What Has Government Done To Our Money?

Posted: February 13, 2010 in Government, Personal

I write in protest of Arizona House Bill 2512, sponsored by Representative Rick Murphy.  This bill will prohibit Arizona cities and towns from hiring private, third-party contractors to provide tax services.

I work as a sales tax auditor for an Alabama-based company called Revenue Discovery Systems (RDS).  Formerly I worked for the Arizona Department of Revenue for about 18 years until the Arizona legislature “riffed” a third of the employees (a “reduction in force”).

Wise legislators don’t cut their tax administration and collections services during a budget crunch since tax auditors and collectors bring in many more times the dollars it costs to pay them.  But the question of whether Arizona legislators are wise is one that perhaps should be tabled for another time.

Unfortunately, HB2512 directly affects RDS’s ability to do business in Arizona.  It seems to me if the politicians at the Arizona legislature cannot even get their own budgetary house in order, why are they dictating to the cities with respect to their budgets?

I was surprised to see that ATRA, a supposedly conservative organization, supports the House Bill.  The main reason is that ATRA is responsive to business lobbyists.  These lobbyists are concerned that if cities start hiring private firms, businesses might have to do more paperwork.

I see this as a non-issue.  In fact, business will be able to file on-line and it would be a simple matter of transferring their general ledger sales information over to their online tax returns.  Why would that involve any more “paperwork” than businesses already have with the State?

Business lobbyists are also afraid retailers and other businesses will be subject to more audits.  However, RDS is not an auditing firm per se.  Their primary function is administration of taxes (accepting monthly returns, tax payments, business licenses, etc).  Auditing and collecting are additional services offered to the cities if they want to pay more for them.

I think the true conservative position in these days and times is that government should be decentralizing, not centralizing.  This bill would take away the right of cities to govern their own affairs, and would amount to unnecessary centralization of government.

Someone (in Alabama I think) has accused RDS of employing “bounty hunters” to go after delinquent taxpayers.  Apparently, being a bounty hunter is a bad thing in this person’s view!  In fact, the American institution of bounty hunting is an honorable profession.

But RDS employees are not bounty hunters, nor are they law-enforcement officials or revenue agents, nor can they capture people and throw them in jail.  Prosecution of tax cheats or delinquents is, and always will be, entirely up to state and city governments.

I think it’s sometimes easier for taxpayers to work with private auditors in that it’s not quite as “scary” as it might be in dealing with government employees.

RDS is not a get-rich-quick scheme for cities to solve their budget woes.  Just hiring RDS doesn’t mean cities will start seeing money flowing in like a torrent.  Lost revenue from the downturn in the economy isn’t something a private tax service can change.  However, RDS has enough experience and resources to enhance efficiency in tax administration, as well as to discover uncollected revenue.

Businesses will also benefit.  RDS is owned by a large collections firm, and they can presumably afford the latest in online technologies.  This will mean businesses will be better able to organize tax information.  Losing track of how much one owes in taxes can be unnerving.  So, reporting taxes to RDS can provide businesses a way to stay on top of all their tax obligations.

The bottom line is that cities should have the freedom to organize their departments, including their tax departments, in whatever way they deem beneficial.  If that includes hiring private companies, that should be their choice.

House Bill 2512 is therefore unconservative: it diminishes the freedom of local governments; it discriminates against one or two companies since the legislation will have a direct impact upon the ability of RDS to establish a business in Arizona; and it will rob cities and towns and businesses of the efficiencies that can be brought about by an experienced private tax service.

For these reasons it should be rejected.

Vern

2/13/2010

Note:  Revenue Discovery Systems does not give prior approval to any writings or links on this blog, nor is notified in advance of any writings or links on this blog, nor is responsible in any way whatsoever for any content expressed in any writings or links on this blog.   The views expressed above are my own opinions.

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