in order to return "home".

The US promotes and supports freedom, civil rights, free trade, patriotism etc. but with this bill it would actually do the opposite. What would the US legislators and citizens say if France, Germany, Italy, Spain etc. would impose the same "exit tax" to US citizens residing there?

The content of this bill has not yet received coverage by any media. Personally, I think that most US voters would be shocked to hear what their legislators are trying to do to non-US citizens living in the United States.

Foreigners who are considering to move to the United States would also think twice before moving ahead once they know that this country imposes an "exit ticket".

Certainly, the already damaged United States' image would not benefit internationally from the passing of this bill.

The United States should want to continue being a leading country where people from all over the world dream about moving to. The imposition of an "exit ticket" would certainly send a bad signal and further contribute to deteriorate the already damaged image of this country internationally.

Resident aliens who REPATRIATE should be exempted from this outrageous exit tax.

Milo Argenio
I liked it.
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