Need one of these? Pay your taxes....
Doesn’t matter who wins or loses in this year’s Presidential elections, taxes are going up. What’s more, Government at all levels, city, county, state or Federal, will become ever more predatory in collecting taxes to alleviate budget troubles. Easy enough prediction to make, but such is modern life.
Here’s the latest nail in the coffin, a random link from CBS News:
Owe The IRS? Bill Would Suspend Passport Rights For Delinquent Taxpayers
LOS ANGELES (CBS) — A bill authored by a Southland lawmaker that could potentially allow the federal government to prevent any Americans who owe back taxes from traveling outside the U.S. is one step closer to becoming law….
…In addition to authorizing appropriations for federal transportation and infrastructure programs, the “Moving Ahead for Progress in the 21st Century Act” (**) or “MAP-21″ includes a provision that would allow for the “revocation or denial” of a passport for anyone with “certain unpaid taxes” or “tax delinquencies”. …
The key section of this Senate Bill 1813 decrees that any United States citizen who owes the vultures fine folks at the Internal Revenue Service more than $50K in back taxes might be subject to “action with respect to denial, revocation, or limitation of a passport”.
Roman Holiday
Pundits play a fair game of comparing the supposed decline of the American Empire with the fall of the Roman one.
History may not quite repeat, but it rhymes and echoes.
Gaius Aurelius Valerius "Chuckles" Diocletianus, b. 245 - d. 336
Some contend that it was during the time of Emperor Diocletian (and later Constantine) from 285 to 305 that the Roman Empire started down the long descent. Some of course say the seeds of descent were started much earlier. For the purpose of this story, let’s stay with Diocletian. From Civilization.org.uk:
Diocletian was in effect the person who introduced centralised management into the Roman Empire. In the great days, the running of the empire had been amateurish, run on an old boys’ network with a minimum of bureaucracy, few controls and low taxes, and as so often, amateurism worked. Diocletian changed all this. The empire was professionalised: it was divided into four, the taxation system was thoroughly overhauled, a census was taken to find out who was who – and all this cost a lot of money. The numbers of bureaucrats rose enormously – there were soon as many bureaucrats as there were soldiers —and thus taxation had to be raised enormously from the previous low levels in order to pay for all the bureaucracy. It was a vicious circle.
The increase in the size of the imperial bureaucracy and in the massive army that went with policing the empire led to naturally higher costs, and to finance this government expansion, higher inflation. Not that this started under Diocletian, previous emperors freely and enthusiastically debased the precious metal content of the imperial coinage. The silver denarius went from a 95% silver coin in the time of Augustus in the first century, to what was eventually only a bronze coin merely dipped in silver in the time just before Diocletian. To offset rising inflation, taxes started being collected not in the imperial currency but “in kind”, that is, produce such as meats and grains. Again from Civilisation.org.uk
“How the Peasants Became Serfs”
In a document from Egypt it is laid down that for the purposes of this census every body must return to their home village. But once the census had established the taxation to be levied, as the produce of so many people, then there was a tendency to insist that once one was recorded on a census, that was one’s legal place of residence. One could not move away from it, and furthermore your children had to continue to cultivate the land and provide the taxes. This completely breaks with the right of migration that had been granted so many years ago by the ius Latinum, the Latin right. This is the classic definition of serfdom.
Polling The Peasants
I asked a few people’s opinions about this new Senate bill.
A select few of a certain political persuasion issued the usual fulminations against that no-good, lower-than-a-snake’s-belly socialist foreign-born impostor, conveniently overlooking the fact that the bill was introduced by a Senator in Congress, not the President… never mind, set that aside…
The general feeling though was akin to “that’s right, you need to pay your taxes, everybody’s got to do their fair share”. Setting aside for now the “fairness” of the US tax regime, more other comments were along the lines of “doesn’t affect me, I don’t have or need a passport.” Indeed, even though the number of passport issued by the State Department has been rising every year, something like two-thirds of all Americans percent of all Americans don’t have a passport, and might never even apply for one.
Words of Martin Niemöller (1892 to 1984) “In Germany they came first for the Communists, and I didn’t speak up because I wasn’t a Communist. Then they came for the Jews, and I didn’t speak up because I wasn’t a Jew. Then they came for the trade unionists, and I didn’t speak up because I wasn’t a trade unionist. Then they came for the Catholics, and I didn’t speak up because I was a Protestant. Then they came for me, and by that time no one was left to speak up.”
The Takeaway
Count me in as a non-affected party, at least in the short term. From a personal finance perspective (my personal finance), I won’t even notice this legislation, even if it passes. I pay my taxes, and I have eight years left on my passport.
The historical parallel is of mild interest only in the sense that large complex bureaucracies, whether ancient or modern, need a constant influx of revenue to function, while producing not much that is of value. Measures to keep and capture revenue sources (or cash cows, or taxpayers) make perfect sense.
Along with stories that some states are aggressively reaching across state lines to pursue back taxes (“The Predatory State of California“), this just reinforces that we all need to be diligent and remain compliant in our tax records. I suspect that dubious deductions and creative accounting will come under increased scrutiny in years to come. Maybe this bill will be expanded in coming years to include more tax infractions and irregularities as reasons to deny passport rights. Owe *any* taxes? No Passport. Under audit? No travel abroad for you.
Furthermore, reducing the overall tax footprint is something that I aspire to do with personal production, as in having a large enough garden. A small measure, but a good start. Let’s just hope that legislation for payment of taxes “in kind” isn’t initiated in Congress anytime soon. I might otherwise be paying income taxes with cucumbers and peppers.
(**) “Moving Ahead for Progress in the 21st Century Act”… sounds a lot like “The Great Leap Forward“. Whoever thinks of these goofy titles?
This is one of my favorite issues…and I laugh also every time someone blames the President. It’s systemic, not “Obama” (off topic: I love those who will call every other President “President” XXXXX but refer to our current man as just “Obama.” He’s as culpable as the rest, but give the guy the respect of his office).
We pass laws with good intentions, not realizing that 1) we’ll never be able to get this stupid s%$# off the books later; and 2) every new law has unintended consequences later.
I just watched the new Atlas Shrugged movie late, late last night. It amazes me every time I read or watch Ayn Rand how prophetic much of that book has been. We’re living many of the moronic dominos she presented way back then.
AverageJoe recently posted..The Best Customer Service I’ve Ever Experienced
Things like this are the proverbial camel’s nose in the tent. Pretty soon, you’re sleeping next to a giant smelly beast.
Thank you to Atlas Shrugged and 1984 for giving us insight into the future.
JT recently posted..Best Buy is not a Value Investment
I don’t agree with denying passports or travel for people who OWE. I’d be a bit more sympathetic to doing it to people who fail to even file.
John @ Married (with Debt) recently posted..$50 Cash Giveaway Reminder
Hi John, considering that many people don’t even pay Federal income taxes, how fair is this to the rest who do?
Those who cannot remember the past are condemmed to repeat it. — George Santayana
Edward Antrobus recently posted..Why I Avoid Cash
You could probably come out ahead if you’re paying taxes in cukes, no? That’s really like growing money. Save seeds from year 1 and continually regrow…could start an empire.
Jeff @ Sustainable Life Blog recently posted..Tenets of Sustainability: Sustainability can be Cheap
A mini-empire at least. Maybe this is the year I get serious about seed-saving. But I said that last year, too.
Read thi one with great interest for two reasons: a) it is a well written and erudite post and b) it resonates with my thinking at the moment. I have had many occasions in the UK to remember that Marx said that history always repeats itself: once as a tragedy and once as a farce. Regretfully we all seem to be living in a time of farce. Apart from that Niemoller’s quote rings true as well: in the UK they came after the single mothers and no one spoke; they came after the unemployed – no one spoke; they came after the disabled and terminally ill – few spoke; now they are coming after the elderly and people with children – and we are running out of people to speak up. The wondeful world of farce and neoliberalism!
maria@moneyprinciple recently posted..Zen and the art of motorcar ownership: how much are our car ownership costs, really ?
Thank you for the kind words, Maria.
I’d not heard that Marx quote, but it sure rings true.
That is pretty crazy. I haven’t even heard about this. I guess it’s a good thing I have a Thai passport. Do you have an Italian passport? Always have a plan B.
retirebyforty recently posted..2012 Goals and Resolutions – Spring Update
Joe, I used to hold an Italian passport, but it lapsed and I was not able to renew it at the time (looong story). I can get another one, but that is a long process. It’s on the long-term to-do list.
Great post 101! In lean times governments will look for the smallest amount it can recover and will go to great length in enforcing payment of owed taxes which is understandable.
Loved the parallel with the Roman Empire, hope history doesn’t repeat with the USA!
BeatingTheIndex recently posted..Canadian Interest Rates Forecast 2012
Sure, Mich, from an apparatchik’s perspective, a perfectly rational piece of legislation. Although in theory it’s up to the governed to police this kind of liberty infringement, the US is so far gone down the path of unconstitutionality that even if the measure won’t pass this time, there will be another one by and by. As one Congressperson famously remarked “Most of what we do in DC is unconstitutional”
I had to pass this article on to my mom, the woman loves to travel! I don’t think she owes anything, but I know she’ll be pissed anyway!
TB recently posted..What You Didn’t Know About Installing Bathrooms
Hi TB – most people are, who hear of this particular shenanigan.
I don’t owe anything either, but this would still piss me off. It takes away freedom of choice which is a whole other post if you ask me.
You’re right, we could spin a whole lengthy blog post about our reduced choices these days. We could start with raw milk, and go from there.
So, does that mean I can still leave the country if I only owe them $49,999?
Wonder how long it would take the bureaucracy to update it the one extra dollar? Plenty of time for the plane to taxi & take off?
Cool story!
Dave, I think the IRS would consider you some kind of wise guy…
Unintended consequences, as mentioned by AverageJoe, always come back to bite somehow. My favorite response on this issue is the one you made to John.. nearly half of US citizens don’t pay federal taxes at all. How is this fair?
I recently read a book by Andy Andrews called, “How Do You Kill 11 Million People.” It speaks to the issue of the survival of a nation and seems relevant to this topic. Highly recommend it. Only took about 20 minutes to read on Kindle.
Matt @ RamblingFever Money recently posted..Where To Tithe When You Don’t Regularly Attend Church
Thanks for the tip, Matt. The book has an impressive list of 5 star reviews. The Nazis kinda snuck up on the “good” Germans, didn’t they?
Great post, 101. You can probably set me straight here, but going along with your posts, I’ve read that a big part of the downfall of the empire was due to economic reasons, as growing debasement of the money eventually ended the division of labour which brought about a catastrophic downfall in the standard of living. Breakdown of trade ensued as the roads were no longer safe for merchants.
We can connect this with the situation in the U.S. today. I think it’s quite clear that should foreign trade break down but spending remain at high levels, the U.S. dollar will clearly suffer for it and not only that, but a lower flow of real resources, like oil, will mean less military projection. No amount of QE can change that.
I love spending time on Wikipedia, but I feel there’s just so much to learn, and one brain to stuff it all in.
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Kevin – I suppose we could say that the severe devaluation of the Roman currency was a necessary *consequence* of empire, and a contributing factor to the degradation of living standards. Was it a primary cause? Doubtful. Another cause is degradation of arable land in mainland Italy, caused by the growth of large slave-labor estates together with the decline of small-holding farms run by what used to be the backbone of the Roman army, the farmer/soldier. Some historians ascribe the decline of Rome to the fall of the Republic and the ascendancy of the Caesars. That supposedly was the beginning of the end, but it was an end that took hundreds more years to play out. I know what it wasn’t, it wasn’t the lead in the acqueducts
I know what you mean about Wikipedia… great for general knowledge, a killer on productivity.
History repeats itself because the world is run by people and people do things based on emotion. We might evolve as a society over time, but the way the operation of the mind will always be governed by emotion.
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