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Posts Tagged ‘IRS’

The Real Tax Scandal | Mises Institute

Posted by M. C. on June 10, 2021

Yet the real scandal here is not the IRS leak, which was no doubt internal and designed to gin up public support for Biden’s proposed tax increases while advancing a progressive inequality narrative.

No, the real scandal is this: federal income taxes are almost entirely about control and not revenue. The byzantine rules and selective enforcement are perfectly designed to keep ordinary people with limited means in mortal fear of the IRS. A tax audit, like cancer, can come out of nowhere and ruin your life.

https://mises.org/power-market/real-tax-scandal

Jeff Deist

The self-styled investigative journalism outlet ProPublica recently published private IRS tax information—presumably embarrassing private tax information—for a host of ultrawealthy and famous Americans. I say “self-styled” because the organization claims a pretty lofty and self-important mission to use the “moral force” of journalism on behalf of the public interest against abuses of power. But does this apply to state power, such as when a federal agency employee illegally leaks sensitive material to media? And why is it presumed to be in the public’s interest to have rich billionaires pay more in taxes? Maybe we’d rather have them investing in their companies, or at least buying megayachts and Gulfstream jets, rather than sending more resources to the black hole of DC? Why is the public interest always defined as “things progressives like”?

ProPublica has obtained a vast trove of Internal Revenue Service data on the tax returns of thousands of the nation’s wealthiest people, covering more than 15 years. The data provides an unprecedented look inside the financial lives of America’s titans, including Warren Buffett, Bill Gates, Rupert Murdoch and Mark Zuckerberg. It shows not just their income and taxes, but also their investments, stock trades, gambling winnings and even the results of audits.

And as an aside, it’s worthwhile to recall the tremendous whopper of a lie President Franklin Delano Roosevelt told back in 1935—namely that no one other than the program’s administrators would ever know your private Social Security number. Today, of course, Social Security numbers are the absolute linchpin of one’s entire financial identity, and known by everyone from the IRS to your local credit union.

Yet the real scandal here is not the IRS leak, which was no doubt internal and designed to gin up public support for Biden’s proposed tax increases while advancing a progressive inequality narrative. Political capture of federal agencies is nothing new or shocking; that’s what presidents do (or have done to them). Nor is it particularly scandalous that the wealthiest people sometime pay little in federal income tax, at least relative to their income. After all, elites by definition tend to wield power rather than fear it, especially when it comes to state power. And they have lobbyists and accountants to make sure taxes remain something the little people pay.

No, the real scandal is this: federal income taxes are almost entirely about control and not revenue. The byzantine rules and selective enforcement are perfectly designed to keep ordinary people with limited means in mortal fear of the IRS. A tax audit, like cancer, can come out of nowhere and ruin your life. In some cases it can land you in jail. Tax enforcement is the ultimate check on the public’s behavior; after all, who takes up the cause of a tax cheat? For middle-class Americans the IRS is an existential threat, but for Jeff Bezos it is another business expense to be minimized.

And as for revenue, consider that Uncle Sam borrowed nearly half of the dollars spent by Congress in fiscal 2020. With covid shutdowns, federal income taxes amounted to about $3.42 trillion, while spending was $6.55 trillion. If the federal government can finance 50 percent of its annual spending through deficits, why not 80 percent or 100 percent? Why do we need the IRS terror regime at all?

Again, this is about control. Progressives will never give up the income tax for this very reason. Proponents of modern monetary theory, for example, are almost uniformly left progressive in political outlook. These are the people cheering Biden’s >$1 trillion infrastructure spending bill because of their fervent belief that deficits don’t matter.

MMT rests on two central assertions.1 First, sovereign governments with their own currencies can print as much money as needed to fund operations without fear of insolvency or bankruptcy—unless a purely political decision is made to go broke. Government deficits per se do not matter, because the only real constraint in any economy is the amount of real resources available rather than the amount of money. In fact, MMT views government debt as private financial wealth—money inserted into the economy by the central state but not taxed back. 

Second, sovereign governments with their own currencies can require tax payments to be made in that currency. Therefore any overheating in the economy in the form of inflation resulting from too much money can be fixed by pulling some money back to the Treasury via tax increases. This is the ostensible reason MMTers are not quite ready to give up on taxes altogether.

Yet I’ve never heard an MMTer express support for even a one-year moratorium on taxes to stimulate a bad economy (after a shock such as a worldwide covid pandemic). Why is this? If inflation really is so low, with the economy struggling in postcovid recovery mode, why pull any money back into federal coffers? Just damn the torpedoes! The bigger the deficit, the more “private wealth” we all have! Perhaps there is a political element to all the MMT jargon after all, one which relies on taxes both for control over people and to advance an advantageous but hollow trope about taxing the rich.

Federal income taxes have always been a tool for compliance. The IRS has always been a tool for presidents to go after rivals—or for rivals to go after presidents. Why would we expect otherwise?

  • 1. See Dr. Robert P. Murphy’s definitive critique of MMT and Professor Stephanie Kelton’s book here.

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Erie Times E-Edition Article-Audits eyed for infrastructure cash

Posted by M. C. on May 16, 2021

The Penn Wharton Budget Model, a research organization associated with the University of Pennsylvania, projected the proposed spending on IRS collection efforts would bring in about $480billion from 2022 to 2031.

Is more government brownshirt misery worth $48B a year?

20 years and $Trillions worth of endless wars and government malfeasance, such as the F-35 fiasco, makes $480B pale in comparison.

Government never has “enough”. How long before you are considered “rich”?

Why is smaller, accountable government never an option?

https://erietimes-pa-app.newsmemory.com/?publink=08b007527_1345d78

Kevin Freking and Marcy Gordon ASSOCIATED PRESS WASHINGTON – Republicans said they won’t raise taxes on corporations. Democrats said they won’t raise taxes on people making less than $400,000 a year. So who is going to pay for the big public works boost that lawmakers and President Joe Biden said is necessary for the country?

Enter the IRS.

Biden is proposing that Congress build up the depleted and often-maligned agency, saying that a more aggressive collection of unpaid taxes could help cover the cost of his multitrillion-dollar plan to boost infrastructure, families and education. More resources to boost audits of businesses, estates and the wealthy would raise $700billion over 10 years, the White House estimated.

It’s just the latest idea emerging in the bipartisan talks over an infrastructure bill, which saw Biden huddle at the White House this week with congressional leaders and a group of Republican senators.

The GOP senators, touting a $568billion infrastructure plan of their own, said they were ‘encouraged’ by the discussion with Biden, but all sides acknowledged that how to pay for the public works plan remains a difficult problem.

House Speaker Nancy Pelosi said Biden brought up his IRS proposal as he met Wednesday with the top four congressional leaders.

‘My understanding is it’s at least $1trillion, it could be a trillion-and-quarter, a trillion-and-a-half dollars of illegally, unpaid taxes in the country,’ Pelosi said. ‘Part of the answer is to beef up the IRS so they could take in those taxes, and that’s a big chunk. That could go a long way.’

She was referring to the tax gap, which is the difference between taxes paid and taxes owed. In a politically charged climate, there isn’t agreement on how big the tax gap is, let alone how much of it could be captured. But it’s a tantalizing target for lawmakers, raising the potential to raise hundreds of billions in revenue without needing to raise taxes at all.

The question is how big the tax gap really is – and how much it can realistically be closed.

The Internal Revenue Service has estimated the tax gap is $440billion a year. But IRS Commissioner Charles Rettig stunned his audience at a recent Senate hearing when he offered a new number: about $1trillion annually.

The old estimates don’t take into account the recent boom in income made by self-employed ‘gig’ workers, which can be underreported, concealed offshore income and the rising use of cryptocurrency, which makes it hard for the IRS to identify taxpayers in third-party transactions, experts said.

The $1trillion figure ‘is not crazy. That’s totally possible,’ said Steve Wamhoff, director of federal tax policy at the left-leaning Institute on Taxation and Economic Policy.

But Sen. Mike Crapo of Idaho, the senior Republican on the Senate Finance Committee, called it ‘speculation.’ And he’s worried it could push the IRS toward overzealous enforcement.

The IRS has been on the losing end of congressional funding fights in recent years, taking a cut of about 20% since 2010, adjusting for inflation, even as its responsibilities have grown. Biden’s new spending proposals include an extra $80billion over 10 years to bolster IRS audits of upper-income individuals and corporations.

But some experts said bolstered audits could fall far short of a $700billion windfall.

The Penn Wharton Budget Model, a research organization associated with the University of Pennsylvania, projected the proposed spending on IRS collection efforts would bring in about $480billion from 2022 to 2031.

In selling its plan, the White House has emphasized what it described as fixing a ‘two-tiered system of tax administration’ in the U.S. While regular workers pay taxes on the wages they earn, some wealthy taxpayers find ways to maneuver around them.

Those with annual incomes under $25,000 are audited at a higher rate (0.69%) than those with incomes up to $500,000 (0.53%), according to IRS data. Taxpayers who receive the earned-income tax credit, which applies mainly to low-income workers with children, are audited at a higher rate than all but the wealthiest filers. The audit rate for millionaires plunged from 8.4% in 2010 to 2.4% in 2019.

The IRS rejected the notion of unfair audit treatment, saying that critics have misinterpreted the data. Rettig bristled at the suggestion at the Senate hearing. High-income taxpayers ‘are audited more than any other taxpayer,’ he said, at a rate over 8% for those earning more than $10million.

So far, Republicans are only ruling out revisiting the 2017 tax cuts that they passed without any Democratic support. How much they are willing to boost the IRS as part of an infrastructure bill remains to be seen. Senate Minority Leader Mitch McConnell of Kentucky said Republicans would rather finance infrastructure through user fees such as tolls and gasoline taxes.

But after pushing the agency’s steep budget cuts over the past decade, it would be a remarkable shift for the GOP to back the kind of sustained investment in the IRS that Biden is talking about – and that experts said is necessary to narrow the tax gap.

Republican lawmakers with control over funding for the IRS have long accused it of overreaching into ordinary taxpayers’ lives. Their hostility toward the IRS erupted into outrage in 2013 during the Obama administration, when the agency admitted targeting conservative tea party groups with heightened, often burdensome scrutiny when they applied for tax-exempt status.

Sen. Chuck Grassley, R-Iowa, wrote in his home state newspaper, the Des Moines Register, that he’s not opposed to closing the tax gap, but he has concerns about the scope of the White House’s efforts.

‘Instead of promising a chicken in every pot, Biden’s plan promises an auditor at every kitchen table,’ Grassley wrote.

Sen. Chuck Grassley, R-Iowa

Internal Revenue Service Commissioner Charles Rettig stunned a House Committee on Wednesday by suggesting Americans underpay their taxes by about $1trillion annually

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BOVARD: The Coming IRS Reign Of Terror | The Daily Caller

Posted by M. C. on May 10, 2021

A 2013 Inspector General report confirmed that IRS employees had devoted far more scrutiny to nonprofit applications that used the terms “tea party” or “patriot” or that criticized government spending or federal deficits. In 2017, the IRS formally apologized to scores of conservative groups that it had wrongfully targeted in tax audits.

https://dailycaller.com/2021/05/06/bovard-biden-taxes-irs-reign-of-terror/

James Bovard Contributor

The power to tax has long conferred the power to destroy political opponents. But in the glorious era of President Joe Biden, all previous cases of government abuse of power are being expunged, at least by the media and Biden supporters. That is why it is supposedly safe to vastly increase the power of perhaps the most feared federal agency, the Internal Revenue Service.

After announcing his endless wish list for new federal spending, Biden told Congress last week: “I’ve made clear that we can do it without increasing deficits.” Biden believes he has found a goose that will lay golden eggs for federal revenue — a new army of IRS agents to hound Americans and corporations to pay far more taxes.

The Washington Post reported that “the single biggest source of new revenue in the plan comes from dramatically expanding the clout of the nation’s tax agency.” Slate reported, “Biden wants to fund a massive upgrade to the American welfare state by making the IRS great at audits again.” (RELATED: ‘Everyone Loves The IRS’: Chris Christie Jokes Biden May Finally Unify America — Against Himself — With Tax Hikes)

But the agency Biden seeks to expand and unleash has an appalling record. As author 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. FDR 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. President John F. Kennedy spurred the IRS to launch the Ideological Organizations Audit Project, which targeted right-leaning groups, including the Christian Anti-Communist Crusade, the American Enterprise Institute and the Foundation for Economic Education. Nixon Administration officials gave the IRS a list of official enemies to, in the words of presidential assistant John Dean, “use the available federal machinery to screw our political enemies.” Congress enacted legislation to severely restrict political contacts between the White House and the IRS.

But the power of IRS agents continued to increase decade by decade. In 1988, then-Sen. David Pryor, a moderate Democrat from Arkansas, warned that the IRS “operates a near totalitarian system.” Pryor complained that the IRS had encouraged a “bounty-hunter mentality among revenue officers” and called for reforms to assure that the IRS “operates on the basis of public respect rather than fear.” Congress enacted a so-called Taxpayer Bill of Rights but it failed to curb the revenuers.

The Clinton administration, like many of its predecessors, exploited the IRS to punish its political enemies. 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 Bill 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. (RELATED: GOP Lawmakers Call On Trump Admin To End Tax Breaks For Abortions)

Members of Congress also routinely exploited their power to send the secret financial police against their enemies. The Associated Press reported in 1999 that “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. Because the abuse was bipartisan, there was little enthusiasm on Capitol Hill for an investigation.

In the Obama era, the IRS again became a political hit squad. The IRS demanded donor lists from 24 conservative nonprofits and proceeded to audit 10% of their donors — an audit rate ten times higher than average for the country. A 2013 Inspector General report confirmed that IRS employees had devoted far more scrutiny to nonprofit applications that used the terms “tea party” or “patriot” or that criticized government spending or federal deficits. In 2017, the IRS formally apologized to scores of conservative groups that it had wrongfully targeted in tax audits.

See the rest here

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Erie Times E-Edition Article-House Dems object to Biden tax plan

Posted by M. C. on May 8, 2021

Good for farmers. Apparently your bought and paid for family inheritance is not so worthy.

https://erietimes-pa-app.newsmemory.com/?publink=0eb6e3c01_1345d70

Exemption for family farms needed, group of rural lawmakers says

Lindsey McPherson

Cq-Roll Call

WASHINGTON – A group of 13 House Democrats, led by Iowa’s Cindy Axne and California’s Jim Costa, is pressing party leaders to exempt family farms from a tax increase President Joe Biden has proposed on inherited assets to help pay for new child care, education and other spending.

Under Biden’s $1.8 trillion package of family related assistance, heirs would no longer receive “stepped up basis” for capital gains tax purposes, which resets the value of inherited property to the date of death.

Instead they’d be liable for the tax on the full appreciation in value from the time the original owner purchased the assets, in some cases decades earlier.

“The requirement to recognize capital gains at death runs the risk of forcing farms and ranches to sell part, or all, of a farm that may have been passed down for several generations in order to pay the tax burden,” the group wrote in a letter to Speaker Nancy Pelosi, House Majority Leader Steny H. Hoyer and Ways and Means Chairman Richard E. Neal.

Biden’s proposal would start taxing gains on inherited assets above $1 million, or $2.5 million per couple factoring in the current tax exclusion for up to $500,000 in gains on a primary residence. Biden also would raise the top capital gains tax rate from the current 23.8%to 43.4% for those earning above $1 million annually.

Biden’s proposal calls for “protections so that family owned businesses and farms will not have to pay taxes when given to heirs who continue to run the business,” sparing them from having to pay the tax immediately upon the original owner’s death.

But the White House’s fact sheet doesn’t provide detail on how that would work. And when the Joint Committee on Taxation analyzed a similar proposal from former President Obama, it found that such rules “are likely to be highly complex and, because of the attractiveness of the deferral benefit they provide, could become a significant source of disputes with” the IRS.

The rural Democrats joining Axne and Costa in the letter expressing concern about Biden’s proposal are Illinois’ Cheri Bustos; Minnesota’s Angie Craig; New York’s Antonio Delgado; Oregon’s Kurt Schrader; Virginia’s Abigail Spanberger; Arizona’s Tom O’Halleran; Washington’s Kim Schrier; and Californians Julia Brownley, Salud Carbajal, John Garamendi and Josh Harder.

The House Republicans’ campaign arm is targeting most of those 13 Democrats in the 2022 midterms. Brownley and Carbajal are the only two not on the National Republican Congressional Committee’s list of incumbents they think they can oust.

Of those signing the letter, six are on the Democratic Congressional Campaign Committee’s Frontline program list of lawmakers set for special help with their midterm races: Axne, Craig, Spanberger, O’Halleran, Harder and Schrier. “The repeal of stepped-up basis for capital gains and immediate taxation could especially hurt family farms, some of which have been in families for generations; therefore, we strongly urge you to provide full exemptions for these family farms and small businesses that are critical to our communities,” the group wrote.

Groups like the American Farm Bureau Federation have fought against proposals to repeal stepped up basis for years.

In a report last month, the Farm Bureau co-authored with the American Soybean Association, the groups looked at Agriculture Department data going back to 1997 and found the average value of cropland has risen 223% since. That could lead to such steep tax bills that affected farms would need years to pay it off, the report said. In a handful of states, including Iowa and Minnesota, the average increase in value tops 300%.

The Democratic letter-writers acknowledged that Biden’s intent is to ensure vast fortunes are not passed on without any taxation and that the president promised protections for familyowned businesses and farms.

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Get Ready

Posted by M. C. on April 14, 2021

Taxes

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Freelancers Punished In New IRS Rule Under COVID Stimulus | ZeroHedge

Posted by M. C. on March 15, 2021

From this rule change the IRS expects to collect an additional $1 billion annually, presumably from the poorest gig workers who previously earned under $20,000 per year. These low earners previously flew under the radar.

But now they could be met with surprise bills from the tax man when it comes time to file. And as many of these contractors are living paycheck to paycheck, they may incur additional IRS penalties if they are unable to pay what the IRS says they owe.

Of course, the same politicians who snuck this into the bill are the ones who declared over and over that their tax policies would only affect millionaires and the ultra wealthy. But now, one of the first things they do is shake down the lowest tax bracket.

https://www.zerohedge.com/markets/freelancers-punished-new-irs-rule-covid-stimulus

Tyler Durden's Photoby Tyler DurdenSunday, Mar 14, 2021 – 20:40

By Sovereign Man Blueprint

A few hundred pages into the latest $1.9 trillion Covid relief law, the “American Rescue Plan Act of 2021,” you’ll find Section 9674. It says that a “third party settlement organization” does not have to report to the Internal Revenue Service (IRS) any payments to contract workers under $600.

These third parties include Uber, Airbnb, Etsy, eBay, Freelancer, and other platforms which facilitate payments to gig workers. The problem is that this little amendment lowers the reporting threshold from $20,000 to $600. Previously, a gig worker could earn up to $20,000 on these platforms without the IRS being informed of their income.

What this means:

From this rule change the IRS expects to collect an additional $1 billion annually, presumably from the poorest gig workers who previously earned under $20,000 per year. These low earners previously flew under the radar.

But now they could be met with surprise bills from the tax man when it comes time to file. And as many of these contractors are living paycheck to paycheck, they may incur additional IRS penalties if they are unable to pay what the IRS says they owe.

Of course, the same politicians who snuck this into the bill are the ones who declared over and over that their tax policies would only affect millionaires and the ultra wealthy. But now, one of the first things they do is shake down the lowest tax bracket.

We hope these gig workers enjoy their stimulus checks. They are soon going to learn that nothing is free when it comes to the government. There are always strings attached.

What you can do about it:

The good news is that freelancers, gig workers, self-employed individuals, and contractors have a number of tools at their disposal to legally minimize their tax bill.

Solo 401(k)

Solo 401(k)s are retirement accounts for business owners and contractors with no full-time employees – only you, part-time and contract labor (those filing an IRS 1099, which signals that they are NOT employees). For the self-employed and those with side hustles, the structure, flexibility, investment options, and annual contribution limits make a Solo 401(k) a potential go-to retirement option.

In 2021, Solo 401(k) owners can put away $58,000 tax free each year. If you’re 50 or older, that amount goes up to $64,500. The taxes on this income will be paid when you are retired and collect the money, presumably in a lower tax bracket. A Solo 401(k) allows you to take out a loan against your balance, and invest in more asset categories like precious metals, international real estate, and cryptocurrency.

Plus there are no reporting requirements until the account reaches $250,000. Click here to read a September 2018 Monthly Letter on Solo 401(k)’s (although certain numbers may be out of date, the general information is still accurate).

Foreign Earned Income Exclusion

The US is one of only two countries in the world that taxes its citizens no matter where they live. (The other country is Eritrea in east Africa, but they don’t have the resources to enforce their tax policy. So that leaves the US as the sole global enforcer of citizenship-based taxation.)

But, by moving overseas, US citizens can take advantage of the Foreign Earned Income Exclusion (FEIE), a special provision in the US tax code that allows US citizens living abroad who file Form 2555 along with their tax return to earn up to $108,700 per year (and growing) tax-free.

“Earned income” means that investment income and dividends do not apply for the exclusion. But self-employed, freelancers, and digital nomads can absolutely take advantage of the rule.

You can even use the Housing Deduction or Exclusion to save even more.

Puerto Rico Act 60, Chapter 3 (previously Act 20) Tax Incentive

Contract workers, freelancers, consultants, and the self-employed can also reduce their tax burden significantly by moving to Puerto Rico and establishing a corporation. This used to be called the Act 20 Export Services Act, now reorganized under Chapter 3 of Act 60. If your company provides services to clients outside of Puerto Rico, the corporate tax rate is just 4% and dividends to the owner are tax free.  You will still have to pay yourself a reasonable salary, subject to federal payroll taxes and Puerto Rico’s income tax. However what is considered “reasonable” in Puerto Rico is often much lower than the mainland.

Since Puerto Rico is a US territory and can set its own tax policies, it’s one of the only options for US citizens to legally escape most federal taxation.

Of course this probably won’t help many Uber drivers and Airbnb hosts. But a broad swath of services do work, for example:

  • Research and development
  • Advertising and public relations
  • Any kind of consulting (economic, scientific, environmental, technological, managerial, marketing, human resources, computer, auditing…)
  • Creative industries (design, art, architecture, creative education, etc.)
  • Commercial art and graphics services
  • Professional services (legal, tax, accounting…)
  • Data processing centers
  • Computer programming
  • Blockchain-related businesses
  • Remote medical services (telemedicine)
  • Educational and training services

Just keep in mind that the clock is ticking on the Puerto Rico incentives. They have already come under attack by certain lawmakers and could be eliminated or altered.

However, when you are granted these tax incentives, you sign a contract with the Puerto Rican government. Based on past court cases, new rule changes do not alter the agreement you signed. In other words, you are grandfathered in under the rules in effect when you sign the tax decree.

There is another risk to consider, however— these tax benefits to US citizens would be eliminated if Puerto Rico became a state.

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No Warrant, No Problem; How Government Buys Its Way Around the 4th Amendment | The Libertarian Institute

Posted by M. C. on February 27, 2021

But since then, government agencies have devised a new surveillance method: instead of getting warrants to force companies to provide data, they simply purchase the information from brokers. Call it entrepreneurial innovation in the market for tyranny.

https://libertarianinstitute.org/articles/no-warrant-no-problem-how-government-buys-its-way-around-the-4th-amendment/

by Ken Silva

When the Supreme Court ruled in 2018 that law enforcement agencies need warrants before they can request geolocation data from cell phone companies, civil liberties advocates touted the judgment as a major win for privacy.

But since then, government agencies have devised a new surveillance method: instead of getting warrants to force companies to provide data, they simply purchase the information from brokers. Call it entrepreneurial innovation in the market for tyranny.

The scope of this activity has been slowly revealed over the last year, beginning with a February 2020 Wall Street Journal article, which reported that the Department of Homeland Security (DHS) has “bought access to a commercial database that maps the movements of millions of cellphones in American and is using it for immigration and border enforcement.” Later reports revealed that Customs and Border Protection (CBP) and Immigration and Customs Enforcement (ICE) purchase similar data.

Had the world not essentially collapsed about a month later, this might have been big news. Alas, government’s data purchases have gone largely unpublicized in the midst of pandemics, riots, elections, and so on.

Even though geolocation data purchases are a norm in government, there are some public officials who agree with civil libertarians that the programs are unconstitutional. For example, in a memo made public this week, the inspector general for the Department of Treasury criticized the IRS for purchasing location information.

According to the IG’s memo, the IRS subscribed to a geolocation database provided by the data broker Venntel. The inspector general shared his view that the IRS program likely violated the Fourth Amendment and the precedent set by the Supreme Court in Carpenter v. US.

However, the IG’s opinion is far from government consensus. In fact, the IG’s memo notes that the IRS shuttered its geolocation tracking program not because of concerns about its constitutionality, but only because it wasn’t useful—a similar fate to what happened with the NSA’s bulk metadata collection.

Other departments have also expressed the opinion that bulk data purchases are constitutional. The Defense Intelligence Agency said in a memo made public last month that it can buy bulk data because the Supreme Court’s Carpenter decision only applies to law enforcement—and not to intelligence agencies.

“The court did not consider ‘collection techniques involving…national security,’” the memo said. “By extension, the court did not address the process, if any, associated with commercial acquisition of bulk commercial geolocation data for foreign intelligence/counter-intelligence purposes.”

Nor does the Biden Administration seem interested in checking the geolocation tracking programs. When new National Intelligence Director Avril Haines was asked about the programs during her confirmation process, she played lip service to the importance that “American people have an understanding of when, and under what authorities, the government is buying their private data”—but she said nothing about curtailing such surveillance.

If it’s indeed important for Americans to know how they’re being tracked, then it’s unclear why the DSH, CBP and ICE are still contesting a lawsuit from the American Civil Liberties Union to produce records about their geolocation tracking programs. Again, this ACLU lawsuit isn’t even challenging the tracking programs— it’s only trying to wrangle records from them—and yet government is insistent on pursuing litigation that could last years.

By the time the Supreme Court would make any rulings on the geolocation tracking programs, it could be nearing the end of the decade, and government agencies will almost certainly have found another workaround by then.

“If law enforcement agencies can buy their way around the Fourth Amendment’s warrant requirement, the landmark protection announced by the Supreme Court in Carpenter will be in peril,” the ACLU said when announcing its lawsuit in December.

Unfortunately, it’s apparent that the Carpenter decision has long passed the point of peril, taking the entire Fourth Amendment with it.

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Who Pays Income Taxes: Tax Year 2018 – Foundation – National Taxpayers Union

Posted by M. C. on January 1, 2021

https://www.ntu.org/foundation/detail/who-pays-income-taxes-tax-year-2018

by Demian Brady

Introduction

Many left-leaning politicians have argued that the tax system is rigged to benefit those at the top and that the wealthy are not paying their “fair share” of taxes. These claims overlook the starkly progressive nature of America’s income tax code. The code has become increasingly progressive over the past several decades, and despite much political rhetoric to the contrary, the 2017 Tax Cuts and Jobs Act (TCJA) made it even more progressive by shifting a greater share of the income tax burden to the top earners.

New data from the Internal Revenue Service (IRS) for the first tax year under the TCJA confirms that even as the tax reform law reduced top marginal tax rates, the top income earners shouldered a larger share of the income tax burden, far exceeding their adjusted gross income share. Lower income earners are largely spared from income taxes and actually paid a smaller share under the TCJA’s reforms.

New Data Highlights Progressivity of the Income Tax Code under the TCJA

Each fall the IRS’s Statistics of Income division publishes data showing the share of taxes paid by taxpayers across ranges of Adjusted Gross Income (AGI). The most recent release covers Tax Year 2018 (filed in 2019).[1] This is the first year of reported data under the changes in the TCJA which lowered tax rates, nearly doubled the standard deduction, and expanded the child tax credit.

The new data shows that the top 1 percent of earners (with incomes over $540,009) paid over 40 percent of all income taxes. Despite the tax rate reductions associated with TCJA, this figure is up slightly from the previous tax year’s 38.5 percent share. In fact, NTUF has compiled historical IRS data tracking the distribution of the federal income tax burden back to 1980 and this is the highest share recorded over that period, topping 2007’s 39.8 percent income tax share for the top 1 percent. The amount of taxes paid in this percentile is nearly twice as much their adjusted gross income (AGI) share.

The top 10 percent of earners bore responsibility for over 71 percent of all income taxes paid and the top 25 percent paid 87 percent of all income taxes. Both of those figures represent an increased tax share compared to 2017. The top fifty percent of filers earned 88 percent of all income and were responsible for 97 percent of all income taxes paid in 2018.

The other half of earners (with incomes less than $43,614) took home 11.6 percent of total nation-wide income (a slight increase from 11.3 percent in 2017) and owed 2.9 percent of all income taxes in 2018, compared to 3.1 percent in 2017.

As NTUF reported earlier this year, the number of filers with no income tax liability increased from 2017 to 2018 to 34.7 percent.[2] The number of nontaxable returns is often related to the economy: as employment decreases and income falls, the number of filers facing no income taxes tends to increase, and vice versa. While 2018 saw a strong economy that would ordinarily increase the number of individuals with income tax burdens, the TCJA removed additional people from income tax rolls by increasing the standard deduction and expanding refundable credits.

Historical Comparison

As noted above, NTUF has compiled historical IRS data tracking the distribution of the federal income tax burden back to 1980. In that year, the income tax share of the top one percent of filers was 19 percent – less than half of what it is now (40 percent). This is despite the fact that the top marginal income tax rate was 70 percent in 1980 and has since fallen to 37 percent in 2018.[3]

On the other side of the income spectrum, the bottom 50 percent’s income tax burden has been significantly reduced over the past forty years. In 1980, it stood at 7 percent. That dropped to a low of 2.4 percent in 2010 during the recession. As the economy gradually improved after the recession, the tax share of this income group gradually increased to 3.1 percent in 2017. Although the economy remained strong in 2018, this group’s tax share fell from the previous year. This can be attributable in part to the lower rates and higher standard deduction enacted in the TCJA along with its additional provisions designed to ease burdens low-income earners such as  the increased child tax credit.

The trends are clear: the code has become increasingly progressive, and when people are allowed to keep more of their own money, they prosper, move up the economic ladder, and pay a bigger part of the income tax bill for those who aren’t.

Tax Cuts and Tax Fairness

Democratic party leaders have taken rhetorical shots against tax reform bill since it was introduced back in 2017. During the debate, Speaker of the House Nancy Pelosi (D-CA) went so far as to call the TCJA the “worst bill in the history of the United States Congress.”[4] Senate Minority Leader Chuck Schumer (D-NY) also disparaged the bill as a “product that no one can be proud of and everyone should be ashamed of.”[5]

Progressives continue to assail the TCJA in the years since its passage. A few days before the election, the Center for American Progress, a  self-described “progressive” policy institute, called the tax system “unfair” and said the results of the TCJA were a “hugely regressive tax cut.”[6]

This ignores that most taxpayers paid less thanks to the TCJA.

See the rest here

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Jim Bovard’s Guide to Surviving Election Day | The Libertarian Institute

Posted by M. C. on October 30, 2020

What’s the point of voting if “government under the law” is not a choice on Election Day?

Having a vote does nothing to prevent a person from being molested by the TSA, spied on by the NSA, or harassed by the IRS.

Politicians are increasingly dividing Americans into two classes—those who work for a living and those who vote for a living.

https://libertarianinstitute.org/articles/jim-bovards-guide-to-surviving-election-day/

by Jim Bovard

Election Day can be the longest day of the year. Especially if the presidential race remains undecided late into the evening, neither Xanax nor vodka may be enough to kill the pain. In lieu of other sedatives, following are some cheerful lines which might blunt the impact of the prattling on CNN or MSNBC, though there is no known antidote to PBS’s piety.

Voting

  • The most dangerous political illusion is that votes limit politicians’ power.
  • Nowadays, we have elections in lieu of freedom.
  • The defects in any system of choosing rulers outweigh the risks of letting people run their own lives.
  • People are entitled to far more information when testing baldness cures than when casting votes that could lead to war.
  • What’s the point of voting if “government under the law” is not a choice on Election Day?
  • Having a vote does nothing to prevent a person from being molested by the TSA, spied on by the NSA, or harassed by the IRS.
  • Politicians are increasingly dividing Americans into two classes—those who work for a living and those who vote for a living.
  • Voting for lesser evils makes Washington no less odious.
  • Politicians have mandated warning labels for almost everything except voting booths.
  • On Election Day, Americans are more likely to be deluded by their own government than by foreigners.
  • Politicians talk as if voting magically protects the rights of everyone within a fifty-mile radius of the polling booth.
  • Political consent is defined these days as rape was defined a generation or two ago: people consent to anything which they do not forcibly resist.

Democracy

  • Modern democracy pretends that people can control what they do not understand.
  • We have a drive-by democracy where politicians wave to voters every few years and otherwise do as they please.
  • The more power politicians capture, the more illusory democracy becomes.
  • A democratic government that respects no limits on its own power is a ticking time bomb, waiting to destroy the rights it was created to protect.
  • The surest effect of exalting democracy is to make it easier for politicians to drag everyone else down.
  • The Washington Post’s motto is “Democracy Dies in Darkness.” But democracy also dies from too many Iron Fists.
  • The phrases which consecrate democracy seep into Americans’ minds like buried hazardous waste.
  • Rather than a democracy, we increasingly have an elective dictatorship. Voters merely designate who will violate the laws and the Constitution.
  • Democracy unleashes the State in the name of the people.
  • The more that democracy is presumed to be inevitable, the more likely it will self-destruct.
  • America is now an Attention Deficit Democracy where citizens’ ignorance and apathy entitle politicians to do as they damn well please.
  • Democracy must be something more than two wolves and a sheep voting on what to have for dinner.
  • Americans now embrace the same myths about democracy that downtrodden European peasants formerly swallowed about monarchy.
  • Instead of revealing the “will of the people,” election results are often only a one-day snapshot of transient mass delusions.
  • Nothing happens after Election Day to make politicians less venal.

Lying

  • A lie that is accepted by a sufficient number of ignorant voters becomes a political truth.
  • America is increasingly a “Garbage In, Garbage Out” democracy. Politicians dupe citizens and then invoke deluded votes to stretch their power.
  • Promising to “speak truth to power” is the favorite vow in the most deceitful city in America.
  • Truth delayed is truth defused.
  •  A successful politician is often merely someone who bamboozled more voters than the other liar running for office.
  • The biggest election frauds usually occur before the voting booths open.
  • Politicians nowadays treat Americans like medical orderlies treat Alzheimer’s patients, telling them anything that will keep them subdued. It doesn’t matter what untruths the people are fed because they will quickly forget.
  • When people blindly trust politicians, the biggest liars win.
  • Secrecy and lying are often two sides of the same political coin.
  • The more powerful government becomes, the more abuses it commits, and the more lies it must tell.

Government et Cetera

  • America is rapidly becoming a two-tier society: those whom the law fails to restrain, and those whom the law fails to protect.
  • Idealism these days is often only positive thinking about growing servitude.
  • It is naïve to expect governments to descend step-by-step into barbarism—as if there is a train schedule to political hell with easy exits along the way.
  • The first duty of today’s citizen is to assume the best of government, while federal agents assume the worst of him.
  • America needs fewer laws, not more prisons.
  • Every recent American commander in chief has expanded and exploited the dictatorial potential of the presidency.
  • Many people reason about political power like sheep who ignore the wolf until they feel its teeth.
  • Political saviors almost always cost more than they deliver.
  • There is no such thing as retroactive self-government.
  • The arrogance of power is the best hope for the survival of freedom.
  • Washingtonians view individual freedom like an ancient superstition they must pretend to respect.
  • Paternalism is a desperate gamble that lying politicians will honestly care for those who fall under their sway.
  • Citizens should distrust politicians who distrust freedom.
  • The Night Watchman State has been replaced by Highway Robber States in which no asset or right is safe from marauding politicians.
  • P.T. Barnum may have been thinking of Washington journalists when he said there’s a sucker born every minute.

About Jim Bovard

Jim Bovard is the author of Public Policy Hooligan (2012), Attention Deficit Democracy (2006), Lost Rights: The Destruction of American Liberty (1994), and 7 other books. He is a member of the USA Today Board of Contributors and has also written for the New York Times, Wall Street Journal, Playboy, Washington Post, and other publications. His articles have been publicly denounced by the chief of the FBI, the Postmaster General, the Secretary of HUD, and the heads of the DEA, FEMA, and EEOC and numerous federal agencies.

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Liberals Confused By Man Giving Money Without Government Forcing Him To

Posted by M. C. on October 21, 2020

Most liberals just didn’t know what to make of the bizarre occurrence.

https://babylonbee.com/news/liberals-confused-by-man-giving-money-without-being-forced-to

LAS VEGAS, NV—Progressives expressed their anger and confusion this weekend as President Donald Trump was seen putting a wad of $20 bills in the offering bucket at International Church of Las Vegas.

In the video, Trump is seen reaching into his pocket and pulling out some money of his own free will. There are no IRS agents nearby making sure he gives his fair share. Nobody even has a gun to his head. Then, entirely of his own volition, he puts the money in the bucket.

Most liberals just didn’t know what to make of the bizarre occurrence.

“He’s giving money, and there isn’t even a law that says he has to!” screamed one woman on TikTok into her iPhone as she drove around Portland. “WAKE UP AMERICA! AHHHHHHHHHHHHHHHHHHHH!!!” She then drove into a pond.

Liberals were similarly confused by people not wearing masks or social distancing, thereby taking responsibility for their own health and well-being after assessing risks and coming to a conclusion regarding whether or not they should go to a large religious gathering.

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