Feds Uses Bribery, Class-Warfare To Catch Tax Cheats

From CNN, via Lew Rockwell, the latest Federal incentives for snitching and snooping on your fellow citizen:

In 2006, the IRS really started cracking down on big time cheaters and introduced a new whistle-blower program, in which informants are paid a minimum of 15% and a maximum of 30% of the amount owed.

But there’s a catch: In order to collect a reward, the taxes, penalties and interest in dispute must add up to at least $2 million. And if the suspected tax evader is an individual, his or her annual gross income must exceed $200,000.

So far, the new incentives have been effective. The IRS has received tips from about 476 informants identifying 1,246 taxpayers in fiscal year 2008, the first full year the program was implemented………

Who snitches?: In this program, the most common informants tend to be dissatisfied middle-ranking employees in big companies, said Tim Gagnon, an academic specialist of accounting at Northeastern University……..

Stephen Whitlock, director of the IRS Whistleblower Office, said that informants have had some connection to the taxpayer but they are not always close acquaintances. They have typically been employees, investors or business associates.

He also said many claims are for substantially more than the $2 million threshold and involve businesses or very wealthy individuals.”

My Comment:

In other words, what you have is the IRS incentivizing class-warfare. By dangling a chunk of cash in front of their noses, the government encourages employees to act against their own economic interest on the basis of a non-existent public good.


Well, yes. Since the government is using its tax revenues mostly to pay off its own friends, to fatten the banks and financiers, loot the tax-payer, murder foreign nationals, and generally mismanage the country, the public interest (in so far as we can ascertain one) may well be better served by not paying taxes.

Tax cheats, while clearly not heroes from a moral standpoint, are also not the villains they’re often made out to be.

The villains are those who constantly demand higher and higher taxes and destroy the productive capacity of this country in pursuit of hubristic and vain schemes that have done nothing but turned a nation built on free enterprise into one enslaved by political patronage…

Tax snitches, as I said, don’t even serve their own economic self-interest. Sure, they get their one-off reward for snitching. But they’ve effectively ended any chance of their being hired by anyone…unless they manage to evade detection.

Any taxes an employer pays to the government must inevitably be passed on to employees and customers. That’s as ineluctable an economic law as any.

Ergo, pay taxes and the Feds get the money….don’t pay and the economy, the customer, or employees eventually get it.

An employee who plumps for snitching is obviously not only treacherous and disloyal as a human being, he’s also an economic fat-head.

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