Thursday, March 5, 2009

Not taking the easy shot: tax evasion and the political elite

I have thus far pretty much avoided commentary on the various and sundry administration appointees with tax problems.

Oh, I might have groused in a comment somewhere or other, but I have consciously focused on lobbyists rather than tax cheats.

So, first, I'll get the Libertarain-anarcho-capitalist part out of my system with an extensive snippet of Jim Davidson's rant over at Boston Tea Party:

There's an old saying that "sauce for the goose is sauce for the gander." This appears to be an early gender equality cliche.

US trade representative nominee Ron Kirk owes $10,000 in taxes. He earned more than a million dollars last year as a partner in Houston-based law firm Vinson and Elkins. He owes some of the money because of honoraria he received for yakking at events. He owes some of it because he took deductions for his season tickets to see the Dallas Mavericks (some sort of spherical ball team?) which apparently didn't comply with government rules for deductions.

Kirk is not alone. Treasury secretary Timothy Geithner paid $43,000 in back taxes before his confirmation. Tom Daschle withdrew his bid to lead the Health and Human Services department, paid $128,203 in back taxes, plus interest.

Labor secretary Hilda Solis is married to some sort of tax deadbeat. And there was some sort of White House aide with a tax problem.

Let's not be unpleasant about these people. They are members of the political class. Paying taxes is for little people, people who are beneath them, people who cannot get cushy jobs at the top of the government.

Let's not criticise their choices, berate them for not paying taxes. Let's not beat them, let's join them.

Americans should stop paying taxes. Go on strike.

Dump tea? No. Keep your tea, but don't pay the tax.

I have two thoughts about this issue, which gives me a fifty percent chance that one of them will have some value.

1) So far the Obama administration has, by the act of nominating these folks, managed to collect nearly $200,000 in back taxes to help fight the deficit. I don't want him to stop nominating tax cheats, I want him to find more of them. Apparently, a presidential nomination to office should become one of the IRS's more effective collection strategies.

Sir, have you considered the fact that your tax debt makes you a prime candidate to become deputy under assistant Secretary of the Treasury? If you'll just send us a cheque for $26,241.68, we'll see that your nomination gets immediately to the right congressional committee.

Given the number of Americans each year who wire money overseas when they discover their relation to various Nigerian princes, I think it would probably work.

2) The difficulty presented by this spate of nominations says little or nothing about the morality or probity of the individuals, but speaks volumes about the nature of elites and social classes in our society.

Apparently it is impossible for any administration--of any party likely to ever hold the White House--to find sufficient numbers of people to accept nomination to high office who haven't either

a) avoided (by mistake) paying tens of thousands of dollars of Federal taxes;

b) avoided (through inadvertence) following the law about employing Guatemalan household help;


c) served as a lobbyist for some interest group or corporate interest that seeks bazillions of dollars in government contracts and hand-outs.


Because we have reached the point where virtually nothing separates the functionality of huge corporations and the State, and the financial health of the two parties has become so intertwined that disaster for one is disaster for the other. Hence, some corporations have become "too big to fail," and the need to give them hand-outs to avoid that failure (while strongly decrying their ineptitude) allows government to proclaim that "the free market has failed."

Materialist Fernand Braudel made an important distinction between capitalism and the free market. He divided economic transactions into three general categories. Daily life involved those small interpersonal economic relationships between individuals, families, and friends. The Free Market involved the direct interactions between customers and merchants, as well as those between merchants, that were generally regulated by municipal or State authorities in order to protect the customers. Above that, Braudel saw the world of Capital, a sphere dominated by people who neither produced, nor transported, nor actually bought or sold commodities, but whose stock in trade was huge amounts of money. These people manipulated whole economies and spread their activities across multiple nations and multiple agencies in order to avoid the impact of regulation.

The point is: there is a point (I can't define it, but when I finish reading Braudel's works in about a decade I'll try) at which there is a line between the Free Market and Capital, and the rules (supply and demand, etc.) or regulations which control the Free Market do not seriously affect Capital.

Governments and Capital are above the laws and regulations made to encompass your life and mine.

So government very rarely manages to shake down Capital. Instead, it uses corporations as tax farmers to collect even more revenue from the customers (or citizens).

But, of course, the way of society--the way of virtually all societies--is that the people at the top level are pretty much exempt from the regulations that govern the rest of us.

Usually, they try not to highlight this distinction: it makes the sheep restless, and mars the illusion that here in America the people govern themselves.

[OK: having finished, I think the IRS tax collection bit in part A was better.]

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