Privatizing Tax Collection

The Bush administration has gotten Congress' green light to let the IRS hire private collection agencies to collect overdue taxes. The Bush campaign collected some hefty campaign contributions from those agencies in a couple of elections.

Let's do some quick math:

• The IRS figures it could collect $80 billion of the taxes it's owed.
• The average government worker at the IRS could collect $900,000 a year -- several times his salary.
• Debt collectors would keep 25% of what they collect.

That'd mean IRS workers would have to earn around $200,000 a year or more to be more expensive than the private sector solution. They make no where near that much. So the bottom line is that this is going to end up costing you money. But it's already happening. Around 40 states already use private debt collectors and the Education Department pays private companies to collect overdue student loans. (WashPost - Editorial)