The IRS is corrupt? Je suis choqué!

What follows is an Op-Ed from the May15, 2013 Wall Street Journal.  It was written by one of my favorite writers - Dr. James Bovard.  Enjoy...or throw up...

Many Republicans are enraged over revelations in recent days that the Internal Revenue Service targeted conservative nonprofit groups with a campaign of audits and harassment. But of all the troubles now dogging the Obama administration—including the Benghazi fiasco and the Justice Department's snooping on the Associated Press—the IRS episode, however alarming, is also the least surprising. As David Burnham noted in "A Law Unto Itself: The IRS and the Abuse of Power" (1990), "In almost every administration since the IRS's inception the information and power of the tax agency have been mobilized for explicitly political purposes."

President Franklin Roosevelt used the IRS to harass newspaper publishers who were opposed to the New Deal, including William Randolph Hearst and Moses Annenberg, publisher of the Philadelphia Inquirer. Roosevelt also dropped the IRS hammer on political rivals such as the populist firebrand Huey Long and radio agitator Father Coughlin, and prominent Republicans such as former Treasury Secretary Andrew Mellon. Perhaps Roosevelt's most pernicious tax skulduggery occurred in 1944. He spiked an IRS audit of illegal campaign contributions made by a government contractor to Congressman Lyndon Johnson, whose career might have been derailed if Texans had learned of the scandal.

President John F. Kennedy raised the political exploitation of the IRS to an art form. Shortly after capturing the presidency, JFK denounced "the discordant voices of extremism" and derided people who distrust their leaders—President Obama didn't invent that particular rhetorical line. Shortly thereafter, JFK signaled at a news conference that he expected the IRS to be vigilant in policing the tax-exempt status of questionable (read: conservative) organizations.

Within a few days of Kennedy's remarks, the IRS launched the Ideological Organizations Audit Project. It targeted right-leaning groups, including the Christian Anti-Communist Crusade, the American Enterprise Institute and the Foundation for Economic Education. Kennedy also used the IRS to strong-arm companies into complying with "voluntary" price controls. Steel executives who defied the administration were singled out for audits.

A 1976 report by the Senate Select Committee on Government Intelligence on the Kennedy program noted: "By directing tax audits at individuals and groups solely because of their political beliefs, the Ideological Organizations Audit Project established a precedent for a far more elaborate program of targeting 'dissidents.'"

After Richard Nixon took office, his administration quickly created a Special Services Staff to mastermind what a memo called "all IRS activities involving ideological, militant, subversive, radical, and similar type organizations." More than 10,000 individuals and groups were targeted because of their political activism or slant between 1969 and 1973, including Nobel Laureate Linus Pauling (a left-wing critic of the Vietnam War) and the far-right John Birch Society.

The IRS was also given Nixon's enemies list to, in the words of White House counsel John Dean, "use the available federal machinery to screw our political enemies."

The exposure of Nixon's IRS abuses during congressional hearings in 1973 and 1974 profoundly weakened him during the uproar after the Watergate hotel break-in. The second article of his 1974 impeachment charged him with endeavoring to obtain from the IRS "confidential information contained in income tax returns for purposes not authorized by law, and to cause, in violation of the constitutional rights of citizens, income tax audits or other income tax investigations to be initiated or conducted in a discriminatory manner." Congress enacted legislation to severely restrict political contacts between the White House and the IRS.

In the following decades, the IRS regularly sparked outrage by abusing innocent taxpayers, but there was not much controversy about the agency's politicizing until Bill Clinton took office.

In 1995, the White House and the Democratic National Committee produced a 331-page report entitled "Communication Stream of Conspiracy Commerce" that attacked magazines, think tanks and other entities and individuals who had criticized President Clinton. In the subsequent years, many organizations mentioned in the White House report were hit by IRS audits. More than 20 conservative organizations—including the Heritage Foundation and the American Spectator magazine—and almost a dozen individual high-profile Clinton accusers, such as Paula Jones and Gennifer Flowers, were audited.

The Landmark Legal Foundation sued the IRS in 1997 after being audited. Its brief quoted an IRS official who had explained at an IRS meeting in San Francisco that audit requests from members of Congress or their staff had been shredded and also suggested how future requests from Capitol Hill could be camouflaged. The IRS told the court that it could not find 114 key files relating to possible political manipulation of audits of tax-exempt organizations.

One potential bombshell of the Clinton era that went relatively unrecognized was an Associated Press report in 1999 that "officials in the Democratic White House and members of both parties in Congress have prompted hundreds of audits of political opponents in the 1990s," including "personal demands for audits from members of Congress." Audit requests from congressmen were marked "expedite" or "hot politically" and IRS officials were obliged to respond within 15 days. Permitting congressmen to secretly and effortlessly sic G-men on whomever they pleased epitomized official Washington's contempt for average Americans and fair play. But because the abuse was bipartisan, there was little enthusiasm on Capitol Hill for an investigation.

The IRS has usually done an excellent job of stifling investigations of its practices. A 1991 survey of 800 IRS executives and managers by the nonprofit Josephson Institute of Ethics revealed that three out of four respondents felt entitled to deceive or lie when testifying before a congressional committee.

The agency also has a long history of seeking to intimidate congressional critics: In 1925, Internal Revenue Commissioner David Blair personally delivered a demand for $10 million in back taxes to Michigan's Republican Sen. James Couzens—who had launched an investigation of the Bureau of Internal Revenue—as he stepped out of the Senate chamber. More recently, after Sen. Joe Montoya of New Mexico announced plans in 1972 to hold hearings on IRS abuses, the agency added his name to a list of tax protesters who were capable of violence against IRS agents.

With the current IRS scandal, we may have seen only the tip of the iceberg. Thorough congressional investigations would no doubt help reveal the extent of the operation, and the criminal investigation announced by the Justice Department on Tuesday may prove fruitful as well. Regardless of what these inquiries uncover, though, we can be almost certain that IRS audits will remain irresistible political weapons.

Mr. Bovard is the author, most recently, of the e-book memoir "Public Policy Hooligan."

 

 

 

 

Jason Collins, Jackie Robinson and the true nature of liberty

I thought you might enjoy my Op-Ed in today's Orlando Sentinel
__________


It was bound to happen. After all, it is the year 2013, not 1947.

This week, for the first time in history, an active player from one of America's four major team-sports organizations announced that he is gay.

Jason Collins, an NBA player, did so — and immediately began drawing praise, criticism and comparisons to Jackie Robinson.

 

All three are undeserved.

 

I am a 46-year old heterosexual Christian who happens to also be a registered Libertarian and a former high-school and college athlete.

 

Allow me to use that background information to build the case that Collins' announcement was no more significant than if I came out today and said, "I am a 46-year old white economics professor who is also not gay."

First, the comparisons to Robinson.

In 1947, Robinson was at risk for being beaten, harassed, arrested, discriminated against, threatened, hated, suppressed and verbally assaulted — just for being a black man

As of April 29, 2013, being gay carries virtually none of the same risks as being black did back then.
Collins will not face anywhere near the level of hatred Robinson faced.

Sure, there will be random lunatics and other homophobic individuals who will say awful things and think awful thoughts. Very little of which will find the mailbox, Twitter account or ears of Collins.
He has opened himself up to a great deal more scrutiny by fans, the media and teammates, and for that it is logical to conclude that his decision took guts. But to compare what he will face and what he means to gay people with Robinson is severely misguided.

As to whether he deserves the praise that many have showered him with is also questionable.
What are we praising? Is it his lifestyle? Is it his willingness to openly tell America that he prefers to have sexual relations with men? Is it the fact that he is an athlete and somewhat famous and therefore a more important gay person?  Is it the opening of doors for other gay athletes to announce they prefer sex with their own gender?

Do we openly praise Tim Tebow for being a virgin? Do we openly praise athletes who are heterosexual and faithful to their wives? Do we need doors opened for other heterosexual athletes to make it easier for them to announce that they do not sleep around and father children with more than one woman?

Which of the two is more worthy of praise?

Finally, the critics...

To others who have characteristics closer to what is "normal" in our society, please note that the U.S. Constitution protects three rights: our rights to life, liberty and the pursuit of happiness.
Collins is not killing anyone; neither is he taking away anyone's right to pursue happiness or enjoy our liberty.

For those who would argue that there is something wrong with Collins and that his announcement is another sign of America dying under the weight of immorality, I would ask the following:
Does the Constitution give us the right to do things that others might disapprove of, as long as no one else's rights are violated? Yes, it does.

Is liberty important enough that we need to be tolerant of people who use their liberty in ways we dislike so that they will be tolerant of how others use their liberty? One could argue that it is.

Does the Bible say anything about heterosexual lust, adultery and fornication? Yes, it does. For many of us Christians, the challenge will be to not judge a man for announcing what we call sin while we engage in other sins that we announce to no one.

I would hope that we could all look at this announcement as one man who has decided to say something about his view of liberty and his view of himself. His teammates — whose liberty is still intact — have the right to reach their own conclusions about working alongside him. That is the nature of freedom, too.

There is really nothing more or less to it than that.

April 15, 2013 - it could be worse...

A few days ago I met with my accountant to settle my obligations, under the questionably ratified 16th amendment, which states that my income is subject to taxation "from whatever source derived." 

 

O.K., if you say so.

 

Two reminders in this brief posting today.

 

First, the Founders never intended for us to face what we all must deal with today.  They did not want us to pay taxes on our income.  This "direct tax" as they called it would be a violation of our natural right to property - income being that property. 

 

From 1776-1914 this was the law of the land.  No income taxes.  None.

 

100 years ago the sixteenth amendment was passed and beginning the next year we have been paying every year.

 

Which brings me to my second point. 

 

Look at the cartoon  above.  It is accurate.  These are the top marginal tax rates that we have seen over the last 100 years. 

 

Thank God - and Ronald Reagan - that we are now in an era where we do not pay these rates any more.

 

Yes, we still pay too much.  We still pay on too many things (capital, real estate, our death, our investments, our savings, our property and more).

 

But at least President Reagan charted a sharply downward course from which President Obama has a long way to go before he can restore the tax rates he would like - and that we used to have.

 

So, as I prepare to mail my check that reflects theft, plunder and a violation of my natural rights I will pause for a second and give thanks that the muggers in Washington, D.C. currently shake me down for far less than what they used to.

God Bless You, Lady Thatcher

This morning I received an email request from The Heartland Institute - a think tank I am an advisor to - requesting a comment for the media on the passing of Margaret Thatcher.

This was the first I had heard of her death.

After a long time of staring at the computer I was finally able to offer this:

“At a time when the world was facing a growing threat from economic collectivism, Lady Thatcher stood firmly rooted in the principles of economic liberty.  Her refusal to cave into the onslaught of union threats, the plea for greater government spending and higher taxes, meant that Britain transitioned from a nation mired in stagflation to one that came to be admired for pragmatic free market reforms.  The last of the giants of 20^th century economic liberty will be missed more than the world is prepared to comprehend.”

It is very difficult to explain to people who are much younger than I what impact the Iron Lady had on global economic freedom.

Even before Ronald Reagan arrived on the scene, Margaret Thatcher was engaged in a great struggle in Great Britain to impose a new economic order on her nation.

When World War II ended, incredibly the British voters gave Winston Churchill the boot and elected a Christian Socialist by the name of Clement Atlee.

Atlee and the Labor Party successfully nationalized Britain's major industries - forcing businesses to sell their property to the government.  The government promised to reform Britain's economy by protecting workers and nonworkers from the evils of capitalism. 

Within 30 years Great Britain had become one of the poorest nations in all of Europe.

Thatcher, who had learned economics as a girl working in her father's store, and from reading Hayek's The Road to Serfdom became Prime Minister in 1974 when England was facing roaring inflation, high rates of unemployment, labor strikes all over the place and growing welfare and tax burdens.

What came next can be seen in the video I am added below.

In just 10 years of her brilliant, pro-liberty reforms, Great Britain's economy was once again a beacon for other nations to emulate.

With her passing, the world is worse off.  The cause of liberty is on shakier ground and heaven has received one of the all-time champions of human dignity.

Thank you, Lady Thatcher.

For Sale: One Cat. Price: Negative $143.12

Six years ago my wife and youngest son spotted the cat in this picture trying to climb a tree at a nearby gas station.  The cat was just a kitten - abandoned - ridden with fleas and cute. 

 

Wife brings cat home.

 

Cat begins constant desire for food and normal medical attention.

 

Husband (me) not happy.

 

This cat costs me about $400 per year in food and vet bills.  That means if she (Tommi is her name) lives for 15 years I am going to be out $6,000.  That is 10 days (probably) in Europe or a month and half of camping in the Northwest or a decent used car or some help for my kid's education or other stuff that I want or need.

 

I do not want or need this cat.

 

She does not lay eggs like the two chickens we recently acquired.  She does not give milk.  She does not guard the house against intruders and Jehovah's Witnesses.  She does not do anything that any economist would claim is of value.  She does bring in the occasional flea, causes me to sneeze, takes naps on clothes I am trying to sell on eBay and even vomits on the floor from time to time.

 

I realize this is a horrible ad for a cat I am writing so please ignore the ad and look at the price.

 

Negative $143.12

 

That's right.  I, the supplier am willing to pay you, the demander, to take this cat off my hands.

 

And I am not joking. 

 

In a normal market, where supply and demand intersect at prices above zero, the buyer pays the seller.

 

In a market where the product is of such low value (think used chewing gum, junked cars and Julia Robert's movies), supply and demand can acually intersect at a price below zero.

 

This is where my cat enters the picture.

 

How did I arrive at the price?  Very simple - it is called trial and error.

 

I do not know what the equilibrium price is for this cat but I have fully disclosed her problems.  Her records are up to date and she is happy inside and outside.  She has many more years left to hang out with one of you cat lovers and you can have her and some cash to get started on giving her a new home.

 

Let the bidding begin.

 

 

 

 

 

 

The Miami Dolphins should have called my Dad...

I was going to write about gay marriage today but I have more important things on my mind this morning.

 

Many, many years ago - back in my middle school days - I was having some problems with certain folks in my school.  One night I lamented to my father that I wish I could just move a way to a new town.

 

My dad - never one to sugar coat things - looked at me and said, "Well, you can move but you take yourself with you."

 

Ouch.

 

He was trying to say that I might need to look at myself in the mirror to figure out why I was struggling at that moment in my life.

 

Stephen Ross, the owner of my Miami Dolphins, could have used my dad yesterday.

 

The photo above is of the new Miami Dolphins logo - their seventh since September 1966  (the same month and year I was born, ironically..).

 

I hate this logo. 

 

In a rare moment of free time last month I actually wrote the owner of the Dolphins a letter - telling him that if the rumors of a logo change were true he should defer to the design the Dolphins wore back when they actually won Super Bowls.

 

He did not take my advice.

 

Now, the Dolphins will run onto the field this fall with this awful design on their helmets.

 

My wife would claim that I am just really old-fashioned.  O.K., what is wrong with that?  Just because I prefer VCR's do DVD, don't own a cell phone, don't have a Twitter account, don't use Facebook and watch movies made, on average, 73 years ago does not mean I am somehow a young "old man".

 

I just don't like change - especially when it involves my sports teams.

 

My dad would have told the Dolphins leadership that a new logo will not impact their ability to catch passes, make tackles or look like something more than a joke this fall.  He would have told them that they can change logos but they will take themselves - and their losing ways - with them.  No disguise will mask their lousy play.  No new uniforms will cover up their poor coaching.

 

It is too bad they did not call him up.  He could have set them straight while adding, "Now my stupid son is going to complain all season as if any of this really matters....."

Welcome to the 29 hour work week

A while back I was sitting in a meeting at work when the subject of "Obamacare", a.k.a, The Affordable (stop laughing please) Care Act was brought up.

 

As you will see from the opinion pages of the Wall Street Journal below, the new law places a penalty on all businesses that do not provide health insurance to workers if said workers are employed more than 30 hours per week.

 

So, guess what?

 

The 29-hour work week is now coming for millions of Americans.

 

We were told in this meeting that the cost of keeping adjunct professors - many of whom work more than 30 hours - would have been in the millions of dollars and that it was very likely that some changes were coming to the number of classes, number of hours and number of adjuncts that would be working at Valencia College.

 

To that information, one person  - a fellow professor - spoke up and said, "Why can't the college just pay them more money so they can afford health insurance?"

 

Now is where you need to read the Wall Street Journal piece....

 

Thank you and good night.

 

 

 

ObamaCare and the '29ers

The Wall Street Journal

February 22, 2013

 

Here's a trend you'll be reading more about: part-time "job sharing," not only within firms but across different businesses.

It's already happening across the country at fast-food restaurants, as employers try to avoid being punished by the Affordable Care Act. In some cases we've heard about, a local McDonalds has hired employees to operate the cash register or flip burgers for 20 hours a week and then the workers head to the nearby Burger King BKW -0.42%or Wendy's to log another 20 hours. Other employees take the opposite shifts.

 

Welcome to the strange new world of small-business hiring under ObamaCare. The law requires firms with 50 or more "full-time equivalent workers" to offer health plans to employees who work more than 30 hours a week. (The law says "equivalent" because two 15 hour a week workers equal one full-time worker.) Employers that pass the 50-employee threshold and don't offer insurance face a $2,000 penalty for each uncovered worker beyond 30 employees. So by hiring the 50th worker, the firm pays a penalty on the previous 20 as well.

These employment cliffs are especially perverse economic incentives. Thousands of employers will face a $40,000 penalty if they dare expand and hire a 50th worker. The law is effectively a $2,000 tax on each additional hire after that, so to move to 60 workers costs $60,000.

A 2011 Hudson Institute study estimates that this insurance mandate will cost the franchise industry $6.4 billion and put 3.2 million jobs "at risk." The insurance mandate is so onerous for small firms that Stephen Caldeira, president of the International Franchise Association, predicts that "Many stores will have to cut worker hours out of necessity. It could be the difference between staying in business or going out of business." The franchise association says the average fast-food restaurant has profits of only about $50,000 to $100,000 and a margin of about 3.5%.

Because other federal employment regulations also kick in when a firm crosses the 50 worker threshold, employers are starting to cap payrolls at 49 full-time workers. These firms have come to be known as "49ers." Businesses that hire young and lower-skilled workers are also starting to put a ceiling on the work week of below 30 hours. These firms are the new "29ers." Part-time workers don't have to be offered insurance under ObamaCare.

The mandate to offer health insurance doesn't take effect until 2014, but the "measurement period" used by the feds to determine a firm's average number of full-time employees started last month. So the cutbacks and employment dodges are underway.

The savings from restricting hours worked can be enormous. If a company with 50 employees hires a new worker for $12 an hour for 29 hours a week, there is no health insurance requirement. But suppose that worker moves to 30 hours a week. This triggers the $2,000 federal penalty. So to get 50 more hours of work a year from that employee, the extra cost to the employer rises to about $52 an hour—the $12 salary and the ObamaCare tax of what works out to be $40 an hour.

Moving to 33 hours a week costs the employer about $10 an hour more in ObamaCare tax. Look for fewer 30-35 hour-a-week jobs. The law that was sold as a way to help business and workers is thus yanking a few more rungs from the ladder of economic upward mobility.

Many franchisees of Burger King, McDonalds, Red Lobster, KFC, Dunkin' Donuts and Taco Bell have started to cut back on full-time employment, though many are terrified to talk on the record. Activist groups have organized boycotts against Darden Restaurants, DRI +1.00%which owns Olive Garden and Red Lobster, for daring to publicly criticize ObamaCare. It's safer to quietly dodge the new costs and avoid becoming a political target.

But the damage won't be limited to franchisees or restaurants. A 2012 survey of employers by the Mercer consulting firm found that 67% of retail and wholesale firms that don't offer insurance coverage today "are more inclined to change their workforce strategy so that fewer employees meet that [30 hour a week] threshold." This week Nigel Travis, the CEO of Dunkin' Donuts, asked Congress to change the health law's definition of full-time to 40 hours a week from 30 hours so worker hours won't have to be cut.

The timing of all this couldn't be worse. Involuntary part-time U.S. employment is already near a record high. The latest Department of Labor employment survey counts roughly eight million Americans who want a full-time job but are stuck in a part-time holding pattern. That number is down only 520,000 since January 2010 and it is 309,000 higher than last March. (See the nearby chart.) And now comes ObamaCare to increase the incentive for employers to hire only part-time workers.

Democrats who thought they were doing workers a favor by mandating health coverage can't seem to understand that it doesn't help workers to give them health care if they can't get a full-time job that pays the rest of their bills.