Tax Lawyer's Blog

We need taxes.

We need them to fund infrastructure, to provide for a national defense, to control and monitor immigration and to fund the operations of government itself.

I get this.

I am not opposed to taxes as a concept.

What I’m against is giving the government a raise.

Here’s my opinion:

Eliminate or Significantly Reduce Waste and Fraud and Abuse Before Asking for More Taxpayer Money

Taxpayers should not be forced to reinvest in a government that has already recklessly squandered its previously invested capital.

Think about it, if the government were a publicly traded corporation, would you be buying or selling? 

Because the government is not a publicly traded entity, however, the capital that its investors (the taxpayers) contribute to it gets to be classified as “Revenue.”

The government doesn’t have to pay back or even provide a return on investment on revenue.

In short, the federal government is less accountible for the way it spends its investors’ money than Enron, Tyco or World Com was for the way they spent their investors’ money.

History has proven that as long as it remains easier for elected officials to increase the government’s bottom line through tax increases than it is to increase the bottom line through spending cuts, there will be no serious spending cuts.

President Obama, the Tax Gap and Fraud and Abuse

The only way to force government to correct the waste/fraud and abuse problem is to put a moratorium on tax increases.

To be fair, President Obama has made overtures at finding sources of government revenue other than tax increases.

For instance, he has vowed to close the tax gap which would recover for the government about $300 billion per year and he has recently proposed spending cuts of $17 billion per year.

But what about fraud and abuse?

Yesterday on ABC news there was a piece about how the government loses $60 billion a year from Medicare fraud.

In Miami an FBI investigation revealed 31% of 1500 medical equipment companies were phony and had bilked the government out of tens of millions of dollars.

Listen to what an ex-drug dealer turned medicare scammer who was interviewed for the report had to say about why he changed careers:

It’s too easy to steal money. Everyone’s going for the easy money.

The government should be humiliated that two-bit con men find it easier and more lucrative to set up fake medical equipment companies to steal taxpayers’ money than to traffic drugs.

There is fraud and abuse in other areas, too, from egregious over-billing by defense contractors to fraudulent applications for government grants.

My Opinion

Taxpayers everywhere – black and white, liberal and conservative – should join in demanding that our government raise money by closing the tax gap and putting an end to fraud and abuse before requiring taxpayers to reinvest.

Our tax dollars are the only leverage we have and we shouldn’t give more of them to a government that refuses to correct its own wastefulness and refuses to vigorously and effectively enforce compliance with its own laws.

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