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Saturday, August 1, 2009

Tax Farming

This post on MSN was an interesting bit of pro-State trolling. The IRS is considering hiring private collection agencies to help it enforce the tax law. The private collection agencies get to keep up to 25% of the actual taxes collected.

This practice is known as "tax farming". The State outsources its tax collection power to a private organization. This is an explicit example of people using State power to line their pockets.

When a tax collector is pocketing a percentage of taxes collected, that makes it too obvious to the cattle that taxes are a scam.

Another example of tax farming occurred recently in Chicago. A toll highway was built with taxpayer-funded money. The highway was then sold to a private corporation. The private corporation has the responsibility to maintain the road, but also is allowed to collect the tolls. This is another example of tax farming.

I liked this piece of pro-State trolling:

Maybe, but what program or institution isn’t susceptible to abuse by the unscrupulous? Derivatives, anyone? Rent control? Defense contracts? Farm subsidies?

*ALL* actions of the State are subject to abuse. That's the whole point of government!

That's a clever bit of pro-State trolling. "Abuse X is allowed to occur. Therefore, people should not complain about abuse Y."

Maybe the think-tank just doesn’t like to see any government action handled by the private sector.

"The State outsources its tax collection power to a private organization" is *NOT* the same as replacing the State with a free market. It's entirely the opposite. It's a group of insiders lining their pocket, with their abuse backed by State power.

The article then ends with a suggestion of reforming the tax code. That is impossible. There are too many people who profit from the current corrupt system. Accountants make a fortune helping people comply with the tax code. Accountants made the tax law complicated on purpose, as a form of job security; it's the same as lawyers making the legal system complicated on purpose. There are too many special groups with perks written into the tax law.

There are lawyers who create tax evasion trusts that target wealthy people. These lawyers have a lucrative business. Whenever there's talk of closing the loopholes, these lawyers lobby against reform.

Reform of the State is impossible. Complete collapse is more likely than reform.

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