Among the issues most commonly discussed are individuality, the rights of the individual, the limits of legitimate government, morality, history, economics, government policy, science, business, education, health care, energy, and man-made global warming evaluations. My posts are aimed at thinking, intelligent individuals, whose comments are very welcome.

"No matter how vast your knowledge or how modest, it is your own mind that has to acquire it." Ayn Rand

17 April 2010

The IRS Ganders and Gooses

We Americans each have one great treasure in common.  We each have an equal, sovereign individual right to life, liberty, and the pursuit of happiness.  We also have two extremely important documents in our shared American history.  The Declaration of Independence and the Constitution of the United States of America.  The Declaration of Independence declares that we each have an equal, sovereign individual right to life, liberty, and the pursuit of happiness.  It is simply recognizing that right, not granting it.  It also notes that government is legitimate only to the extent that it serves the sole purpose of protecting and preserving the individual rights of the People.  It declares any government that tramples those rights to be a tyranny which men must overthrow.  Our second great shared American document, the Constitution, provides for a very limited federal government whose purpose was limited to preserving the individual rights of the People by providing for their defense and very limited and carefully enumerated other powers for their general welfare.  Our present government has largely ignored these governing documents.

Among many other problems, it fundamentally does not believe that we have the individual right to life, liberty, and the pursuit of happiness.  It taxes us to a much greater extent than that needed to provide for our defense, which is only 19% of the 2010 federal budget.  Such other of its legitimate functions do not even constitute a sufficient part of the pie chart of government outlays to be separated out from the 38% covering all other activities and shown in the pie chart below:


The incredible expansion of government has led to a necessary problem that we are no longer seen as individuals with equal rights.  To have equal rights, the scope of government must be very small.  As that scope grows, the government becomes the decider on who gets the benefits of the exercise of each of those powers.  If the primary function of government is to provide for the national defense, we all benefit equally with increased security for our lives.  But when the governmental powers include crop subsidies, ethanol mandates, carbon dioxide emissions policies, export loan guarantees, home mortgage guarantees, student loans for college, medical care regulations, alternative energy subsidies, electrical grid improvements, income taxes, death taxes, dividend and interest taxes, capital gains taxes, sales taxes, education tax credits, mortgage interest deductions, sulfur dioxide emissions regulations, railroad regulations, power plant regulations, airline regulations, banking regulations, insurance regulations, and an almost infinite number of other exercised powers picking beneficiaries and losers, we are not recognized as equal.  With this expansive vision of government we cannot be treated equally.  It is impossible.  Yet, the socialists commonly claim that they want government to exercise a new power in order to make us more equal.  The opposite must be the effect, at least with regard to our rights, if not always with regard to our income.

So, we have a society of gooses and ganders.  Some of us are ganders and most of us are gooses.  The ganders goose the gooses.  This was the way of life throughout human history until the American Founders tried to set up the government of the United States of America with a more enlightened vision.  In the early days of the republic, we fell short of the vision due to slavery and perhaps too great a role for religion.  In the past century, we have lost sight of this vision due to the obscuring vision of the Progressives who see the People as being in conflict with one another for material goods and services, which they value more than their sovereign, equal individual rights.  We too often have a materialistic viewpoint heavily laden with envy and jealousy supplanting a spiritual recognition of the equal right of every American to choose his own values and then to manage his own life in accordance with his chosen values.  The socialist vision is of two children fighting over a couple of toys with a parent, the ruler, to moderate the fight, while the American vision was of adults taking on the joys and responsibilities of living their own lives in a harmonious society of voluntary associations.

The IRS has long had the reputation of a piranha, for its role in tax collection.  This is an American federal government agency that according to a list compiled by Richard W. Rahn, a senior fellow at the Cato Institute, does the following:
  • Unnecessarily strikes fear into the hearts of tens of millions of your fellow citizens, causing such anguish and despair that some are driven to suicide each year.
  • Requires citizens to know 10 million words of rules and regulations because the failure to do so may result in draconian fines and even jail, while at the same time no one in the agency has a full understanding of all the rules and regulations it requires others to know.
  • Routinely ignores the constitutional protections against self-incrimination and the right to the presumption of innocence.
  • Seizes the assets of citizens without obtaining court judgments.
  • Penalizes marriage.
  • Discriminates against many of the nation's most productive citizens.
  • Destroys incentives to work, save and invest, and undermines job creation.
  • Routinely protects agency personnel who have engaged in citizen intimidation, misrepresentation or worse.
But, it also decides in other ways, which of us are ganders and which are gooses to be goosed.  Consider the case of the gander Tim Geithner, now Secretary of the Treasury, which manages the IRS.  In 2006, he was audited by the IRS, and they examined his tax records for 2003 and 2004.  They found that he had not paid his Social Security and Medicare taxes which were not paid by his employer at the time, the IMF.  They withheld his income taxes, but for some reason they did not pay the Social Security and Medicare payroll taxes.  The IMF did send out frequent reminders that their employees needed to be sure to pay these taxes themselves.  The IRS audit found that Tim Geithner needed to pay $17,230 in back taxes and interest.  What?  No tax penalty?  What's this?  If you or I paid taxes owed late, we would be hit with tax penalties that would make the interest look puny in comparison!  But not Tim Geithner.  No, he is a goose.

While he was vetted for the nomination by Obama to become the Treasury Secretary, it was discovered by the vetters that he had also not paid his Social Security and Medicare taxes for the years 2001 and 2002.  He and his tax expert had decided he did not need to pay them even after the results of the 2006 audit, because the statute of limitations meant he had gotten away with not paying them.  But, to ease his conformation by Congress, he then paid $25,970 of taxes and interest, but no penalty.

The vetters also found he had charged expenses for overnight camps for a child as dependent care tax deductions, though these are not allowed.  He had taken an early withdrawal from a retirement plan, a small business deduction, a charitable deduction, and a utility cost deduction on post 2004 returns which were not allowed.  He had also had an immigrant housekeeper whose papers expired while working for him.  So, he owed $4,334 of additional taxes and $1,232 of interest.  Still, he paid no tax penalties!

We have all seen the many TV ads for the services of companies specializing in getting your past unpaid taxes paid for a small fraction of the amount owed.  They often boast of the many employees they have who used to work for the IRS.  Apparently, they call up an old buddy still with the IRS and say, "Hey, Wesley, this is your old buddy Mouch!  I've got a client who needs a bit of help with paying $20,000 of overdue taxes.  They are finding it a bit hard to pay so much money.  I want to ask you to give me a little favor and agree not to charge them a penalty, or any interest, and just take $0.35 on the dollar of the overdue amount."  "Yeah, thanks old buddy."  "Yes, the money here is good.  When you retire or want to leave the government, I'll hold a position here for you."

Yes, despite the equal protection provision of the Constitution, some of us are more equal than others.  Many of us are gooses and some of us are ganders.  For most of us, the IRS is the beak of the gander and it is a cruel gooser.  I hope you paid all of your taxes, because those tax penalties will kill you.  It does not matter that year after year the IRS owed you money and they never, ever paid you interest on the money they held and used for maybe 9 months on average or more interest-free.  The IRS is the gander, and you are the goose.

Besides, the great socialist leader Obama tells us it is our patriotic duty to pay him our taxes so he can buy the votes of those who like his social welfare entitlement programs and those who like his subsidies for his friends.  He chortles at the Tea Party American protesters who gathered across the country on 15 April and implies they are unpatriotic.  And so the tyrant tramples on our individual rights and calls himself and his largely fascist and Marxist socialist followers American Patriots!

Interesting fact:  By definition, a gander is also a stupid and foolish fellow!  What an inverted society we have where the stupid and foolish fellows rule their intellectual betters.

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