Don't Mess With Taxes

I know it's not exactly news that President Obama signed the $410 billion omnibus budget measure into law yesterday.

But I did want to mention it, in part because I wanted to use this cool drawing by Free Pig Art.

As I noted in my earlier post about the budget bill's now unnecessary provision to end private tax debt collection, the IRS got a bit more money in this package.

IRS allocations: The Treasury Department gets $12.7 billion for fiscal 2009, with $11.5 billion of that going to its bread-and-butter agency, the IRS. That's a $428 million increase over the IRS' fiscal 2008 amount.

Once the money gets to IRS hands, it's supposed to spend most of it, $5.1 billion, for enforcement, so double check those returns before you file! Another $2.3 billion goes for taxpayer service, $3.87 billion toward operations support and $230 million to deal with business systems modernization.

The Treasury's budget also includes $146 million for the Treasury Inspector General for Tax Administration.

Pork protestations: The budget numbers that got the most attention, however, have to do with the measure's earmarks, amounts specifically designated by members of Congress for certain projects.

The just-enacted law contains, in case you haven't heard, around 8,500 earmarks totaling $7.7 billion. Yes, that is a lot. And on their own, 8,500 and $7.7 billion are big, really big, numbers.

But the outrage also is a bit excessive.

The dollar amount actually is less than 2 percent of the overall bill. Did you really want Washington to shut down government again, and that includes offices outside the Beltway, over just 1.88 percent of the overall budget? Ask Newt Gingrich and his party how closing federal offices worked out for them in 1995.

Do as I say, not as I do: Then there's the hypocrisy of the whole situation.

Some of the lawmakers who voted against the bill and then got all self-righteous about doing so actually had their own pet projects in the measure. They simply took political advantage of grandstanding about earmarks while fully knowing that the budget, their items included, would pass.

MSNBC's First Read blog cites Taxpayer for Common Sense data that shows 28 Senators had a combined 307 solo earmarks totaling nearly $240 million. 

Now I'm not saying that we, Congress and the President included, don't need to learn a lesson or two (or three or ...) about belt tightening. But we also need to admit that an earmark isn't necessarily a bad thing.

In our personal budgets, we all earmark certain amounts we want to come up with to make a special project happen. Where eyebrows start being raised is when you think a particular earmark is ill-advised or extreme.

Many of you might gasp at, for example, the $3,000 that hubby and I want to put aside for a nice vacation, arguing instead that we should earmark that money for an emergency fund or retirement accounts. We can explain to you how that amount works for our situation (can you say tax season burnout?) and we'll listen to what you have to say about why your suggestion is wiser.

Evaluate, don't eliminate: The point is that a blanket end to earmarks isn't the answer. Instead we, and this time I specifically mean Congress and the President, need to quit bandying about this funny sounding word and focus on evaluating the types of projects that are funded and at what amounts.

Maybe that pig odor research project in Iowa doesn't need $1.7 million, but I'll guarantee you that folks living downwind of such agricultural operations will argue just as vociferously that they need at least some federal help.

Of course, coming to any sort of mutually agreeable accommodation takes some civil discourse, a bit of compromise and an acknowledgment of the type of government we have. We are a representative system, meaning we elect folks to do our will and a lot of time that will is to bring home the bacon from a local, now less smelly pig farm.

So don't go automatically denouncing some project that's in another state or Congressional district. Remember that on Capitol Hill, more so than many other places, one Senator's or Representative's treasure is another lawmaker's trash.

The goal is to make sure that all such projects have at least some gemstones in them.