La loi, dans un grand souci d’égalité…

August 17th, 2011  |  Published in Politics  |  2 Comments

Sometimes, I read a couple of apparently unrelated blog posts in quick succession, and immediately spot a connection between them. I’m never sure whether I’m being insightful, or just giving in to the incorrigible tendency of the primate homo sapiens to find patterns in everything. Anyway, take this for what you will.

Kevin Drum points us to a particularly galling story of the rich using lawsuits to push people around and get their way, in this case by harassing hot-air balloon operators for disrupting their “Moorish fortress castle” for “ultra high net worth individuals”.

This made me think of this recent post by Corey Robin, also discussed by Mike Konczal with follow-up here. They’re talking about Mitt Romney’s new proposal to replace Unemployment Insurance with individual UI savings accounts, instead of the pooled public insurance fund we have now.

See Konczal’s first post for an explanation of all the ways in which private accounts are inferior as a way of dealing with unemployment. What I’m interested in is that managing a personal UI account would be much more cumbersome than just having UI paycheck deductions go into a general fund, and that this is part of a more general neoliberal phenomenon where, as Corey Robin puts it, “all of us are forced to spend an inordinate amount of time keeping track of each and every facet of our economic lives”.

This is where I made the connection with the balloonist lawsuits. The underlying theme here is that in a highly unequal society, greater complexity in the institutions of the state will generally favor the interests of the rich. The more complex the law is, the more victory in court comes to depend not on who is legally in the right, but on who can spend more money on their legal team. The value of a personalized UI account will be greater, and the associated hassle smaller, for those who can afford to pay someone to professionally manage their assets. The other great example of this is the tax code, since only the rich can hire accountants to take advantage of its many intricacies and loopholes–which is why I suspect that the Republicans will never really be interested in the “lower the rates, broaden the base” genre of tax reform, even if they like to pay lip service to it.

The right has gotten a lot of mileage of out of the demand for small government. Maybe it’s time for the left to make a bigger deal out of simple government.

Responses

  1. Sandwichman says:

    August 17th, 2011 at 1:10 pm (#)

    The big scare for dual-citizen Americans living in Canada these days is an IRS regulation that says you have to file an income tax return each year [retroactive to forever, no statute of limitations] on “foreign” income even if you don’t owe any taxes.

    This regulation is supposedly to catch wealthy tax haven crooks BUT of course they can evade it by leaving no accessible paper trail. Law abiding Canadians with dual citizenship, however, dutifully file their Canadian income tax returns each year and the taxes they pay WOULD make them exempt from paying additional taxes in the U.S. except for the opposite of a loop-hole (which I suppose would be a noose). They are legally required to file a return each year to demonstrate to the IRS that they owe no taxes.

    Common sense would suggest that if you owe no taxes, there is no need to file a tax return. But no. Common sense would dictate that if the IRS wanted to confirm that you owe no taxes, it could do so by the Canadian taxpayer authorizing access to his/her Canadian records. But no.

  2. guest says:

    August 17th, 2011 at 11:06 pm (#)

    I’ve thought along those lines a lot myself. It’s not really that the tax code is so complicated (although I agree it could and should be much simpler and fairer) as the fact that if you are rich enough or big enough to afford to stall your audits and/or precede to litigate your tax disputes, you will probably get away with 90% or more of what you got caught doing (which is probably just the blatant low hanging fruit – you get away with 100% of the rest). You can do it because the government has limited audit resources which get tied up more and more with various procedural burdens, and even more limited resources for going to court. It’s not even David v Goliath. It’s David’s sissy baby brother against Goliath.

    On the other hand, if you are a typical wage earner with typical tax issues and the cost of hiring a tax attorney or even just a CPA would be greater than the taxes in dispute, your opportunites to cheat, or even to take “aggressive” tax positions is highly limited. When it comes to corporations or the self employed (coincidentally, the base of all right wing politics), it’s the wild west out there. There really is no law.

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