All Commentary
Monday, January 1, 1996

Customer Service, Government-Style

Taxpayers Are "Customers" of the IRS Like Convicts Are "Customers" of Prisons

Mr. Bandow is a Senior Fellow at the Cato Institute and the author of The Politics of Envy: Statism as Theology (Transaction).

One of the defining characteristics of denizens of the nation’s capital is their belief that government “serves” the people. This attitude naturally leads to much concern, particularly among the “good government” crowd, for government efficiency. Never mind whether government should be doing one job or another—it should be doing it effectively.

Indeed, there is nothing so irritating to the process-minded than someone attempting to put substance before “good” government. Consider the inside-the-Beltway gang’s opposition to tax cuts. Some critics are forthright: the money would be better spent on social programs or used to shrink the deficit. Others, however, worry that reducing taxes would, horrors!, burden the IRS and create more paperwork for taxpayers. “People will hate the Internal Revenue Service when it’s Congress’s fault,” said Cynthia Beerbower, Deputy Assistant Secretary of the Treasury for Tax Policy. “People are going to just freak out.”

For instance, the IRS figured that the proposed cuts in the capital gains tax would add seven lines to Schedule D. A 33-line Schedule W would be necessary for a credit to reduce the marriage penalty. Medical savings accounts would require a two-page form. And so on.

The contention that taxpayers would prefer not to have an option of filling in a few extra lines in order to keep more of their own money is dubious enough. In any case, there is something, well, curious, about IRS officials professing their concern about taxpayer paperwork. Especially since the IRS spent months preparing to carry out more than 150,000 excruciatingly painful audits as part of the Taxpayer Compliance Measurement Program. The TCMP requires that taxpayers prove every line on their return—by producing a marriage license for their spouse and birth certificates for their kids, for instance. Preparing for such audits, last conducted in 1988, can take days. Naturally, taxpayers, who are targeted at random and not for cause, aren’t compensated for their time. The psychic pain is even worse. One doctor calls the process “an autopsy without the benefit of dying.” Last year the agency put the TCMP on hold, but only because of budget cutbacks, not concern over taxpayer burdens.

Yet the IRS seems to genuinely view itself as an organization of, by, and for the taxpayers. For instance, Commissioner Margaret Milner Richardson cheerily announced that “The Internal Revenue Service has embarked on several major initiatives that will improve our service to you, the American taxpayer.”

We all like to be served, but exactly how does the IRS “serve” us? By taking our money to pay the bills run up by politicians in Washington. The IRS unabashedly seeks to instill fear in people across the land, lest someone think for even one minute that his money would be better spent by him than the government. If anyone has the temerity to act on that belief, the IRS will cajole, threaten, and penalize. This is “service”?

Well, yes, according to Ms. Richardson. “The National Performance Review [NPR], chartered by the President and led by the Vice President, conducted an extensive review of the Federal government. Its purpose is to ensure a government that works for people.” Which people? The customers, explained Commissioner Richardson.

The customers!? Yes, indeed. According to the Commissioner: “The NPR recognized the Internal Revenue Service as a leader among government agencies in customer service, but challenged the IRS to make even more progress toward customer service, with emphasis on quality, fairness, and efficiency. Improving customer service is central to the job of reinventing government to make it work better and cost less.” Happily, the “IRS accepted the NPR’s challenge. Our plans for customer service are a major step toward making better IRS customer service a reality.”

Normally no one could complain about a business that tried to make customer service its most important attribute. But the term “customer” implies voluntariness. A Wal-Mart customer shops there of his or her own accord. No one files with the IRS because he wants to. Taxpayers are “customers” of the IRS like convicts are “customers” of prisons.

Nevertheless, Ms. Richardson emphasized that she was serious. “I want you to know that the `S’ in IRS represents a commitment to serve you. We intend to meet your needs and expectations as taxpayers and as customers. If the service you receive from the IRS does not measure up to our Customer Service Standards, please let us know.” Well, sure. Taxpayers—er, customers—have no reason to complain so long as IRS agents—er, sales associates—smile as they seize one-third and more of people’s earnings. And as long as auditors—er, fiscal engineers—are efficient, customers shouldn’t fuss.

Perhaps what is most amazing about the Commissioner’s sentiments is that they seem genuine. As such, they help demonstrate why the gulf separating Washington from the rest of America is so wide.

Another bureau that has enthusiastically embraced Vice President Gore’s NPR initiative is the Agency for International Development. AID officials proclaim that their bureaucracy has been reinvented and are now fighting a scorched-earth campaign to defeat attempts to either eliminate their agency or cut back the so-called foreign aid programs which they administer. At some level, of course, it is better for taxpayers that AID not lose a lot of money through administrative waste, corruption at home and abroad, and so on. However, far more fundamental than AID’s efficiency or “service” level is whether its programs make sense. Which is precisely the issue agency officials prefer not to discuss.

Enthusiasm for process over substance afflicts more than just incumbent public officials. Commissions (the National Commission on the Public Service), academic institutions (Harvard’s John F. Kennedy School of Government), foundations (Carnegie), and other groups (Center for Excellence in Government) have all arisen from time to time to argue, in the words of the Center’s Mark Abramson, that “whatever government does, it should do well.” Most recent in this long line of “efficiency uber alles” is Action, Not Gridlock!, which surfaced in Washington in 1994 to issue a slew of press releases denouncing government gridlock, particularly the Senate filibuster and its role in blocking a vote on health-care reform. “Together we represent a wide variety of political views, but we share a common belief in democracy and in its most central principle—the principle of majority rule,” explained former Senator Barry Goldwater, a member of Action, Not Gridlock!

But majority rule puts process before the far more important substance. Even if a majority of people want to nationalize the medical system, they have no right to do so. Nothing in the Constitution gives government the authority to dictate how 250 million Americans will receive health care. And for Washington to attempt to do so would be sheer madness.

It has long been said that the rich are different than everyone else. So are members of the Washington elite. They really believe that the government equals the people. Which is reason enough for average people to keep a close eye on elected officials, appointed bureaucrats, and most everyone else in Washington.

  • Doug Bandow is a senior fellow at the Cato Institute and the author of a number of books on economics and politics. He writes regularly on military non-interventionism.