By Thomas Knapp, on October 5th, 2009
Hat tip — Eric Dondero.
Here’s the text of a note from Tom Barthold, chief of staff to the Joint Committee on Taxation, to US Senator John Ensign (R-NV) [Click here for PDF]:
Dear Senator Ensign,
Sec 7203 of the Code provides that if there is a willful failure to file, pay. maintain appropriate records and the like that the taxpayer may be charged with a misdemeanor with a penalty of up to $25,000 and not more than one year in jail.
Sincerely,
Thomas A. Barthold
The “Code” in question is the Internal Revenue Code, and Barthold’s note was a followup to Ensign’s public interrogation of him on the issue of whether or not the IRS would be responsible for enforcing the “individual mandate” in President Barack Obama’s health care “reform” plan. Apparently the answer is “yes.”
If the IRS enforces the thing, and if failure to comply is prosecuted under the tax code, it gets pretty hard for Obama to argue with a straight face — as he did last Sunday to George Stephanopoulos — that the mandate isn’t a tax.
Last year, some companies were “too big to fail.” This year, apparently, some companies are “big enough to get Washington to sic the IRS and the cops on people who don’t want to buy their stuff.”
How big does a company have to be to get that kind of sweetheart deal? Will the store ads that arrive in the mail each week eventually come with red letter warnings that a warrant may be issued for your arrest should you fail to take advantage of Wal-Mart’s low low prices every day, or to transfer your medical prescriptions to Walgreens? Will we be assessed fines (with jail time for not paying) if we choose to nurse a few more miles out of our clunkers, or ride bikes, instead of ponying up for something new from Detroit every five years?
A liquidator with friends in DC could really clean up on this kind of thing — buy a warehouse full of Slim Whitman albums, say, then get a two-years-in-stir penalty passed for willful non-possession of “Indian Love Call.” It’s a matter of personal responsibility! We must each carry our fair share of the yodeling fandom burden!
By G.L.C., on September 2nd, 2008
On June 17, President Bush signed into law a $1.2 billion military tax relief package, which includes an Exit Tax on U.S. citizens and long-term green card holders who expatriate from the United States. The Exit Tax is part of the Heroes Earnings Assistance and Relief Tax Act (HEART) of 2008.
An American citizen or a lawful permanent resident giving up the citizenship or green card is now subject to a tax. The United States is probably the only country on the planet that taxes citizens on their worldwide income, no matter where those citizens happen to live.
Before this tax was introduced it was easy for individuals to renounce their American citizenship or surrender their green card to escape from the global U.S. tax liability. This tax applies to U.S. citizens who expatriate and lawful permanent resident who loose their permanent resident status, voluntarily or otherwise, on or after June 17, 2008.
Those who renounced their American citizenship or lost their permanent residency before this date are outside the purview of this tax. Such persons were treated as citizens or lawful permanent residents if they remained in the country for specific periods.
The exit tax includes a capital gains tax on the unrealized gain in an expatriate’s worldwide assets and a transfer tax on all gifts and bequests from an expatriate to any U.S. person during the life or upon the expatriate’s death if the expatriate:
- Has an average annual net income tax liability that exceeds $ 139,000, over the past five years subject to some adjustments; or
- Has a net worth of more than $2 million on the applicable date; and/or
- Fails to certify under penalty of perjury that he has complied with all federal tax obligations for the past five years.
The exit tax introduces the imposition of what can be described as mark-to-market on the basis that the expatriate sold all his or her worldwide assets for the fair market value on the day before expatriation. The exit tax is subject to an exclusion of $600,000 on the market value of all the assets owned by the expatriate in addition to a few applicable exemptions.
The exit tax applies to any expatriate that:
1. Has an average annual net income tax liability that exceeds US$139,000 adjusted annually for inflation for the five preceding years ending before the date the expatriate loses American citizenship or looses permanent resident status
2. Has a net worth of US$2 million or more on such date
3. Fails to certify under penalty of perjury that he or she has complied with all U.S. federal tax obligations for the preceding five years or fails to submit any proof of compliance the IRS demands.
With the exit tax, Congress has made the most significant change to the anti-expatriation rules since their inception in 1966. In doing so, it has sent a clear message: as American citizens and permanent residents, you have enjoyed many privileges, and if you want to exercise your right to leave, you’ll pay dearly for the privilege.
By J.D. Seagraves, on July 16th, 2008
Since I wrote my most recent article about the economic and fiscal views of the “third-party” presidential candidates – Ralph Nader, Cynthia McKinney, Chuck Baldwin, and Bob Barr – I thought I’d use my blog to highlight a U.S. Senate candidate with an Austrian economics-friendly platform. His name is Scotty Boman, and he’s a Libertarian from Michigan.
Boman’s issues page is divided into three categories: Peace, Liberty, and Prosperity. This triumvirate of topics will be familiar to fans of Ron Paul, the most famous popularizer of Austrian economics of all time, and that’s because Scotty Boman was a grassroots leader of the Ron Paul campaign in Michigan. In fact, Boman voted for Paul not only in 2008 but also in 1988 when Paul was the Libertarian Party’s nominee for president.
Since this is an economics blog, I’m concerned here with the candidate’s views on “Prosperity.” On the downside, Scotty doesn’t paint a very rosy picture when discussing the Federal Reserve System, the income tax, and Social Security. This is a common knock against Austrians, who are often said to be even more pessimistic than Communists! But hey, we see the direction the U.S. is headed, and we refuse to put on the rose-colored glasses. Sorry!
Boman points out that the U.S. dollar has lost 95% of its value since the 1913 debut of the income tax and Federal Reserve System. Of the income tax, he says he supports “repealing it and replacing it with nothing” and makes a mostly moralistic argument against taxation in general. While I agree, the view has little to do with economics. Boman’s views on the Fed are more suitable for discussion here.
Boman says the Federal Reserve System has been “absolutely ruinous” to our country. He points out the ridiculousness – so eagerly regurgitated by the financial media – that the Fed exists to “combat inflation” when, in reality, only the Fed can cause inflation in the first place!
“They do this by expanding the money supply. Each time the Fed creates new money, it diminishes the value of your dollar-based financial holdings. It thus imposes a hidden tax – the ‘inflation tax’ – and redistributes wealth from the poor and working class to the rich and politically connected.”
This is a hardcore Austrian view in line with the “principled populism” of Dr. Murray Rothbard.
As for a solution, Boman supports the revolutionary idea of free market competing currencies. This would take the power of determining “what is money” out of the hands of the government and put it into the hands of the people. The core of this philosophy rests on the Austrian “Theory on the Origin of Money,” which states that money arose naturally as the most commonly accepted means of exchange during the course of prehistoric barter. Gold and silver became “money” for a variety of reasons but basically because they were widely accepted and easily transportable. Once you see that the government doesn’t need to declare anything money, that the free market can do that, then the Federal Reserve System’s theft is demystified. You can see the Man Behind the Curtain and find out that the Emperor has no clothes. It’s not a pretty sight.
Of Social Security, Boman’s solution isn’t nearly as well defined. He basically throws his hands up in the air and admits there is no good solution, or at least, he doesn’t have one. This is refreshing from a politician. But he does offer one reform: make Social Security voluntary and allow young people to opt out. I know I would.
Author’s note: Since writing this article, I have become involved with the Boman08 campaign.
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