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With the Affordable Care Act having passed constitutional muster, Republicans are once again targeting the Internal Revenue Service in order to deny funding for the ACA's implementation. Hoping to repeat the GOP's successful 1990s war on the agency, Republicans like Maine Gov. Paul LePage are resurrecting terms like "the new Gestapo" to slander the IRS. Of course, LePage's malicious smear isn't merely wrong on its face. It also suggests that in 2006 Mitt Romney must have unleashed a goose-stepping Massachusetts Department of Revenue after the passage of his virtually identical Bay State individual mandate.

As you will recall, the Affordable Care Act is forecast by the nonpartisan Congressional Budget Office (CBO) to reduce the U.S. national debt. It does this in part through $500 billion in new tax revenue over 10 years. But as it turns out, penalties for noncompliance with the individual mandate to purchase insurance represent only a small fraction of those funds. The CBO estimates only 4 million people (less than 2 percent of the population) will pay that penalty, producing just $65 billion in the first decade of the law.

Which is very similar to the experience in Massachusetts, where six years ago Governor Romney signed what MIT professor and adviser Jonathan Gruber called "the same f--king bill." Enjoying the consistent support of Bay State residents by a 2 to 1 margin, the bill Gov. Mitt Romney signed into law lowered the uninsured rate from around 10 percent to a national low of two percent. In March, a study by the National Bureau of Economic Research (NBER) showed that universal coverage in Massachusetts is indeed making people there healthier. And as it turns out, only 48,000 Bay State residents out of a population 6.6 million opted to pay the penalty ranging from $228 to $1,212 a year rather than acquire health insurance under Mitt Romney's version of the individual mandate. That's less than half the national rate projected by the CBO.

Nevertheless, Republicans are sounding the alarm about what the Fiscal Times called "the new health care tax the IRS won't enforce." Dredging up bogus charges that "the tax man cometh to police you on health care" by deploying 16,000 new IRS agents, House Republicans have scheduled hearings this week. Overlooking the ACA's tax incentives for small businesses and individuals needing help purchasing insurance, the GOP's best-and-brightest like Sen. Marco Rubio (R-FL) are issuing dire warnings:

Romney "supported it on the state level. Which means if you didn't like it in Massachusetts, you could move to another state," Rubio said on Bloomberg Television. "What are people supposed to do? Leave the United States now because of Barack Obama's brilliant idea to stick the IRS on millions of people? More importantly, the state of Massachusetts doesn't have the IRS. The IRS will follow you. Do people understand what this means?"
In his Saturday radio address, Maine Republican LePage claimed that he does. As the Portland Press Herald reported:
LePage said the court decision has "made America less free."

"We the people have been told there is no choice," he said. "You must buy health insurance or pay the new Gestapo -- the IRS."

If that kind of incendiary rhetoric, it should. Because back in the 1990's, Congressional Republicans used it to undermine both the Internal Revenue Service itself and the tax revenue it is supposed to collect.

Continue reading below the fold.

As the Los Angeles Times reported in 1998, "Americans are failing to pay $195 billion annually in taxes owed to the federal government, the highest estimate ever of the so-called tax gap." But that was before the full force of the anti-IRS jihad led by Phil Gramm and his Republican allies was brought to bear.

As David Cay Johnston explained in his 2003 classic Perfectly Legal, the GOP during the Clinton administration waged an all-out war on the IRS, turning the priorities for auditing Americans upside-down. Then as now, GOP spinmeister Frank Luntz framed the issue for his Republican allies, "Which would you prefer: having your wallet or purse stolen or being audited by the IRS?" As Sen. William Roth's Finance Committee held hearings in 1997 and 1998, Mississippi's Trent Lott decried the IRS' "Gestapo-like tactics" while Alaska's Frank Murkowski protested, "You don't need to send in armed personnel in flak jackets." Former Sen. Don Nickles of Oklahoma raged, "The IRS is out of control!" Congress went on to pass and Bill Clinton signed the IRS Reform and Restructuring Act in 1998.

Even as then-IRS Director Charles Rossotti warned Congress about an epidemic of tax cheating, Sen. Gramm in May 1998 denounced the agency. Peddling myths of jack-booted IRS agents tormenting American taxpayers, Gramm called on Rossotti to fire his 50 worst employees. Gramm concluded:

"I have no confidence in the Internal Revenue Service of this country. You do not have a good system. This agency has too much unchecked power."
As the New York Times recounted that spring, the plan to gut the IRS advocated by Phil Gramm and his allies was a popular political gambit, but almost certain to create incentives for tax evasion:
Mr. Gramm spoke at length of how he had ''no confidence'' in the I.R.S., remarks that were in sharp contrast to those of every other senator, who emphasized that the majority of I.R.S. workers were honest and most taxpayers law-abiding.

A variety of tax experts have said in recent weeks that attacks on the I.R.S., which polls show are a potent device to win votes and contributions for Republicans, give comfort to tax cheats and discourage honest taxpayers.

Which, of course, is exactly what happened. IRS staffing was slashed and audits of the wealthy dropped precipitously. As Johnston explained:
In 1999, for the first time, the poor were more likely than the rich to have their tax returns audited. The overall rate for people making less than $25,000 a year was 1.36%, compared with 1.15% of returns by those making $100,000 or more...Over the previous 11 years audit rates for the poor had increased by a third, while falling 90 percent for the top tier of Americans.
By 2006, as the New York Times reported, "Over the last five years, officials at both the I.R.S. and the Treasury have told Congress that cheating among the highest-income Americans is a major and growing problem." By 2010, estimates put the tax gap, that is, revenue lost to evasion, fraud and underreporting, as high as $500 billion a year.

Mercifully, the Obama administration in the face of continued Republican opposition and budget cuts to the IRS has made progress against tax cheating, especially by the rich. But when it comes to making sure people who flout the insurance mandate pay up, the Massachusetts experience shows it was all business as usual for the government's revenue agency. That is, what Paul LePage calls the Gestapo.

Originally posted to Jon Perr on Sun Jul 08, 2012 at 12:29 PM PDT.

Also republished by ClassWarfare Newsletter: WallStreet VS Working Class Global Occupy movement.

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Comment Preferences

  •  Phil Gramm Got Rid Of Glass Stegall..... (11+ / 0-)

    & his reprehensible wife, Wendy, was an exec at Enron.  Hard to think of a more ghoulish, thugish couple.  They should both be in prison.  

    The least Phil could do is STFU.  

    •  "Nation of Whiners" Now at AEI (0+ / 0-)

      He's at AEI these days. Second favorite place the Shrub administration hung out at next to FoxNews

      Senator Phil Gramm joins AEI to work on economic policy

      American Enterprise Institute (AEI) President Arthur Brooks announced today that former senator Phil Gramm has joined AEI to work on economic policy.

      Senator Gramm joins AEI as a visiting scholar after a long and distinguished career in public service, academia and the private sector. As a member of the House of Representatives and senator, Gramm authored the Gramm-Latta Budget Bill, which reduced federal spending, rebuilt national defense and mandated the Reagan tax cut. He authored the Gramm-Rudman Balanced Budget and Deficit Control Act, the first congressional effort to rein in the deficit. As chairman of the Senate  Banking Committee, he authored the Gramm-Leach-Bliley Act, which modernized the nation’s financial system.

      After leaving the Senate, Senator Gramm served for nine years as vice chairman of UBS Investment Bank and took part in such major transactions as the Visa and Bank of China initial public offerings, the Industrial and Commercial Bank of China rights offering and the Telstra follow-on offering that privatized the phone company in Australia.

      At AEI, he will be working on a comprehensive plan to fix the U.S. economy through reform of the tax code and entitlement programs such as Social Security and Medicare.

      Not blaming Bush for the mess we're in, is like not blaming a train engineer for a fatal train wreck because he's no longer driving the train.

      by JML9999 on Sun Jul 08, 2012 at 01:56:52 PM PDT

      [ Parent ]

  •  With all of Mitt Romney's tax haven problems (6+ / 0-)

    do they really want to make the IRS a campaign issue?


    It seems like they've run out of ideas they think can actually benefit them and are just etch-a-sketching the debate every week or so because nothing they could be talking about at any length is really a winner for them. It makes sense.

    •  They've all got so much dirt (3+ / 0-)
      Recommended by:
      addikell, ericlewis0, JML9999

      Everytime a Republican cooks up a new self-defense or a new attack line against the ACA, it seems to shed light on things that other parts of the Republican Party want to keep in the shadows.
      One opens up a new attack and another says "SSHHHHH don't mention that!!!"

      Everybody got to elevate from the norm....

      by Icicle68 on Sun Jul 08, 2012 at 01:14:54 PM PDT

      [ Parent ]

  •  testing the ideological fixity of the GOP base (1+ / 0-)
    Recommended by:

    Präsidentenelf-maßschach"Nous sommes un groupuscule" (-9.50; -7.03) "Ensanguining the skies...Falls the remorseful day".政治委员, 政委‽ Warning - some snark above ‽

    by annieli on Sun Jul 08, 2012 at 01:37:15 PM PDT

  •  Seriously (1+ / 0-)
    Recommended by:

    Paul LePage is the new Gestapo. He isn't qualified to be dogcatcher. Can't you just feel his wet dreams over making sure nobody who doesn't deserve it has access to health care through his words?

  •  they know that Americans are stupid & don't (0+ / 0-)

    want to pay taxes. We want something for nothing. We don't want to pay for services do we get moldy crumbs.

    Evil in America= GOP

    The radical Republican party is the party of oppression, fear, loathing and above all more money and power for the people who robbed us.

    by a2nite on Sun Jul 08, 2012 at 05:49:40 PM PDT

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