Contributor

Ray Haynes

Mr. Haynes is an Assembly member representing Riverside and Temecula. He serves on the Appropriations and Budget Committees. [go to Assembly Member Haynes website at California Assembly][go to Haynes index]

The Duty Of The People
We're the government, we're here to help you with your taxes...
[Ray Haynes] 9/14/04

The American Revolution began over tax abuses. The colonists decried taxation without representation, saying that whenever a government abused its taxing power “…it is [the people’s] right, it is their duty, to throw off such government and to provide new guards for their future security.”

Indeed, the recall momentum can be traced to the illegal increase of the car tax by Governor Davis, an act so abusive that people returned to that great American tradition of peaceful revolution to remove, for the first time in California history, a sitting governor.

Not long ago, I visited the town of Perugia in Italy. On the wall above the dais of the Town Council of Perugia is a metal instrument with Etruscan writing on it, commemorating the elimination of a tax by the then King of Perugia in the third century before Christ. 2400 years ago, this Etruscan king eliminated a tax, and they are still celebrating the fact in Italy. The historical evidence is clear, whenever a government respects its citizens with fair and honest tax laws and burdens, the leaders of that government are celebrated. Whenever those leaders become abusive of that power, they are removed from office, either peaceably or otherwise.

Which makes the recent actions of the California Franchise Tax Board (FTB) disturbing. Since the inception of our current income tax system, it has been voluntary in the sense that you fill out your own tax forms, calculate the tax you owe, and then send it in. If the government doesn’t agree with you they can dispute it through the audit process.

FTB wants to change that. The board has tried to take over the on-line tax preparation business through legislation for the last several years. FTB has tried to pass legislation that would require you to use a computer tax program they prepared if you want to file your taxes over the computer. Right now, several companies offer relatively inexpensive programs that help you prepare your taxes, ask you questions to aid you in taking deductions, and then calculate the tax. This system maintains the benefits of the voluntary compliance system, where private companies profit from aggressively helping you keep your taxes as low as possible.

FTB has tried to put them out of business. The FTB has claimed that they could increase tax revenue by billions of dollars if they did your taxes for you with their program. The legislature previously balked on these attempts. But, two weeks ago, under cover of the press of business in the legislature, FTB was successful in getting a bill passed that creates a “voluntary” tax preparation program. If you file the Form 540EZ, the FTB will prepare your taxes for you, and send you the refund if you are owed one, or send you a bill if you owe. If you don’t like it, you have to appeal.

It is the first step to a complete government takeover of the entire tax-preparation business. Think about it—if there is a question about whether you deserve a deduction, do you think a government tax collector is going to give you the benefit of the doubt, like your accountant or tax-preparer does now? Of course not. That revenue agent is going to say you don’t deserve the deduction, and, if you don’t like it, you can appeal. These tax agents expect to increase the tax revenue by billions of dollars without one change in the tax law.

It is an abuse worthy of King George. It is not a stamp or tea tax, but it will prove just as onerous. But we can fight it by choosing not to participate. If you get their notice, say thanks, but no thanks. Until then I would recommend that you write and complain about what they are trying to do, all under the guise of making our life “easier”. It is the duty of the people to keep a wary eye on how their government works. Maybe, just maybe, those bureaucrats will change their minds. CRO

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