Tuesday, April 15, 2014

“So It's Tax Day Again”

“So It's Tax Day Again”
 by Karl Denninger

“How often do you sit down and think about this? If you're a W2 employee, it should be every payday, but it probably isn't. Indeed, you probably only think about it once a year, when you file your taxes, and then you get it exactly backward when the IRS sends back your money that you foolishly overpaid and let them have free for the entire rest of the year.

If you're an independent (such as myself) then you probably think about it four times a year, because you're making estimated payments. But in that case most of you probably don't think about it the right way either, because in your quest to not get penalized you intentionally overpay to remain in the "safe harbor" instead of taking your best guess (which can be wrong and if it is will result in a penalty for underpayment.) You then wind up with either an overpayment that is "refunded" (again, you let the government have the money without paying for its time value) or you let them keep it for two years (applying it against the next year's tax liability.)

Have you ever considered exactly how insane it is that we allow either situation to exist? In what sort of other environment do we have a circumstance where you are expected to overpay for a good or service- without being compensated for the other party having free use of your money?

Never would we allow this in auto repairs, new roofs, water heaters or air conditioners. But we not only tolerate it when it comes to our taxes we actively celebrate when the overpayment is returned to us without interest! And that's just the first bit of stupidity.

The second is found here, in the GDP tables -- and that materially understates the truth. Federal government is claimed to be $1,224.7 billion (that is, just over $1.2 trillion) on an annualized basis.  This is an outright fraud; Federal spending alone for FY 2014 will be $3,650 billion or three times the claimed rate from the GDP tables! That is more than one dollar in five. Yet that one dollar in five of every dollar spent in America is doled out by 536 people who quite-clearly believe they're better than God himself, to the point that they then employ legions of individuals who are tasked with making sure they can continue to collect those funds- at gunpoint, should you not willingly turn them over.

Now let's think about exactly what we get for our money. First and foremost, we get a group of people in DC who believe they don't have to follow the same laws the rest of us do. They can (and do) drive drunk, hit their spouses, bounce checks ("postal bank" anyone?) and grossly cheat on their taxes. All of these offenses and more would (and do) land common people like you or I in jail or prison. Oh sure, not all the time to be certain, but often enough. When was the last time you saw a Congressperson or Senator wind up actually go to jail for any of the above? Has it happened? Well, yeah, once or twice (e.g. Jackson) but the better question is how often does it not happen (that would be "nearly always.")  Further, in what other profession is using your former job as a means of extracting favors from others after you quit legal? In most professions this would be considered bribery and prosecuted. In Washington DC it's called lobbying and is not only legal it's arguably the largest "industry" in the city!

Next, we get a group that passes laws and then intentionally and blatantly refuses to enforce them. Obamacare is just one example that has been in the news of late; arguably the worst is in fact The Federal Reserve Act, a law that specifically lays forth a duty to regulate both money and credit supply so as to prohibit inflation. This law is in fact exactly correct in that it identifies both money and credit as fungible and imposes the correct duty upon the FOMC.

Congress and the Executive have, however, factually not only permitted but egged on the willful and intentional violation of that law for over 100 years serially by our banks, allegedly regulated by The Fed, and not once has that law been enforced against the banks nor has sanction been applied to The Fed for their willful and intentional refusal to enforce the law despite the fact that they publicly and loudly proclaim their willful and intentional violation of same. This is why a dollar earned when you're 20 only buys 26 cents worth of product in constant terms when you turn 65. This is not an accident, it is in fact a stated policy of The Fed in direct and blatant violation of the very statute that enables The Fed to exist.

We, the people of this nation, deserve what we get from our government. It would be one thing if these abuses were hidden and not blatantly in your face, as one could claim ignorance. But over the years these rank violations of law and refusal to enforce them equally, including against Congress and the Executive itself, have become so openly brazen that we factually allowed an entire county (Jefferson County, Alabama to be precise) to be robbed through hinky derivative deals that were proved in a court of law to be undertaken in part as a consequence of outright bribery and yet the entities that were beneficiaries of the outcome of those bribes were not prosecuted and the people who live there, totaling roughly a million citizens, are still being forced to pay, in perpetuity, for the outcome of that corruption!

There comes a time when one must concede that a people abused are in fact masochists, for they are openly and notoriously consenting to the gross and outrageous acts that are perpetrated against them. As we pass Tax Day perhaps it's time to reflect and ask that singular question: Are we there yet?”

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