Thursday, April 16, 2015
—Oliver Wendell Holmes, Jr., Compania de Tobaccos v. Collector
At tax time it is always fun to get away from numbers and instead reflect on news from the IRS that is invariably more interesting than a bunch of numbers would be. The recent news comes from two sources: those who reside in the penitentiary and those who, but for the penuriousness of Congress, would join them.
Those who are already there have made news because of their ability to turn their prison tenancy into a financially productive tenure through creative use of the tax system. In December 2014 it was reported that over $1 billion in tax refunds had been requested by occupants of assorted penitentiaries around the country. This is not, of course, because those engaged in the production of license plates have had excess amounts of taxes withheld from the prison wages to which their work entitles them. It is because some of those in prison who are sophisticated have engaged in tax related activities that pay considerably more than other penitentiary occupations.
The December report disclosed that some inmates have spent time filing bogus claims for tax refunds. In 2012 the $2 billion in claims for refunds originated by prison inmates was four times the amount claimed in 2009. In 2012, 138,000 inmates filed claims for refunds. The IRS, however, was on top of things and caught most of those claims before they were paid. It paid out only about $70 million in bogus refunds, a trivial sum in the overall scheme of things, less than 10% of the amount claimed and slightly more than ½ of what had been paid out the preceding year. (It was, however almost twice as much as had been paid in any year since 2007.) Many of those filing fraudulent returns, used the social security numbers of their prison colleagues. The inmates filing these returns are not all run of the mill bank robbers and murderers. A fair number of them are people who got to be where they are by committing crimes involving tax fraud of various sorts. One prisoner who was caught had a bank account with 7,654 claims associated with it. He was hoping to get $30 million in refunds. An Alabama inmate who used social security numbers of his colleagues was caught and sentenced to an additional 66 months in prison and ordered to pay back $788,280 that he had earned with his scheme. So that is the bad news. The good news, it turns out, is not all that good except for the headline.
The headline said: “IRS Opened 19% Fewer Criminal Cases in 2014, Report Says.” The report explains that IRS agents had initiated 5,314 criminal investigations in 2013 and only 4,297 in 2014. The kinds of investigations being conducted involve questionable refunds, money laundering, tax fraud, etc. The inference to be drawn from that headline is that more people are stepping up to the plate and paying the taxes that they owe. That, sad to state, is not the case. It turns out that the apparent good news has nothing to do with pricked taxpayers’ consciences but a great deal to do with a penurious congress.
Congress collectively, has no concept of the economics of the IRS. In 2010 the Treasury Secretary explained to his dim-witted listeners in Congress that every dollar invested in the IRS has a return of $5 in collections from non-compliant taxpayers. In a time when Republicans believe the country is in financial distress the logical thing to do is to provide more money to enable the IRS to collect from the intransigent. That, however, is not how Republicans work. In FY 2010 Congress gave the IRS $4.5 million less than it requested thus insuring there would be more than $20 million in uncollected taxes from non-compliant taxpayers. In 2015 the IRS will receive 10 per cent less than it got in 2010. The 2015 budget is about the same as the 1998 budget when 30 million fewer returns were being filed.
In fairness to members of Congress it must be pointed out that there is a method to their madness. They want to punish the IRS for activities conducted by some of its rogue employees in failing to act in a timely fashion on requests by conservative organizations that they be granted tax-exempt status. By decreasing the funding received by the IRS to conduct its routine operations, members of Congress think they are punishing the agency. If they were a bit brighter they’d realize that they are punishing the entire country by depriving the IRS of the additional revenue adequate funding for the agency would enable it to collect. Republicans, however, know that they can make up for the lost revenue by cutting benefits received by the needy such as food stamps, Pell grants, Medicaid and similar programs. It’s a win-win for the Republicans-punish the IRS and give the greedy needy the incentive to get jobs. It’s only the country for which it’s a lose-lose.
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Wednesday, March 25, 2015
Blind and naked Ignorance
Delivers brawling judgments, unashamed,
On all things all day long.
— Alfred, Lord Tennyson, Merlin and Vivien
There are two ways to attack climate change. One comes from Rick Scott of Florida and the other from Mirthful Mitch McConnell of Kentucky. They attack the same problem with different weapons. It all revolves around what some people call “climate change.” For Rick Scott the words are anathema because they suggest there is such a thing. For Mitch McConnell, attempts to stop it are offensive because those attempts have an adverse financial impact on those who give him money for his campaigns.
The two words are meant to describe a phenomenon that many scientists say the world is undergoing. Reports from assorted Florida sources demonstrate how Rick Scott responds to his fear of the words. The most recent example was offered by Barton Bibler, the Land Management Plan Coordinator for the Division of State Lands in Florida. He was reprimanded for “Poor Performance”, “Insubordination” and “Conduct Unbecoming a Public Employee.” It all came about because of his use of the proscribed words at a teleconference in which he participated. From the bureaucratic gobbledy gook in the Reprimand it is hard to understand exactly what Mr. Bibler, did or failed to do to deserve the reprimand. In speaking with the Washington Post, however, Mr. Bibler explains his offense. He said that in the teleconference there was a discussion about reports dealing with climate change and Mr. Bibler opined during the teleconference that the Keystone XL Pipeline would negatively affect Florida. He was told by his supervisor to remove the words “climate change” from his minutes of the teleconference. His subsequent refusal to do so constituted “insubordination.” As Mr. Bibler explained to the paper’s reporter: “We should be talking about climate change. If we can’t, that’s absurd. And it’s harming our future.”
The governor’s office insists there is no ban on the words. Other state employees, however, confirm the fact that they have been forced to remove the words from reports they have prepared. One scientist said she was required to remove the words “climate change” from a state report on climate change. Doug Young, the president of the south Florida Audubon Society, told the Guardian newspaper that when undergoing training to become a presenter of a Florida Department of Environmental Protection (DEP) power point presentation on Florida’s coral reefs he was told he couldn’t mention climate change in his presentation. A report from the Florida Center for Investigative Reporting quote six people who said the DEP banned the use of the words “global warming” or “climate change.” The people quoted included a former attorney with the department’s office of general counsel. Both the agency and the governor’s office said there was no such policy in place although when asked to provide examples of where the phrases were used in DEP materials, no examples were provided. Mirthful Mitch (aka Merry Mitch because of his unfailingly cheerful demeanor) is less concerned with words and more concerned with action.
The Environmental Protection Agency has issued regulations that will reduce carbon pollution from coal-fired power plants and force many of them to close. Those plants are the major source of greenhouse gas emissions and funds for Mr. McConnell’s campaigns. (In the last election cycle coal companies gave Mr. McConnell more than a quarter of a million dollars, more than any other candidate received from them.) Mr. McConnell’s home state of Kentucky is one of the largest producers of coal and if coal fired power plants are forced to close, it will reduce the greenhouse gas emissions that adversely affect all of us, as well as the profits enjoyed by his supporters through the sale of coal.
There is no way the senate can block implementation of the EPA rules but Mr. McConnell has begun an effort to get states to block enforcement of the new rules by engaging in litigation. He has sent a letter to every governor in the country outlining a legal strategy they can follow to stop the rules from becoming effective in their states. By tying up implementation of the rules through litigation, states that follow Mr. McConnell’s road map guarantee that carbon pollution will continue unabated in their jurisdictions for the foreseeable future.
Alan Rusbridger is the editor of the Guardian newspaper who is retiring this summer after 20 years in that position. In an editorial in that paper on March 6, 2015, he said that one of his few regrets as he looked back at his tenure was “that we had not done justice to this huge, overshadowing, overwhelming issue of how climate change will probably, within the lifetime of our children, cause untold havoc and stress to our species. . . . So in the time left to me as editor, I thought I would try to harness the Guardian’s best resources to describe what is happening and what-if we do nothing-is almost certain to occur, a future that one distinguished scientist has termed as ‘incompatible with any reasonable characterisation of an organized, equitable and civilized global community.’” Messrs. McConnell and Scott have no interest in being members of an “organized, equitable and civilized global community” nor do they belong in it. It’s a pity that they are in positions where their lack of interest adversely affects so many.
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Thursday, March 12, 2015
Cried all, “Before such things can come,
You idiotic child,
You must alter human nature!”
And they all sat back and smiled.
— Charlotte Perkins Gilman, In This Our World
It is a whole new approach to bigotry and it comes just as the country is celebrating 50 years since Bloody Sunday in Selma. Those who still secretly harbor a longing for the days when racial prejudice was accepted in many parts of the country will be kicking themselves for not having thought of it back then. I refer of course to the steps being taken by state legislatures around the country to give religious cover to those who continue to find satisfaction in asserting their superiority to others by invoking whatever God they happen to be worshipping. Those over whom the devout wish to establish their superiority are the members of the LGBT community. As this is written legislators in at least five states are considering legislation that blesses (my word rather than theirs) the actions of those who refuse to make wedding cakes for same sex couples, offer them employment or otherwise assert their right to refuse to serve members of the gay community.
In Georgia two different versions of what is called the “Preservation of Religious Freedom Act” are being considered. If enacted they would give Georgians “the right to act or refuse to act in a manner substantially motivated by a sincerely held religious tenet or belief whether or not the exercise is compulsory or a central part or requirement of the person’s religious tenets or beliefs.” The bill has gotten through the senate judiciary committee but has not yet been set for a formal vote. In Mississippi a pro-discrimination bill provides that the state may not “burden” a person’s exercise of religion. The bill was passed unanimously in the state senate. It now awaits action by the state house. In Missouri Senate Bill 916 permits businesses to refuse service to anyone if “the refusal is substantially motivated by sincere religious belief . . . .” If God tells someone in Missouri not to bake a wedding cake for a gay couple the law will sanction the refusal. Notwithstanding the foregoing, not all the news in this arena is bad.
In Colorado a pro-bigotry bill which is described in its preamble as being for “the protection of a person’s first amendment rights in the enforcement of public accommodations laws, and, in connection therewith, protecting a person’s right to not be involuntarily compelled in speech, acts of artistic expression, or acts of religious expression” was defeated in committee. Had it passed the owner of a hotel could have refused to rent a room to a gay couple without being in violation of any law pertaining to making accommodations available to all. It would also protect the baker whose religious belief tells him it is wrong to bake a wedding cake for a gay couple. A companion bill was also defeated. It was described as concerning “state freedom of conscience protection act” and specified that “no state action may burden a person’s exercise of religion, even if the burden results from a rule of general applicability. . . .” This bill, too, would have protected the recalcitrant baker. Colorado was not the only state to decline to follow in the footsteps of Missouri et al.
Arizona Governor Jan Brewer vetoed a bill presented to her entitled the “Religious Freedom Restoration Act.” She said the vetoed bill that her Republican controlled legislature passed would have permitted business owners to refuse service to gay people on the basis of religious beliefs.
In Arkansas a conscience protection bill was proposed. If a person’s conscience told the person that serving a gay person was wrong the bill provided that the person and the conscience would not be subject to legal penalties for their refusal to serve such persons. Although it was passed by the Arkansas House of Representatives it did not receive the votes it needed in the Senate Judiciary Committee to get it to the full senate. Although it may still get to the Senate it probably is of little importance since Arkansas has no law banning discrimination based on sexual orientation or gender identity. Thus, it would seem, in Arkansas discrimination against gays is permitted without the benefit of new legislation.
Thanks to the invocation of religious conviction it is clear that prejudice in the United States is getting new life insofar as the LGBT community is concerned. It is acceptable to those promoting prejudice because they attribute their bigotry not to themselves but to the God by whom they pretend to be guided. It’s safe to say their God probably finds that surprising. He shouldn’t. Much of the evil that takes place around the world is done in the name of the God the perpetrators claim to worship. It must be hard on Him.
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