$513 Million: The Amount the IRS Paid in ‘Fraudulent & Erroneous’ Homebuyer Tax Credits
- Posted on April 15, 2011 at 12:48pm by
Jonathon M. Seidl
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WASHINGTON (AP) — The Internal Revenue Service has paid out more than a half-billion dollars in homebuyer tax credits to people who probably didn’t qualify, a government investigator said Friday.
Most of the money – about $326 million – went to more than 47,000 taxpayers who didn’t qualify as first-time homebuyers, said the report by J. Russell George, the Treasury inspector general for tax administration. Other credits went to prison inmates, taxpayers younger than 18 and people who did not actually buy homes.
“The IRS has taken positive steps to strengthen controls and help prevent the issuance of inappropriate homebuyer credits,” George said. “However, many of the actions occurred after hundreds of thousands of homebuyer credits had already been issued, including fraudulent and erroneous credits totaling millions of dollars.”
The popular credit provided up to $8,000 to first-time homebuyers and up to $6,500 to qualified current owners who bought another home during parts of 2009 and 2010.
The IRS said it worked hard to enforce a complicated tax credit that provided more than $27 billion to almost 3.9 million taxpayers. The agency said it corrected math errors on more than 370,000 returns and audited more than 400,000 taxpayers claiming the credit, denying hundreds of thousands of questionable claims. In all, the agency said its enforcement efforts saved more than $1.3 billion and identified more than 200 criminal schemes.
The agency questioned some of the inspector general’s findings, but said it would follow up on the report and continue working to recoup any credits that were incorrectly paid out.
The tax credit for first-time homebuyers was part of President Barack Obama’s economic recovery package enacted in 2009. In November 2009, Congress extended the credit and expanded it to longtime owners who bought new homes.
Homebuyers qualifying for the credit had until April 30, 2010, to sign purchase agreements. They had until Sept. 30 to complete their purchases, after Congress extended the deadline. The extensions and expansion of the credit created a complicated system that made it hard for many taxpayers to determine which credit they qualified for, if any. There were also income requirements.
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Comments (49)
Peerless1
Posted on April 16, 2011 at 8:13amThis is all a result of a tax code that is way too complicated and used for social engineering instead providing revenue to finance the government. Pass the FairTax so all the underground income is taxed, everyone gets taxed (not just the top 50% of income earners), and tens of billions of dollars each year are saved not having to comply with this complicated system.
Report Post »AWM
Posted on April 16, 2011 at 12:28amAnytime you give money away, you’ll not have any problems finding people to give it to. Lots of these people are going to be there to “game” the system, period.
Remember all the people coming to get some of Obama’s cash stash!
Solution, stop giving money away, or anything else for that matter.
Report Post »Thank goodness the entitlement system will be self correcting!
attitudijudi
Posted on April 15, 2011 at 7:08pmOn the flip side of this story – My husband and I filed our income taxes the end of Jan. 2011. We bought a house the end of 2008 and used the $8000.00 Federal credit (which we have to pay back effective this year. If you received the credit in 2009 you did not have to pay it back). The IRS has known the payments were to begin in 2011 but failed to code their programs to handle the payments. Our tax return has been held up for weeks because of this failure. (And they want to run Obamacare). H&R Block, Jackson Hewitt, Turbo Tax and other tax outlets have had their programs ready for the housing credit payback in 2011. Scary or what?
Report Post »Sunnyr
Posted on April 15, 2011 at 6:55pmMore Fraud and Corruption and Income Redistribution from the Idiot in the White House.
One and Done in 2012!
Report Post »shirtsbyeric
Posted on April 15, 2011 at 4:05pmI’m sure the fraud in the stimulus packages were ten times this.
Report Post »JenniferNB
Posted on April 15, 2011 at 3:58pmHow about a FRAUD CZAR! Would be a busy job!
Report Post »fatsomann
Posted on April 15, 2011 at 3:53pmAnd yet the Federal Government wants to expand and control our healthcare.
Report Post »Pat in PA
Posted on April 15, 2011 at 3:41pmTO ABC:
You prefer truth and accuracy…Really ?? The conservative talking point is totality at odds with reality…Really ??
Well here is some reality relative to your multiple postings:
1) The total mortgage market may in fact be $10 trillion….however, with regards to the homebuyer tax credit, that was in place for the most part two years 2009/2010, that dealt with Purchases of property during the applicable years….the Total mortgage originations in 2009 was ~ $2.0 Trillion, and ~ 65 % of that was refinancing….meaning about $700B were purchases. For 2010, Total mortgage origination was $1.5T, and 65% refinances…meaning ~ $500B were purchases. So your analysis and resultant % should be multiplied by at least 10, as the $500M IRS is attributed to ~ $1T, not $10T….which makes it about 5%…not so insignificant…..however, most conservatives could have predicted this, as we are good look like that.
2) Fannie & Freddie don’t originate ?…..well that is technically true (and thank God for that) ; however, they do issue the guidelines that every mortgage lender/originator must abide by in order for them to purchase the originated loan from them and issue it’s guarantee to any buyer they then sell (after routinely bundling them up as an MBS) to. So, if politicians want to increase homeownership, they lower the standards at FNMA/FDMC (lower their standards in liberal talk may bsound something like “make mortages more flexible and accessible to the middle class and underserved diverse markets).
PS: You may not believe this but it is still going on, only it’s happening at FHA…don’t think so, ask a reputable lender what is the maximum debt to income ratio on an FHA loan…54.9%….what’s even more hard to believe, FHA’s % of the market has increased exponentially over the past 3 years !!! Whooda thunk. Ohhh…and you’ll never guess, with the sunlight shining on them, FNMA/FDMC now have at best 45% maximum ratios. (i.e., watch what the other hand is doing)
3) Bush-Clinton-Bush did not regulate….well that is not entirely true, as it is well documented that the 2nd Bush requested many times to regulate Fanne and Freddie but was met with considerable opposition by certain members of Congress….you can look up those names. In addition, it is well documented that Clinton oversaw the “making them more flexible era”. :Look that up to…. Hint: start with Franklin Raines
4) Fed did nothing and kept rates low….true…and that makes current Fed policy what ?
5) Citizens demanded low credit w/1000s of private companies goading them…..is ACORN and SEIU included or are you just referring to the financial progressive think tanks Goldman Sachs etc.,
6) Subprime default 3x more likely than prime products Fannie and Freddie created…..so the open line of credit this administration gave them in Dec 2010 to cover future loses over and above the $150 Billion they already have actually incurred was because the sub prime market made them do it. Future loses are estimated to be $150B – $250B. Those are current administration estimates. Believe them at your own risk. Most of the toxic mortgages were originated using the guidelines FNMA / FDMC issued (you know, the make them more flexible ones above)….if a lender/originator stepped outside those guidelines, then yes, they needed to find anotherr buyer (and Goldman Sachs and company were more than happy to sell them then resell them) or hold them on their books until they found a buyer or the borrower refinanced. ….if you think Fannie and Freddie did not “create” products that had an increasingly higher probability of default, you need to expunge the Kool Aid in your system.
Report Post »mossbrain
Posted on April 15, 2011 at 2:43pmAllowing people to deduct home mortgage interest as an itemized deduction is nothing but a gift to the housing industry and the rich. It should be done away with. Only the rich really benefit from it.
Report Post »babylonvi
Posted on April 15, 2011 at 2:19pmI’da thought that if I improperly gave away a half billion $$$ of my bosses money improperly, I wold be, at least, fired. How many of these fraudsters have been brought to justice?
Report Post »emh99
Posted on April 15, 2011 at 2:15pmAnd they are working to get it ALL BACK? RIGHT?! Yeah, right. They will just let them get away with it. While we have to pay and pay and pay more and more b/c the idiots in DC can’t do a damn thing without taking ALL our money. On this tax day, a pox on all IRS bs. 2012 can’t get here soon enough.
Report Post »Diana M.
Posted on April 15, 2011 at 1:53pmSo what is a person to do that will actually get rid of all this crap!!!! This country is going off the ledge and we need some help. We need someone who is stronger that Obama and let us not forget the Soros influence over Obama and his policies. A flat tax is a very good idea.
Report Post »HippoNips
Posted on April 15, 2011 at 1:27pmLOL It‘s Bush’s fault !!! or something!
Report Post »rightwingheroes
Posted on April 15, 2011 at 1:27pmYet more FRAUD by King Obama and nobody gives a crap. His whole presidency is a sham. We have all been duped. His recovery act is fraudulent and it still doesn’t work. Wow King Obama fails at failing.
Report Post »Vyger
Posted on April 15, 2011 at 1:23pmI got a tax bill a month ago for $364,000 for the year 2005. Really? What the heck did I do with the 1.2 million I made?
The IRS is one of the institutions that has to be overhauled. They tried to collect $ 600 from me when I was a high school junior. And then re-opened that same file four years in a row when the new college hire showed up. Ridiculous!
Report Post »miles from nowhere
Posted on April 15, 2011 at 1:15pmBETTERDAYS thank you so much for your factual comment, you are a true patriot.
Report Post »Showtime
Posted on April 15, 2011 at 1:20pmAnd a good man, too!
Report Post »BetterDays
Posted on April 15, 2011 at 1:34pm@miles and SHOWTIME:
Report Post »first off SHOW, only GOD is good. ( mandatory humility before mandatory humiliation).
Second off: Good morning to you both.
Thanks for the compliment(s), I pray we conservatives and functional progressives alike can come together to combat cancers like the FED, the IRS, and our budget in a results orientated manner.
I don‘t know if that’s Possiable, as the only examples of progressivism that are “openly” displayed here are not conducive towards constructive debate. Rather it is most normally exampled by displayes of childishness or vitriolic statements written to intimidate rather than to invite response.
And lastly, be at peace with all men if at all possible, be quick to forgive.
IMISSGWB
Posted on April 15, 2011 at 1:14pmTo get money to buy a house, car, washer and whatever else is insane. If you cannot buy a home without a handout, you shouldn’t buy one.
Report Post »Showtime
Posted on April 15, 2011 at 1:14pm@dawg of gawd
Report Post »Posted on April 15, 2011 at 10:49am
Yeah, just imagine the headlines . . . “Mediocrity Triumphs! Conservatives Usher in the Age of Ignorance”
~~~~~~~~~~~~~~~~~~~~~~~~~
Well stated, Dawgy!
Showtime
Posted on April 15, 2011 at 1:19pmWere it not for conservatives, this story would never have surfaced.
Report Post »And which party is in power now? Conservatives did not usher in the age of ignorance. Conservatives just expose the ignorance of the party just in control.
DarthMims
Posted on April 15, 2011 at 1:14pmMore evidence that the IRS and the tax system needs to be replaced. My friend and I came up with a system that not only provides the federal government with a steady income, but also lowers taxes for 99% of Americans. It is an old idea, but one that people have never embraced. A flat income tax and a flat corporate tax. A flat income tax of 15% lowers the tax burden for most individuals, and a flat corporate tax of 20% lowers the tax burden for all corporations. The catch is, there would be no more loopholes or writeoffs. Everybody pays the same because everybody gets a break. Also, no more refunds for the same reason. The IRS could be dismantled and replaced with billing and receiving computer server. The federal government would save billions per year, and bring in billions more by making sure everyone pays their fair share.
Report Post »nxs2012
Posted on April 15, 2011 at 1:13pmin response to THEONEFROMABOVE: What do you mean small? That is still tax payer money that got redistributed?
Report Post »miles from nowhere
Posted on April 15, 2011 at 1:07pmHere is a plan to get rid of 90% of the IRS, and save over a 100 billion in the first year. We only need one IRS building in the US located in Colorado, everybody will pay a certain percentage in taxes to this central location once a year in the form of a flat tax and be done with it. This will eliminate all those big expensive buildings in every city in the US and wipe out all those damn IRS agents that are a nuisance to the American way of life. You the tax payer will save 100 billion+/year!!!!!!!!!!!
Report Post »Ducky 1
Posted on April 15, 2011 at 1:01pmAh……the efficiency of our government!
Report Post »tinydd
Posted on April 15, 2011 at 1:39pmExactly, the IRS has proven to be the joke of Washington although the FAA is running a very close second. Can we blame Bush for this? I’m sure Obama will.
We must not allow Obama to be elected again in 2012, please America, wake the hell up!
Report Post »Non-sequitur
Posted on April 15, 2011 at 2:27pmRead ABCs posts a little further up, they show that the IRS is actually extremely efficient.
Report Post »Therightsofbilly
Posted on April 16, 2011 at 12:18am@non-seq
A national sales tax would be MORE efficient, less costly to administer, and force criminals to pay their FAIR SHARE. Even Timmy & Charlie would have paid up.
You’re all for everyone paying their fair share, right?
Report Post »Rearden Steel
Posted on April 15, 2011 at 1:00pmWe need to start charging individuals in government with crimes.
Report Post »BetterDays
Posted on April 15, 2011 at 1:11pmHolder is to busy deciding what laws he won‘t defend and what criminals he won’t prosecute, it takes up his whole day………..sad.
Report Post »Showtime
Posted on April 15, 2011 at 1:23pmBetterDays ~
Report Post »Add (1) defending Obama by keeping him out of court and (2) making bad decisions.
CatB
Posted on April 15, 2011 at 2:11pm@READRDEN STEEL
Let’s start in the White House
Report Post »CatB
Posted on April 15, 2011 at 12:58pmGO GET IT FROM THE CROOKS!
I know a young couple who QUALIFIED for it and had a HECK of a time to get it.
Report Post »Pat in PA
Posted on April 15, 2011 at 4:32pmTO ABC:
You prefer truth and accuracy…Really ?? The conservative talking point is totality at odds with reality…Really ??
Well here is some reality relative to your multiple postings:
1) The total mortgage market may in fact be $10 trillion….however, with regards to the homebuyer tax credit, that was in place for the most part two years 2009/2010, that dealt with Purchases of property during the applicable years….the Total mortgage originations in 2009 was ~ $2.0 Trillion, and ~ 65 % of that was refinancing….meaning about $700B were purchases. For 2010, Total mortgage origination was $1.5T, and 65% refinances…meaning ~ $500B were purchases. So your analysis and resultant % should be multiplied by at least 10, as the $500M IRS is attributed to ~ $1T, not $10T….which makes it about 5%…not so insignificant…..however, most conservatives could have predicted this, as we are good look like that.
2) Fannie & Freddie don’t originate ?…..well that is technically true (and thank God for that) ; however, they do issue the guidelines that every mortgage lender/originator must abide by in order for them to purchase the originated loan from them and issue it’s guarantee to any buyer they then sell (after routinely bundling them up as an MBS) to. So, if politicians want to increase homeownership, they lower the standards at FNMA/FDMC (lower their standards in liberal talk may bsound something like “make mortages more flexible and accessible to the middle class and underserved diverse markets).
PS: You may not believe this but it is still going on, only it’s happening at FHA…don’t think so, ask a reputable lender what is the maximum debt to income ratio on an FHA loan…54.9%….what’s even more hard to believe, FHA’s % of the market has increased exponentially over the past 3 years !!! Whooda thunk. Ohhh…and you’ll never guess, with the sunlight shining on them, FNMA/FDMC now have at best 45% maximum ratios. (i.e., watch what the other hand is doing)
3) Bush-Clinton-Bush did not regulate….well that is not entirely true, as it is well documented that the 2nd Bush requested many times to regulate Fanne and Freddie but was met with considerable opposition by certain members of Congress….you can look up those names. In addition, it is well documented that Clinton oversaw the “making them more flexible era”. :Look that up to…. Hint: start with Franklin Raines
4) Fed did nothing and kept rates low….true…and that makes current Fed policy what ?
5) Citizens demanded low credit w/1000s of private companies goading them…..is the well coached ACORN and SEIU included or are you just referring to the financial progressive think tanks Goldman Sachs etc.,
6) Subprime default 3x more likely than prime products Fannie and Freddie created…..so the open line of credit this administration gave them in Dec 2010 to cover future loses over and above the $150 Billion they already have actually incurred was because the sub prime market made them do it. Future loses are estimated to be $150B – $250B. Those are current administration estimates. Believe them at your own risk. Most of the toxic mortgages were originated using the guidelines FNMA / FDMC issued (you know, the make them more flexible ones above)….if a lender/originator stepped outside those guidelines, then yes, they needed to find anotherr buyer (and Goldman Sachs and company were more than happy to buy them then resell them….to public employee and union pension funds, european countries and banks, other naive investors) or hold them on their books until they found a buyer or the borrower refinanced. ….if you think Fannie and Freddie did not “create” products that had an increasingly higher probability of default, you need to expunge the Kool Aid in your system.
Report Post »miles from nowhere
Posted on April 15, 2011 at 12:55pmSo does this mean that we need to throw the people in the IRS in jail for there corruption. OH! thats right they are above the law. Only us peon citizens that owe the IRS a few hundred dollars get thrown in jail for not paying our taxes. The IRS what a bunch of losers, they could care less about the regular folks just there own little selves. What abunch of ******!
Report Post »Snowleopard {gallery of cat folks}
Posted on April 15, 2011 at 1:05pmThe enforcement arm of the fed’s revenuers are indeed above the law; they are just like the admin and the Congress, do something wrong and the most, if anything, that happens is a slap on the wrist. If we were doing the same, jail for life and the equivilent of indentured servitude for penalties if you are lucky.
Report Post »BetterDays
Posted on April 15, 2011 at 1:09pm@miles
Here’s more:
41 Obama White House aides owe the IRS $831,000 in back taxes — and they’re not alone. source
http://latimesblogs.latimes.com/washington/2010/09/congress-taxes-irs.htm
The la times story goes on to report that over 18,000 people on the “hill” owe the IRS a whopping 9.3 billion dollars.
The Federal Reserve bank is a Fraud as we all know. The IRS is that private banks hired goon squad, and we pay their wages to rob us?
Report Post »Obama wants to raise taxes on individuals who make over 250,000 dollars. After the big boys continue to avoid taxes courtesy of legions of lawyers and loopholes they paid to have written into the 16,000 pages of the IRS tax codes, the only ones paying more taxes will be the small business’s that generate 90% of all new jobs in this country. That will cause a depression, but mark my words that’s the plan.
RINOs and socialist still control the purse strings, and we are sone to become a milk cows for the very globalists that run the FED and the IRS.
abc
Posted on April 15, 2011 at 1:24pmHere’s a question: does the Blaze or anyone commenting on it know how big the US mortgage market actually is? The problem with political pundits and most of those who listen to them is that they do not know what is significant and what is not significant. The $500M+ seems significant since most of us do not have anywhere near that much dough, but the reality is that when viewed in context the amount is actually rather small. It would be nice to eliminate this fraud, but you must judge how bad it is as a percentage of the size of the mortgage market, which is well over $10 TRILLION dollars. This means that the tax fraud is equal to .0017% of the tax credits being processed (assuming an avg tax rate of 30%). This is a remarkably low number and shows that the IRS is ruthlessly good at avoiding fraud in this area, which makes sense since the banks and other entities that hold these mortgages are good about reporting.
To put it into perspective, Amex has stated policies internally that say that they will automatically refund disputed purchases of $25 or less since they are not worth the cost of administration to deal with. Given that the average Amex bill is less than $1,000 per month, this means that the tolerance for fraud at Amex is 2.5% of that monthly bill. To be fair, Amex will only let you have one such fraud per year before investigating, so it really is $25 on less than $12,000 or up to 0.21%. This is more than TEN TIMES the fraud that the IRS allows, which reflects the greater (and maybe inefficient?) resources that the government is willing to use to enforce compliance.
Given the anti-government sentiments expressed here, along with general skepticism about government efficiency, perhaps Beck and his crew ought to be complaining that the $513M figure is too low rather than too high. If Amex were running this show, it would be more than a $5B number…
Report Post »Mr. Nice Guy
Posted on April 15, 2011 at 1:35pm@ABC,
Interesting perspective, thanks for posting that.
It‘s also interesting how the government is as careful as you describe about collecting money but doesn’t seem to be so careful about spending it.
Report Post »BetterDays
Posted on April 15, 2011 at 1:44pm@ABC:
Nice post BTW, I do know that.
Are you aware that Fannie Mae and Freddie Mac currently hold 7 billion of those mortages?
You are proabally aware that this two fine government run/ nationalized corporation have received to date Right now, the Government Sponsored Enterprises (GSEs) that helped cause the housing bubble in 2000’s and the financial crisis that followed with loose lending standards have an unlimited credit line from the U.S. Treasury. The bailouts have already cost $148 billion, and although the unlimited credit line expires at the end of 2012, after that the companies will be entitled to another $275 billion, according to former chief credit officer of Fannie Mae Edward Pinto.
Fannie and Freddie, you will recall, were the mortgage giants that helped foment the financial crisis by selling trillions of dollars of mortgage-backed securities all over the world with the implicit backing of taxpayers. Currently, they own or guarantee some $5.5 trillion of mortgages, more than half of all homes in the nation. Please note that this source differs from my previous statement of 7 trillion, Wikipidea states the assists held by these entities total over 10.5 trillion.
Report Post »Now matter which way you cut the pie ABC, this country is in DEEP financial trouble. This seems to be one of the few areas progressives and conservatives agree on, where they differ is in solutions.
abc
Posted on April 15, 2011 at 1:57pmBetterDays,
Sorry, but I have to disagree. The GSEs should not be singled out as causing the housing bubble, since there is a lot of other, bigger culprits to blame. There were the investment banks that put the toxic CMOs and other derivatives together in the first place. Freddie and Fanny are not allowed to originate subprime mortgates, although they could and did syndicate them, but even if they hadn’t the private banks were also doing much of that anyway. The private ratings agencies totally abdicated responsibility, signing off on total toxic instruments without thought. The government under Bush, Clinton and Bush chose not to regulate the instruments and systematically under funded and under manned the SEC. SEC Chairman Cox did not enforce as he should although even the FBI had produced warnings about widespread fraud in the market for years ahead of time. The Fed also did nothing and then kept permissively low interest rates to keep the whole thing afloat. And the citizens of this country got in over their heads and continued to demand low credit to fund a lifestyle beyond their means, with thousands of private companies goading them on by pushing questionable lending practices (e.g., Countrywide and its CEO Mozillo).
It is also important to note–and I’ll cite the numbers again, since they are important–that the default rate for subprime originated instruments has been running at about 3 times the level of prime orginated instruments, according to Fed Reserve data. What this means is that the crap on public and private balance sheets that the private banks created is three times more likely to blow up than the products that Freddy and Fannie created. Yet the average conservative continues to spin a story that makes those GSEs the prime culprits. This is totally at odds with reality, although it is politically useful. I prefer truth and accuracy to what is politically expedient. Hopefully, you do as well… The reality is that the cast of characters responsible is very large, and Freddie and Fanny are not even close to being the two largest ones.
Report Post »abc
Posted on April 15, 2011 at 2:02pmBetterDays,
On the fiscal mess, the reality is that BOTH sets of solutions are required. You cannot cut your way to deficit neutrality, since there is not enough waste or unwanted or unnecessary programs to get you there. You also cannot tax your way there, since you will get widespread tax evasion if taxes as a percentage of GDP rise too much. So you need to do both. Obama is leaning towards $1 in tax hikes for $2 in spending cuts. I’m not sure that this is correct, but it is better than pretending that only GOP or Dem solutions are the right prescription. By the way, Obama’s plan will require finding about $8T in spending cuts, which is still a daunting amount even with the tax hikes. People better get used to the idea that the party is over. We have spent more than we earn since 1979, and that will end. We now will pay more (taxes) for less (government services). And everyone, from rich to poor, will feel the pain.
Report Post »G.W. Dobbs
Posted on April 15, 2011 at 2:28pmCareful, there; the IRS takes PERSONAL RETRIBUTION and will completely DESTROY you. They have done it MANY times in order to instill FEAR into citizens. http://www.losthorizons.com. Here, you will read TRUTH. The author, however, remains in JAIL for writing the truth and the Courts will NOT let his book be shown to the Jury or rebutted. America is a FREE and JUST NATION under the RULE OF LAW?
You should know better.
Report Post »right-wing-waco
Posted on April 15, 2011 at 2:44pmA few hundred million here a few billion there and at some point it becomes real money. Government is the most irresponsible group to let spend anything. That is why the founders gave us a REPUBLIC with LIMITED government.
The answer… return to the list in Article 1, Section 8 of the US Constitution and repeal everything not there.
Report Post »Professional Infidel
Posted on April 15, 2011 at 2:49pmEither they don’t care, (which is bad) or don’t have a clue what there job is. Why is there never any energy to correct anything???
Report Post »BetterDays
Posted on April 15, 2011 at 4:06pm@ABC
Sorry for the time late in replying.
I’m not disagreeing with what you stated, as you say facts tend to stand on their own. I was proffering data to support rather than detract from our conversation.
No problem, it’s easy to make asumptive leaps towards antagonistic response when one has shall we say a : history of disagreement between parties.
Awarding the cumulative data presented we can make the following statements with a high degree of certainty.
A.) banking and mortages finance corporate structures continue to place undue crisis upon the economy because of unscrupulous practices.
B.) governmental oversight over the periods of at least the last four administrations has been negligent and remiss in identifying and prosecuting parties ( A).
C.) lobbying and other methods (corruption) have undermined the tax codes and criminal laws to unfairly permit (A) to escape culpability in their actions.
D.) Congress’s over an unknow period of time {since at least 1913, establishment of a Federal reserve bank} has been culpable in the establishment of loopholes and laws permitting parties (A) to fund action (C).
Any conclusion we might draw from the assembled data is mitigated by in large the peoples ineffectiveness in having remedy to (B) and (D) and the fore are powerless over (A) and (C).
An implementation of a constitutional amendment should therefor be brought forth stating the following:
Establishment of a fair/ flat tax rate and the abolishment of the Federal reserve Bank and all it’s entities including the Internal Revenue Service.
a mandate that the federal Goverment may not present a budget large than it’s flat tax revenue, must pass a yearly budget or shut down until it does, and that the flat tax can not be raised by any other means than by a constitutional amendment approved by the States and her peoples.
A constitutional amendment stipulating that “ social welfare systems” are to be maintained by contracted private professionals who shall be bonded to indemnify loss or theft.
ABC, it’s a start, it needs your thoughts, but these are the ideas I have towards fixing the issue.
Report Post »What say you?
restorehope
Posted on April 15, 2011 at 4:42pmIRS needs an overhaul, just like everything else in this government. Why aren’t congressmen screaming about prison inmates getting payments? No wonder the govt is broke. They squander millions in ways like this, and then expect us to trust them with our tax dollars and our lives.
Report Post »abc
Posted on April 15, 2011 at 5:59pmBetterDays,
Thanks for the thoughtful response. I agree with your statement of the problem, but I disagree with the proposed solutions for various reasons.
You correctly, succinctly and elegantly summarized most of the aspects of the problem that financial reform would have to address:
“Awarding the cumulative data presented we can make the following statements with a high degree of certainty:
A.) banking and mortages finance corporate structures continue to place undue crisis upon the economy because of unscrupulous practices.
B.) governmental oversight over the periods of at least the last four administrations has been negligent and remiss in identifying and prosecuting parties ( A).
C.) lobbying and other methods (corruption) have undermined the tax codes and criminal laws to unfairly permit (A) to escape culpability in their actions.
D.) Congress’s over an unknow period of time {since at least 1913, establishment of a Federal reserve bank} has been culpable in the establishment of loopholes and laws permitting parties (A) to fund action (C).
Any conclusion we might draw from the assembled data is mitigated by in large the peoples ineffectiveness in having remedy to (B) and (D) and the fore are powerless over (A) and (C).”
The issue for me is that the solutions you propose do not logically flow from your statement of the problem. You cite special interest money causing politicians to fail to enforce the laws that exist or pass more stringent ones, for example, yet you do not call for solutions to special interest money, like legislative actions to mitigate Citizens United.
Instead, you shift from a regulatory issue, over which both Congress and the President (via the SEC, et. al.) can take action, to tax and monetary policies that are not really related. You write:
“An implementation of a constitutional amendment should therefor be brought forth stating the following:
Establishment of a fair/ flat tax rate and the abolishment of the Federal reserve Bank and all it’s entities including the Internal Revenue Service. A mandate that the federal Goverment may not present a budget large than it’s flat tax revenue, must pass a yearly budget or shut down until it does, and that the flat tax can not be raised by any other means than by a constitutional amendment approved by the States and her peoples. A constitutional amendment stipulating that “ social welfare systems” are to be maintained by contracted private professionals who shall be bonded to indemnify loss or theft.”
I do not agree with your solutions. A flat tax is inherently regressive since marginal utility of wealth (like all things) means that the millionth dollar earned is worth less to you than the ten-thousandth, so to tax them the same is punative on the guy making only $30K per year. Ending the Federal Reserve means that the important actions taken during the crisis to avert disaster and a decades-long Great Depression (and which happened when the Fed had far less power pre-1929) would leave the US economy more vulnerable during the inevitable next crisis. Mandatory balanced budgets are not always a good idea, since deficit spending actually is called for under certain economic conditions (e.g., war, massive recessions or depressions, etc.). And mandating that the government work with private professionals may not be desireable, since the reason the government is involved in the first place is often because there is a market failure and a private company’s solution is suboptimal; moreover, it is unclear why such a requirement should be made for social welfare but not for other public goods like the military, police, infrastructure, education, etc.
But the more important point is that I struggle to understand how you come to these solutions when they have nothing to do with the crisis that you aptly described and diagnosed as the problem which financial reforms need to address. You’ll have to explain…
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