Can Taxpayers Stand Any More Relief?

Decrying the Internal Revenue Service and its complicated regulations, U.S. Reps. Helen Chenoweth and Mike Crapo have marched across Idaho during the past two months holding hearings and promising to slay the tax-collection dragon.

They have the wholehearted support of U.S. Sen. Larry Craig, also a foe of Rubik’s cube twists in the tax laws. All are promising to make taxpayers’ lives simpler.

But just last summer, all three of those Idaho Republicans voted for what critics from across the political spectrum are calling the most convoluted tax laws in more than a decade - the ironically titled 1997 Taxpayer Relief Act.

“If you have a capital gain, it’s lots worse,” Michael Ettlinger, of Citizens for Tax Justice, said of the new law. “Now there are six different capital gains rates. Child-care credit for lower-income people is really complicated,” he said.

Some members of Idaho’s congressional delegation say tax laws tend to be complex. Some blame it on the IRS. Some say it’s just one more reason to eliminate the income tax.

But skeptics say there is little hope for improving the federal income tax based on Congress’ track record.

“I think a lot of this (IRS) bashing has nothing to do with simplification,” said Ettlinger. “Bashing the IRS leads to a national sales tax or a flat tax, which lowers taxes on the wealthy and corporations.”

Newsweek financial columnist Jane Bryant Quinn noted that the recently anti-IRS Congress “passed 824 new income-tax changes, most of them cuts. They’ll require thousands of regulations, a couple of dozen new lines on your tax return and Cliffs Notes for tracking the weird eligibility rules,” Quinn wrote.

The more conservative Forbes magazine bluntly snapped, “The tax code was bad a year ago. The changes enacted this summer made it worse.”

Crapo acknowledges the 1997 tax bill was imperfect. “It was 800 pages of tax cuts,” he said, “it made the tax code more complicated.

“But it did reduce the tax burden.”

He doesn’t love the final product of last summer’s tax efforts. But “the Republicans went through a convoluted way of building the tax cut so it couldn’t be attacked as a tax break for the rich,” Crapo said.

Craig, meanwhile, specifically ties tax reform to IRS reform. “We have such a phenomenally complicated tax code,” he said during a recent interview. “Out of it grows a rather rogue culture.”

So how does Congress justify passing such complex legislation while it calls for simplification?

“It’s not Congresses’ intent to make it more complex,” said Mike Tracy, Craig’s chief spokesman. “The contradiction with the fact that Congress wants reform and the legislation doesn’t move us in that direction is on the rule and regulation side.”

Those rules and regulations are developed by the IRS, he said.

“The legislation may have been very clear and the IRS can make it very complicated,” Tracy said. That’s a problem with the way lots of federal agencies, including the Forest Service, implement legislation.

In addition, “the complications of the IRS grew under the Democratically controlled Congress,” Tracy said. Tax code simplification didn’t become the watch words until the Republicans came to power.

Chenoweth also regularly complains about the reams of IRS regulations. She issued a news letter after coming to Coeur d’Alene in December talking about the hundreds of tax forms and millions of words of regulations that will evaporate when the IRS is eliminated.

She also doesn’t see a contradiction with voting for legislation that compounded tax-code complexities while simultaneously stumping for simplification.

“A lot of these changes are tax cuts and if we are going to cut taxes, we are going to have to make changes,” said Chap Hyslop, Chenoweth’s press secretary.

The 1997 Taxpayer Relief Act may have made things worse, Hyslop said. But that doesn’t change Chenoweth’s message.

“The tax code is a mess, it’s a disaster, it has to be eliminated.”

, DataTimes MEMO: This sidebar appeared with the story: wHAT’S NEXT? Congress is expected to resume hearings on Capitol Hill next month on Internal Revenue Service reform and legislation promoting a flat tax or a national sales tax. Meanwhile, the IRS is holding taxpayer Problem-Solver Days in Boise and Spokane next month.