A Modest Proposal for Shrinking Big Government

Proposed law: “Be it enacted, etc. etc. that the total personnel count of the Internal Revenue Service may not exceed 80,000 for the fiscal year 2011 and henceforth.”

As every American knows, and more importantly, feels, the IRS is big brother. The IRS collects private information on every one of us; the IRS pays informers to rat on their neighbors; the IRS compels us to undertake grueling paperwork burdens, and forces us into maddening thousands-of-hours legal disputes. All its horrendous weight of makework, fear, and accusation is upheld by the threat of sending us to jail, and seizing our homes, businesses, and savings if we do not satisfy its demands. The IRS is the repugnant heart of the big government most Americans want to see diminished.

It is not surprising, therefore, that in the laundry list of initiatives to shrink the state, “elimination of the IRS” figures prominently. The problem with this proposal is that it is too extreme. It implies the end of all revenues, and therefore the end of the federal government. Since just about everyone agrees that government should exist to do at least a few things, the proposal dies. In an attempt to rescue the idea, conservatives get themselves into the tangled business of proposing an entirely new tax system—like a value added tax or national sales tax—which would have to be enforced by some new agency, one just not called the IRS. For most people, the idea of exchanging one tax system and enforcement agency for another carries little appeal, so the idea of limiting the IRS dies.

Instead of this dramatic, draconian idea of eliminating the IRS, I propose a more modest limitation: putting an employment cap on the agency. The 2009 employment level at the IRS was 90,000 permanent, full-time workers. Let this be slightly reduced, to 80,000 workers, and fixed there.

It certainly can’t be argued that the IRS needs these extra 10,000 workers to collect taxes. In 1962, the agency had 62,000 workers and got along fine. Since that time, the advent of computers has greatly eased data handling tasks at the IRS, so staff levels should have fallen dramatically. No matter how many workers it has, the IRS will always say that it needs more agents to track down those who don’t pay their full tax burden. Theoretically, the argument is correct. If the IRS put microphones in every bathroom and a tax informer under every bed in America, there would be less tax evasion—but who wants to live in that kind of country? That’s why we fought the Cold War: to defeat the totalitarian surveillance state.

As a way of shrinking big government, in practical terms this proposal is indeed modest. One is cutting only 10,000 government employees, and only marginally reducing the IRS’s burden on Americans. But in symbolic terms, this measure is revolutionary.

The main reason why the public wants big government—Social Security, Medicare, college loans, farm subsidies, and all the rest—it that it has not truly counted the cost of these measures. Most people vaguely believe that government money comes from the sky; they don’t make the connection between government’s nice-seeming giving and it’s ugly and burdensome taking. Until now, political discussion has focused on benefit programs and the nice things they are supposed to do. Understandably, the public tends to approve of them.

To seriously begin to limit big government, we must shift attention from the giving side of the welfare state equation to the taking. This proposal to limit the size of the IRS accomplishes this change of perspective. It focuses attention on the question: Do you want more or less of the intrusive, burdensome bureaucracy that takes money away?

With the debate over big government posed in these terms, there’s no question in my mind how the American public will answer.

James L. Payne is a Research Fellow at the Independent Institute and Director of Lytton Research and Analysis.
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