May 18, 2012 | Immigration, Take Action, Taxes
By Dr. Harold Pease
An atomic bomb like story dropped April 27, when Channel 13 Eyewitness News, an NBC affiliate in Indiana opened with “Millions of illegal immigrants are getting a bigger tax refund than you. Eyewitness News shows a massive tax loophole that provides billions of dollars in tax credits to undocumented workers and, in many cases, people who have never stepped foot in the United States. And you are paying for it!” Bob Segall, narrator of the news segment 13 Investigates, begins with the disclosure of a longtime tax consultant, who produced thousands of tax returns easily documenting his claims, from illegal immigrants.
Everyone employed in the U.S. is required to pay taxes. Because illegal immigrants do not possess a social security number the IRS gives them an individual taxpayer identification number, or ITIN. The tax loophole deals with the Additional Child Tax Credit “meant to help U.S. working families who have children living at home” by giving them a credit of up to $1000 per child. The problem is that illegal immigrants have learned that they too can claim this and are doing so for kids in Mexico who have never lived here—lots of them. The whistle blower showed the television station refunds of $10,300 for nieces and nephews of one filer, yet another $11,000 for his nieces and nephews. “I can bring out stacks and stacks,” the tax consultant said.
Eyewitness News selected one of the cases and found multiple adult illegals even using the same filing address. “One of the workers, who was interviewed at his home in southern Indiana, admitted his address was used this year to file tax returns by four other undocumented workers who don’t even live there. Those four workers claimed 20 children live inside the one residence and, as a result, the IRS sent the illegal immigrants tax refunds totaling $29,608.” The reporters found only one child actually living in the mobile home. When they asked were the others were they were told that they live in Mexico. In fact, they had never lived here. An interview of other illegals revealed that both, filing under false address and listing children who had never been in the U.S., was not uncommon.
The reporters next interviewed Russell George, the U.S. Department of Treasury’s Inspector General for Tax Administration and learned that “the IRS has known about the problem for years,” that he himself has repeatedly warned them and still they have done nothing about it. Last year the Inspector General “released a new report showing the problem now costs American tax-payers more than $4.2 billion.” He added, “Millions of people are seeking this tax credit who, we believe, are not entitled to it.” How big is the problem? The Inspector General continued, “undocumented workers filed 3.02 million tax returns in 2010. Seventy-two percent of those returns (2.18 million) claimed the additional child tax credit.” And then he added another bombshell. “In 2010, the IRS owed undocumented workers more in claimed additional child tax credits than it collected from those workers in taxes.” You might want to read that last sentence again.
The reporters were rebuffed at every attempt to interview the IRS. “Despite repeated phone calls, e-mails and a visit to IRS headquarters in Washington, the agency said none of its 100,000 employees had time to meet.” Finally, in an email the IRS did admit that this practice was known to them for over a decade but that they were only following the law “as it is written.”
This explanation did not satisfy the tax consultant either, who said that he repeatedly informed the IRS of other discretions practiced as well, such as the filing of “phony documents and false income to claim tax credits.” They did not care about that either. “These were fraudulent, 100% fraudulent tax returns, but I got no response; absolutely none. We never heard a thing.”
Obviously the IRS does not care and is an accomplice in fraud to the tune of $4.2 billion a year. The next question is does Congress care enough to investigate, and reign in its unruly 1913 creation, or is it corrupt as well? Why not ask your congressman if he will take the lead in this investigation.
Dr. Harold Pease is an expert on the United States Constitution. He has dedicated his career to studying the writings of the Founding Fathers and applying that knowledge to current events. He has taught history and political science from this perspective for over 25 years at Taft College. To read more of his articles, please visit www.LibertyUnderFire.org.
Feb 17, 2012 | Taxes
By Dr. Harold Pease
President Barack Obama’s favorite president, as is the case with so many Americans, is Abraham Lincoln who shares a national holiday, Presidents Day, with George Washington. But this bond certainly could not be because of shared political ideology. Lincoln was for the free market and decidedly against socialism—just opposite of President Obama. He saw nothing in the Communist Manifesto, published in 1848, worthy of emulation.
On the ownership of property Abraham Lincoln’s feelings were especially strong, he said, “Property is the fruit of labor; property is desirable; is a positive good in the world. That some should be rich shows that others may become rich, and hence is just encouragement to industry and enterprises” (The Collected Works of Abraham Lincoln edited by Roy P. Basler, Volume VII, pp. 259-260). To him there was no need to take by force the wealth of those who produce and give it to those less productive. The “share the wealth” philosophy articulated by Obama as a presidential candidate in 2008 to “Joe the plumber,” would have been foreign ideology to the Civil War president.
The answer for the poor was not class envy, first identified by Aristotle some 2,500 years ago as being the natural inclination of those with less, a philosophy implemented by Lenin in Russia when the communists identified those holding property as enemies of the state and liquidated some four to eight million farmers, the “Kulaks” (“The Russian Kulaks,” InDepthInfo.com). Then they wondered why the country had such a horrific famine in 1921-1922. Lincoln’s answer to the poor, from which he sprang himself, “Let not him who is houseless pull down the house of another, but let him labor diligently to build one for himself, thus by example assuring that his own shall be safe from violence….”
Unfortunately, many in our society have forgotten the “labor diligently” part of his phrase and have come to expect the government to provide, from the industry of others, their every need. On that score Lincoln also had words. “You toil and work and earn bread, and I will eat it.” He viewed this principle as a form of tyranny to those who work. Today 47.5 % of the adult population pay no federal income tax; many actually receive benefits for which they have paid nothing.
Watching others acquire wealth was, in fact, a sign of a healthy economy for Lincoln. “I take it that it is best for all to leave each man free to acquire property as fast as he can. Some will get wealthy. I don’t believe in a law to prevent a man from getting rich; it would do more harm than good.” Nor would he have supported the hundreds of laws that we have today that disincentivize a man trying to acquire wealth.
Lincoln might have added, “When has a poor man ever created a full time job for anyone?” Hate the Wall Marts or the McDonalds all you want but they provide the poor thousands of jobs. Do not bite the hand that feeds you then wonder where the jobs and prosperity went as did the early Russian communists. The “share the wealth” philosophy, which Lincoln opposed, has never brought long term general prosperity for any people, any place, or any time.
Dr. Harold Pease is an expert on the United States Constitution. He has dedicated his career to studying the writings of the Founding Fathers and applying that knowledge to current events. He has taught history and political science from this perspective for over 25 years at Taft College. To read more of his weekly articles, please visit www.LibertyUnderFire.org
Feb 1, 2012 | Constitution, Economy, Taxes, Tea Party
By Dr. Harold W. Pease
The French philosopher Alexis de Tocqueville in 1840, once prophetically said, “The American Republic will endure until the day Congress discovers that it can bribe the public with the publics’ money.” That day is here!!
Both parties have succumbed to the temptation of getting elected by promising ever more goodies from the public coffers, irrespective of constitutional limits, and to the point that they have irresponsibly enslaved our children with 15.25 trillion dollars indebtedness. Both parties are blatantly guilty with democrats far more so the last three years. The national debt has increased at an average of 4 billion dollars a day under President Barack Obama. The seriousness of this led Admiral Mike Mullen, Chairman of the Joint Chiefs of Staff to exclaim, “Our national debt is our biggest national security threat.”
Last summer both big government parties, Democrat and Republican, unable to come to any agreement, turned their authority over to what was called a “Super Committee” of six democrats and six republicans and still could not reduce the debt by 1.2 trillion dollars over ten years. Impasse!!
Everything is talked about in the presidential debates except this national security threat. We will just pretend it away. Why? Because both parties know that the cuts that have to be made to save the terminal cancer patient have to be drastic, career politicians, which they are, do not want the media to blame their party—which it will! So, the ship (the United States) will sink for lack of real leadership, each party blaming the other.
Not so fast! The Tea Party Patriot movement comes to the rescue again. They predicted correctly that neither party really represents limited constitutional government and both are addicted to debt. It is like an addict prescribing his own detox program. Consequently Freedom Works, a Tea Party affiliate, selected 12 of their own members and through the Internet invited 150,000 members to make suggestions on what should be done.
The Tea Party Plan cuts, caps, and balances federal spending. The budget is balanced in four years, without tax hikes, and remains balanced. Federal spending is reduced by $9.7 trillion over the next ten years. The plan shrinks the federal government from 24 % of GDP to about 16 %. Finally it stops the growth of the debt and begins paying it down. Within a generation there would be no national debt. Bold indeed!
These goals are accomplished, their report continues, by repealing ObamaCare, eliminating four unconstitutional, costly, inefficient Cabinet agencies—Energy, Education, Commerce, and HUD—and reducing or privatizing many others, including EPA, TSA, Fannie Mae, and Freddie Mac. The report calls for ending farm subsidies, government student loans, and foreign aid to countries that don’t support us—luxuries we can no longer afford. Social Security is saved and improved by shifting ownership and control from government to individuals, through new SMART Accounts, a program successfully tried in Chile. It gives Medicare seniors the right to opt into the special Congressional health care plan. Moreover, it suspends pension contributions and COLAs for Members of Congress, whenever the budget is in deficit.
The new plan offers a rational transition to ownership of our own retirement and more control and choice over our health care. Why did the government fail to accomplish the same thing—even behind closed doors? Remember, Congress, as Alexis de Tocqueville predicted, has learned that it can bribe the public with the publics’ own money. Their first concern is to protect their jobs and party. Outsiders, without a personal stake in the outcome, can see much more and do much more without the inevitable political wrangling. Will the media give this plan a fair hearing or will they simply ignore it?
I will follow in another column with Tea Party specifics on dealing with unfunded liabilities in Medicare and Social Security which the two big government parties will never talk about.
Dr. Harold Pease is an expert on the United States Constitution. He has dedicated his career to studying the writings of the Founding Fathers and applying that knowledge to current events. He has taught history and political science from this perspective for over 25 years at Taft College. To read more of his weekly articles, please visit www.LibertyUnderFire.org
Dec 4, 2011 | Economy, Healthcare, Taxes, Tea Party
By Dr. Harold Pease
Be grateful for your right to criticize the government, whether as a Tea Party Patriot or as Occupy Wall Street. This can be lost. It helps to remember that we can vote to make things much worse if we continue to travel further into socialism. Take Austria in 1938 for example, as related by eyewitness Kitty Werthmann, whose account is herein summarized. They too voted for socialism to end dire economic conditions and died as a nation for so doing.
With unemployment and interest rates at 25%, the country was in deep depression and “people were going from house to house begging for food.” Kitty remembers her mother cooking a big kettle of soup and baking bread to feed her staving neighbors, about “30 daily.” The Communist Party and the National Socialist Party, two conflicting varieties of socialism, were fighting each other. The Germans, under Adolf Hitler, promised an environment of no crime, full employment, a high standard of living, and happiness. Austrians “became desperate and petitioned the government to let them decide what kind of government they wanted.” The Austrian government could not deliver these conditions, so 98% of the population, believing the lies, “voted to annex Austria to Germany and have Hitler for our ruler.” When this happened, the people danced for joy in the streets for three days.
Almost immediately law and order returned and “everyone was employed” in government created jobs, but what followed under fascist socialism was pure hell. In return for believing the empty promises, education was nationalized and freedom of religion in public education ended. Crosses in the predominantly Catholic schools were “replaced with Hitler’s picture hanging next to a Nazi flag” and prayer, replaced with singing praises of Germany. “Sunday became National Youth Day with compulsory attendance.” If their children were not present, parents were threatened first with “a stiff letter of warning,” then with a $300.00 fine, and then with jail. The day consisted of two hours of political indoctrination followed by sports and fun. The children loved it but “lived without religion.” Having no moral compass, illegitimacy flourished. “Unwed mothers were glorified for having a baby for Hitler.”
Men and women had equal rights under Hitler. They found out what that meant when workloads were equal, making no distinction on the basis of sex. When the war came in 1939, the draft was compulsory for both sexes and women served on the front lines as well. Many became “emotional cripples because they just were not equipped to handle the horrors of combat.” Kitty Werthmann continues, “When the mothers had to go out into the work force, the government immediately established child care centers. You could take your children ages 4 weeks to school age and leave them there around-the-clock, 7 days a week, under the total care of the government. The state raised a whole generation of children. There were no motherly women to take care of the children, just people highly trained in child psychology. By this time, no one talked about equal rights. We knew we had been had.”
Under Hitler’s socialism everyone was entitled to free handouts, such as food stamps, clothing, and housing. Healthcare was socialized as well, free to everyone. “Doctors were salaried by the government. The problem was, since it was free, the people were going to the doctors for everything. When the good doctor arrived at his office at 8 a.m., 40 people were already waiting and, at the same time, the hospitals were full. If you needed elective surgery, you had to wait a year or two for your turn. There was no money for research as it was poured into socialized medicine. Research at the medical schools literally stopped, so the best doctors left Austria and emigrated to other countries.” Of course, to pay for this benefit for the less productive, “the tax rate had to be raised to 80% of our income.”
When the war started, a food bank was established. “All food was rationed and could only be purchased using food stamps. At the same time, a full-employment law was passed which meant if you didn’t work, you didn’t get a ration card, and if you didn’t have a card, you starved to death.” Socialism now controlled life and death by controlling who ate.
Small businesses were intentionally over-regulated out of business leaving the government owned large businesses the only ones existing. “We had consumer protection. We were told how to shop and what to buy. Free enterprise was essentially abolished.” Moreover, “farmers were told what to produce, and how to produce it.”
Worse yet, finding it so easy to kill six million Jews, Hitler next moved on the mentally retarded as not having value and liquidated them as well. To prevent the population from revolting, guns had long since been registered, then outlawed, and freedom of speech ended as well. “Anyone who said something against the government was taken away.”
How close are we to having implemented some of the above socialism by false promises, as did they, too close? No wonder Tea Party Patriots have said no further. It’s not a matter of gridlock for them, but liberty. So far both groups can criticize the government, but the slippery slope for the end of such is at our backside.
Dr. Harold Pease is an expert on the United States Constitution. He has dedicated his career to studying the writings of the Founding Fathers and applying that knowledge to current events. He has taught history and political science from this perspective for over 25 years at Taft College. To read more of his weekly articles, please visit www.LibertyUnderFire.org.
Nov 18, 2011 | Economy, Taxes
By Dr. Harold Pease
Few realize that New England’s first form of government under the Pilgrims was communalism (socialism) where “each produced according to his ability and each received according to his needs,” more than two centuries before Karl Marx first penned the above script. The result of “share the wealth” then and now was, and always will be, shared poverty.
William Bradford, the colony’s governor its first 30 years, wrote of the agreement between the Pilgrim passengers and the financial “Adventurers” in his book Of Plymouth Plantation. He noted that the seven-year contract signed July 1, 1620, before leaving Plymouth England, stipulated that the Pilgrims were to pool, for common benefit, “all profits and benefits that are got by trade, traffic, trucking, working, fishing, or any other means of any person or persons…” It further noted “that at the end of the seven years, the capital and profits, viz. the houses, lands, goods and chattels, be equally divided betwixt the Adventurers and Planters…” During this time the colonists were to “have their meat, drink, apparel, and all provisions out of the common stock and goods of the said colony.” It doesn’t get more socialistic than this because the government divvied out the goods and loafers received the same as those who worked.
The first two years the result was shortages and starvation. About half the colonists died. No one did more than the minimal because the incentive to excel was destroyed. The industrious were neutralized. Bradford wrote of the scarcity of food “no supply was heard of, neither knew they when they might expect any.” The socialist experiment Bradford added, “was found to breed much confusion and discontent and retard much employment that would have been to the benefit and comfort. For the young men, that were most able and fit for labour and service, did repine that they should spend their time and strength to work for other men’s wives and children without any recompense….” In other words, socialism made strong men lazy. In another book written by the same author, History of Plymouth Plantation, Bradford spoke of another problem because of the government created famine—thievery. Even in this Christian community, “much was stolen both by night and day….”
After two years of such, with the survival of the colony at stake, they contemplated upon “how they might raise as much corn as they could, and obtain a better crop than they had done, that they might not still thus languish in misery.” They opted to abandon the incentive killing socialist contract in favor of the free market. And so they “assigned to every family a parcel of land, according to the proportion of their number, for that end…”
The effects were almost immediate. A delighted Governor Bradford wrote: “This had very good success, for it made all hands very industrious, so as much more corn was planted than otherwise would have been by any means the Governor… could use, and saved him a great deal of trouble, and gave far better content. The women now went willingly into the field, and took their little ones with them to set corn; which before would allege weakness and inability; whom to have compelled would have been thought great tyranny and oppression.” In other words, the free market is a much greater stimulus than governmental force. The Pilgrims now wished to work because they got to keep the benefits of their labor. “Instead of famine now God gave them plenty,” Bradford wrote, “and the face of things was changed, to the rejoicing of the hearts of many, for which they blessed God…. Any general want or famine hath not been amongst them since to this day.”
Secure property rights are the key to prosperity for all who wish to work. When this right is threatened by confiscatory taxation or outright confiscation of property, or by excessive government rules and regulations governing such, whether planned as in a contract enforced by the government at Plymouth, or gradual as in our day, work and production slow and can eventually stop. The answer for them was to extract socialism from their midst as it is for us today as well. May we have the wisdom to do so?
Dr. Harold Pease is an expert on the United States Constitution. He has dedicated his career to studying the writings of the Founding Fathers and applying that knowledge to current events. He has taught history and political science from this perspective for over 25 years at Taft College. To read more of his weekly articles, please visit www.LibertyUnderFire.org.
Oct 1, 2011 | Constitution, Taxes
By Dr. Harold Pease
Governor Rick Perry is accused of referring to Social Security as a Ponzi scheme. To consider the authenticity of this claim we must return to the deceptive strategy of its origin.
Since Social Security was not on the list of the qualifiers of general welfare—Article I, Section 8 of the Constitution—government had no power to forcibly extract a portion of a man’s wage and force his employer to match this fund—not even close. So they used the power to tax to justify this action. But Congress had no power to tax for powers that it did not have. Never the less the government took over the responsibility for everyone’s retirement and the people lost the right to their own money—the portion that was forcibly extracted as a condition of employment. Moreover, since the federal government would now do this for them, they had no incentive to do it for themselves.
At the time the Supreme Court had ruled much of the New Deal legislation unconstitutional and Social Security probably would have met the same end had Franklin D. Roosevelt’s new Court Packing bill not been threatening the independence of the Supreme Court. They let this one slide. To do so they had to agree to place the new tax monies in the “Treasury like internal-revenue taxes generally, and … not earmarked in any way” (301 U.S. 619, 1937). They should have gone to Article V, adding an amendment to the Constitution empowering the federal government to do so, but they were uncertain that it would pass so enacted an end run around the Constitution instead.
The money taken under the guise of taxes was not set aside for the giver’s future at all, as most believed, but just added to the general fund and spent. If private firms did the same thing, the federal government would call it a Ponzi scheme and perpetrators would serve time. When taxpayers do retire, they will have to depend upon the resources of future generations to cover what was promised. The system could never end without injustice to the “old” people. Each generation rightfully came to believe in their entitlement, having allowed FDR to spend their contributions on the previous generation.
Payroll taxes and benefits payments began in 1937. Ida May Fuller, a legal secretary, paid a total of $24.75 into the system between 1937-1939. Her first monthly check issued Jan. 1940, was $2.00 short of this. “After her second check, Fuller already had received more than she contributed over the three-year period. She lived to be 100 and collected a total of $22,888.92 (Research Note #3: Details of Ida May Fuller’s Payroll Tax Contributions, Social Security Administration).” How can this not be a Ponzi scheme?
Those receiving social security in 1935, never having paid a cent into the program, were grateful, of course, for the generosity of the nation and became beholding to the party in charge of the handouts. This insured the democrats’ continuance in office for the next 17 years. Prosperity returned in the fifties and sixties, and a challenge to the now established and popular program was unthinkable. People saw Roosevelt as having saved the country. Only now, younger historians, not favorably conditioned to a worshipful response to Roosevelt, recognize and document that it was not the New Deal but World War II that pulled us out of the 21-year long Great Depression.
Over time more groups that paid nothing or very little into the fund have received benefits: spouses, widows, children and the disabled—even illegals. I have a friend who brought his mother to America and she received benefits until her death. Government figures estimated in 2010 that 54 million were receiving Social Security benefits. Without significant changes the program will crash by 2036 say the Social Security Board of Trustees in their 2011 Annual Report.
We agree that somebody does owe our elders the total of what they paid into the program, but it is not the new generation. They did nothing wrong. Why should they pick up the tab for commitments made before their birth? How can government take their money, spend it on others, look them in the eye, and tell them that this isn’t a Ponzi scheme? They are its biggest victims.
Dr. Harold Pease is an expert on the United States Constitution. He has dedicated his career to studying the writings of the Founding Fathers and applying that knowledge to current events. He has taught history and political science from this perspective for over 25 years at Taft College. To read more of his weekly articles, please visit www.LibertyUnderFire.org.
