Tag Archives: New Deal

The IRS’s Job Is To Violate Our Liberties

MONDAY, MAY 20, 2013

By Ron Paul

Ron Paul

“What do you expect when you target the President?” This is what an Internal Revenue Service (IRS) agent allegedly said to the head of a conservative organization that was being audited after calling for the impeachment of then-President Clinton. Recent revelations that IRS agents gave “special scrutiny” to organizations opposed to the current administration’s policies suggest that many in the IRS still believe harassing the president’s opponents is part of their job.

As troubling as these recent reports are, it would be a grave mistake to think that IRS harassment of opponents of the incumbent president is a modern, or a partisan, phenomenon. As scholar Burton Folsom pointed out in his book New Deal or Raw Deal, IRS agents in the 1930s were essentially “hit squads” against opponents of the New Deal. It is well-known that the administrations of John F. Kennedy and Lyndon Johnson used the IRS to silence their critics. One of the articles of impeachment drawn up against Richard Nixon dealt with his use of the IRS to harass his political enemies. Allegations of IRS abuses were common during the Clinton administration, and just this week some of the current administration’s defenders recalled that antiwar and progressive groups alleged harassment by the IRS during the Bush presidency.

The bipartisan tradition of using the IRS as a tool to harass political opponents suggests that the problem is deeper than just a few “rogue” IRS agents − or even corruption within one, two, three or many administrations. Instead, the problem lays in the extraordinary power the tax system grants the IRS.

The IRS routinely obtains information about how we earn a living, what investments we make, what we spend on ourselves and our families, and even what charitable and religious organizations we support. Starting next year, the IRS will be collecting personally identifiable health insurance information in order to ensure we are complying withObamacare‘s mandates.

The current tax laws even give the IRS power to marginalize any educational, political, or even religious organizations whose goals, beliefs, and values are not favored by the current regime by denying those organizations “tax-free” status. This is the root of the latest scandal involving the IRS.

Considering the type of power the IRS excises over the American people, and the propensity of those who hold power to violate liberty, it is surprising we do not hear about more cases of politically-motivated IRS harassment. As the first US Supreme Court Chief Justice John Marshall said, “The power to tax is the power to destroy” − and who better to destroy than one’s political enemies?

The US flourished for over 120 years without an income tax, and our liberty and prosperity will only benefit from getting rid of the current tax system. The federal government will get along just fine without its immoral claim on the fruits of our labor, particularly if the elimination of federal income taxes are accompanied by serious reduction in all areas of spending, starting with the military spending beloved by so many who claim to be opponents of high taxes and big government.

While it is important for Congress to investigate the most recent scandal and ensure all involved are held accountable, we cannot pretend that the problem is a few bad actors. The very purpose of the IRS is to transfer wealth from one group to another while violating our liberties in the process; thus, the only way Congress can protect our freedoms is to repeal the income tax and shutter the doors of the IRS once and for all.

Dr. Ron Paul, a medical doctor and longtime Texas Representative to the US House, continues to promote and educate on issues of liberty through his “Ron Paul’s Texas Straight Talk” column, pubished weekly here.  

 

 


Under Capitalism, Welfare State’s Main Function Is Corporate Welfare

by Kevin Carson

Thanks to a Twitter friend, I just stumbled across remarks from 2005 in which Walmart CEO Lee Scott called on Congress to pass a higher minimum wage:

“The U.S. minimum wage of $5.15 an hour has not been raised in nearly a decade and we believe it is out of date with the times. We can see first-hand at Wal-Mart how many of our customers are struggling to get by. Our customers simply don’t have the money to buy basic necessities between pay checks.”

At first glance this seems decidedly odd, coming as it does from the CEO of a company which — as you know if you’ve been following the Black Friday news — is notorious for keeping its workers’ pay as low as humanly possible. But if you think about it, there’s really no contradiction at all. There’s a fundamental prisoner’s dilemma at the heart of capitalism. It’s in the interest of large corporations collectively to guarantee sufficient purchasing power to keep the trucks moving and the inventories turning over. But it’s in the interest of individual large corporations to keep labor costs as low as possible.

Likewise, it’s in individual employers’ interests to pay only enough to maintain employees in subsistence while they’re actually working, without enough of a surplus to save against periods of sickness or unemployment. But it’s in the collective interest of employers to pay enough to cover the minimum reproduction cost of labor power.

Overcoming such prisoners’ dilemmas is the main purpose of the capitalists’ state. When the state mandates a minimum wage sufficient to facilitate the reproduction of the workforce (of course it doesn’t in practice, outside the European “social democratic” model of capitalism), the cost falls on all employers in a given industry equally. And unlike the case of a private, voluntary cartel, individual employers are unable to defect for the sake of a short-term advantage from double-crossing their competitors. So funding the minimum reproduction cost of labor-power is no longer an issue of cost competition among employers; it’s a collective cost of an entire industry that can be passed on to consumers as a cost-plus markup, via administered pricing.

Marx had a lot to say about this phenomenon, as illustrated by the Ten-Hours Act in Britain (Capital, vol. 1 ch. 10).

“These acts curb the passion of capital for a limitless draining of labor-power, by forcibly limiting the working-day by state regulations, made by a state that is ruled by capitalist-and landlord.

… [T]he limiting of factory labor was dictated by the same necessity which spread guano over the English fields. The same blind eagerness for plunder that in the one case exhausted the soil, had, in the other, torn up by the roots the living force of the nation.”

This common interest in preventing “exhaustion of the soil,” Marx argued, explained the counterintuitive support of many capitalists — as exemplified by employer Josiah Wedgwood — for the Ten-Hours Bill.

The state, in many ways, functions as an executive committee of the economic ruling class, carrying out for them in common many necessary functions it’s not in their interest to carry out individually. The state, in short, cleans up the capitalists’ messes for them.

Things like the minimum wage, collective bargaining, and universal healthcare may be perceived by individual capitalists as a restraint or an imposition. But they’re supported by the smarter capitalists — especially those in the industries that benefit most from them. Just consider the role of General Electric CEO Gerard Swope in the business coalition behind the New Deal.

The minimum wage increases aggregate purchasing power among the working class at large, and helps secure employers a reliable pool of labor power on a sustainable basis. The welfare state keeps unemployment, hunger and homelessness from reaching politically destabilizing levels that — without the state cleaning up the capitalists’ mess at taxpayer expense — might result in capitalism being torn down from below. Universal healthcare, whether on the British or Canadian model, externalizes labor costs on the taxpayer, which would otherwise be (and are, in countries like the U.S.) borne by employers who provide health insurance as a benefit.

Any time you hear soccer mom rhetoric about “our working families,” or self-congratulatory platitudes to the effect that “Democrats care,” look behind the voice and take a look at what the hands are actually doing. In a freed market — without the state to do the capitalists’ bidding — corporate capitalism would wither like a garden slug with salt on its back. The state works for the capitalists, not for you.


Nullification: What You’ll Never Learn in School

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Mises Daily: Friday, October 29, 2010 by

Having just finished a course on the New Deal for the Mises Academy, I’m nowoffering one on state nullification, the subject of my most recent book. I thought my New Deal course covered issues and sources left out of the typical classroom, but in that respect this course has that one beat.

Nullification is the Jeffersonian idea that the states of the American Union must judge the constitutionality of the acts of their agent, the federal government, since no impartial arbiter between them exists. When the federal government exercises a particularly dangerous power not delegated to it, the states must refuse to allow its enforcement within their borders.

I can hear people saying that such a response doesn’t go nearly far enough. No argument there. The trouble with nullification is not that it is too “extreme,” as the enforcers of opinion would say, but that it is too timid. But it gets people thinking in terms of resistance, which has to be a good thing, and it defies the unexamined premise of the entire political spectrum, according to which society must be organized with a single, irresistible power center issuing infallible commands from the top.

That’s at least a pretty good start.

The course, Nullification: A Jeffersonian Bulwark Against Tyranny, will cover the basics, to be sure, and after the first week everyone will be well-grounded in the relevant issues. But then I want to dig into the primary sources. I want to examine the long-forgotten debates on this subject in detail. In particular, we’ll study the exchanges between Daniel Webster and Robert Hayne, Andrew Jackson and Littleton Waller Tazewell, and Joseph Story and Abel Upshur.

Hardly anyone, including graduate students in American history, has actually read these texts as opposed to just knowing of their existence — and if my own experience at Columbia University is any indication, even that is more than some grad students know.

The various commissars who have taken it upon themselves to ensure that no one strays from officially approved opinion — or to appropriately scold anyone who in fact does so — have become apoplectic at the return of nullification. I confess to taking mischievous delight in this. They are accustomed to setting the terms of debate. They are not used to seeing people promote ideas of their own.

And the commissars have not read these sources, either. But you will. You will know the arguments of both sides inside and out.

You will also enjoy the discussions that ensue at the end of each lecture. You can sign off whenever you like, of course, but during the course I just completed on the New Deal I stayed around for an hour and a half to two extra hours answering questions and directing discussion, and then shooting the breeze about anything people wanted to discuss. We had a great time. As always, the lectures are available for viewing, along with a full transcript of the chat box, for people who cannot watch them live.

Mises Academy: Tom Woods teaches Nullification: A Jeffersonian Bulwark Against Tyranny

I understand the impatience that many of us feel regarding nullification, particularly the complaints that

  1. the Constitution per se isn’t what matters anyway; what matters is freedom; and
  2. the states are no angels, either.

These criticisms are by no means misplaced. But nullification remains a useful quiver in the liberty arsenal all the same. As I’ve said, it gets people thinking in healthy ways. And it can be employed for good purposes, as when the Principles of ’98 (as the ideas culminating in nullification came to be known) were cited on behalf of free speech and free trade, and against unconstitutional searches and seizures, military conscription, and fugitive-slave laws. In our own day, Janet Napolitano said the reason the Real ID Act failed was that the states refused to cooperate in its enforcement.

And the states are indeed rotten, too — which is why we may as well put them to some good use by pursuing nullification. Liberty is more likely to have room to flourish in a world of many competing jurisdictions rather than under a single, irresistible jurisdiction.

In short, this course will introduce you to a chapter of American history that has fallen down the memory hole but which is much too interesting and valuable to leave down there. In the process of pulling it out, you’ll acquire a much deeper understanding of American history.

I hope you’ll join me.

Here is the Mises Institute‘s Jeffrey Tucker interviewing me on the subject:

(You can also watch this video on YouTube.)
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Thomas E. Woods, Jr. (visit his website) is a senior fellow at the Mises Institute, where he will be teaching “Nullification: A Jeffersonian Bulwark Against Tyranny” this fall at the Mises Academy. He is the author of the New York Times bestseller Meltdown: A Free-Market Look at Why the Stock Market Collapsed, the Economy Tanked, and Government Bailouts Will Make Things Worse. His other recent books include 33 Questions About American History You’re Not Supposed to Ask, The Church and the Market: A Catholic Defense of the Free Economy, Nullification, and The Politically Incorrect Guide to American History (a New York Times bestseller). Send him mail. See Thomas E. Woods, Jr.’s article archives.


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