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The World's Greatest Financial Fraudster

February 17, 2015 in Economics

By Richard W. Rahn

Richard W. Rahn

The London Times headlined last week, “HSBC helped customers to hide millions from taxman.” There are decades of stories about corporations, movie actors, artists and politicians hiding money from the taxman. Many economic studies have shown that once tax rates exceed 20 percent, most people will start thinking about and then acting in legal or illegal ways to avoid the tax bill.

The reason there is so little remorse about tax avoidance and evasion is that virtually everyone knows that much of what government does is a ripoff. If people really believed that “government is underresourced” and spends its money wisely, they would not take legal charitable and other deductions when they file their income taxes. Even a big-government liberal like President Obama makes charitable deductions because he knows or suspects that the charities he gives to will spend the money more wisely than the government he oversees. The president’s buddy, Al Sharpton, is welcome at the White House almost any time, even though the Internal Revenue Service reportedly claims he owes millions in unpaid taxes. If Mr. Sharpton had robbed a supermarket of a mere $10,000, it is unlikely he would be welcome at the White House. The message is obvious. The government even tells us that federal employees, including thousands at the IRS, owe billions in back taxes, yet little is done. At the same time IRS leaders have the unmitigated gall to demand larger budgets.

Every thinking person implicitly knows that the U.S. government is the world’s biggest financial fraudster. The cumulative yearly fraud by government actors is well in excess of $1 trillion and takes many forms. It begins with the IRS overcharging citizens by doing such things as engaging in “asset forfeiture” — that is, seizing banking accounts and other property of individuals and businesses who have not been convicted of any wrongdoing. The IRS taxes the portion of capital gains due solely to inflation as “income” when it is clearly not.

Government is notoriously mismanaged, wasteful and fraud-ridden. Last May, the Economist magazine reported: “In 2012 Donald Berwick, a former head of the Centers for Medicare and Medicaid Services (CMS), and Andrew Hackbarth of RAND Corporation, estimated that fraud added as much as $98 billion, or roughly 10 percent, to annual Medicare and Medicaid spending and up to $272 billion across the entire health system.” Similar amounts of fraud are found in most every federal government program — Social Security, food stamps and other …read more

Source: OP-EDS

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