If you are one of the millions waiting for your 2020 tax refund, you are right to be frustrated – and even angry – about the fact that you’ll be expected to file your 2021 tax return on time, else find yourself at the mercy of the Internal Revenue Service (IRS) and their labyrinth of penalties and fines.
Additionally, even if you’re due a refund, you’ll be expected to pay your 2021 taxes regardless of whether you received it or not. Let me say that another way. Even though the federal government hasn’t returned your money to you after they involuntarily withheld it from your 2020 paychecks, you will still be required to pay for 2021 or face penalties and fines.
This is all due to a completely dysfunctional tax system, a federal government that has grotesquely overreached from its constitutional purview, an administration that has weaponized a pandemic and the IRS, and our lack of applying pressure on our elected class to radically reform or completely reconfigure how our government levies taxes.
The dysfunction is admitted.
In a recent op-ed, IRS Commissioner Chuck Rettig acknowledged that millions of taxpayers still haven’t had their 2020 tax returns processed and that refunds for 2020 are even further in arrears.
“We have taken extraordinary measures to work through unprocessed returns and correspondence, including mandatory overtime by IRS employees, creating and redirecting surge teams to address the inventories, temporarily suspending certain automated compliance notices and, where possible, modernizing operating systems to accelerate the manual processing of inventories,” he wrote.
Rettig said that although the IRS has already issued 4 million refunds, a massive backlog of unprocessed returns from 2020 remains.
It is estimated that the IRS had a backlog of over 8.6 million unprocessed individual income tax returns and 2.8 million business returns as of mid-December. It also had approximately 5 million pieces of unanswered correspondence.
Traditionally, the IRS has nearly 1 million outstanding returns to process at the start of the next year’s tax-filing season.
“Millions are waiting for their returns to be processed, and many won’t be able to reach us when they call with questions this filing season. This is frustrating for taxpayers and for us,” Rettig wrote. “We want to do more, but we face great challenges.”
Rettig said the agency is grossly understaffed and, while stating that the agency needs more federal funding, laid the brunt of the blame for the back-ups on COVID stimulus check issuances and his workforce being unable to work for pandemic-related health reasons.
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Why This Is Important
Never addressed in Rettig’s explanations is the fact that maybe, just maybe, the Internal Revenue Service – along with the total of the “income tax” scheme – is outdated, untenable, and terminally dysfunctional. Perhaps, just perhaps, there should be some serious talk about bringing the gleaning of a revenue stream for the US federal government into the 21st Century.
Of course, if the federal government hadn’t expanded its purview beyond the limitations set forth by the US Constitution and the Bill of Rights in their original forms, there would be no dysfunction. The lion’s share of the tax burden would be at the state level and the federal government would be a secondary consideration in our daily lives…as it was originally meant to be.
But to suggest that the federal government is a spendthrift and horrific steward of our nation’s tax dollars; to intimate that Congress and the Executive Branch regulatory bureaucracy routinely play favorites with the tax code at the taxpayers’ expense, well, that’s the unstated yet understood truth that we all tolerate, isn’t it?
Today’s warped, expanded, exploded, and exploitative income tax system came to be under – you guessed it – the Wilson administration. In 1913, according to the IRS’s own website:
“As the threat of war loomed, Wyoming became the 36th and last state needed to ratify the 16th Amendment. The amendment stated, ‘Congress shall have the power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several states, and without regard to any census or enumeration.’ Later, Congress adopted a 1 percent tax on net personal income of more than $3,000 with a surtax of 6 percent on incomes of more than $500,000…[t]he first Form 1040 was introduced.
“The Revenue Act of 1918…codified all existing tax laws and imposed a progressive income-tax rate structure of up to 77 percent.”
The Constitution, in Article I, Section 8, originally held that:
“The Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defence and general welfare of the United States; but all duties, imposts and excises shall be uniform throughout the United States…”
Article I, Section 9 also addresses taxation:
“No capitation or other direct tax shall be laid, unless in proportion to the census or enumeration herein before directed to be taken…”
It took a constitutional amendment shepherded by Wilsonian Progressives – the first true fascist administration in US history (the Biden administration being the second) – to create a disproportionate system of taxation that allowed Congress to reward its crony friends, while constantly adding regulations and tax legislation that bleeds the American people of their wealth.
With the politicization of the COVID event and the politicians’ dedication to bribing the public for adoration, we are all bearing witness to the fact that the tax system in the United States is fragile, unmanageable, unfair, and dysfunctional beyond repair.
There are many efforts to advance fair and equitable tax reform in the United States and all are worthy of examination. But two things are for certain.
First, we need to understand that the United States exists as a consumer nation, spending more than any other population in the world. This reality truly needs to be capitalized on in addressing a new, and fair system of taxation.
And second, whatever system of taxation is crafted for the American people, it needs – needs – to have protections built-in against opportunistic politicians carving our regulatory benefits for political and ideological purposes and a prohibition on an unchained bureaucracy creating any tax regulations without the exact consent of Congress through an ultra-super majority.
The “progressive” income tax system does not work. It has been corrupted by special interests and unethical, spendthrift politicians. Creating a tax system that serves the people, rather than the government is the first step toward reigning in the spending addiction from which our federal government suffers.
Creating a tax system that is equitable to the American taxpayer is the first step toward reigning in an overreaching federal government.
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