Another bit of tax news I noted while on vacation is that the IRS, as reported by David Cay Johnston in the NY Times, is using private collectors to get unpaid tax revenues, even though this costs more than 20 cents on the dollar, in lieu of the 3 cents per dollar that it would cost to hire more revenue agents to do the collecting. Plus, from a social standpoint, it's probably best NOT to make the tax collectors' incentive too strong by letting them, as private parties, keep a part of the take. As Paul Krugman pointed out, this is why we have moved beyond tax farming.
My wife saw to the heart of it, however. I told her about the Johnston story and she replied (kidding, of course): "Yes, but if we hired more revenue agents, the government would be bigger."
That (meaning that type of thinking) is exactly what my forthcoming book is about, I told her.
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