22 July 2008

Private Tax Collection A Bust

Using private collection firms to collect unpaid taxes isn't working. Contract oversight is poor and the approach isn't increasing tax collections as intended.

Perhaps there is some manner in which the federal government bureacracy is regulated, but the private sector is not, which makes tax collection less effective. For example, perhaps private debt collectors have more compensation package flexibility allowing them to give their employees greater incentives to increase collections. If that is the problem, it is within the power of Congress to change to offending rules while keeping tax collectors within the I.R.S.

On the other hand, if private debt collectors are no more effective at collecting taxes than government employees, which appears to be the case in real life, there is no reason to use private debt collectors or their methods.

No comments: