A recent Treasury Report advises that the new and improved Internal Revenue Service could save a lot of money by streamlining documents and - gasp! - sending out less mail. Never missing an opportunity to see his name in the papers, Senator Baucus said the following:
“This is more than a matter of trimming government waste,” Baucus said. “Deficits in the publishing and postage budget at the IRS must be made up somewhere, and that can mean fewer resources to address other important objectives.”
Okay, that’s all fine and great, but remember when Big Sky Cairn uncovered the unnecessary millions spent on the stimulus package that came out of Baucus’ committee?
Here’s how much - in administrative dollars only - it cost Baucus to give you a rebate instead of a credit/cut.
Cost of mailing the rebate notice: $41,800,000.
Cost of mailing the rebate check: $42,000,000 (conservatively)
Estimated total expense to the taxpayer: $84,000,000.
Beyond this, there’s a cost to the economy from the lag between when people pay their tax and when they get their rebate. Taxpayers must front the cash to Uncle Sam for the time between when they pay their taxes and receive the rebate check. In other words, the tax rebate is taking money out of the economy for 30-90 days at the exact time that we need it most.
It would have made more sense fiscally and economically to provide taxpayers with $600 tax credit which would 1) credit any outstanding balance owed to the IRS and/or 2) get added to an existing refund? For the taxpayer, this would have accomplished the same thing as sending the rebates separately except it would have saved over $80,000,000 in administrative fees and infused the money into the economy without first having pulled it out.
I guess it’s a lot easier to send out a press release demanding some fiscal accountability than to actually pass the laws that make that accountability possible. In this case, Baucus takes a political victory lap at the taxpayers’ expense, and then criticizes the pit crew for the extra gas it used to take that lap. Classic.
Posted in Max Baucus | | Write a Letter to the Editor
I have no way of knowing that $84 million is not a reasonable cost for notifying people about their rebate and sending them the check. The notice is a necessary accounting device, to prevent or minimize fraud. I don’t see that being a large expense in government terms though it seems like a lot of money to an individual.
Also, the source of the rebate is not our tax dollars. We are borrowing that money - it is being added to the Bush deficits. I thnk there’s a fundamental understanding here on your part about how this program is designed to work. Letting us keep our money is not stimulus, as it makes no difference in economic terms whether individuals or government spend money. But making new money for people to spend is stimulus.
Not saying I like it. I think it’s bogus. Just setting you straight.
“fundamental understanding” was of course meant to read “fundamental misunderstanding” on your part.
Wow, you missed the point pretty spectacularly. It’s almost 100 million dollars Mark - that could have been saved if Baucus’ bill had been a tax credit (instantaneous) instead of a tax stimulus (that required mail).
The point here - the one that you were nowhere in the vicinity of - is that Baucus is a raging hypocrite. That is all.
And that $84 mil doesn’t even take into account the taxpayer money that he spent sending Jack the Blogger and thousands of other Montanans a postcard telling them of his great work to get their stimulus check to them.
“For the taxpayer, this would have accomplished the same thing as sending the rebates separately except it would have saved over $80,000,000 in administrative fees and infused the money into the economy without first having pulled it out.”
I agree, this stimulus program is a bastard child of politicians trying to please everyone. As a tax preparer, I did reams of unnecessary returns for seniors who don’t have to pay tax to secure their payment. It was ridiculous.
But as I said, $80 million is nothing in the larger scheme. We spend that much in a few minutes in Iraq every fleeting day. And note that you say “without first having pulled it out”. Again, you misunderstand the nature of stimulus. It’s new money, and not tax money. Otherwise, it doesn’t stimulate.
Hypocrisy is the mother’s milk of politics. What’s remarkable is how the partisan can spot in in his opposite, but is oblivious to it in the people he supports. You’re just a Republican partisan. You’ll really surprise me someday if you can spot some duplicity in your own party. But I won’t hold my breath.
And yes, before you accuse, I do it all the time. Read our blog.
