Tax Crooks: Government or Taxpayers?

Monday, 08 Apr 2013 07:43 AM

By Denis Kleinfeld

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Let me see if I understand what is going on. The U.S. government collects taxes to the extent of about $2.5 trillion.

The government spends $3.7 trillion more or less, according to the government’s statistics. It is hard to really know because no one in the government — particularly Congress — actually knows.

The Treasury doesn’t know and the IRS doesn’t either. The Government Accountability Office (GAO) reports tell us that the IRS does not comply with federal accounting requirements and does not have sufficient books and records from which the GAO can do an audit.

Editor's Note: Dangerous Dealings Between Obama, Bernanke, Special Interests

So while the taxpayers get hammered if they fail to have a receipt or two, the IRS basically can’t even tell what or where its current cash balances are much less a lot of other things. To be fair, the IRS is doing rather well given that Congress underfunds the IRS while significantly, no less than annually, increasing the complexity of what is required.

The national debt is $17 trillion. If generally accepted accounting principles accounting were used, then the debt would be more like $70 trillion.

About 70 percent of the “debt” is owned by the Federal Reserve, intergovernmental or by the U.S. public. China owns perhaps 8 percent. Interest on the debt is being artificially suppressed and the government claims that inflation is negligible. Taxpayers viscerally know the purchasing power of each of their dollars is mysteriously vanishing.

A millionaire was, well, a millionaire not too long ago. Now, someone with a million dollars is still living from paycheck to paycheck. Could you retire on a million dollars?

Want to know what happened?

Your government stole your purchasing power.

Remember Al Gore debating George W. Bush (I know, it’s a painful thought.) There he was stomping about the stage rambling on about the Social Security lock box. Gore seemed to actually believe that when the government says that something is in a “trust fund” that there is actually money being kept in a bank or someplace and not spent.

The truth is that the government has lots of trust funds and there is not a single penny in any of them. What’s in them?

The Treasury’s promise to pay. IOUs.

And to pay interest to the prior investors, the government — that is the Treasury and Federal Reserve —sells more debt to new investors.

This is a classic Ponzi scheme.

The government is committing fraud and theft on a scale so vast that it is beyond the average taxpayer to even contemplate.

This leads to the question of what does the government do with the money it steals from taxpayers and investors buying government debt?

Admittedly, some amount goes for legitimate things the federal government is supposed to do.

Mostly, the money goes to buy votes so the politicians can get re-elected. Paying off campaign contributors, voting blocks and developing new sources of money and votes are what politicians do full time.

It’s called “bringing home the bacon” or “pork barrel politics.” This is the fundamental law of politics — somewhat akin the Second Law of Thermodynamics.

Billions upon billions are spent on subsidies and welfare transfer payments. Billions more are lost to theft and fraud. Reports flow out of the GAO, Inspectors Generals and a long list of other watchdog agencies that carefully document that they can’t figure out what is really going on in any aspect of government operations.

As for Congress, it is hard not to recognize that this is a group that thinks insider trading is a perk of the job. Their motto is “If it brings in cash for me or votes, then it’s legal.” I think this is also carved over the front door of the White House as well.

Is there a better way for politicians to steal than by creating a tax system that makes governmental fraud and robbery legal? I don’t think so.

On the other side of the equation are the victims — taxpayers.

People using lawful deductions or putting money into retirement accounts are somehow cheating on taxes. Cheating who?

Editor's Note: Dangerous Dealings Between Obama, Bernanke, Special Interests

Where is the tax injustice to people who don’t pay tax by people who do? How can people who pay no taxes claim that people who do pay taxes are not paying their fair share? The taxpayers are not just paying a fair share, they are paying all the shares.

We are expected to believe that hundreds of thousands of U.S. taxpayers are crooks because they have foreign bank accounts or foreign investments. Can it be that millions of people all around the world who have international bank accounts woke up and said that they couldn’t live one more day without being a tax evader?

Maybe the millions who have international bank accounts are not the crooks, but the politicians who use the income tax system to rob them are.

Next time you read or hear about loopholes, tax shelters, retirement and offshore accounts, think about who are the real tax crooks. Are they the government or the taxpayers?

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