Stupid Government Power–Making The Innocent Pay

https://grantcoulson.files.wordpress.com/2014/04/incentiveseverywherepicturecorrect1.jpg?w=444&h=288

     Do not think about, write about or deal with  human behavior without determining the effects of incentives.

     Wherein we see that doing legitimate business legitimately is no protection against zealous persecution by those who will never be punished.

Heavy hand of the IRS seizes innocent American’s assets
By George Will

JewishWorldReview.com | Flint, Mich.—Earnest moralists lament Americans’ distrust of government. What really is regrettable is that government does much to earn distrust, as Terry Dehko, 70, and his daughter Sandy Thomas, 41, understand.

Terry, who came to Michigan from Iraq in 1970, soon did what immigrants often do: He went into business, buying Schott’s Supermarket in Fraser, Mich., where he still works six days a week. The Internal Revenue Service, a tentacle of a government that spent $3.5 trillion in 2013, tried to steal more than $35,000 from Terry and Sandy that year.

Sandy, a mother of four, has a master’s degree in urban planning but has worked in the store off and on since she was 12. She remembers, “They just walked into the store” and announced that they had emptied the store’s bank account. The IRS agents believed, or pretended to believe, that Terry and Sandy were or conceivably could be — which is sufficient for the IRS — conducting a criminal enterprise when not selling groceries.

What pattern of behavior supposedly aroused the suspicions of a federal government that is ignorant of how small businesses function? Terry and Sandy regularly make deposits of less than $10,000 in the bank across the street. Federal law, aimed primarily at money laundering by drug dealers, requires banks to report cash deposits of more than $10,000. It also makes it illegal to “structure” deposits to evade such reporting.

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    This regulation, part of the relentless, failed and failing War On Drugs, was designed to prevent something, but is only one more stupid regulation inhibiting commerce enforced by government employees who never need worry about their income.

Because 35 percent of Schott’s Supermarket’s receipts are in cash, Terry and Sandy make frequent trips to the bank to avoid tempting actual criminals by having large sums at the store. Besides, their insurance policy covers no cash loss in excess of $10,000.

  In 2010 and 2012, IRS agents visited the store and examined Terry’s and Sandy’s conduct. In 2012, the IRS notified them that it identified “no violations” of banking laws. But on Jan. 22, 2013, Terry and Sandy discovered that the IRS had obtained a secret warrant and emptied the store’s bank account. Sandy says that if the IRS had acted “the day before, there would have been only about $2,000 in the account.” Should we trust that today’s IRS was just lucky in its timing?

The IRS used “civil forfeiture,” the power to seize property suspected of being produced by, or involved with, crime. The IRS could have dispelled its suspicions of Terry and Sandy, if it actually had any, by simply asking them about the reasons — prudence, and the insurance limit — for their banking practices. It had, however, a reason not to ask obvious questions before proceeding.

The civil forfeiture law — if something so devoid of due process can be dignified as law — is an incentive for perverse behavior: Predatory government agencies get to pocket the proceeds from property they seize from Americans without even charging them with, let alone convicting them of, crimes. Criminals are treated better than this because they lose the fruits of their criminality only after being convicted.

Sandy remembers her father exclaiming, “Aren’t we in the United States? We did nothing wrong.” They did something right in discovering the Institute for Justice’s activities against civil forfeiture abuse. IJ, a libertarian defender of property rights and other American premises, says that what was done to Terry is done routinely across the nation — indeed, it was done almost simultaneously to the owner of a gas station near Schott’s Supermarket who deposited his cash receipts whenever he could get to the bank, typically every few days.

Civil forfeiture proceeds on the guilty-until-proven-innocent principle, forcing property owners of limited means to hire lawyers and engage in protracted proceedings against a government with limitless resources just to prove their innocence. Says IJ:

“To make matters worse, forfeiture law treats property owners like random bystanders and requires them to intervene in the lawsuit filed by the government against their property just to get it back. That is why civil forfeiture cases have such unusual names, such as United States v. $35,651.11 in U.S. Currency — the case involving Terry and Sandy.”

In what it probably considered an act of unmerited mercy, the IRS offered to return 20 percent of Terry’s money. Such extortion — pocketing others people’s money — often succeeds when the IRS bullies bewildered people not represented by IJ, which forced the government to return all of Terry’s and the gas station owner’s money.

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    Government employees often wonder why they are held in contempt by people engaging in real enterprise. I wonder why they wonder.

IJ’s countersuit seeks an injunction to prevent such IRS thefts and extortions. Meanwhile, earnest moralists might consider the possibility that Americans’ distrust of government is insufficient.

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    The only way to make them stop wasting money is to give them less. The only way to stop them abusing power is to give them less.

Government Job or Respect–Which’ll It Be?
Cheerio and ttfn,
Grant Coulson, Ph.D.
Author, “Days of Songs and Mirrors: A Jacobite in the ‘45.”
Cui Bono–Cherchez les Contingencies

 

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