The Hill Report

This week in Washington the House debated the so-called “Tax Collection Responsibility Act” fiscally irresponsible legislation that shuts down a highly-successful contracted tax collection program to stack the decks in favor of Big Labor Bosses.

Today an estimated $345 billion in unpaid taxes exists – meaning that every year the average taxpayer who plays by the rules must pay an extra $2700 to cover the taxes not being paid by others.

To help close this “Tax Gap” of unpaid hard-to-collect taxes in 2004 Congress gave the IRS the ability to utilize the best practices and advantages created by the private sector to address this growing backlog of unpaid debt. This new program which began as a small pilot program that grows as it continues to succeed is estimated to bring in $2.2 billion in the first 10 years alone. And under this agreement the IRS would get the first 25 cents of every dollar to hire new collections professionals – a provision that will have a positive compound effect by helping to bring in even greater amounts of this uncollected revenue for the government.

The program has already been extremely successful bringing in over $30 million of uncollected taxes. It has received a 98 percent rating from the IRS for regulatory and procedural accuracy as well as a 100 percent rating for professionalism. Additionally less than 1 of the taxpayers contacted by these private agencies have filed complaints with the IRS – not one of which has ever been validated.

Despite this program’s track record of success on behalf of taxpayers who play by the rules and pay their designated share House Democrats voted on Wednesday to shut it down supposedly to protect the dues of big Government Union Bosses.

Opponents of the program have claimed that this is something that only the government can do—despite the fact that 40 out of the 50 States in America already contract these services out. They have also claimed that allowing for private debt collection will cost untold union jobs—a statement which is also based in an alternate reality. The private collection agencies working in this program do not replace a single IRS worker.

In fact the IRS has publicly stated that no government employee will lose his or her job as a result of this highly-efficient private contracting – instead they will benefit from the opportunity to focus their talent expertise and resources on higher priority more complex cases.

As of this July 2007 over 51667 “Cold Cases” that the IRS was incapable of collecting were given to private agencies—resulting in over 5300 full repayments to the Treasury and almost 2000 agreements to repay these debts incrementally. This means that the government received over $24 million of gross revenue that it would not have otherwise received.

Instead of eliminating this cost-effective program I supported a substitute offered by Congressman Phil English (R-PA) with whom I Co-Chair the “Zero Alternative Minimum Tax Caucus.” His amendment would have continued the private debt collection program and provided for AMT relief for millions of American families. Unfortunately House Democrats in the Rules Committee barred his amendment from being considered on the House floor thereby further proving this Congress’ non-existent credibility when it comes to defending the interests of hard-working taxpayers.

I remain committed to opposing legislation designed intent on preventing the private sector from growing and creating jobs in a desperate effort to appease the wishes of Big Labor Bosses.

The Deficit Drops. . . Again
On Thursday the Treasury Department and the Office of Management and Budget announced that the deficit fell to $162.8 billion for the 2007 fiscal year marking a $250 billion decline in the last three years. The deficit is now just 1.2 percent of the national economy which is lower than the average of the last forty years.

This deficit reduction once again highlights the strength of our economy and the success found in trusting the American people with their own money. Thanks to the tax relief provided by previous Republican Congresses lower taxes have spurred economic growth increasing tax receipts and driving down the deficit:  

• This year tax revenues rose by $161 billion to a total of nearly $2.6 trillion – the highest level of federal revenue ever recorded.
• Since 2001 the economy has grown for 23 consecutive quarters with real GDP growth averaging 2.9 percent a year.
• Job creation has thrived as over 8.2 million jobs have been created since the 2003 tax relief resulting in 49 consecutive months of job growth.