Saturday, August 19, 2006

Uncle Sam Wants You! - A Follow-Up - Our Worst Fears Confirmed

From Ash:

When we were writing our piece, "Uncle Sam Wants You!" – about job openings that would be coming because of an aging federal workforce – Po and I warned that, if these government positions weren't filled, they'd be subcontracted out to companies - which would mean that the costs to the nation would increase exponentially.

Well, welcome to the United States of Haliburton, since an article in today's New York Times has our worst fears confirmed.

According to the NYT, the IRS is now subcontracting its debt collection to private companies – hiring three companies to track down and collect the taxes owed by over 12,500 people. And that's just the start. By 2008, 350,000 people's records will be distributed to ten different companies. The IRS could just hire more staff – they asked for Congressional approval but didn't receive it.

This will cost You, the taxpayer. How much? Hundreds of millions. Eight times as much as it would if the IRS hired enough agents in house. The IRS staff only costs 3¢ for every dollar collected. But the subcontractors will keep 22-24¢ of every dollar they collect: they'll get a cool $330 million of the $1.4 billion they're charged with collecting.

Hmm. What could the feds do with $330 million of your money that they are giving away?

Well, in FY2006, the federal government is giving $80 million in federal student loans. So that could wipe out over four years of students' federal loans. Imagine letting four years of students being able to go to school federal-debt free – or the 17,000 students whose entire debt we could forgive.

$330 million is about what the Department of Agriculture is sending to aid the Sudan and other countries of Africa that are starving to death.

That would fund federal drug courts for almost five years.

And remember – this is just the start of what will be a much bigger, costly program.

Take a look at this paragraph:

"The main objection so far to the privatization program is that it is more expensive than internal collection. “I freely admit it,” Mark W. Everson, the tax commissioner, told a House of Representatives committee in March."

But costs are just the tip of the iceberg. IRS records are considered basically sacrosanct, because they have so much information about you. Do you want the run of the mill debt collector to have all that on you? Because you know that the next step from debt collection will just be normal processing. And if that idea doesn't make you nauseous: Consider that one of the partners of the new IRS subcontractors has a prison record.

And since this is a profit-making exercise - the negotiated amounts, the waived penalties you could have negotiated with the IRS won't be something the debt collectors are going to agree to. So you the taxpayer will pay more, and will get less.

I'm sorry to say it, but this is just the beginning.


Anonymous Anonymous said...

America no longer exists. Contracting and government work has always been dispensed to the governing party's friends, but this administration takes the cake in attempting to make a prision out of lives of the middle and lower class. The privatization is mostly aimed at taking focus off wealthier fraudsters; the corporations and high net worth invdividuals, and squeezing the average to below average wage earner.
Further, among the contractors listed for work in Iraq and Afghanistan, NONE are Iraqi or Afghani owned companies. Is it any wonder that when we build in those countries our efforts are rewarded with bombs from so called 'insurgents'? The net effect of all of this is the same; whether it is in the US or overseas: it creates injustice and social injustices have a way of biting us back. This will only create more fringe groups who do not trust the government and we'll have more Waco's and Montana Freemen and Timothy McVeighs who see that they can no longer live under the strain of the system. We're all gonna suffocate in some form or another.

9:06 AM  
Anonymous Anonymous said...

It's worth notingthat gap between the rich and poor is growing and this administration more than any other has set the stage for staggering economic inequality. The article below puts it well:

"The unwritten theory seems to be that if citizens have personal freedom they will ignore economic inequality." I think it's no longer a theory. It's now become an unwritten law of governance here in the United States of Affluence.

12:44 PM  

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