Monday, June 26, 2006

Money Doesn't Talk; It Whispers

Tracking the global flows of dirty money. The Nation (06.23.06), via Max:
"The New York Times devoted a lot of ink to the Bush Administration's practice of secretly rummaging through international banking transactions in pursuit of terrorists. But, frankly, I had a hard time grasping the scandal. After all, the Treasury announced it was going to do something like this after 9/11 -- a legitimate, legal method of discovering the networks financing terrorist cells." Dirty Money
"The scandal here is not government over-reach, he tells me. The scandal is the pitiful reluctance of this administration (and others before it) to get serious about the problem. Bankers, Blum explained, 'have fended off every conceivable rule that would really be effective. Why are we pandering to them if we say we are in such a desperate situation?'" "The political influence of bankers tops all other sectors, I learned as a young reporter. Regardless of party or ideology, politicians seek their friendship. So the United States has created a truly bizarre banking code that legalizes--and keeps secret--vast flows of ill-gotten gains." "The American dollar is lingua fria for illegal commerce and Congress protects the sanctity of its privacy, even allows it the criminal proceeds to flow freely through government-chartered and regulated financial institutions. This shady business is not an inconsequential profit center for banks (a bit like pornography for Microsoft)." And what these bums don't pay, we do. The case for more stringent enforcement of the tax code. The Economic Policy Institute (04.06), also via Max (hell; he's the editor):
"The ability to finance public services at a low financial cost with minimal social dislocation is a precious national asset. The United States is blessed by a tax system with these attributes — the vast bulk of taxes owed are paid voluntarily and on time. In a $13 trillion economy, our federal government taxing authority costs about $10 billion — less than one dollar out of a thousand — to run. A nation squanders such an asset at its peril, but that is what is happening now." Bridging the Tax Gap: Addressing the Crisis in Federal Tax Administration
"Compliance with the federal tax system is eroding. The Internal Revenue Service estimates that as much as $350 billion in taxes are not paid voluntarily and timely. On a bare-bones enforcement budget, about $50 billion is eventually recovered." "The remaining gap means that tax rates must be higher than necessary to collect the revenue that comes in, and moreover, that such rates penalize the honest taxpayer for the sake of the evader. The absence of a tax cop on the beat demoralizes those who pay their correct amount and encourages evasion, further adding to the enforcement burden and the revenue loss."


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