Republicans Want Private Debt Collectors To Replace IRS Agents

[desrt]

The GOP thinks it'll save the government money, but the facts suggest the opposite.

http://www.huffingtonpost.com/entry/republicans-private-debt-collection-irs_55b1570de4b07af29d580b9f?

"Senate Republicans want to replace IRS agents with private debt collection agencies, which are known to harass people for overdue credit card bills and student loan payments.

GOP senators have conjured up a host of exotic program cuts to pay for highway construction, which was once considered routine congressional business. Senate Democrats on Wednesday night fought off a GOP effort to pay for the highway funding with Social Security cuts, but the privatized debt collection maneuver remains in the bill.

While privatization is popular with congressional Republicans, collection agencies have terrible reputations. They frequently run afoul of the law by illegally harassing or intimidating borrowers, and sometimes even family members of borrowers who are under no legal obligation to make good on their relatives' debts. Collectors also often get in trouble with the government for tricking borrowers into ponying up payments they are not actually required to make.

Democrats are privately fuming about the GOP's move, which is intended to provide $2 billion for highway maintenance over the next decade. Previous efforts to privatize tax collection, though, have ultimately cost the government money. Two previous government efforts to save money by turning IRS collections over to private industry have backfired, Democratic Senate aides told The Huffington Post. In 1996 and 1997, the government lost a total of $17 million on one such project, the aides said. From 2006 to 2009, a similar effort led to losses of $4.5 million.

The federal highway program has traditionally been funded by a tax on gasoline, which the GOP has refused to raise this time around.  

The reason the government loses money when it farms out IRS duties is because the people who owe back taxes generally don't have any money. About 79 percent of people who failed to pay their tax bills in 2013 were essentially too poor to pay up, the Senate aides said, according to their internal analysis of IRS data.

Putting debt collectors in charge of those accounts won't create any new money for the households. It will, however, create new administrative costs as the government transfers its accounts to private companies -- along with a new set of headaches for many low-income people.

The Senate bill cleared a key procedural hurdle Wednesday night and is expected to receive a vote soon. However, Senate Majority Leader Mitch McConnell (R-Ky.) still has the option of moving to eliminate the private debt collection provision."

[mikesimon]

I don't doubt you've formed opinions. I just think they're based on very limited information. And that's limiting

[specialmom]

Sometimes it is definitely insightful.  Ising ones own life is often how opinions are formed.  In this case I do not agree with republicans. V

[mikesimon]

So, you had a bad experience and that alone informs your opinion. Lucky you're not a black woman. Just think of the conclusions you'd draw. Anecdotal evidence is so very limiting. Isn't that just special!

[specialmom]

I'm not sure this is a good idea, debt collectors.  They are often very wrong with the information they have in their relentless quest.  I've got a pretty common maiden name and am often harassed for other people's debts based on that last name and my first or even just my first initial.  I can't imagine taking that to the serious level of dealing with the IRS.

We had a sales tax issue for a business we owned and there were some hiccups and what the State treasure did was turn the case numbers over to various attorneys which then acted just like tax collectors.  (first we heard of the sales tax issue).  They were very difficult to work with so we just called the treasurer directly and figured out what we needed to do to resolve it. They gave us a letter to send back to the shark lawyers that were working on our issue trying to collect.  because just 'telling' them that we'd taken care of it wasn't enough and they kept harassing us.  

There are laws protecting people from debt collectors for a reason because some are way over the top in the way they handle things!  Tying the government to that type of business is a bit crazy.

Maybe the govt. should set up their own internal collection agency.  But I thought that was what the IRS was??  

[brice1967]

"Democrats are privately fuming about the GOP's move, which is intended to provide $2 billion for highway maintenance over the next decade.'  

Of course they are fuming.  Highway maintenance was supposed to be some of those "shovel ready jobs" we were promised.  Our highways between Wyoming and Nevada have never been in worse shape in my life time.  I 80 is a mess all the way to the state line with Nebraska/Colorado.

So much for that part of the infrastructure, eh democrats?

[desrt]

"........the GOP's move, which is intended to provide $2 billion for highway maintenance over the next decade. Previous efforts to privatize tax collection, though, have ultimately cost the government money. Two previous government efforts to save money by turning IRS collections over to private industry have backfired, Democratic Senate aides told The Huffington Post. In 1996 and 1997, the government lost a total of $17 million on one such project, the aides said. From 2006 to 2009, a similar effort led to losses of $4.5 million.

The federal highway program has traditionally been funded by a tax on gasoline, which the GOP has refused to raise this time around.  

The reason the government loses money when it farms out IRS duties is because the people who owe back taxes generally don't have any money. About 79 percent of people who failed to pay their tax bills in 2013 were essentially too poor to pay up........."


Third time's the charm? Maybe the people who couldn't pay their taxes the first two times this was tried under Clinton and under Bush II will have the money this time? And guess who gets to pay for the process of privatization, all so they can say they didn't raise gas taxes.
If this is how we're supposed to repair our roads, I'm investing in new tires now.