Harry Reid Confused by “Voluntary” Tax
The saying goes: “Only two things are certain: death and taxes.” With April 15 upon us in a few weeks it’s hard to believe paying taxes is voluntary. Yet, that’s what Sen. Harry Reid tried to tell Jan Helfeld.
Reid is confused by what he means by “voluntary.” Paying income taxes isn’t voluntary. If we earn income we have to pay tax. Now, the U.S. system has what’s called “voluntary compliance.” Prof. Jonathan Siegel describes it:
So what does the IRS mean when it says it relies on “voluntary compliance”? It is referring to the primary method by which it enforces the (mandatory) duty to pay taxes. The IRS recognizes that this is a huge country and there are hundreds of millions of people who have a duty to pay taxes. The IRS can’t follow each of us around personally and force us to pay. The system can function only if most people voluntarily comply with their duty to pay. If everyone in the country simultaneously stopped complying with the tax laws, the IRS would be helpless. It doesn’t have the resources to bring 200 million tax prosecutions. So the primary method of tax enforcement used in this country is the fact that most people voluntarily go ahead and comply with their mandatory duty to pay their taxes.
But make no mistake about it: the duty to pay is mandatory. If the primary method of enforcement of that duty (voluntary compliance) fails for a particular person, the government hauls out the secondary method of enforcement: a tax prosecution. It can go after the nonpayer in a civil action, or seize assets of the nonpayer, or bring a criminal case that can land the nonpayer in prison.
“Is Taxation Voluntary?” [via Betsy’s Page]
[picture via swaters]
Reid is not confused on these points. He made exactly the distinctions you quote above, in his original statement.
He did not use the term “voluntary compliance” - he simply said “the system” is voluntary - but he explained the point clearly and accurately. He said explicitly that it is not voluntary to pay taxes, but that the method of collection - through individually-prepared tax returns and tax payments - is voluntary, which is exactly what is meant by that term in tax-policy usage. Those are the same points made in the quote you give, so I hardly see in what way you think he was wrong.
If your complaint is that he did not work the word “compliance” into it, that seems like you’re stretching pretty hard to find something to object to. It’s obvious he knows perfectly well how the system works - he described it accurately, and the only confusion evident on the video was that of the questioner.