The so-called recovery is only built on debt and printed cash declares our own Byron King. In the long term, the only option for the government to continue financing it's operations is to print too many dollars. Money printing has it's limits, however. It's Byron's opinion that at some point, perhaps very soon, the government will have to turn to more desperate measures. Namely, capital controls. In the following featured essay, Byron outlines 4 probably ways the government will take your cash and one play you can buy through your broker to prepare today. Read on...
Americans expatriate because they want to get out of the country. Corporations expatriate for similar reasons. Clem Chambers explains...
Say goodbye to your boring morning commute. New technologies are changing the way people drive their cars. It’s making them safer, more fuel efficient, and could reshape the way America builds its roads and cities. The only thing that could stand in the way...
In a 2009 article, the Huffington Post went into considerable detail about the number of people with PhD degrees in economics employed by the Board of Governors of the Federal Reserve System. This is the government’s branch of the Federal Reserve. It is not one of the 12 regional Federal Reserve banks, all of which […]
The U.S. dollar is the dominant global reserve currency. All markets, including stocks, bonds, commodities, and foreign exchange are affected by the value of the dollar.The value of the dollar, in effect, its “price” is determined by interest rates. When the Federal Reserve manipulates interest rates, it is manipulating, and therefore distorting, every market in […]
When the NSA surveillance news broke last year it sent shockwaves through CERN, the particle physics laboratory in Switzerland. Andy Yen, a PhD student, took to the Young at CERN Facebook group with a simple message: “I am very concerned about the privacy issue, and I was wondering what I could do about it.”There was […]
The game of speculation is the most uniformly fascinating game in the world. But it is not a game for the stupid, the mentally lazy, the person of inferior emotional balance or the get-rich-quick adventurer. They will die poor.– Jesse Livermore, How to Trade in StocksThe trouble with capitalism’s guardians is that they have no […]
Let’s head back in time…In 2004, a mere decade ago, the US national debt rang the register at $7.4 trillion. That represents “debt per citizen” of over $25,000. You, me, your neighbor, your 4-yr old grandson, you name it and they’re portion of the U.S. debt is $25k.But flash forward to today and you’ll see […]
John Foust, a Democrat running for the 10th congressional seat in Northern Virginia, is — like Gov. Terry McAuliffe and other state Democrats — gung-ho to expand Medicaid. His wife’s position is, shall we say, a bit more nuanced.Foust has slammed his opponent, Republican Del. Barbara Comstock, for her opposition to expansion. He has spoken […]
The midterm election season is upon us, and it’s a tossup whether the Republicans will win the Senate, or if President Obama, seemingly oblivious as conflict flares up around the world, will, through his continuous campaigning, keep Harry Reid in his majority leader seat.The only thing we know for sure is that sociopaths will be […]
Alexander Hamilton was America’s first Secretary of Treasury under President George Washington. When he first entered office in 1789, America was an agricultural nation of just 4 million still broke from its financially costly victory over the British Empire in the Revolutionary War.The states had accumulated relatively massive debts to finance that war, which mostly […]
I was talking with one of my colleagues the other day, and he raised a very interesting question, one that deserves consideration by anyone worried about their digital privacy. He read an article that championed the idea that the more steps one took to protect their privacy by using anonymous Web-browsing tools like Tor, the […]
In the minds of many people around the world, including in the United States, the term “capitalism” carries the idea of unfairness, exploitation, undeserved privilege and power, and immoral profit making. What is often difficult to get people to understand is that this misplaced conception of “capitalism” has nothing to do with real free markets […]
When you type a website address into a browser, you might have noticed that the letters “http” appear at the front. “HTTP” stands for Hypertext Transfer Protocol. In typing a Web address, you are actually sending an HTTP command to transmit that website to you. Hypertext Transfer Protocol is the means by which information is […]
Some people are saying it is just what the doctor ordered. Others are saying that the cure is worse than the disease.The Affordable Care Act? Reengagement in Iraq? Tea Party bullying in the GOP?Not this time. Just as protracted in the corridors of Congress and the White House is the debate over the proposed reform […]
In 2012, money mandarins running the European Union chose stagnation over restructuring. Here’s a consequence of that choice: expectations for a self-sustaining economic recovery keep getting crushed.Two years ago, European Central Bank (ECB) chief Mario Draghi promised to do “whatever it takes” to hold the eurozone together. He bluffed nervous investors into believing in a […]
Picture the scene. It’s 2020. You’re at the checkout in a convenience store with a carton of milk. But you’ve got no cash and you’ve left your cards at home. No problem. You scan your right index finger; the green light flashes. Purchase approved and you leave. Easy.Is this a realistic vision of the future, […]
“In the beginning, all the world was America.” — John Locke“The Garden of Eden was a perfect place,” my friend Manuel explained. “Man had free will. He could live in harmony with nature and God — and everything would be fine. But if he defied God, the stain of original sin would be on his […]
After a week of reckoning about the American oil and gas boom… I’ve got to get something off my chest.I can’t stand it when a coworker takes credit for something I did.Whether it’s a special report I wrote or just a little investing trick I found on my own — if someone takes it and […]
It might sound like the latest new product from Apple, but IPAB is actually the newest major legal challenge to Obamacare.Recently, a three-judge panel in the 9th Circuit Court of Appeals in San Francisco heard arguments about the Independent Payment Advisory Board, or IPAB, a 15-member panel created by the Affordable Care Act and empowered […]
Americans have come to believe that the IRS and the income tax are inevitable parts of our lives. After all, most everyone alive today has lived his entire life under federal income taxation.It wasn’t always that way. For some 125 years, the American people lived without having any tax imposed upon their income.The obvious question […]
Here’s a fun fact: Although we all hate the U.S. dollar, as it continues to hemorrhage wealth, its foothold as the world’s reserve currency isn’t going to disappear overnight.A Russian gas deal with China won’t change that — as we’ll highlight below.But before we get to the nitty-gritty, let’s dive into a story that’s right […]
Franklin Delano Roosevelt famously used the term “forgotten man” in a 1932 speech to describe those at the bottom of the economic pyramid who, he felt, government should aid.But the originator of the phrase “forgotten man” had a whole different meaning in mind. He aimed to expose the seeming good intentions of government to reveal […]
“As the nation’s central bank, the Federal Reserve derives its authority from the Congress of the United States. It is considered an independent central bank because its monetary policy decisions do not have to be approved by the President or anyone else in the executive or legislative branches of government, it does not receive funding […]
The Keynesian disaster recovery plan has been to lower rates, force people to take more risk in search of yield, and entice others to borrow and spend and, magically, more jobs will be created. If people won’t buy stocks, central banks will.Back in 2011, Ben Bernanke, when asked if QE2 was driving up stock prices, […]
In September 2009, when President Obama made a primetime speech pitching his not-yet-passed health care overhaul, he made the following promise: “I will not sign a plan that adds one dime to our deficits — either now or in the future. Period.” To prove his seriousness, he further promised that “there will be a provision […]
Whatever your views on the role of government, one thing is clear: There will be no way to pay for it if the economy doesn’t grow. And I’m not talking by a measly percentage point or two. If we can’t find our way back to 5% annual economic growth or above soon, America’s accumulated federal […]
The power to tax has long conferred the power to destroy one’s political opponents. When the latest IRS politicization scandal erupted in May, many commentators talked as if the abuses were a novelty in American history. But, as David Burnham noted in his masterful 1990 book, A Law Unto Itself: The IRS and the Abuse of Power, “In almost every administration since the IRS’s inception the information and power of the tax agency have been mobilized for explicitly political purposes.”
The IRS has a long history of trying to ruin the political careers of its critics. In 1925, Internal Revenue Commissioner David Blair personally delivered a demand for $10 million in back taxes to Michigan’s Republican Sen. James Couzens — who had launched an investigation of the Bureau of Internal Revenue — as he stepped out of the Senate chamber. Couzens fought the case, and eventually proved that he had actually overpaid his taxes by roughly $1 million. But the precedent of using threats to deflect oversight was firmly established.
President Franklin Roosevelt used the IRS to harass newspaper publishers, including William Randolph Hearst and Moses Annenberg (publisher of the Philadelphia Inquirer). He also dropped the IRS hammer on political rivals such as Huey Long and Father Coughlin, and prominent Republicans like former Treasury Secretary Andrew Mellon.
Perhaps Roosevelt’s most pernicious tax skullduggery occurred in 1944 when he spiked an IRS audit of massive illegal campaign contributions from a government contractor to Texas Rep. Lyndon Johnson. Johnson’s career would likely have been destroyed if Texans had learned of his dirty dealing. Instead, Johnson survived, and scores of thousands of Americans and more than a million Vietnamese died as a result.
John F. Kennedy raised the political exploitation of the IRS to an art form. Shortly after capturing the presidency, he denounced “the discordant voices of extremism” and, in a passage that could have been lifted from Obama’s recent Ohio State University commencement speech, derided people “who would sow the seeds of doubt and hate” and make Americans distrust their leaders.
At a news conference a few days later, a reporter sought his views on the legality of campaign contributions supporting “right-wing extremist groups.” Kennedy replied, “As long as they meet the requirements of the tax law, I don’t think that the Federal Government can interfere or should interfere with the right of any individual to take any position he wants. The only thing we should be concerned about is that it does not represent a diversion of funds which might be taxable to — for nontaxable purposes. But that is another question, and I am sure the Internal Revenue system examines that.”
Actually, Kennedy heavily elbowed the IRS to make sure that it targeted the tax-exempt status of conservative organizations that had criticized Kennedy or his agenda. The IRS launched the Ideological Organizations Audit Project, which targeted numerous right-leaning groups, including the Christian Anti-Communist Crusade and the American Enterprise Institute.
Shortly before his assassination, Kennedy specified that he wanted an “aggressive program” against the IRS targets. Kennedy also used the IRS to bolster compliance with “voluntary” price controls, targeting steel executives who defied the administration for audits.
Nixon’s tax enforcers
A 1976 Senate report noted, “By directing tax audits at individuals and groups solely because of their political beliefs, the Ideological Organizations Audit Project established a precedent for a far more elaborate program of targeting ‘dissidents.’” After Richard Nixon took office, his administration quickly created a Special Services Staff (SSS) to mastermind “all IRS activities involving ideological, militant, subversive, radical, and similar type organizations.”
More than 10,000 groups and individuals were targeted because of their political activism or slant between 1969 and 1973, including the John Birch Society and Nobel laureate Linus Pauling. The IRS was also given a list of Nixon’s official enemies to, in the words of White House counsel John Dean, “use the available federal machinery to screw our political enemies.” Contributors to the Democratic Party were also high on Nixon’s target list.
Nixon’s administration vastly expanded a secret computer database — the “Intelligence Gathering and Retrieval System” the IRS began in 1963 — to sweep up information on individual Americans and groups. By 1975 the IRS had stockpiled data on almost half a million persons and groups; the program was abolished after its existence became known outside of official circles.
The exposure of Nixon’s IRS abuses profoundly weakened him during the uproar after the Watergate break-in. The second article of his 1974 impeachment charged him with endeavoring to “obtain from the IRS … confidential information contained in income tax returns for purposes not authorized by law, and to cause, in violation of the constitutional rights of citizens, income tax audits or other income tax investigations to be initiated or conducted in a discriminatory manner.” Congress enacted legislation to severely restrict political contacts between the White House and the IRS.
But the IRS continued its freelance work. After Sen. Joe Montoya of New Mexico announced plans in 1972 to hold hearings on IRS abuses, the agency added his name to a list of tax protestors who were capable of violence against IRS agents. When IRS Commissioner Donald Alexander was challenged on the listing at a 1975 Senate hearing, he replied, “The only connection that I can think of immediately is that Senator Montoya is, after all, the Chairman of the IRS Appropriations Subcommittee, and someone might have thought that he did violence to our appropriation.” Information from an IRS investigation of Montoya was leaked to the Washington Post. Partly as a result of the IRS leak, Montoya lost his reelection bid.
The IRS targets conservatives
In the following decades the IRS regularly sparked outrage by abusing innocent taxpayers, but there was scant controversy about the agency’s politicization until Bill Clinton took office. In 1995 the White House and the Democratic National Committee produced a 331-page report, “Communication Stream of Conspiracy Commerce,” that attacked magazines, think tanks, and other entities and individuals who had criticized Clinton.
In subsequent years many organizations that were mentioned in the White House report were hit by IRS audits. More than 20 conservative organizations — including the Heritage Foundation and the American Spectator – and almost a dozen high-profile Clinton critics were audited.
The Landmark Legal Foundation sued the IRS after being audited. Its brief quoted an IRS official who claimed at a meeting that documents revealing the names of congressmen and their staffers who had requested audits were being or had been shredded. The official went on to recommend tactics for masking such requests in the future.
The IRS claimed that it could not find 114 key files relating to possible political manipulation of audits of tax-exempt organizations. The Clinton administration fought vociferously to prevent Americans from learning how it had abused IRS powers. As a Wall Street Journal editorial noted, “The IRS position is incredible. It says letters from politicians asking that someone be audited are confidential tax-return information.”
Bipartisan tax bullying
In perhaps the least recognized media bombshell of the Clinton era, the Associated Press reported in late 1999 that “officials in the Democratic White House and members of both parties in Congress have prompted hundreds of audits of political opponents in the 1990s,” including “personal demands for audits from members of Congress.” Audit requests from congressmen were marked “expedited” or “hot politically,” and IRS officials were obliged to respond within 15 days.
The AP noted, “The IRS computer tracking system in Washington denotes the name of a politician who refers a matter. The original letter from the White House or lawmaker is forwarded to the case agent.” Permitting congressmen to secretly and effortlessly sic G-men on whomever they pleased epitomized official Washington’s contempt for average Americans and fair play. But because the abuse was bipartisan, it evinced little or no interest on Capitol Hill.
After Obama’s first presidential election, conservative groups began mobilizing across the nation to resist what they perceived as his socialist policies and programs. By mid-2010, conservative organizations were complaining of harassment by the IRS. The Obama administration perpetually denied that any such targeting was occurring.
However, a May 2013 Inspector General report confirmed that IRS employees had devoted far more scrutiny (sometimes amounting to seeming harassment) to nonprofit applications that used the terms “tea party” or “patriot” or that criticized government spending or federal deficits. The Inspector General report concluded, “Developing and using criteria that focuses on organization names and policy positions instead of the activities … does not promote public confidence that tax-exempt laws are being adhered to impartially.” Surprise, surprise.
Congress claims to be vigorously investigating the latest scandal, and further facts may come out in the future. Thus far the media have largely ignored how the Obama-era abuses vivify how the tax code allows rulers to suppress political opposition.
This fundamental truth has burst forth only occasionally over the past century — perhaps most eloquently in a 1967 federal appeals court decision overturning the conviction of a leftist Oregon lawyer: “The court will not place its stamp of approval upon a witch-hunt, a crusade to rid society of unorthodox thinkers and actors by using the federal income tax laws” to silence them.
But as long as the federal tax code is incomprehensible to most Americans, the IRS will continue to have vast power over its targets. And we cannot expect politicians to fix the problem as long as they expect to profit from the IRS’s machinations. But, as Alexander Hamilton, later the nation’s first secretary of the treasury, warned in 1782, “Whatever liberty we may boast in theory, it cannot exist in fact while [arbitrary tax] assessments continue.”
– James Bovard
This article originally appeared here on the Future of Freedom Foundation website.