Tuesday, September 27, 2011

Confessions of libertarian revenuer

About three weeks ago, I started corresponding with an IRS agent.  Yes, a living breathing IRS agent. 

After he convinced me that he wasn't going to try to audit my dachshund manure business, we started talking about the problems he saw within his agency.  After a while, I started feeling like a priest in a confessional. 

After I asked him to flesh out his story a bit, I got this gem of an email. 
Enjoy. 
For many years, I have been living a lie.

I have kept my orientation a secret from all but the most trusted of friends. I carry on my duties, day after day, knowing that if my peers knew my deepest feelings, they would hate me. I know that if my employer found out who and what I was, I might get fired. I bear the hidden guilt of someone who took an oath to do things contrary to my own conscience.

No, I am not a gay soldier recently liberated by the end of Don't Ask, Don't Tell. I am a libertarian who works for the federal government.

More specifically, I'm a Senior Revenue Agent for the Internal Revenue Service.

To some, that might sound a lot like a Vegan working for a meat packing plant. Although I accept your visceral revulsion at the apparent hypocrisy, I respectfully disagree. Most libertarians are for minimal government, not no government. Most libertarians are for lower, flatter, more fair, and more consistent taxes, not zero taxes.

I support a flat tax out of the principle of fairness. If that means that some of my coworkers (or me) gets laid off, so be it. I do worry about my ability to find a job, but I am not so unprincipled that I would alter my beliefs because they might impact my wallet. Even with a flat tax, the government and firms will still need accountants.

I will not provide too many details about myself or my duties, because I still want to keep my job. Also, my responsibility to my work demands confidentiality. So I will speak in generalities, and I pray that you will listen to my tale without requesting personal information or enlightening details. I remain in the closet.

I began working for the federal government not out of some sense of civic duty, but because it was a decent job offer at a tough time. I graduated with a Bachelor's degree in Accountancy, and scored a junior position with a Big Six accounting firm. I worked mostly on accounts for medium-sized firms, but eventually graduated to big accounts. Unfortunately, my esteemed private employer had some rather large difficulties with one client you might have heard of, and I found myself looking for other employment.

I don't believe the ethical stain of my previous employer transferred much to me, but finding work in our profession was difficult at that time. I was offered and accepted a job with the IRS. At the time, I considered myself a Republican with some socially liberal beliefs. I wasn't politically active, and I didn't find much joy in seeing the guys in the red jerseys win. Several scandals involving Republicans in my home state turned many people against the GOP, and an inexperienced, little-known Democrat from Chicago joined the Senate that year. I was more interested in women, sports, fast cars, and other things that young men like.

Earlier, in my sophomore year of college, I had taken an economics course in which the professor talked about Austrian economics. It would be more accurate to say he ridiculed them. But his contempt for their species only made me want to learn more about them. I discovered the Von Mises Institute in Auburn, AL, and applied for a scholarship to attend one of their summer sessions. I was accepted, but I had to cancel my trip at the last minute because a water line broke and flooded my apartment. I did, however, receive all the books which sat on my bookshelf, unread, for many years.

While applying for work, I began to read the works of Von Mises, Hayek, Rothbard, Bastiat, and others. I was enthralled with their prose, thinking to myself, "YES!, this is EXACTLY what I believe!"

Still, I didn't harbor any ill will toward my government. I didn't feel oppressed as a citizen or a taxpayer - yet.

I met a wonderful woman in Chicago and, shortly after I took the IRS job, we got married. We had a beautiful daughter together, and I bought a house near the federal building. Little did I know that my American Dream was going to turn into a nightmare of self-discovery and disillusionment.

For the first time in my life, I had to pay high income, sales, and property taxes. Fees for state services were high, and the cost of living was incredible. I was well-paid by the standards of mere mortals, but the vast majority of my income was consumed by my mortgage, taxes, insurance, and retirement savings. Even with a dual-income family earning into the six-digits, we struggled to pay our bills. Despite the large bills for taxes, the services we received were substandard by the measure of any other state I've lived in.

In my early years with the Service, I treated the accounts like nothing more than files to review. When I found tax delinquencies or suspected fraud, I reported them to Collections or Investigations. I didn't recognize that there were HUMAN BEINGS on the other end of my work. I didn't merely do my job with diligence, I thoroughly ENJOYED being a petty bureaucrat and prided myself on being the best there was. Happiness was an empty In-Box. I received awards almost yearly for the zeal of my examination efforts and subsequent collections. I was doing the Lord's work.

Things fell apart. First, the Service began to outsource some of our duties to private firms in order to save money. In order to protect my job, I joined our labor union. The union promised to "fight" to maintain our jobs, our pay, and our benefits. Indeed they did. A few years afterward, the government finally relented and brought Collections back into the government fold. They claimed that our system of Collections was more efficient, and that every dollar spent brought in $7 of revenue.

The following year, I was blind-sided with a spurious allegation of professional impropriety based on an anonymous complaint. After a deeply disturbing investigation that turned up no evidence, I was essentially cleared; but no one survives such an anal exam without scars. I ceased to be regarded as the "Golden Child" in my Division. The awards stopped even though I worked as well and harder than ever.

Once I became persona non grata, going to work was painful. But we had just begun this terrible recession and accountants were having difficulty finding work or retaining their jobs. I know, because the moment I was threatened with being fired, I began a new job search and no one was hiring.

The union was of little help to me. Sure, they sat by my side as the Service probed me, but they didn't do much to help. As we moved into the election season, I began to notice that the union was hell-bent-for-leather to elect Democrats to office. Although they are prohibited by law from contributing directly, they had a PAC that gladly accepted voluntary donations, and we received requests for donations frequently. Almost all of the letters from the union president spoke in bellicose rhetoric of "fighting" for more pay, more benefits, more employment, and she directed anger squarely at Republicans. There wasn't even a facade of impartiality. Their priorities were JOBS, PAY, BENEFITS.......... and every other facet of employment far behind.

I recall a story - perhaps apocryphal - of the head of the US Patent Office who suggested the office be shut down because everything that could be invented had already been invented. History has proven him to be short-sighted, but think about that for a moment! The head of a US government agency recommended that his OWN OFFICE be shuttered - that all of the staff be fired and his claim to glory and power be incinerated.

Do you think that the Secretary of Education would ever say, "Our work here duplicates and interferes with the work of the states, and we should close the Department of Education."?

Do you think that the head of the Federal Deposit Insurance Corporation would ever conduct a research study into deposit insurance that might conclude it causes moral hazard in the banking system, and therefore the FDIC should be disbanded?

Would a Secretary of the Navy suggest he had too many aircraft carriers, or would the Postmaster General ask that mail service be privatized?

Do you think that the head of ANY government organization would take a sober, independent, logical, and reasoned look at the work they do and conclude that it is a waste of taxpayer money?

Would any public sector union agree that their employee retirement plans were unsustainable and employment or wages were too high?

If you answered "yes" to any of these questions, you must be smoking dope (which I do think should be legal).

Earlier this year I was planning on attending a research conference in Washington, DC, but it was canceled because of budget cuts. In fact, most of our conferences this year were canceled. Most people would think that eliminating conferences to Vegas where $16 muffins and $10 boef bourginon appetizers are served is a good thing. Not so fast.

Conferences are often the ONE TIME per year where colleagues in our organization across the nation get to meet, face to face, to discuss our work. In a single line item, conference expenditures look enormous by layman's standards, but it is a tiny fraction of our operating budget. By far, the most important expense for a federal agency is employee pay and benefits. Even the combined expenditures on daily or weekly trips adds up to more than any 5-star resort conference. I submit that the attention given to conference travel lately is a red herring, designed to distract you from the real problem - excessive government.

I was watching Fox News last week and heard the commentators making fun of an Obama official's signature. I ignored the empty rhetoric and focused on the subject line in the memorandum: Eliminating Excess Conference Spending and Promoting Efficiency in Government.

http://www.whitehouse.gov/sites/default/files/omb/memoranda/2011/m11-35.pdf

The letter explains that President Obama asked all his federal agencies to review conference expenditures and other "unnecessary" expenses in order to make government more efficient. It proceeds to list the numerous steps The Chosen One has taken to reduce federal expenditures (notwithstanding an enormous increase in our deficit). The memo reads more like a campaign ad than a presidential directive.

Look, I have been examining corporate accounts for years, and I never saw a single company with negative earnings that could get back into the black by switching to Kyocera printers, reusing coffee filters, selling the corporate jet, switching to single-ply toilet paper, or by making the CEO work for free. A company awash in red ink has problems too large to be solved by small measures. And even after earnings resume, it takes years for a company to dig itself out of the hole it was in to restore customer, supplier, and investor confidence.

This nation is awash with red ink, and cutting nickels and dimes is like holding a bake sale to retire our national debt. Don't get me wrong, I don't condone waste no matter how small, but we need to think BIG if we're going to attend to our problems. If $16 muffins gets people angry enough to march on DC with torches and pitchforks, then show me my place in line. I think this anger will soon subside as attention turns to the next American Idol and the next two World Series teams. When a federal agency cancels a conference, it doesn't send the cash back to the Treasury - the canceled expense goes back into the agency budget where it is SPENT ON SOMETHING ELSE - something far less transparent and far less useful than a conference of professional employees. Trust me, I don't shed any tears over canceled conferences, but doing so accomplishes very little.

I believe that many of my coworkers and I are diligent and capable public servants, but I'd be lying to you if I said we were all necessary. I'd be lying if I told you that there weren't government employees who sit at their desks reading books. I'd be lying if I said there weren't too many layers of middle management where "good ol' boys (and girls)" were promoted just to keep them happy and in the government service. I've even seen the revolving door between the regulators and the regulated.

I remember a defining moment when I began to realize that I was referring PEOPLE to Collections. It's true that many of these people were tax cheats or incompetent at managing their finances. But I forgot about all the cases where we collected taxes ahead of all the employees, suppliers, customers, and creditors to whom the business owed money. Uncle Sam always jumped the queue. I forgot that many of these businesses fell on hard times, and their business' survival very well could have hinged on the amount of taxes they paid; but for onerous taxes, they might have made it.

Many of my colleagues never left bureaucrat mode. To the ingratiators, their primary stakeholder is their boss, not the taxpayers. Some are "Retired on Active Duty," coasting to an easy pension. Others don't bother to approach even a minimal standard of duty performance, and managers are too spineless to counsel them much less fire them. If they receive a middling evaluation, they'll still complain they are being poorly treated. It's tough to get HR to do their jobs in processing personnel actions swiftly and correctly. When you do outperform your peers, there is a lingering air of contempt for having raised the bar. Supervisors are notoriously risk-averse, adding their veto to anything that is even remotely innovative (and hence disparaging or disturbing of the status quo). Nevertheless, the official propaganda is focused on high performance and institutional change - you're just not supposed to believe it.

I've spent my own time (not taxpayer time) reading those Austrian books, and I'm impressed now more than ever. I clearly see the government stacking the deck for favored constituents. Now, I clearly see the strings holding all the puppets, making them dance for other people's amusement. I've seen various government programs which tried and failed to drag us out of recession.

But more importantly, as the housing and financial crisis inflated, I saw the government "profits" rolling in. At the IRS, we work closely with states since they usually base their taxes on federal taxable income. We monitor and research revenues from all sources. From the late 1990's through the mid-2000's, government revenues were pouring in everywhere. Tax authorities were ebullient - flush with revenues from artificially-created wealth. We knew the good times wouldn't last, but we didn't care. Taxes were our business, and business was GOOD!

After the crash, we continued to cruise on the momentum we had built. Friends of mine who worked for other federal agencies were working overtime (for additional pay, of course). When a recession strikes, the demand for government services skyrockets. Federal and state employees were never so loved and hated, feared and respected as when millions of people NEEDED our assistance and cooperation to take their turn sucking at the teat of government. Through two presidents and an accommodating Congress, life was still good for the federal employee.

But a funny thing happened on the way to the Colosseum to see the gladiator fights and the lion feeding. When the recovery didn't go as smoothly as planned, the taxpayers of this great nation began a quiet revolt. It was the sound and sight of millions of locusts, still in the distance, but heading straight for the harvest. Government entered panic mode. Managers in various divisions and agencies went into overdrive to justify with data the reasons for their continued existence. From bogus investigations and committees, to frenetic leadership, to pointless cheer leading, to political rent seeking. Values gave way to toeing the party line. It seemed that the only job of a government employee was to retain their job.

As the TEA Party gained momentum and Republicans stole Nancy Pelosi's gavel, the Earth shook in Washington, DC, and I'm not referring to the recent tremor. When Obama finally conceded that greater expenditures were no longer politically feasible, he embraced faux austerity. It was now no longer a matter of whether he would make cuts, but how much. And he was too beholden to labor unions to concede too much; this had to be a controlled release of pressure.

I remain in the eye of the storm. The changes to the payroll tax have kept us busy. I quit the labor union, refusing to donate one more dime to an organization that puts themselves above all other interests. It's their sense of ENTITLEMENT that is most repugnant. They can't fathom the idea that we could ever serve the American people with fewer employees and at a lower labor cost. In my position, I'm relatively underpaid as Accountants go, but I have a non-pecuniary benefit of relatively secure employment. I"m not complaining about low pay. There are many people at the IRS, though, who serve no useful purpose.

I empathize with anyone who has or will lose his job, and I hope I don't have to face that - but I already have once lost a job, and I may yet again have to stretch my neck for the executioner's axe. I have faith that my investment in human capital will see me through.

If I were the Head Guy in Charge, here's what I would do:

- Eliminate either the corporate income tax or the tax on dividends and capital gains
- Implement a flat tax with an exemption of one-half the national median income, adjusted annually
- Start from the top of Whited Sepulcher's list of government agencies and see which ones we could do without
- Have my Vice President start at the bottom and work up, meeting me in the center.
- Privatize social security, making each person responsible for their own retirement savings and ending redistribution
- Eliminate public sector unions for every purpose other than ensuring fair processes and procedures for employees.
- Privatize most government services wherever feasible
- No taxes on blood, sweat, or tears

I would end all forms of corporate welfare. I'd end the federal minimum wage. I'd require states to have a balance budget on a multi-year cycle with stress tests on their budgets.

I would move our national capital to Salina, Kansas, making the surrounding area as inhospitable to lobbyists as possible. Congress would become a part-time job. Remaining government agencies would be located in areas where land is cheap and high-quality labor is available. Washington DC would be renamed "Monument City," representing the monumental waste of resources and its role as a monument to monolithic government power and authority.

Barry Obama would be forced to take Amtrak back to Chicago, although I'd rather run him out on a rail in its original sense.

I'd make our military leaner and meaner, setting a more modest agenda for our role in international diplomacy and defense, but wielding a terrible swift sword against any enemy who dares to threaten us or our allies.

I'm not sure which Republican I support for the nomination yet. It's doubtful Ron Paul could win, and if he did he'd likely get chewed up by both parties.

Ladies and gentlemen, our government is rotten to the core. From the Civil War to the Great Depression and WWII and through the Civil Rights era and the Post-911 world, our government has taken on enormous power and eroded our liberty. It will take decades (not four or eight years) and extraordinary leadership by many people to unwind it. The entire culture of government must be changed.

I'd recommend a Constitutional Convention to rewrite our beloved laws in a way that even retarded lawyers could understand it, but to me they already possess crystal clarity for anyone willing to study the history of our great Republic. Could the Ninth and Tenth Amendments be made any more clear?

I don't claim to have all the answers, but I know in which direction I want to go. Thank you for your patient and kind attention. I'm spent. Rant concluded.

A libertarian revenuer.

3 comments:

CenTexTim said...

I read this yesterday and have been thinking about it off and on since then. I would love to contribute a meaningful comment, but other than a few minor quibbles I have nothing to add. He says it all, and says it well.

The Whited Sepulchre said...

Yes, he does. Hope to meet him soon.

Nick said...

I agree Tim. I read it four times today, thinking about what to say.

I wanted to agree. I wanted to disagree. But in the end, I had nothing significant to say.

That's a lot to carry.