Tuesday, June 04, 2013

Is this any way to help the poor?

By Jeff Jacoby

Is welfare corrupt? Of course it is, and in a damning report last week, the Massachusetts state auditor, Suzanne Bump, rounded up some of the scams:

Welfare payments issued to recipients long after they were listed as dead. Multiple recipients using one Social Security number — and multiple Social Security numbers being used by one person. Electronic benefit cards from Massachusetts being used in places like Hawaii, Las Vegas, and the Virgin Islands. Tens of thousands of blank EBT cards missing from state welfare offices. Repeated requests for “lost” benefit cards to be replaced.

In a report that covered only a two-year period, Bump’s investigators identified at least $18 million in illegal or suspicious welfare payments. “It pains all of us,” Bump told reporters, “to think that the program’s integrity is not being maintained.”

If this sounds familiar, it should. Blistering exposés of welfare fraud and abuse, in Massachusetts and elsewhere, have become almost routine.

Over a 22-month period in New Jersey, that state’s comptroller disclosed last week, prison inmates collected almost $24 million in unlawful welfare benefits — including $10.6 million in unemployment checks and $4.2 million in food stamps. TV reporters in Florida documented the use of electronic benefit cards in strip clubs, liquor stores, bowling alleys, and bingo parlors. A 65-year-old cashier in New Hampshire was fired last year for refusing to let a young man use a benefit card to buy cigarettes.

The new Massachusetts audit, meanwhile, followed an earlier report by the state’s inspector general, who estimated that the state is squandering $25 million a year on improper welfare payments. And before that was a national investigation by the US Department of Agriculture, which administers the food stamp program. It uncovered fraud in every state it reviewed.

Is welfare corrupt? Is it ever. And yet the infuriating waste of taxpayer funds is only the beginning of the corruption.

More Americans rely on government assistance today than ever before. Food stamps have become almost a middle-class entitlement. At the end of 2012, a record 47.8 million people were on food stamps. Of the 115 million households in the United States, 23 million — one in five — are on the food dole.

It wasn’t so long ago that such a degree of dependency would have been inconceivable. In 2001, according to federal data, 17.3 million people were receiving food aid. In little more than a decade, the food stamp rolls have almost tripled.

That didn’t happen by accident. Under the last two presidents, increasing food stamp enrollment became an explicit government goal. George W. Bush sharply expanded eligibility, rebranding food stamps as “nutritional assistance” instead of welfare. States were encouraged to sign up more recipients — a ball the Obama administration took and ran with. The Agriculture Department promotes food stamps through radio ads and “public service” announcements; billboard-style ads appear on city buses. To attract even more participants, the department advises local welfare agencies to “host social events where people mix and mingle” — show them a good time, and try to get them on welfare.

Is this any way to help the poor? FDR didn’t think so. In his annual message to Congress in 1935, President Roosevelt warned that “continued dependence upon relief induces a spiritual disintegration fundamentally destructive to the national fiber.” The father of the New Deal knew that “to dole out relief in this way is to administer a narcotic, a subtle destroyer of the human spirit. It is inimical to the dictates of a sound policy. It is in violation of the traditions of America.”

It is a mark of how far we have declined that a political figure who dared to say such a thing today would be denounced as heartless, a hater of the poor, even a racist — as Newt Gingrich found out when he tried to make an issue of soaring food stamp rates during the presidential campaign. When Massachusetts lawmakers last year tried to prevent electronic benefit cards from being used to pay for tattoos, guns, or jewelry, Governor Deval Patrick vetoed the measure, saying he would not be a part of “humiliating poor people” or making them “beg for their benefits.”

FDR feared the effect of long-term dependence on government. Political leaders today enable it.

Welfare corrupts in so many ways. What it does to taxpayers is bad, and what it does to welfare recipients is worse. But what it is doing to our nation’s character and deepest values may well be worst of all.



Abolish the Corporate Income Tax!

Sen. Carl Levin was aghast. Before his committee sat, unapologetic and uncontrite, Apple CEO Tim Cook, whose company had paid no U.S. corporate income taxes on the $74 billion it had earned abroad in recent years.

"Apple has sought the Holy Grail of tax avoidance," said Levin. "Apple has exploited an absurdity."

Actually, Apple had done nothing wrong, except hire some crack accountants who chose Ireland's County Cork as the headquarters of their international division. Thus Apple paid on profits earned outside the U.S.A. nothing but a 2 percent tax imposed by the Irish government.

Far from being condemned, Apple's CPAs ought to be inducted into the Accountants Hall of Fame.

It is no more immoral for Apple to move its headquarters for foreign sales to Ireland than for Big Apple residents to move to Florida to escape the 12 percent combined state and city income tax.

Among the reasons the Sun Belt is booming at the expense of the Rust Belt is not just the weather. Southern states strive to keep income and estate taxes low or nonexistent. They want companies and families to relocate and live there, and to spend their money there.

The problem here is not with Apple, it is with Sen. Levin & Co.

In a press release, "Avoiding Their Fair Share of Taxes," the AFL-CIO hails Levin and bewails the fact that though the U.S. corporate tax rate is 35 percent, highest in the world, corporate income tax revenue has fallen to well below 10 percent of federal tax revenue.

"Cash tax payments by non-financial companies in the S&P 500 Index fell ... to $222 billion in 2010," moaned the AFL-CIO.

"Another corporate tax avoidance strategy is to move overseas to a corporate tax haven like Bermuda. By reincorporating offshore, companies avoid paying federal income taxes on profits earned outside the United States."

Yes, they do. But instead of bewailing this, perhaps we should start thinking and acting as our forebears did. In the same Wall Street Journal that reported on Cook's defense of Apple, former Sen. Phil Gramm described that earlier America:

"Over the late 19th century, real GDP and employment doubled, annual average real earnings rose by over 60 percent and wholesale prices fell by 75 percent, thanks to marked improvement in productivity."

Astonishing. And what is the difference between that age and ours? A 35 percent income tax rate on individuals and corporations that did not exist then, and would have been regarded by Americans of the Gilded Age as the satanic work of Friedrich Engels and Karl Marx.

From the Civil War to World War I, our economy grew from one-half the size of Great Britain's to twice Britain's. American companies were capturing markets abroad. Today's U.S. companies are looking for ways to relocate abroad.

Herewith, a modest proposal to turn this around.

Since the U.S. corporate income tax now produces less than 10 percent of federal revenue and less than 2 percent of gross domestic product, abolish it. Get rid of it.

Think of it. A continent-wide nation that doesn't tax business.

Assume this would cost the Treasury $250 billion in lost revenue.

How to make it up? Put a 10 percent tariff on imports entering the United States, which last year added up to $2.7 trillion.

This tax reform would thus be revenue neutral.

And what would a corporate income tax rate of zero, with a 10 percent tariff on goods entering the U.S.A. from abroad, accomplish?

First, every U.S. corporation that had moved abroad in search of lower taxes in recent years would start thinking about coming home and bringing its production and its jobs back to America.

Second, that $2 trillion in income U.S. companies have stashed abroad would come roaring back into U.S. institutions.

Third, foreign companies would begin to relocate and produce here in America, both to get around the tariff and pay no taxes.

Fourth, U.S. producers would see sales soar inside the $17 trillion U.S. market, at the expense of foreigners who would pay a 10-percent admission fee to get into this market, a fraction of what they used to pay in the 19th century.

While this would cause a surge in unemployment among IRS agents and accountants, hundreds of millions of man hours could be redirected away from filling out tax forms and into productive work.

"Since 1980, the U.S. has run trade deficits in every year totaling about $9 trillion," writes columnist Robert Samuelson.

That is 9 thousand billion dollars in trade deficits!

It is what unmade America as a self-reliant republic and made China a manufacturing marvel. And those trade deficits are how America became a dependent nation in hock to the world.

From 1865 to 1914, America had 10 Republican presidents. All believed in financing government by taxing imports, not the incomes of U.S. citizens or the U.S. companies that employed them.

And this was how the miracle Sen. Gramm details came about.



Now The Gibson Guitar Raids Make Sense

IRS Scandal: The inexplicable raid nearly two years ago on a guitar maker for using allegedly illegal wood that its competitors also used was another targeting by this administration of its political enemies.

On Aug. 24, 2011, federal agents executed four search warrants on Gibson Guitar Corp. facilities in Nashville and Memphis, Tenn., and seized several pallets of wood, electronic files and guitars. One of the top makers of acoustic and electric guitars, including the iconic Les Paul introduced in 1952, Gibson was accused of using wood illegally obtained in violation of the century-old Lacey Act, which outlaws trafficking in flora and fauna the harvesting of which had broken foreign laws.

In one raid, the feds hauled away ebony fingerboards, alleging they violated Madagascar law. Gibson responded by obtaining the sworn word of the African island's government that no law had been broken.

In another raid, the feds found materials imported from India, claiming they too moved across the globe in violation of Indian law. Gibson's response was that the feds had simply misinterpreted Indian law.

Interestingly, one of Gibson's leading competitors is C.F. Martin & Co. According to C.F. Martin's catalog, several of their guitars contain "East Indian Rosewood," which is the exact same wood in at least 10 of Gibson's guitars. So why were they not also raided and their inventory of foreign wood seized?

Grossly underreported at the time was the fact that Gibson's chief executive, Henry Juszkiewicz, contributed to Republican politicians. Recent donations have included $2,000 to Rep. Marsha Blackburn, R-Tenn., and $1,500 to Sen. Lamar Alexander, R-Tenn.

By contrast, Chris Martin IV, the Martin & Co. CEO, is a long-time Democratic supporter, with $35,400 in contributions to Democratic candidates and the Democratic National Committee over the past couple of election cycles.

"We feel that Gibson was inappropriately targeted," Juszkiewicz said at the time, adding the matter "could have been addressed with a simple contact (from) a caring human being representing the government. Instead, the government used violent and hostile means."

That includes what Gibson described as "two hostile raids on its factories by agents carrying weapons and attired in SWAT gear where employees were forced out of the premises, production was shut down, goods were seized as contraband and threats were made that would have forced the business to close."

Gibson, fearing a bankrupting legal battle, settled and agreed to pay a $300,000 penalty to the U.S. Government. It also agreed to make a "community service payment" of $50,000 to the National Fish and Wildlife Foundation — to be used on research projects or tree-conservation activities.

The feds in return agreed to let Gibson resume importing wood while they sought "clarification" from India.

The feds say they acted to save the environment from greedy plunderers. America is a trivial importer of rosewood from Madagascar and India. Ninety-five percent of it goes to China, where it is used to make luxury items like $800,000 beds. So putting Gibson out of business wasn't going to do a whole lot to save their forests.

Juszkiewicz' claim that his company was "inappropriately targeted" is eerily similar to the claims by Tea Party, conservative, pro-life and religious groups that they were targeted by the IRS for special scrutiny because they sought to exercise their First Amendment rights to band together in vocal opposition to the administration's policies and the out-of-control growth of government and its power.

The Gibson Guitar raid, the IRS intimidation of Tea Party groups and the fraudulently obtained warrant naming Fox News reporter James Rosen as an "aider, abettor, co-conspirator" in stealing government secrets are but a few examples of the abuse of power by the Obama administration to intimidate those on its enemies list.


There is a  new  lot of postings by Chris Brand just up -- on his usual vastly "incorrect" themes of race, genes, IQ etc


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