Free Markets, Free People
So, there’s this Italian guy named Rossi who has a little device he calls the "E-Cat" reactor tube. He says this reactor tube produces a Low Energy Nuclear Reaction (LENR), or what the rubes call "cold fusion". Rossi has been a very secretive little fellow about his device, and has essentially been classified as either a crank or a scam artist—and has a white collar conviction record. So, he’s not especially trustworthy. He’s been challenged to submit the E-Cat to independent testing, because his claims about seem too good to be true.
Well, apparently he did. A team of researchers from Uppsala University in Sweden, the Swedish Royal Institute of Technology, and Bologna University in Italy have uploaded a paper to Cornell’s xarchiv pre-press archive server entitled, "Indication of anomalous heat energy production in a reactor device", in which they say they observed the E-Cat in two tests, during which says things like, "the E-Cat HT2’s performance lies outside the known region of chemical energy densities," and it’s "at least one order of magnitude above the volumetric energy density of any known chemical source." To wit, the paper says the team observed "observed power production of 2,034 Watts thermal for an input of 360 Watts."
Not everyone is convinced, of course, and there are still troubling references to Rossi’s "industrial trade secrets". Skeptics are saying the physicists who took part in this are being hoodwinked by Rossi.
But if—and it’s a big if—the paper’s observations are true, then this is big. Really big. Still, it would’ve been nice if, in addition to the physicists, the team had taken a good journeyman electrician along, to look for the simple stuff.
Weekly retail sales are the only economic news today. ICSC-Goldman is showing some strength, with a 0.2% rate of weekly sales growth, and 3.1% year-over-year growth. Conversely, Redbook is still showing weakness, with year-on-year sales growth dropping to 2.4%.
And, as it always seems to happen now days, nothing was done:
In late March 2012, IRS deputy commissioner Steven Miller–who resigned his post as acting commissioner last week at President Obama’s request–directed senior technical advisor Nancy J. Marks to investigate allegations of political targeting of groups seeking tax exempt status, agency officials told congressional aides. Holly Paz, acting director of ruling and agreements, worked with Marks on the probe, and both traveled to Cincinnati to conduct interviews.
Sounds serious, right? Eh, not so much:
On May 3, 2012. Marks gave what IRS officials described as a “presentation” to Miller describing her findings. According to the House aide, Marks said the investigation had found significant problems in the review process and a substantial bias against conservative group. No written findings were produced as a result, the aide said, and it does not appear the internal review led to any disciplinary actions against IRS employees.
Now, I don’t know about you, but if, in fact, “a substantial bias against conservative groups” was found, and it was important enough, at least initially to send Paz and Marks to check it out, then by doing nothing, it would seem to me that IRS management at least tacitly endorsed the action.
Which may be why certain IRS official has decided has decided to plead the Fifth:
A top IRS official in the division that reviews nonprofit groups will invoke the Fifth Amendment and refuse to answer questions before a House committee investigating the agency’s improper screening of conservative nonprofit groups.
Lois Lerner, the head of the exempt organizations division of the IRS, won’t answer questions about what she knew about the improper screening – or why she didn’t reveal it to Congress, according to a letter from her defense lawyer, William W. Taylor 3rd.
And yes, you’re right … this stinks to high heaven and it absolutely begs to be prosecuted.
Of course, if you had any faith in government, you’d expect it too.
That exempts me, however. I expect a few low level IRS employees to get to take one “for the team” and those that actually made it happen will, as usual, escape scott free.
That’s how it works today in this land where everyone is “equal” under the law.
Reprinted from Medium.
Forget your politics for a minute. Lose the whole Democrat vs. Republican, liberal vs. conservative thing. Because this doesn’t really have anything to do with that. We’ve heard a lot this week about some IRS people improperly handling tax applications for some conservative and, oddly, Jewish groups.
If so, this shouldn’t a surprise, because it’s happened before. There were certainly allegations of it as far back as the Kennedy and Johnson Administrations, and it comprised one of the impeachment articles against Richard Nixon. Until the IRS is staffed by benevolent philosopher-kings, rather than, you know, people, IRS power abuses will continue to recur.
Even if they didn’t, ordinary run-of-the-mill IRS incompetence should be bad enough. But put aside the various GAO and inspector generals’ reports showing, for instance, that the IRS accepted 2,137 tax returns from a single address in Lansing, MI, to which they returned $3.3 million in refunds. Forget the Treasury Department investigation where IRS taxpayer question centers incorrectly answered 43% of the taxpayer questions they received. And don’t even think about poor Rachel Porcaro, the Seattle single mom who filed a tax return for $18,000, only to be told by the IRS that it was impossible to live in Seattle on that little money, whereupon the IRS demanded an additional $16,000 in taxes and penalties.
All you have to think about is how many times you or some member of your family or friends have had some sort of hassle with the IRS. Think about how you feel when you receive an envelope with the IRS eagle in the upper left-hand corner. It’s not a good feeling is it? Because you know, really, that you’re not gonna open it up and find out that you’ve won a cuddly little puppy.
The IRS is a government agency with the power to delve into the deepest minutia of your personal financial life. If they don’t like what they find they can garnish your income, confiscate your property, or jail you. If they decide you owe them more money, you can’t escape paying them. You can’t even discharge a tax bill with bankruptcy. It’s like having Ray Liotta’s character in Goodfellas in charge of taxation. “Your kid got sick? F*** you, pay me. You lost your job? F*** you, pay me.”
Ultimately, though, the problem with the IRS isn’t incompetence or malice. The problem is that we have a system of income taxation in the first place. If you tax income, you inherently give the government the power to inquire into every single aspect of your financial life. Once you’ve done that, then you automatically have a government agency with the power to destroy individuals’ lives.
So…why would you do that? There are plenty of options for governments to raise revenue. There are sales taxes,value-added taxes, excise taxes, tariffs on imports and exports, user fees, and several other methods. So, why would you intentionally create a tax system that gives the government such enormous power over individuals?
There are lots of other reasons to wonder about the efficacy of a system of income taxation, of course. The IRS estimates that simply completing a tax return costs the average taxpayer 25.5 hours and $149. If you own a small business or are self-employed, that rises to more than 97 hours and $752. That’s a lot of time and money to fill out a single form.
Also, it’s nearly impossible to prevent politicians from expanding and complicating the tax code, because an income tax allows politicians to subsidize or penalize all sorts of individual behaviors—and they do. The assumption being, apparently, that 535 people in Washington, DC, can make better decisions than you can about how to spend your money. Do you remember that Congressman from Georgia who asked the Chief of Naval Operations if sending more Marines to Guam would cause the island “to tip over and capsize”? He’s one of the guys who gets to decide how the tax code handles your income, and he’s a dolt.
Ask yourself a simple question: “If I was creating a new tax system from scratch, would I create one that allows the government to take my house, and maybe send me to jail if I make a mistake?”
If you wouldn’t, then why in the world would you want to keep one that already does?
If it’s possible for a presidential administration to use the IRS to cow his political opponents, why would you want to keep the tax system that allows it, no matter who the president is? That’s serious banana republic stuff. And if that power exists, it seems self-evident that it isinevitable that it will be exercised. Indeed, by all accounts it already has been, and more than once.
We could completely liberate ourselves from individual attention from the IRS simply by switching to a system of consumption taxation, rather than income taxation. No more individual tax returns. No more income tax withholding from paychecks. No more letters from the IRS demanding extra taxes and penalties for some minor mistake three years ago. No more giving out the details of our private financial lives to some government busybody. The government would know nothing about how much money you make or how much money you have. They’d get their money when you spent yours.
Sure, there might be some quibbling about precisely what form a consumption tax would take. Maybe we’d argue a bit, too, about how to build some progressivity into it and make it revenue neutral. But both of those things are achievable. A 23% VAT that excluded non-prepared foods, clothing, and rental housing would get us in the ballpark. In return, we’d get the government’s nose out of our personal business, get a bigger chunk of our paychecks to spend each week, and turn April 15 into just another spring day.
The benefits of eliminating the income tax and switching to some sort of consumption tax seem so clear to me. I cannot imagine why anyone, of any political persuasion, would be opposed to it.
Grab your wallets, this is going to cost you plenty … for zero gain against a made up problem:
“A principal challenge to all of us of life and death proportions is the challenge of climate change…I regret that my own country – and President Obama knows this and is committed to changing it – needs to do more and we are committed to doing more.”–Secretary Kerry
And the apology tour continues.
This week, Bruce, Michael, and Dale discuss the week’s scandal updates.
The direct link to the podcast can be found here.
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Here are today’s statistics on the state of the economy:
The Conference Board’s index of leading indicators rose 0.6% in April, much stronger than expected.
The Reuter’s/University of Michigan’s consumer sentiment index jumped sharply from 76.4 to 83.7 in May.
Peggy Noonan makes this statement today:
What happened at the IRS is the government’s essential business. The IRS case deserves and calls out for an independent counsel, fully armed with all that position’s powers. Only then will stables that badly need to be cleaned, be cleaned. Everyone involved in this abuse of power should pay a price, because if they don’t, the politicization of the IRS will continue—forever. If it is not stopped now, it will never stop. And if it isn’t stopped, no one will ever respect or have even minimal faith in the revenue-gathering arm of the U.S. government again.
And it would be shameful and shallow for any Republican operative or operator to make this scandal into a commercial and turn it into a mere partisan arguing point and part of the game. It’s not part of the game. This is not about the usual partisan slugfest. This is about the integrity of our system of government and our ability to trust, which is to say our ability to function.
First paragraph … agree, for the most part. Where I don’t agree is that there is a “minimal faith” in the revenue gathering arm of the US government. There’s been little faith in it since it’s inception. Most people understand that the gun is pointed at them and the prison cell is open and waiting. They don’t pay taxes because of any “faith” or respect for the IRS or government. They do it out of fear.
As for the second paragraph, that’s total horse hockey. Total.
The entire point of the scandal was it targeted “political” organizations. How does one not politicize it? It took place under a Democratic administration and the opponents of that party were the target of the IRS.
And what do we get from Noonan? “Hey, let’s take a knife to a gun fight”.
Noonan’s advice is, by far, the stupidest advice one could give.
Yes, this is about the integrity of the system. And, like it or not, that is directly linked to those who administer and govern.
Ms. Noonan, who is that right now? And how, if they were doing an effective job, would this have been going on for two years. Oh, and speaking of trust, how are you with the whole AP scandal? My guess is you’re wanting some heads over that.
Well, I want some heads of this. And Benghazi. And Fast and Furious.
Instead we get shrinking violets like you advising everyone to back off and not make this “political”.
Here are today’s statistics on the state of the economy:
The Consumer Price Index fell -0.4% in April, but rose 0.1% ex-food and -energy. On a year-over-year basis, the headline CPI is up 1.1% and the core is up 1.7%.
April housing starts fell -16.5% to a 0.853 million annual rate. Housing permits, conversely, jumped 14.3% to a 1.017 million annual rate.
Initial jobless claims rose 32,000 to 360,000, and the 4-week average rose 1,250 to 339,250. Continuing claims fell 4,000 to 3.009 million.
The Bloomberg Consumer Comfort Index slipped half a point to -30.2 in the latest week.
The Philadelphia Fed Survey slipped into negative territory in May, falling from 1.3 to -5.2.