IRS bonus scandal demonstrates that it's time for the GOP to wake up and run against the IRS

By Thomas Lifson

The partisan bureaucrats at the IRS who were ready and willing to harass conservative groups are just the tip of the iceberg at a corrupt and irresponsible agency that just happens to be the most unpopular and feared arm of the federal government. So self-serving is the agency that it actually paid bonuses – many bonuses – to employees who were delinquent in their own taxes. Gail Sullivan of the Washington Post reports:

A report from the Treasury Inspector General for Tax Administration shows that between Oct. 1, 2010, and Dec. 31, 2012, the IRS paid $2.8 million in bonuses to employees cited in the past year for such things as drug use, making violent threats, fraudulently claiming unemployment benefits, misusing government credit cards and — get this — failing to pay their taxes.

The report said more than 1,100 employees who failed to pay their taxes received discretionary awards of more than $1 million in cash bonuses and more than 10,000 hours in extra paid vacation.

At least five employees received performance awards after being disciplined for intentionally under-reporting their tax liabilities for multiples years, paying taxes late and under-reporting income.

This is beyond outrageous; it is the stuff of fatal institutional rot. Such practices encourage misbehavior, and make fools out of people who actually do work hard and keep their noses clean. How bad do you have to be before suffering any problems?

You have to do something really bad before the IRS will take conduct into account, bad enough to be suspended for 14 days or more. Even then, conduct is only deemed relevant to awards of permanent pay increases, not for bonuses or extra vacation time.

Given the standard of conduct demanded of the rest of us by the IRS with the presumption of guilt on our shoulders, this is completely unacceptable.

The GOP has a golden opportunity to launch a campaign to abolish the IRS and substitute a simpler tax system based on a VAT or sales tax, taxing consumption.

Yellen proposes taxing savings at 2% a year until further notice

What? She did?

Yes she did. She ….She has decided … yes, She has decided that a 2% inflation rate is just the answer to our economic troubles. And She has also decided that zero interest rates are here to stay for a while. Yes, She has decided and She has spoken. Praise unto the Federal Reserve Chairperson.

It was just a few years ago that Cyprus was on the rocky shoals of bankruptcy. One of the solutions floated to assuage the condition was a 10% tax on savings. Outrage ensued.

Yet what Ms. Yellen proposes is exactly the same solution. It is merely dragged on at smaller increments for a longer period. Outrage, where art thou?

The much ballyhooed and headlined “Federal Reserve Mandate” includes the direction to “stabilize prices”. At the Yellen recommended rate of 2% inflation, compounded, prices will rise by 64% nearly every 25 years and will double every 36 years. Exactly where is the allegiance to price stability? And more importantly, where is the authority and the power to encourage inflation? We, those who save and hold dollars, respectfully inquire.

So as Yellen continues with the ZIRP (zero interest rate policy) and promotes 2% inflation (as they so lamely measure), the net effect cannot be denied. No country has ever assumed a ZIRP and extricated themselves. Couple this with the fear of deflation, trumped up as beef, shrimp, electricity, and gasoline all are making or near all time high prices, and we have a misguided unauthorized policy implemented by an appointed body, self directed by assumed authorities and guided by false inflation measures. What could go wrong?

Illinois Dead Receive $12M of Medical Services from Medicaid

By Cassy Fiano

Illinois is not just the state that gave us our illustrious president. It’s also the state where the dead can rise. This clearly explains why Medicaid paid $12 million worth of medical services for people listed as deceased.

The Illinois Medicaid program paid an estimated $12 million for medical services for people listed as deceased in other state records, according to an internal state government memo.
The memo dated Friday, which The Associated Press obtained through a Freedom of Information Act request, says the state auditor compared clients enrolled in the Medicaid database last June with state death records dating back to 1970. Auditors identified overpayments for services to roughly 2,900 people after the date of their deaths.
The heads of the departments of Healthcare and Family Services and Human Services, the two state agencies involved with Medicaid payments, outline steps to fix the problem in the memo to their senior staffs.

Sure, let’s trust the agencies who messed up in the first place to fix it. Makes sense. But is it really that big of a problem, considering that the dead still vote in Illinois, too?

Piketty Gets It Wrong

Instead of berating capitalists, we need to make it easier for workers to join their ranks.

By Michael TannerFor those who believe in the redistribution of wealth, the hero of the hour is Thomas Piketty, the French economist whose book Capital in the Twenty-First Century provides a serious critique of inequality in modern capitalist economies and warns that market economies “are potentially threatening to democratic societies and to the values of social justice on which they are based.” To remedy this, he argues for a globally imposed wealth tax and a U.S. tax rate of 80 percent on incomes over $500,000 per year.
The Left has been rapturous. In the last two months, Piketty’s book has been cited more than a half-dozen times by the New York Times, something that has happened with no other book in recent memory. Paul Krugman hails it as “the most important economics book of the year.” Martin Wolff, in the Financial Times, lauded it as “an extraordinarily important book.”
Capital in the Twenty-First Century is well researched and contains much useful information and some important insights. But it is not unflawed. Some of the problems are technical — Piketty tends to underestimate the elasticity of returns on capital — but more are deeply philosophical. Piketty takes the evilness of inequality as a given, ignoring the broader question of whether the same conditions that lead to growing wealth at the top of the pyramid also improve material well-being for those at the bottom. In other words, does it matter if some people become super-rich as long as we reduce poverty along the way? Which matters more, equality or prosperity?
To cite just one example, Piketty devotes considerable effort to criticizing the rise of inequality in China over the past three decades as it has adopted market-oriented policies. But he largely glosses over the way those policies have lifted millions and millions of people out of poverty.
Piketty’s proposed “solutions” are equally problematic. He seems to believe that “confiscatory taxes” (his term) can be imposed without changing incentives or discouraging innovation and wealth creation. Piketty’s solutions would undoubtedly yield a more equal society, but also one that was remarkably poorer.
Still, Piketty makes some important points. In particular, he notes correctly that returns on capital nearly always exceed the return on labor. With capital held by a relatively narrow group, therefore, rising inequality is inevitable. Moreover, with the wealthy able to pass capital on to their heirs, that inequality will be perpetuated and even extended over generations.
One wonders why, then, Piketty’s fans ignore the obvious answer to this problem. Instead of attacking capital and capitalism, why not expand the number of people who participate in the benefits of having capital? In other words, let’s make more capitalists.
Yet, the Left is unremittingly hostile to exactly those policies that would give workers more access to capital.

MSNBC host Chris Hayes pens radical 'climate justice' manifesto

By Byron York

"What the climate justice movement is demanding is the ultimate abolition of fossil fuels," writes MSNBC's Chris Hayes in a lengthy new call for action against global warming. To drive home the point, Hayes' piece, published in The Nation, is titled "The New Abolitionism," and its message is that a way must be found to "convince or coerce" the world's energy companies and energy-producing nations to give up the multi-trillion dollar business of powering the planet. Once the fossil fuels regime has been destroyed, it will be replaced with — well, that is the subject for another article.
Comparing anti-fossil fuels activism to abolitionism gave Hayes some pause. "Before anyone misunderstands my point, let me be clear and state the obvious: there is absolutely no conceivable moral comparison between the enslavement of Africans and African-Americans and the burning of carbon to power our devices," Hayes writes. "Humans are humans; molecules are molecules. The comparison I’m making is a comparison between the political economy of slavery and the political economy of fossil fuel."

Hayes, a former Nation writer who remains an editor-at-large at the publication, compares the Southern economy based on slavery — worth trillions in today's dollars to the slaveholders — to the economy based on carbon fuels. Energy companies and energy-producing nations have ever-increasing stores of recoverable oil and gas that are almost unimaginably valuable in today's economy. And with today's rate of exploration and technological advances, those reserves are increasing by the minute. But burning all that fuel, Hayes argues, citing various influential environmental writers, would destroy the planet. The oil and gas must stay in the ground if human civilization is to survive.
"It's a bit tricky to put an exact price tag on how much money all that unexcavated carbon would be worth, but one financial analyst puts the price at somewhere in the ballpark of $20 trillion," Hayes writes. "So in order to preserve a roughly habitable planet, we somehow need to convince or coerce the world’s most profitable corporations and the nations that partner with them to walk away from $20 trillion of wealth."
Note the phrase: "convince or coerce." If persuasion were to fail, coercion — presumably by the federal government or some very, very powerful entity — could be pretty rough. Certainly by writing that the "climate justice movement" should be known as the "new abolitionism," Hayes makes an uneasy comparison to a 19th century conflict over slavery that was settled only by a huge and costly war — a real war, not a metaphorical one. Is that how environmentalists plan to save the planet from warming?
....Hayes' article is not a detailed blueprint for the replacement of fossil fuels with alternative energy. It has policy recommendations of a sort; for example, the oil and gas companies must stop exploring for more oil and gas, because if they continue, they'll just find more. In addition, ways to transport oil and gas, like the Keystone XL pipeline must be stopped in the hopes of keeping more oil and gas in the ground, where it will not contribute to warming the earth.

Fed. Judge Rules Ohio Must Follow Other States' Marriage Laws Instead of Its Own

By David Roberts

So long, Ohio. According to a federal judge Monday in Henry v. Himes, the U.S. Constitution now requires that the laws of one state automatically supersede those of Ohio, whether or not Ohio approves.
The circumstances surround same-sex marriage, though the precise legal issue is one that has been flying below the radar for some time – the recognition by one state of another state’s same-sex marriage. In the case, several same-sex couples with marriage licenses from California, Massachusetts, and New York sought recognition of their relationships in their home state of Ohio, where marriage is defined as between only one man and one woman. According to Monday’s ruling, Ohio’s marriage laws are “facially unconstitutional and unenforceable under any circumstances.” Thus, same-sex marriage licenses from any jurisdiction are valid in Ohio.
While the court said that Ohio is not required to issue its own marriage licenses to same-sex couples, this reservation amounts to a distinction without a difference. If same-sex couples can cross the state line, get a same-sex marriage, and then demand full recognition of their relationship upon returning home, it makes little difference whether Ohio issues licenses itself.
But is this result really required by the U.S. Constitution?
When the Supreme Court struck down DOMA last summer in the Windsor case, it struck down only the federal definition of marriage, leaving in place the sovereignty of the several states. Federal law still affirms that “[n]o State... shall be required to give effect to any public act, record, or judicial proceeding of any other State... respecting a relationship between persons of the same sex.” In other words, if your state doesn’t have same-sex marriage, your state doesn’t have to recognize same-sex marriages from other states. Yet, in this ruling that Ohio must recognize same-sex marriages from other states, the court determined that this directly-applicable provision of federal law is somehow “not specifically before the Court.”
However, states have the right to be different from each other, and they do so in a whole host of ways, especially when it comes to licenses. Marriage licenses per se have never been required to be recognized in other states. The states have traditionally done so in most cases, but not always. In the Matter of the Estate of Fannie May, New York chose to recognize another state’s marriage between an uncle and niece, but acknowledged that it didn’t have to do so. In Moustafa v. Moustafa, Maryland refused to apply Egyptian law and rule that a man was lawfully married to more than one woman at the same time. Yet, in addition to concluding that same-sex marriage is somehow deeply rooted in the history and traditions of America, the court in Ohio also found a brand new federal right never before seen – an absolute “right of marriage recognition.”

Yet having a license somewhere doesn’t mean you have a license everywhere. Beyond marriage licenses, no lawyer, physician, or other licensed professional has an automatic right to practice his trade everywhere just because one state has licensed him. A Florida lawyer can’t walk into a Texas courtroom and begin practicing law, and Texas isn’t required to allow it. While courts, hospitals, and others typically grant certain privileges to out-of-state professionals, they are not required to do so.