Predictably, a recent survey found that more Americans say cheating — at least a little — on taxes is acceptable. This attitude coincides with the declining number of audits conducted by the IRS in recent years and, accordingly, the decreasing likelihood of being caught.
It probably also indicates the declining morality of the “Bill Clinton” generation.
About 76% of taxpayers agreed that we should cheat “not at all” on our tax returns — meaning that almost a quarter felt otherwise. More statistics to satiate the statisticians among us. Eleven percent said it was OK to cheat “a little here and there,” with 5% saying people should cheat “as much as possible.” The Roper polling organization conducted the survey for the IRS Oversight Board, an organization created by Congress as an independent agency watchdog.
Oversight Board chairman, Larry Levitan, said that although the survey only presents a short-term snapshot of taxpayer attitudes it does “indicate some erosion in the commitment to the importance of paying taxes.”
Each of the above numbers represents a significant change from 1999 when the IRS asked taxpayers the same questions. The biggest difference was in the “not at all” question: 87% said then that any cheating was unacceptable.
The disappointing result of last year’s survey findings comes as the IRS struggles to reverse a long decline in its enforcement activity. In 1988, one out of every 79 tax returns was audited, or a total of about 1.8 million. By 2000, the 716,000 audits represented only one out of every 232 returns.
To better evaluate the situation and devise corrective measures, the IRS recently announced it would randomly check about 50,000 returns this year. Tax experts have long agreed that confidence in the tax system erodes if people believe their neighbors are getting away with cheating.
I believe that a number of factors are influencing the increasing willingness to cheat.
The seriously reduced number of audits conducted by the IRS is a big factor. In years past, as many as 5% of all tax returns were audited. Today, that number has dropped well below 1%. That is simply not enough verification to encourage compliance.
Secondly, the morally-challenged Sixties generation is coming of age. With Bill Clinton as a role model, it’s easy to see how faithfulness in civic responsibility is slipping.
The third factor is the result of increased access to knowledge. Taxpayers now have much more information about the actual workings of government than has been available in the past. With the explosion of print media, around-the-clock cable news broadcasts and the increasing popularity of talk radio, politicians are being watched as never before.
Taxpayers are increasingly aware of every pork deal passed by the Congress and the Legislature. For example, in prior years most taxpayers believe that federal farm subsidy bills were a blessing to the small farmer. Now, most everyone knows that the biggest beneficiaries are the multi-billion dollar farming corporations who actually take a part of the federal subsidy to buy out distressed small farming operations.
On a more local level, a decade ago most Mississippians believed that legalized gaming would solve most of our education funding problems. Hundreds of millions of dollars of tax revenue were anticipated from the new industry, and that money would be funneled into our public schools. This was a major selling point in persuading taxpayers that gaming was what we should do. Now here we are with all the gaming taxes going, well, somewhere, and our public schools are in the midst of another fiscal crisis.
Many futurists believe that increased access to information will change the way democracies operate. There will be less opportunity to pull the wool over the taxpayers’ eyes than in times before. In my view, this is truly a blessing. An informed electorate is a basic building block of democracy.
Accepting that taxes are a cost of enjoying all that our country offers is a smart move. It is helpful when we accept our tax obligation with no more consternation than making the car payment. The voting booth is the proper place to voice our pleasure or displeasure with how our government is being managed.
Cheating on taxes makes us into liars — and that ain’t no way to live.
Continuing on last week’s listing of nifty things you can do with a newspaper, courtesy of the Mississippi Press Association, I suggest the following:
1. Use to pack with when moving
2. Roll into fireplace logs
3. Use as a blanket for bench sleeping
4. Roll up to make a telescope
5. Recycle for cash
6. Hang as temporary curtains
7. Cover the floor when painting
8. Use for wrapping gifts
9. Use as insulation
10. Clip and paste letters for ransom notes
Joe D. Jones, CPA, is publisher of the Mississippi Business Journal. Contact him at email@example.com.