Feeds:
Posts
Comments

Archive for the ‘Government Thuggery’ Category

I recently appeared on CNBC to talk about everyone’s favorite government agency, those warm and cuddly folks at the IRS.

Our tax system is a dysfunctional mess, but you’ll notice that I mostly blamed politicians. After all, they are the ones who have unceasingly made the internal revenue code more complex, starting on that dark day in 1913 when the income tax was approved.

But I don’t want to give the IRS a free pass.

I’ve cited IRS incompetence and misbehavior in the past, most notably when discussing political bias, targeted harassment, and other shenanigans.

And, as illustrated by these five examples, we can always cite new evidence.

Such as lack of accountability.

…a new report from the Cause of Action Institute reveals that the IRS has been evading numerous oversight mechanisms, and it refuses to comply with laws requiring it to measure the economic impact of its rules. Congress has passed several laws, including the Regulatory Flexibility Act and the Congressional Review Act, that require agencies to report on their rules’ economic impact to lawmakers and the public. …These good-government measures are meant to ensure unelected bureaucrats can be checked by the public. …the IRS has made up a series of exemptions that allow it to avoid basic scrutiny. The agency takes the position that its rules have no economic effect because any impact is attributable to the underlying law that authorized the rule.

Such as inefficiency.

Private debt collectors cost the Internal Revenue Service $20 million in the last fiscal year, but brought in only $6.7 million in back taxes, the agency’s taxpayer advocate reported Wednesday. That was less than 1 percent of the amount assigned for collection. What’s more, private contractors in some cases were paid 25 percent commissions on collections that the I.R.S. made without their help…the report stated, “the I.R.S. has implemented the program in a manner that causes excessive financial harm to taxpayers and constitutes an end run around taxpayer rights protections.”

Such as rewarding scandal.

The Internal Revenue Service (IRS) issued more than $1.7 million in awards in fiscal 2016 and early fiscal 2017 to employees who had been disciplined by the agency, a Treasury Department watchdog said. “Some of these employees had serious misconduct, such as unauthorized access to tax return information, substance abuse and sexual misconduct,” the Treasury Inspector General for Tax Administration (TIGTA) said in a report made public this week. …in fiscal 2016 and early fiscal 2017, the IRS had given awards to nearly 2,000 employees who were disciplined in the 12 months prior to receiving the bonus.

By the way, the IRS has a pattern of rewarding bad behavior.

Such as pursuing bad policy.

…for 35 years the Internal Revenue Service has exempted itself from the most basic regulatory oversight. …Tax regulations (like all regulations) have exploded in recent decades, and of course IRS bureaucrats impose their own policy judgments. The IRS has in recent years unilaterally decided when and how to enforce ObamaCare tax provisions, often dependent on political winds. In 2016 it proposed a rule to force more business owners to pay estate and gift taxes via a complicated new reading of the law. …Secretary Steve Mnuchin’s Treasury…department is inexplicably backing IRS lawlessness with a string of excuses.

Again, this is not the first time the IRS has interfered with congressional policy.

Such as stifling political speech.

The Internal Revenue Service infamously targeted dissenters during President Obama’s re-election campaign. Now the IRS is at it again. Earlier this year it issued a rule suppressing huge swaths of First Amendment protected speech. …The innocuously named Revenue Procedure 2018-5 contains a well-hidden provision enabling the Service to withhold tax-exempt status from organizations seeking to improve “business conditions . . . relating to an activity involving controlled substances…” The rule does not apply to all speech dealing with the listed substances, only that involving an “improvement” in “business conditions,” such as legalization or deregulation. …This is constitutionally pernicious viewpoint discrimination.

In other words, the bureaucrats didn’t learn from the Lois Lerner scandal.

Now that I’ve hopefully convinced people that I’m not going soft on IRS malfeasance, let’s look at the budgetary issue that was the focus of the CNBC interview.

Is the IRS budget too small? Should it be increased so that more agents can conduct more audits and extract more money?

Both the host and my fellow guest started from the assumption that the IRS budget has been gutted. But that relies on cherry-picked data, starting when the IRS budget was at a peak level in 2011 thanks in part to all the money sloshing around Washington following Obama’s failed stimulus legislation.

Here are the more relevant numbers, taken from lines 2564-2609 of this massive database in the OMB’s supplemental materials on the budget. As you can see, IRS spending – adjusted for inflation – has nearly doubled since the early 1980s.

In other words, we shouldn’t feel sorry for the IRS and give it more money.

To augment these numbers, I made two simple points in the above interview.

  • First, we should demand more efficiency from the bureaucracy.
  • Second, we should reform the tax code to eliminate complexity.

The latter point is especially important because we could dramatically improve compliance while also shrinking the IRS if we had a simple and fair system such as the flat tax.

Last but not least, here’s a clip from another recent interview. I explained that the recent shutdown will be used as an excuse for any problems that occur in the near future.

Standard operating procedure for any bureaucracy.

P.S. My archive of IRS humor features a new Obama 1040 form, a death tax cartoon, a list of tax day tips from David Letterman, a Reason video, a cartoon of how GPS would work if operated by the IRS, an IRS-designed pencil sharpener, two Obamacare/IRS cartoons (here and here), a collection of IRS jokes, a sale on 1040-form toilet paper (a real product), a song about the tax agency, the IRS’s version of the quadratic formula, and (my favorite) a joke about a Rabbi and an IRS agent.

Read Full Post »

It’s not easy being a libertarian. Thanks to senseless and harmful government policies, you run the risk of being perpetually outraged.

Well, we have some good news about that final example.

In a unanimous decision, the Supreme Court has chipped away at the odious practice of civil asset forfeiture.

Professor Ilya Somin, from George Mason University’s Law School, explains the legal issues.

The decision is potentially a major victory for property rights and civil liberties. The key questions before the Court are whether the Excessive Fines Clause of the Eighth Amendment is “incorporated” against state governments and, if so, whether at least some state civil asset forfeitures violate the Clause. The justices answered both questions with a unanimous and emphatic “yes.” As a result, the ruling could help curb abusive asset forfeitures, which enable law enforcement agencies to seize property that they suspect might have been used in a crime – including in many cases where the owner has never been convicted of anything, or even charged. Abusive forfeitures are a a widespread problem that often victimizes innocent people and particularly harms the poor. …the Court…previously ruled that the Fourteenth Amendment incorporates nearly all of the rest of the Bill of Rights against the states, including the Excessive Bail and Cruel and Unusual Punishment Clauses of the very same amendment. Justice Ruth Bader Ginsburg’s majority opinion offers a good explanation of why incorporation of the Clause is easily justified under the Court’s precedents.

This morning, the Wall Street Journal opined favorably on the ruling.

Police and prosecutors around America have long used asset forfeiture as a cash cow, but a unanimous Supreme Court ruling Wednesday should make them think twice. The Bill of Rights keeps paying dividends even after 228 years. …Justices left and right agree. In her opinion for the Court, Justice Ruth Bader Ginsburg held that the safeguard on excessive fines, quoting earlier cases, is “fundamental to our scheme of ordered liberty” and “deeply rooted in this Nation’s history and tradition.” …the Court’s ruling in Timbs v. Indiana puts states and cities on notice. Some police departments have set annual targets for asset seizures, and a limiting legal principle has been nowhere to be found. During oral argument, Indiana’s solicitor general said that if a driver in a Ferrari was going five miles over the speed limit, that could be grounds for police to take the car. …defendants trying to protect their property against unjust state seizure will now have the Constitution firmly on their side.

While this decision is good news, let’s not get too excited.

What we really need is for the Supreme Court to rule that the entire practice of civil asset forfeiture is unconstitutional.

Unlike criminal asset forfeiture, there’s no finding of illegal behavior in cases of civil asset forfeiture. Indeed, in many cases, the government steals the property of people who aren’t even charged with a crime!

That’s why it is so outrageous and immoral.

Here’s a short video on the topic from the Institute for Justice (which, incidentally, deserves credit for the victory at the Supreme Court).

P.S. It’s worth noting that the first two people to lead the Justice Department’s asset forfeiture division have repented their sins and say the racket should be ended. Too bad Trump is on the wrong side.

P.P.S. Given the human misery it has caused, we shouldn’t laugh about asset forfeiture, but this bit of humor is very entertaining.

Read Full Post »

When I think of over-bearing governments with myopic enforcement of silly rules, I obviously think of the United States, especially the IRS, EEOC, FDA, and EPA.

And I also think of Germany, Japan, and other straight-laced societies.

But I don’t think of Canada. After all, that’s the home of Dudley Do-Right. Canadians are too nice to do dumb things!

However, I shouldn’t be basing my views on a cartoon from my childhood. It seems that Canadians are quite capable of bizarre behavior. At least when you look at their legal system.

Let’s review three additional examples.

I’ve written about some of the mistakes that American states (California and Colorado, for instance) have made when legalizing marijuana. Well, there are similar mistakes in Canada according to the Washington Post.

When the government launched Canada’s official recreational-pot market on Oct. 17, it was banking on the idea that many users would prefer to buy legally and that the black market would quickly begin to fade. …things aren’t going as expected. …a month after legalization, more than a third of Canadian cannabis users said they were still buying from their regular dealers and hadn’t even tried the legal system. Five illegal sellers in Quebec told The Washington Post their sales are slightly up.

It turns out that the legal system is a mess of harsh regulation.

In 2015, when the government first committed to legalization, many of them planned to apply to open private shops. “All of us thought, ‘Okay . . . I’m going to be able to come out of the shadows and I’m going to be able to pay taxes,’ ” David said. “As time went on, it became clear that’s not what they were after.” In Quebec and several other Canadian provinces, all cannabis stores are government-run, leaving no path to legality… said Lewis Koski, former director of the Colorado Marijuana Enforcement Division and now a consultant on legalization. “I can’t think of a state here in the U.S. that has a government-control model similar to . . . Canada’s.” Even in provinces that do allow private shops or dispensaries, including Alberta, Saskatchewan and Manitoba, small businesses face high barriers. It costs almost $5,000 just to apply for a license, and if approved, $23,000 each year thereafter in regulatory fees, with provinces often adding their own charges.

Let’s now look at a government-enforced Canadian cartel.

The maple syrup farmers of Québec have been saddled with compulsory membership to the Federation of Québec Maple Syrup Producers (FPAQ, according to the native French abbreviation) since 1990. The Federation holds monopoly rights over all maple syrup produced in the province, controlling wholesale distribution and prices. Anyone who dares to sell more than five litres of their boiled tree sap on their own farm or to local grocery stores faces a prison sentence and a fine of hundreds of thousands of dollars. …Angele Grenier and her husband, decades-long syrup farmers, have been smuggling their contraband syrup to the neighboring province of New Brunswick. In the dark of the night, they load barrels onto trucks and sneak across the province border to market freedom. For this terrible black market act of choosing their own customers and prices, Angele is one of Canada’s most wanted women. She has appealed the charges brought against her by the FPAQ, and her case is being taken up by the Supreme Court.

Maybe Canadian syrup smugglers can learn lessons from Norwegian butter smugglers?

Last but not least, the Toronto Star reports that Canadian law enforcement is capable of government thuggery.

At about 5 p.m. on May 13, 2009, Kosoian stepped on the down escalator at a subway station in Laval. She was heading to her history class at a university in downtown Montreal. Kosoian had used that same escalator almost every day for four years. She knew that at the front of the escalator, as well as at a spot halfway down, were yellow pictograms that said, “Caution … hold handrail.” She deemed the pictogram nothing more than a warning or recommendation. Besides, the H1N1 virus was making the rounds, and Kosoian considered the handrail a cesspool of microbes. …A police officer…stopped in front of Kosoian on the step below when the escalator had taken her about halfway down. The officer, Fabio Camacho, …ordered her to hold the handrail. Kosoian says she responded: “It’s my right to hold the handrail or not to hold it.” …when Kosoian reached the bottom of the escalator, Camacho and his partner, the officer who initially walked past Kosoian, grabbed her by the arms and took her to a nearby locked room that also contained a jail cell. …Camacho and his partner cuffed Kosoian’s hands behind her back and sat her in a chair. He searched her bag, found her driver’s licence and began writing her two tickets: a $100 fine for not holding the handrail, and a $320 fine for obstructing the work of a police officer.

It’s quite possible that Kosoian was being obnoxious and baiting the cops, but none of that changes the fact that not holding a handrail shouldn’t be a criminal offense.

Do cops in Canada bust into people’s houses to see if mattress tags are still attached (though perhaps only the U.S. is dumb enough to have such a rule)?

Interestingly, this episode from 2009 is now going to the Canadian Supreme Court.

The Laval police force and the transit agency…pressed for the fines to be paid, and Kosoian’s refusal triggered a municipal court hearing in May 2011. In March 2012, Judge Florent Bisson acquitted Kosoian of the tickets… Kosoian…launched a lawsuit against Camacho, the STM and the City of Laval. In August 2015, the Quebec Court dismissed it with a legal tongue lashing. …She appealed and, on Dec. 5, 2017, the Quebec Court of Appeal ruled against her in a 2-1 decision. …Kosoian and her lawyer again appealed, this time to the Supreme Court. …the Supreme Court has only granted about 10 per cent of the 500 or so requests for appeals it receives each year. So Thomas Slade, a lawyer who is not involved in the case, says he was initially surprised when the court agreed to hear Kosoian.

I’m not overflowing with sympathy for Ms. Kosoian, but there’s not much doubt that getting rid of stupid laws is the best way of avoiding this type of mess.

I’ll close with two observations. First, Americans can’t throw stones at our Canadian friends since we live in a glass house.

Second, Canada obviously needs to change some of its silly laws, but I don’t want this to be interpreted as an indictment of the entire country (notwithstanding Prime Minister Zoolander).

In recent decades, Canada has dealt with several issues (spending restraintwelfare reformcorporate tax reform, bank bailoutsregulatory budgeting, the tax treatment of saving, school choice, and privatization of air traffic control) in a very sensible fashion.

P.S. Though a Canadian politician is eligible for the hypocrite-of-the-century award.

Read Full Post »

In the world of public policy, it’s very easy to make fun of politicians (especially Barack Obama, Donald Trump, Hillary Clinton, Bernie Sanders, and Elizabeth Warren).

And there are plenty of jokes about certain issues in the public arena, particularly the IRS, but also gun control and Brexit. And I have entire pages dedicated to libertarian humor and communism/socialism humor.

But some topics are so grim that’s it’s not easy to laugh about them. There’s nothing funny about the horror of Venezuela, for instance, though there are examples of dark humor from that unfortunate nation.

Another topic that doesn’t lend itself to laughs is the horrid practice of civil asset forfeiture. I’ve shared many nauseating stories about how governments literally steal property from people who have not been convicted of crimes (or, in many cases, have not even been accused of any crime).

Here’s the latest absurd example, this time from Michigan.

Nearly 400 people in Wayne County who were never charged with a crime still lost property to law enforcement agencies last year through a legal procedure called civil asset forfeiture… Altogether, there were 736 asset forfeiture proceedings in Michigan in 2017 during which someone lost property to the government despite never being charged with any crime; this happened 380 times in Wayne County. …Jarrett Skorup of the Mackinac Center for Public Policy, who co-authored a recent report on civil forfeiture, said…it’s likely that these forfeitures disproportionately affected low-income individuals, who are less able to afford an attorney or navigate the legal system to reclaim their property. Revenue obtained from forfeited property typically goes to the agency that seized the property.

Yes, you read correctly. The agency that steals the property gets to keep the money, which is why the disgusting practice of civil asset forfeiture is sometimes known as “policing for profit.”

If this sounds like the kind of behavior you’d find in a third-world banana republic, you’re right.

Anyhow, is there any way we can find mirth and amusement in this reprehensible practice?

Actually, courtesy of libertarian Reddit, there is.

Kudos to the clever person who left this comment. Maybe the bureaucrats finally understand what it feels like to have property arbitrarily seized.

I’m not quite ready to applaud the actual thief, however, since a speed trailer only notifies people how fast they’re traveling.

If that person wants my praise, go after speed-trap cameras like this hero.

P.S. There is an example of money-laundering humor, and it features a former President.

Read Full Post »

I don’t think I’ll ever stray from libertarianism. But if I ever get tempted by the siren song of statism, I’ll bolster my resistance by reminding myself of how people have been victimized by venal government.

And if that doesn’t get my libertarian blood boiling, I’ll revisit some of my columns on so-called civil asset forfeiture. This is the policy that allows the government to steal your money.

I’m not joking. Bureaucrats can take your money (or property) simply by concocting a claim that it may have been associated with criminal activity.

They can grab your cash even though you haven’t been convicted. Heck, they don’t even need to arrest you.

Let’s look at some new examples of this odious practice. We’ll start with this video clip from a local news station in Sacramento, California.

And here’s another example from West Virginia, as reported by the Charleston Gazette-Mail.

A West Virginia State Police trooper issued Dimitrios Patlias a warning for failing to drive within his lane, just before seizing more than $10,000 in cash from him and his wife. …The trooper pulled them over, Smith said in an interview, …accusing them of smuggling cigarettes, to having drugs in the car, to gift card fraud. After searching the car, their persons, and Smith’s purse, the trooper let them go with a uniform warning citation. However, he also took the $10,478 in cash, the 78 “gift cards” in the car, and Patlias’ smartphone, according to a property disposition report. …Patlias and Smith wound up returning to their home in Egg Harbor City, New Jersey, stripped of all their cash but $2, without ever having been charged with a crime. …The seizure was part of a practice known as civil asset forfeiture, where law enforcement officers have the right to lay claim to property they argue was used in the commission of certain crimes. …the law seems to incentivize bad behavior from otherwise good police officers.“To me, this law, now that I’ve learned of it, it turns police officers into dishonest crooks,” she said. “I feel like I was in a movie.”

Yes, indeed, the cop was a crook in this instance. That’s because civil asset forfeiture creates a horrible incentive called “policing for profit.”

Efforts to curtail this disgusting tactic have not been successful in West Virginia.

In February, the state House Judiciary Committee considered a bill that would tie civil asset forfeiture to its respective criminal proceeding, i.e., if you’re acquitted criminally, the seized property cannot be forfeited. The bill died in committee.

But this story does have a happy ending. When this example of theft-by-government began to get publicity, the bureaucrats decided to return everything they stole.

After the Gazette-Mail reached out to the state police Monday with inquiries about the seizure, and after weeks of Smith calling police, the Jefferson County prosecuting attorney and local politicians, Smith said an officer returned her and Patlias’ possessions in full Thursday evening.

Speaking of good news, some governments around the country are curtailing this venal practice.

And the Utah Supreme Court also is taking a jaundiced look at civil asset forfeiture, even if only for procedural reasons.

The Utah Supreme Court has sided with a man pulled over in a traffic stop where police seized more than $500,000. In a unanimous ruling published Wednesday, the state’s top court ordered a lower court to reconsider who has jurisdiction over the money seized when Kyle Savely was stopped in a 2016 traffic stop. A drug dog alerted to the presence of narcotics, but none were found. Instead, a Utah Highway Patrol trooper found cash and seized it despite never charging Savely with any drug crime. …The libertarian-leaning think tank Libertas Institute, which jumped into the case, praised the ruling. They argued that state and federal agencies often split seized money. “The public is rightly outraged by laws that allow the government to take property from people not charged with a crime, as was the case here. It’s even worse when state laws designed to protect a property owner’s rights are not followed by state agencies, which is why we’re very pleased to see the state’s highest court unanimously holding them accountable,” Libertas Institute President Connor Boyack said in a statement.

What we really need, though, is for the Supreme Court to decide whether governments have the right to steal.

And that’s exactly what may soon happen, according to Jibran Khan of National Review.

Did you know that, in most states, the police can take your money and property without even charging you with a crime? Mundane actions such as having cash on hand have been cited as grounds for seizure, as a young man moving to Los Angeles to start a business discovered when his life savings were seized. He wasn’t detained, or charged with any crime — but he was left with nothing when the Drug Enforcement Agency took his cash. In any other situation, we would label this theft… Stories abound of abusive seizures justified under civil forfeiture. …A new Supreme Court case, however, might change that. …Justice Thomas has hoped for a civil-forfeiture case to come before the Supreme Court, so that this practice, which he views as incompatible with the due-process clause, can be analyzed on constitutional grounds. When it considers Timbs v. Indiana later this year, the Court will be able to do just that.

Kudos to Clarence Thomas for wanting to protect our rights.

If you need more evidence, Khan goes on the summarize why civil asset forfeiture is so reprehensible.

The system incentivizes policing for profit, rather than for public safety. The way that seized money is spent is just as disgraceful as the takings themselves. Departments have used forfeiture funds to buy Mercedes-Benzes, BMWs, Corvettes, Hawaiian vacations, and ski trips — just to list a few. They have also used these funds to buy military equipment, which has contributed to the dissolution of Sir Robert Peel’s concept of good policing that held the police should be well-integrated with the public rather than seeing itself as a military force. It’s no surprise that Brad Cates, who headed up asset forfeiture at the Department of Justice in the 1980s, describes it as “a free-floating slush fund.” The taking of property from citizens who are not charged with crimes to fund lavish lifestyles for government officials sounds like something out of the most dysfunctional Third World regimes. It’s heartening to see that the Supreme Court will hear the case. The practice is an affront to both constitutional and cultural norms, and has empowered law enforcement to engage in what would be considered criminality by any other measure.

Amen.

By the way, Brad Cates is one of two former officials who were in charge of asset forfeiture who now reject the procedure.

Sadly, this is an issue where Trump and his team are definitely on the wrong side.

P.S. Defenders of civil asset forfeiture sometimes tell me that I shouldn’t get upset because many of the people who lose their property are criminals.

I’m willing to acknowledge that some of these folks may not be model citizens, but I make two basic points.

  1. Our Constitution has a presumption of innocence, so people shouldn’t be punished unless found guilty by a jury of their peers. In other words, I side with the Founding Fathers rather than Jeff Sessions.
  2. Something shouldn’t be against the law if there isn’t a victim. This is why asset forfeiture laws, just like drug laws and money-laundering laws, are misguided and should be repealed.

Read Full Post »

It’s a judgement call, of course, but I think the IRS’s suppression of the Tea Party was the worst of all the Obama-era scandals.

Some people say the green-energy scams like Solyndra should be at the top of the list, but steering taxpayer money to campaign donors was just routine corruption. And the fast-and-furious scandal at the BATF was reprehensible, but did not have systemic impact on society.

Lois Lerner and the other hacks at the IRS, however, did something profoundly worse. They actively used the coercive power of government to suppress political speech.

The bad news is that Lois Lerner didn’t get punished. She’s now enjoying a fat taxpayer-financed pension. And other IRS officials successfully stonewalled with no adverse consequences.

Heck, Republicans actually rewarded the IRS with a bigger budget. And the Trump Administration so far has been AWOL on curtailing IRS abuses.

But that may be about to change. One of the President’s appointees has expressed support for protecting donors to nonprofit organizations.

The Wall Street Journal recently opined on this topic.

….a Congressional hearing this week offered potentially good news to nonprofits whose donors are under political threat. …Montana Republican Steve Daines asked Acting IRS Commissioner David Kautter whether the agency is considering the necessity of IRS 990 Schedule B. These are the forms that nonprofits must supply to the IRS listing donors who contribute more than $5,000. Schedule Bs are supposed to remain confidential, but AGs in New York and California have sought to require nonprofits to file them at the state level. Many Democrats see the form as a gift-wrapped list of donors to target, and a way to chill donations to conservative nonprofits. …Mr. Kautter acknowledged that he was “actively involved” along with Treasury Secretary Steve Mnuchin at offering more donor protection. …Nonprofits would still be required to keep their donor details, and if the IRS or other authorities had valid reason to suspect fraud they could demand to see the records. But requiring nonprofits to provide names each year to partisan AGs or tax bureaucrats is an invitation to repeat the scandal of the Obama years when Lois Lerner and the IRS targeted conservative nonprofits.

Brian Garst of the Center for Freedom and Prosperity also weighed in on the issue, pointing out that government has a sorry track record of persecuting political dissent.

…robust protections for speech were listed first among the Bill of Rights and have long been a cornerstone of our republic. …Like the secret ballot, respecting donor privacy and thus anonymous speech and association is essential to prevent majoritarian abuse and intimidation that subverts democracy. This was a lesson learned in the civil rights era after the shameful attacks on the NAACP and its supporters. …Lois Lerner was found to have illegally shared confidential Form 990 taxpayer information with the Federal Election Commission.

The solution is to not let the government get the information in the first place, especially since it isn’t needed to enforce any tax laws.

Unfortunately, invasive donor reporting requirements instituted by the Internal Revenue Service threaten to chill this critical democratic tool. …Schedule B requires 501(c) organizations to include certain contributors’ names and addresses with their annual Form 990 reports. Yet the IRS has acknowledged that this information has no enforcement value. Instead, its collection creates opportunities for abuse and chills speech and civic participation. …there’s good reason to question the ability of the government to protect sensitive taxpayer information given the history of inadvertent disclosures and information leaks at the IRS. …For minority viewpoints, public exposure can lead to intimidation… Several years ago, the IRS was said to be considering dropping the unnecessary Schedule B reporting requirement, which it was never required by statute to collect in the first place. Unfortunately, the agency did not follow through under President Barack Obama… The Trump administration should do what the Obama administration would not and ensure the right of Americans to participate in the political process without fear that they will be made vulnerable to targeting based on their political views.

Well said.

Though I think both Brian and the WSJ should have gone even farther and called for the abolition of the charitable deduction in the tax code as part of a shift to a simple and fair flat tax.

Then there would be zero rationale for the government to know about our donations. And since there’s plenty of evidence that nonprofits would prosper without a special preference in the tax code, this would be a win-win reform.

P.S. Privacy is an under-appreciated benefit of fundamental tax reform. Not only would donors and nonprofits no longer have to share information with the IRS under a flat tax, we also wouldn’t need to tell the government anything about our homes since the mortgage interest deduction would vanish. And since the death tax and capital gains tax are abolished, the government would have no need to know about our assets. And since all capital income is taxed at the business level, we wouldn’t have to tell the government about any stocks, bonds, or bank accounts we own.

Read Full Post »

On several occasions, I’ve shared horror stories of government brutality and asserted that all decent people should be libertarians.

If you still are not convinced, today we’re going to look at seven stories about so-called civil asset forfeiture, which is a sanitized term. Most people call it stealing.

Or “policing for profit.”

Let’s look at how this third-world scam operates, starting with a disgusting example of asset forfeiture from Reason.

Rustem Kazazi, an American citizen, was just trying to get on a plane to return to his native Albania last October, from Cleveland Hopkins International Airport. He was initially flying to Newark where he’d catch a connection to Albania. …Given facts about the Albanian banking and finance system and the advantages of cash there, he chose to turn his life savings into U.S. dollars and bring them with him to cover expenses related to the above house needs and his long stay rather than deal with bank transfers… Kazazi ran his carry-on luggage through the x-ray machine, like we all must. In that luggage was his life savings in cash, $58,100. There was zero attempt to be clandestine or smuggle-y about it. It was divided into three labeled and marked stacks of $100 bills, all in one envelope with $58,100 written on the outside.

Here’s how despicable bureaucrats reacted.

TSA agents noticed the money. …They called Customs and Border Patrol (CBP) on Kazazi, who took him off to a private room to grill him, as well as strip him naked… They kept his money, without telling him why, then tried to get him to just get on his flight without it. The receipt they handed him made no reference to the specific amount they’d confiscated. When he refused initially to just go on with his day as if he hadn’t just suffered a horrible crime, they escorted him out of the airport. …In December CBP finally formally informed him via a “Notice of Seizure” that they’d taken $57,330 from him, $770 less than he insists was actually taken. The Kazazis filed all the officially required forms and notices to proceed with trying to get their money back… CBP agents tried to finagle the Kazazis into withdrawing their demand for federal court action, but failed.

The good news is that the invaluable Institute for Justice has intervened.

Kazazi and his family today filed a formal motion for return of property…with the assistance of consistent civil-forfeiture-justice fighters from the Institute for Justice… Let’s hope the courts do the right, and legal, thing, demand CBP obey the law and return the stolen money.

And here’s a nauseating example of theft-by-government from Texas.

For nearly a decade, Anthonia Nwaorie dreamed of starting a medical clinic in her hometown in Southern Nigeria. Last October, the 59-year-old nurse was boarding a plane in Houston with medical equipment, supplies, and about $41,000 in cash — which had taken her years to save — when Customs and Border Protection officials stopped her. …Nwaorie said she was detained for hours. She missed her flight to Nigeria and the customs officers seized all her money. …CBP took the money because Nwaorie, a U.S. citizen since 1994 who lives in Katy, had not declared that she was taking more than $10,000 out of the country — a technical requirement that her lawyers say is not well-publicized…six months after her money was taken, Nwaorie has not been charged with a crime.

Once again, the great people at IJ are involved.

Lawyers at the Institute for Justice, an Arlington, Virginia-based public interest law firm, say her case demonstrates just how abusive the practice of civil forfeiture — which allows the government to take property that is believed to be tied to a crime — can be. ….the Institute for Justice filed a class-action lawsuit against the agency on Nwaorie’s behalf, demanding that CBP return her money without forcing her to sign any written agreement. They’re also asking a federal court in Houston to void all such agreements that might have been signed by others trying to get seized property back.

George Will opined about another reprehensible example from Texas.

On Sept. 21, 2015, Serrano drove to the Eagle Pass, Tex., border crossing, intending to try to interest a Mexican cousin in expanding his solar panel installation business in the United States. …they searched his truck — this was unusual for a vehicle leaving the country — and one agent said, “We got him!” …Having found five .380-caliber bullets in the truck’s center console — he has a concealed-carry permit but had no weapon with him — they handcuffed him and seized his truck under civil forfeiture, saying it had been used to transport “munitions of war.”

The heroes at IJ are on the case.

Assisted by litigators from the Institute for Justice (IJ), whose appearance on the West Texas horizon probably panicked the government into pretending to be law-abiding, Serrano wants to make the government less larcenous and more constitutional when it is enriching itself through civil forfeiture. …Serrano is suing for restitution but also seeking a class-action judgment on behalf of others who have been similarly mistreated. …Robert Everett Johnson is one of the IJ lawyers… Johnson says: “Imagine being detained at an airport checkpoint because you innocently forgot to take a tube of toothpaste out of your luggage. But rather than asking you to throw it out or put it in a plastic bag, the TSA agents told you they were seizing all of your luggage, including the toothpaste tube.” That happened to Serrano at the hands of a government — the one north of the border — that felt free to say, “You have no rights here.”

Here’s an example of this despicable practice from Wyoming.

Phil Parhamovich…had spent years restoring and selling houses, cars, and musical instruments, often clocking 12-hour workdays, to save up more than $91,000. And now it was all going to pay off: He would buy a music studio in Madison, Wisconsin… Then came the police stop… By the time it was over, police in Wyoming would take all of Parhamovich’s money — the full $91,800. Parhamovich, who has no criminal record, was not accused of or charged with a serious crime; he only got a $25 ticket for improperly wearing his seat belt and a warning for “lane use.” …state officials said they consider the cash “abandoned.” The state has even moved to forfeiture the money without notifying Parhamovich of the relevant court hearing until after it happened.

You won’t be surprised to learn who got involved to protect Parhamovich’s rights.

According to Parhamovich and his attorneys with the advocacy group, the Institute for Justice, this is another classic example of policing for profit and the problems it causes. Police initiated the stop for a minor traffic violation, but quickly escalated it further and further until they took a man’s life savings — all to use that money for their own law enforcement purposes.

This story has a happy ending (except for the fact that the cop isn’t in jail for stealing).

Wyoming lawmakers, citing this story, have now banned the roadside waivers that police used to wrongly take Phil Parhamovich’s $91,800. Previously, Parhamovich…got…his money back during a court hearing.

The IRS also participates in this thuggish racket, as reported by the Washington Post.

Oh Suk Kwon, who left South Korea for America in 1976, served as a fleet mechanic in the U.S. Army. After four years in the military, decades of working in an electrical plant and as an auto mechanic, after raising the kids and seeing them off to their adult lives, Kwon finally bought a gas station in Ellicott City in 2007. It meant everything to him. Just a few years after he opened it, zealous government investigators…seized all of the station’s money on a hunch — and wiped the family out. No, they weren’t money launderers or terrorists or mobsters or tax evaders. The government found no evidence of criminal activity. …the gas station went under, and Kwon’s wife died amid the stress of it all…the agency won’t give Kwon his money back. …He’s heartbroken that the country he loves is treating him this way.

The story has additional examples.

…fervent investigations targeted scores of small businesses in Maryland. The best known of these was South Mountain Creamery… the creamery was accused of structuring — farmer Randy Sowers also said his bank teller told him to keep the deposits under $10,000 to cut paperwork — the farm’s entire operating budget was seized. …The government eventually found out that the cows weren’t drug mules and the chickens weren’t gangsters and allowed Sowers to sign a settlement agreement to get back half of about $60,000 that the IRS took. Sowers did it because he needed that money to keep the farm going. Another Maryland farmer, Calvin Taylor, had about $90,000 seized in 2011 after the government snagged him in a similar investigation. He couldn’t take the time to fight the charge, either, and agreed to a settlement where the government returned about $41,000.

Once again, the IJ people are fighting to protect people from rapacious government.

The farmers didn’t walk away from the fight. Backed by the libertarian Institute for Justice, Sowers, Taylor and others testified before Congress, petitioned and fought for three years to get their cash back.

The awful thugs at the IRS also stole money in Connecticut.

David Vocatura watched $68,000 disappear. He was at his family’s bakery in Norwich, Connecticut, when a squad of armed IRS agents filed into the store. The agents wanted to know if Vocatura and his brother Larry were trafficking drugs or running a prostitution ring. The brothers had no idea what they were talking about. …the IRS refused to believe Vocatura’s Bakery was operating on the up and up. Agents said the business raised red flags because of a series of cash deposits in sums under $10,000, the amount at which banks are required to report transactions to the federal government. …The agents had no evidence of other wrongdoing, but thanks to a controversial law enforcement tool known as civil asset forfeiture, they didn’t need any to seize every penny in the Vocaturas’ bank account… The IRS has…[been] subjecting David, 53, and his brother Larry, 69, to a series of increasingly aggressive legal maneuvers — including threats of significant prison time and additional fines — in an attempt to strong-arm them into permanently forfeiting their assets.

Naturally, IJ is riding to the rescue.

…the Institute for Justice, a libertarian public interest law firm, filed a lawsuit in U.S. District Court for the District of Connecticut on behalf of Vocatura’s Bakery, demanding that the IRS promptly return their money. …Hours after the suit was filed, the IRS said it would finally give the Vocaturas their money back.

But the jackboots in government are vindictively going after the family.

Peter S. Jongbloed, assistant U.S. attorney for the District of Connecticut, served the Vocaturas a grand jury subpoena calling for them to turn over every financial record from the six years between March 2007 and April 2013, so the agency could finally begin investigating the business’s tax and regulatory compliance. …“At this point, the government is in so deep, they’ve put these guys through three years of hell — and held onto their money for three years — and so they feel like they need to justify it,” said Robert Everett Johnson, an attorney for the Institute for Justice who is representing the Vocaturas. “So now they’re going to conduct this investigation into the bakery in some effort to try to find something that will make it look like they were doing the right thing all along.”

Let’s review one final example of banana-republic law enforcement, this time from Alabama.

The morning of June 29, 2010, began much like any other at FAR Computers in Ensley. Frank Ranelli, who has owned the computer repair business for more than two decades, was doing some paperwork in his windowless office when he heard loud banging on the front door. When he answered it, he was unaware that about 20 officers with the Homewood and Mountain Brook police departments were surrounding his store, some wearing flak jackets and carrying assault rifles. Within moments, a Homewood police sergeant had declared a room full of customers’ computers, merchandise and other items “stolen goods,” Ranelli recalled. …The police proceeded to confiscate more than 130 computers – most of which were customers’ units waiting to be repaired, though some were for sale – as well as the company’s business servers and workstations and even receipts and checkbooks. …Nothing ever came of the case. The single charge of receiving stolen goods was dismissed after Ranelli demonstrated that he had followed proper protocol in purchasing the sole laptop computer he was accused of receiving illegally. Yet none of the property seized by police that summer morning more than seven years ago has been returned to him.

The article references the stellar work of IJ.

Alabama’s laws, however, still provide the state’s citizens with few protections from the practices, earning the state a “D- for its civil asset forfeiture laws” in a November 2015 report by the Institute for Justice, a Virginia nonprofit advocacy law firm. Alabama laws stack the deck against victims of asset forfeiture by establishing a “low bar to forfeit” and not requiring a conviction to do so; offering “limited protections for innocent third-party property owners”; and letting “100% of forfeiture proceeds go to law enforcement,” the report stated. …In a time of increasingly tight budgets for many law enforcement agencies, seizing property offers an opportunity for them to increase revenue without politicians having to raise taxes.

The good news (relatively speaking) is that some states are trying to curtail this evil practice.

The bad news is that cops in some states have figured out how to steal regardless.

In theory, New Hampshire has reformed its asset forfeiture laws. The state passed a bill in June 2016 to keep police from seizing and keeping people’s property unless those people have been convicted of a crime. And yet New Hampshire Public Radio reports this week that the state’s cops are still trying to keep stuff seized from people who have been accused but not actually convicting of criminal behavior. …when the reforms were passed…there was a big loophole. The U.S. Justice Department’s “Equitable Sharing” program allows local law enforcement agencies to partner with the feds for busts, then funnel the forfeiture through the looser federal program, which doesn’t require convictions, back into the local police budgets. Doing this allows them to skirt any state-level restrictions on asset forfeiture.

In other states, the establishment is going nuts trying to preserve their shady scam.

…a local prosecutor and police officer say the state will be welcoming violent drug cartels if a Republican lawmaker gets his way. State Sen. Kyle Loveless has been trying to muster support this year for a bill that would reform a controversial law enforcement tool known as civil asset forfeiture. …Loveless sees this as a fundamental violation of people’s rights to due process and property and says the lax standards have gotten innocent people in Oklahoma caught in the civil asset forfeiture net. On Thursday, he sparred with Tulsa County District Attorney Steve Kunzweiler and Eric Dalgleish, a major at the Tulsa Police Department, over the merits of his bill to require a criminal conviction to permanently take someone’s property. …Kunzweiler, the district attorney, said the extra level of protection was unnecessary and that raising the bar for forfeiture would effectively roll out a welcome mat to ruthless drug traffickers from Mexico. …Dalgleish later said that cartels were keeping a close eye on Loveless’ legislation and even lobbying for its passage.

Shame on Kunzweiler and Dagleish. What reckless and dishonest demagoguery.

And three cheers for Sen. Loveless, who deserves a lot of love for putting the principles of the Constitution first.

Sadly, the Trump Administration is on the side of theft-by-government, which is especially disappointing since there was a small move in the right direction during the Obama years.

P.S. Just like intrusive and ineffective money-laundering laws, wretched asset forfeiture laws are largely the result of the foolish War on Drugs. One bad policy generates another bad policy. Lather, rinse, repeat.

Read Full Post »

Older Posts »

%d bloggers like this: