Tax Day Travesties and Facts, Part 1

Today is the first in what is likely to be a multipart series on taxes and wasteful government spending. It is an appropriate topic given that most honest Americans filed their Federal and state income taxes last week. 

We will be going through a random hodgepodge of different taxation stories that arose in the past few weeks, all of which prove that: 1) we pay way too much in taxes for the lousy quality and quantity of government services we get in return, 2) the political class and the government they operate wastes so much money and taxpayer wealth on inefficient, criminally infested, and unneeded programs, and 3) we have probably already passed over from heavy taxation into pure oppression.

1) Let’s start this random walk through the taxation jungle with an article that appeared in the Independent Journal Review, 9 Facts About Taxes That Will Have You Looking Into Getting Stranded on a Desert Island, facts that are likely to make you either crazy or enraged:

#1: There are more than 72,000 pages in the federal tax code. That’s more than 146 times the size the tax code was in 1939 and about 26,000 pages longer than it was just 14 years go in 2000.

#2: It will take the average American worker 111 days to earn enough to pay their taxes. That day, which lands on April 21 for many but varies by state, is called Tax Freedom Day. Tax freedom day in 2014 is five days longer than in 2013, indicating our tax oppression is getting worse, not better.

#3: Over 300,000 federal employees and retirees were found delinquent on their taxes. A report published by Senator Tom Coburn, found that these Federal employee tax dodgers owe the Federal government $3.5 billion in back taxes. Coburn’s report also found that the number of Federal employees not paying their fair share of income taxes was increasing over time as was the amount of their unpaid Federal income taxes. 

#4: Federal taxes push 7 million childless Americans into or further into poverty. The Center For Budget and Policy Priorities, using U.S. Census data, found that Federal taxation pushes 1.2 million childless Americans under the poverty line and 5.8 million childless Americans further under the poverty line.

#5: In less than 20 years, the Social Security program will likely be insolvent. In reality, the Social Security program is already insolvent, paying out more than it takes in from a cash perspective. This point talks about the accounting trick of the Social Security Trust fund, a trust fund that is really a giant Ponzi scheme. 

The real crime here is that the Social Security Administration loses over $100 billion a year to waste, inefficiency, and criminal activities. That is why it is running out of money, the political class cannot run an effective and efficient program for retirement despite collecting trillions and trillions of tax dollars over the years.

#6: Payroll taxes are out of control. Payroll taxes are growing very, very quickly as a percentage of total taxation as the baby boomers age and retire, driving up Medicare and Social Security taxes. This trend is unlikely to naturally slow since the growth in baby boomer retirement is growing faster every day while the political class gets slower and less creative in problem solving every day.

#7: Most Americans’ taxes went up this year. This is due to the fiscal cliff deal raising payroll taxes, as well as Obama Care’s 3.8 percent net investment income tax and 0.9 percent Additional Medicare Tax. In a quirk of the voluminous tax code, the lowest earners and the highest earners in America this year will both see the greatest increase in their effective tax rate and the greatest decrease, on a percentage basis, in their net income after taxes. This is despite the fact that the highest earners in the top quintile of American workers pays more than 16 times the effective income tax rate of the lowest quintile earners.

#8: You probably pay more in Medicare and Social Security taxes than in income taxes. People can talk about having a “safety net,” but there’s a flipside to that: a lot of money lost to the government could be used by people hoping to start businesses or save for college – lost opportunities. 

#9: The majority of Americans feel that they pay too much in taxes. A long term tracking poll from Gallup finds that the majority of Americans think they pay too much in taxes. Could that possibly be because they do not get any quality services back in return for such high and oppressive tax rates? Why is that not reflected in our elected officials' actions and budgeting?

The Independent Journal Review article summed these findings nicely: While taxes are vital for a government to function, the government has an inherent duty to spend tax dollars in a responsible way, as well as a duty to reflect the will of its citizens when spending those dollars. Our Federal government is fulfilling neither of those responsibilities.

And neither are our Federal politicians.

2) While we may feel we pay too much in taxes, a recent Washington Examiner article pointed out that our politicians can still find ways to waste the billions of dollars we send to them every year, especially how there are so many stupid and wasteful tax deductions that the vast majority of Americans cannot take advantage of. 

You can be sure that some lobbyist somewhere paid off some politicians to make sure these narrowly focused tax breaks got into the tax code, not because they were good for the economy or many citizens, but because they were good for a politician’s career:

1. Pet moving. If you get a new job, you cannot not only deduct your regular moving expenses but you can also deduct your pet moving expenses. Specifically, if you don’t want to take your pet with you as you drive across the country, you can deduct the cost of shipping them to your new home. Really, how many people does this effect and what is even worth the administrative time to write this idiotic deduction into the tax code?

2. Fostering a pet. Did you know you can deduct expenses for fostering an animal? If you’re taking care of a dog or cat while it’s waiting for adoption, you can deduct expenses for food, vet bills, cat litter and more, assuming it is in conjunction a 501(c)(3) charity.

3. Guard dogs and service animals. If you use a guard dog (or cat, or ferret or whatever) to protect your property, you can deduct expenses related to its care. Who knew that Fido could be such a vital part of your tax planning?

4. Clarinet lessons. You can not make this stuff up.You can deduct the cost of a clarinet purchase and resultant clarinet lesson costs from your taxes. 

Why? Orthodontists lobbied the government for the deduction because playing the clarinet helps with the overbite. Obviously, the drum, trumpet, and other instrument lobbyists are not earning their money like the clarinet lobbyists are.

5. Whale, whale, whale, what have we here? If you happen to be a indigenous Alaskan with a whaling boat, you can deduct up to $10,000 for ship repairs, equipment and other whaling expenses. 

As with the non-clarinet instrument lobbyists, the cod fishermen in the Northeast and the grouper fishermen in the southeast must also be extremely disappointed with their fishing lobbyists since they were not able to get the same favored tax treatment that Alaskan fishermen get.

6. Legal defenses. Shouldn’t being a criminal exempt you from using your criminal defense lawyer as a tax deduction? Just saying, paying for your crime should not be in the form of the American taxpayer paying for your legal defense.

7. Wigs. The cost of wigs can be deducted if they are purchased “upon the advice of a physician for the mental health of a patient who has lost all of his or her hair from disease,” according to the IRS. 

8. B-I-N-G-Oh heck yeah! In some parts of the country, e.g. Long Island, bingo is extremely popular and as such, you can deduct your bingo losses just like any other gambling. Besides bingo, should we really be having the American taxpayer paying the expenses of someone’s hobby or addiction, depending on how one defines gambling?

This is what your Federal tax filing helped to subsidize and pay for last year.

3) Finally for today, consider some analysis that was done by the group, Americans For Tax Reform: 

Since taking office in 2009, President Barack Obama has formally proposed a total of 442 tax increases, according to an Americans for Tax Reform analysis of Obama administration budgets for fiscal years 2010 through 2015. The 442 total proposed tax increases does not include the 20 tax increases Obama signed into law as part of Obama Care.

The number of proposed tax increases per year is as follows:

-79 tax increases for FY 2010
-52 tax increases for FY 2011
-47 tax increases for FY 2012
-34 tax increases for FY 2013
-137 tax increases for FY 2014
-93 tax increases for FY 2015

Two observations here:

•  These tax increases, proposed and actual, comes from a President who campaigned on the promise that no American earning over $250,000 would pay a penny more in Federal taxes during his regime’s time in office. I maintain it is impossible to propose and/or pass more than 400 new taxes and not seriously and negatively affect the take home pay for those Americans earning under $250,000. It cannot be done, and as we showed above, it has not been done, especially with the lower quintile of American workers who are paying taxes at a higher rate and a higher total dollar amount. Thus, another Obama promise seriously broken or seriously deceptive.
• Notice that in typical political fashion, the lowest number of taxes was during a major election year where the Obama administration proposed or passed “only” 34 new taxes. Once the election was over, that rate went up four fold. More cowardice and deceptions.

That will do it for today in our tax round up. Today we found out that this administration is tax crazy, taxes are going up for every kind of American in every income tax bracket, the political class has wasted away trillions of dollars of Medicare and Social Security taxes over the years, endangering the financial solvency of both programs, hundreds of thousands of Federal employees are Federal tax evaders, there are way too many stupid deductions in a way too large and too complex tax code and your dog should be part of your tax planning. 

Political class tax insanity at its worst. More gruesome details tomorrow of high taxes, low government service, and wasteful spending.

Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at:

www.loathemygovernment.com

It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Please visit the following sites for freedom:

Term Limits Now: http://www.howmuchworsecoulditget.com
http://www.reason.com
http://www.cato.org
http://www.robertringer.com/
http://www.youtube.com/watch?v=08j0sYUOb5w

Obama Scandal Number Three - Using and Abusing The IRS For Political Gain

This is the third in a series of introductory posts where we begin the long process of trying to get our arms around just three of the disgraceful political scandals that the Obama administration has recently brought down on itself and the American people:

1. The Benghazi consulate terrorist attack and cover up.
2. The unauthorized and secret confiscation of confidential telephone logs of Associated Press news reporters by the Obama Justice Department.
3. The use of the IRS to hamper, harass, and intimidate American citizens and organizations that held political opinions contrary to the Obama administration’s positions and opinions.

We have covered the first two scandals listed here in the past two days at a very high level of detail in order to get a basis established to jump forward from with more details in the near future. Today, we will look at the third, and probably most disgraceful scandal. It involved violating the freedom of speech rights of millions and millions of Americans, the use of the IRS to suppress political activity and speech for any group and any American who held and holds political opinions in opposition to Obama’s.

The basis of this first cut at this scandal comes from a May 15, 2013 Associated Press article entitled, “AP Exclusive: IRS Knew Tea Party Targeted in 2011.” Although this article’s information is almost a week hold as I write this and a ton of other revelations and law breaking have come to light since May 15, it is a good starting point, with the later breaking news to be filled in in a near future post.

Highlights from the AP story include the following details and atrocities:

• High level/executive officials knew their employees were targeting Tea Party groups as early as 2011, according to a draft of an IRS inspector general's report.
• These findings are likely in conflict with public statements previously made by the IRS that only lower level IRS agents were involved, statements made by the IRS commissioner.
• We know that much of this information must be true because the IRS actually publicly apologized for what it called "inappropriate" targeting of certain, and always conservative, political groups during the 2012 election to see if they were violating their tax-exempt status.
• Despite apologizing, the IRS press release did reaffirm its stance that no higher level IRS employees were involved in the targeting.
• But the inspector general’s report is going to claim that on June 29, 2011, Lois G. Lerner, the head the IRS division that oversees tax-exempt organizations, was told at a meeting that groups were being targeted.
• Specifically, at that meeting, she was told groups with "Tea Party," ''Patriot" or "9/12 Project" in their names were being singled out for additional and burdensome scrutiny, the inspector general report says.
• The 9/12 Project is a group started by conservative TV personality Glenn Beck. In a statement to the AP, Beck asserted that this news was not news to him and other conservatives.
• But apparently this news to Ms. Lerner did not deter the IRS probably illegal and at least disgraceful targeting since the report says that on Jan, 25, 2012, the criteria for flagging suspect groups was changed to, "political action type organizations involved in limiting/expanding Government, educating on the Constitution and Bill of Rights, social economic reform/movement," many of the issues that Tea Party and other conservative groups are focused on.
• Simultaneously, committees in Congress were writing letters IRS Commissioner Douglas Shulman to express concern because Tea Party groups were complaining of IRS harassment. Thus, the head of the IRS was aware of these charges and claims over a year ago.
• In fact, Shulman was adamant in his denials testifying before Congress that, "There's absolutely no targeting. This is the kind of back and forth that happens to people" who apply for tax-exempt status, Shulman said at the House Ways and Means subcommittee hearing. Thus, Mr. Shulman is either being dishonest, under oath, in testimony to Congress or had no idea that this sort of illegal and despicable behavior was going on the very organization he was supposedly in charge of.
• The IRS has not said when Shulman found out that Tea Party groups were targeted.
• Shulman was appointed by President George W. Bush, a Republican. His 6-year term ended in November. President Barack Obama has yet to nominate a successor.
• The agency was being run by an acting commissioner, Steven Miller. but he just got relieved of duties by the President.
• The IRS said in another recent press release that the IRS believes the timeline in the inspector general’s report is correct, lending credibility to the conclusions and findings of the report.

That gives you an idea of the background. The IRS now acknowledges that Tea Party and Conservative political groups were singled out for burdensome harassment simply because of their free speech-guaranteed freedoms. However, the IRS would have you believe that their executive managers were so incompetent that they themselves should not be blamed or held accountable for these hideous actions because some very low level IRS agents did bad things.

Reactions to this disgrace were right on target for anyone who believes in a free country, the First Amendment, and the adult exchange of ideas and conflicting opinions:

• Congressman Charles Boustany, chairman of the House Ways and Means Committee's oversight subcommittee, said the inspector general’s report "raises serious questions as to who at IRS, Treasury and in the administration knew about this, why this practice was allowed to continue for as long as it did, and how widespread it was. This timeline reveals at least two extremely unethical actions by the IRS. One, as early as 2010, they targeted groups for political purposes. Two, they willfully and knowingly lied to Congress for years despite being aware that Congress was investigating this practice, This is an outrageous abuse of power. Going after organizations for referencing the Bill of Rights or expressing the intent to make this country a better place is repugnant. here is no excuse for this behavior."
• Congressman Dave Camp is chairman of the House Ways and Means Committee:"The admission by the agency that it targeted American taxpayers based on politics is both shocking and disappointing. We will hold the IRS accountable for its actions."
• Jenny Beth Martin, national coordinator for the group Tea Party Patriots: "We must know how many more lies they have been telling and how high up the chain the cover-up goes. It appears the IRS committed crimes and violated our ability to exercise our First Amendment right to free speech. A simple apology is not sufficient reparation for violating the constitutional rights of United States citizens. Therefore, Tea Party Patriots rejects the apology from the Internal Revenue Service. We are, however, encouraged to hear that Congress plans to investigate. Those responsible must be held accountable and resign or be terminated for their actions."

The IRS has acknowledged that some of the harassment from IRS agents included the demand for information that the agents had no right to access in addition to information that was not related to the request for non-profit status:

• Lengthy, intrusive questionnaires and forms.
• The forms asked for information about group members' political activities, including details of their postings on social networking websites and about family members.
• The IRS also listed for lists of financial donors.

The number of groups filing for this tax-exempt status more than doubled from 2010 to 2012, to more than 3,400. To handle the influx, the IRS centralized its review of these applications in an office in Cincinnati.

Lerner said on Friday this was done to develop expertise among staffers and consistency in their reviews. As part of the review, staffers look for signs that groups are participating in political activity. If so, IRS agents take a closer look to make sure that politics isn't the group's primary activity.

Even after the apology, the information coming out about Congressional testimony, and the inspector general’s report, Ms. Lerner was still sticking with quickly weakened excuse of why only Tea Party and conservative groups and individuals were harassed: "It's the line people that did it without talking to managers. They're IRS workers, they're revenue agents."

Bad things happened, rights were trampled on but it is not our fault. But we should not expect anything different from the Obama administration since nothing is ever their fault. It is always someone else’s fault or the fault of a natural disaster or the fault of the Republicans or the fault of fate of line agents...

But consider this Ms. Lerner: according to a recent USA Today article, for 27 consecutive months, beginning February, 2010, not a single tea party application was approved for non-profit status. So either for 27 months, IRS management was completely out of touch with what was going on within its organizations or we have a lot of people either lying or in denial when it comes to trampling the freedom od speech rights of millions of Americans. In either case, many IRS executives either need to be fired from their jobs and/or put in jail.

Okay, that sets up on these three scandals going forward. More to come, none of it any good, as we move forward on these three disgraces to liberty in the next week or so, after we finish up our monthly review of the unfolding Obama Care disaster and related scandals.

Which is not to be confused with the Fast and Furious disaster and scandal.

Which is not be confused with the poor Obama administration economic management disaster and scandal.

Which is not to be confused the Obama administration’s alternative energy crony capitalism scandal…..

Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at:

www.loathemygovernment.com

It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Please visit the following sites for freedom:

http://www.reason.com/
http://www.cato.org/
http://www.robertringer.com/
http://realpolichick.blogspot.com
http://www.youtube.com/watch?v=08j0sYUOb5w