As I explained 2 1/2 years ago, the most salient feature of progressives’ Green New Deal is that it would transform our mixed economy (essentially capitalist, although partially warped by cronyism and massive government interventionism) into a command economy. In a command economy, the independence of ordinary citizens is diminished as they’re reduced to cogs in a socialist/fascist central plan. Big Government becomes more intrusive and oppressive, morphing into Big Brother.
With President Joe Biden in the White House and his progressive/socialist/fascist allies having a majority, however thin, in Congress, they’re charging full-speed ahead toward central planning (see the left’s proposed $3.5 trillion “reconciliation” package). So is Big Brother breathing down our necks? Or is that being too paranoid? Consider the following:
The Proposal to Have Banks and Other Savings Institutions Report All Transactions Over $600 to the Treasury Department
Such a law would constitute a massive invasion of privacy. It would eviscerate the Fourth Amendment by stripping away our right “to be secure … against unreasonable searches.” The progressive/socialist central planners want a permanent, open-ended search warrant against millions of innocent Americans.
One irony of such grotesque overreach is that the resulting flood of information flowing to federal officials might actually impair law enforcement’s efforts to detect criminal activity. Recall that after 9/11, we learned that U.S. intelligence had obtained information that could have prevented those attacks, but those vital bits of information got lost in the oceans of irrelevant intelligence that had been gathered.
Question: Upon whom would the costs of administering this rule fall? Answer: On financial institutions that already bear the costs of acting as unpaid gatherers of tax-related information for the IRS. These additional costs could sink smaller banks and credit unions. Your local neighborhood bank might not survive such onerous reporting requirements, and depositors like you and me might end up having our accounts transferred to megabanks monitoring our every financial move.
This would further the Marxist goal of centralizing credit. If that seems like overstatement to you, note that Biden has nominated as the new Comptroller of the Currency a woman who graduated from “Moscow State University in 1989 on the Lenin Personal Scholarship” and who has “proposed that the Federal Reserve take over consumer bank deposits,” according to the Wall Street Journal editorial board.
Speaking of “monitoring” Americans, adding federal employees to monitor our money flows would be as economically wasteful as President Franklin D. Roosevelt’s decision to pay people to keep track of how much acreage farmers were planting. Hiring people who produce nothing, but simply monitor people who actually do produce wealth, is to create make-work jobs that contribute nothing to the wealth of the nation.
The Proposal to Tax Unrealized Capital Gains
Progressives have proposed a new type of tax: an annual levy on saved wealth in addition to the current tax on income. Currently, if an investment (whether in stocks, businesses, or land, houses, and other forms of real property) appreciates in value, the owner owes tax on the capital gain only when he or she sells the asset. But progressives don’t want to wait for owners to sell their properties. They want to tax assets every year, based on how much a property has increased in value each year.
This is highly problematic. In the case of real property or business assets or any asset that—unlike the stock market—doesn’t have an identifiable market value on a given day, the “gain” on which the asset-holder would be taxed would involve guesswork, injecting an element of arbitrariness. Worse, what would be taxed would be potential gains, not real ones. Until an owner actually sells an asset, one can’t accurately determine if there is a capital gain or loss.
Market value rises and falls. (Remember 2008?) Say a person’s retirement account has an accumulated cost basis of $600,000. Today, its market value is $1 million. Should the government tax a percentage of the $400,000 paper gain? But what if the stock market subsequently crashes and the account’s market value falls to $350,000, at which point the stressed investor throws in the towel and sells? The actual loss would be $50,000. Yet under a wealth tax, the investor might have paid thousands of dollars in taxes on gains that were never realized, but existed only on paper. Would the government refund the tax revenues that it had collected from temporary paper gains that turned out to be actual losses?
Another major defect of the wealth tax is that (as proposed, at least) it doesn’t index gains to inflation. Thus, it taxes phantom gains by using nominal prices, rather than real, inflation-adjusted prices.
One other point: Proponents of a wealth tax will try to sell it to the public by saying that only the rich would pay it. Just remember, that’s what they promised when the graduated income tax was introduced during Woodrow Wilson’s presidency. It wasn’t long before that promise fell by the wayside. The excuse for extending the income tax to Americans of modest means was World War I. Well, if you’re paying attention, the Green New Deal would be far more costly than any war we’ve fought. Once the camel has its nose under the tent—that is, once the principle is established in law that the government may tax holdings of wealth—it won’t be long before middle-income taxpayers are subject to it, too.
The FBI Keeping a Database on Parents Who Protest Against Obnoxious Local School Policies
Biden’s attorney general, Merrick Garland, has directed the FBI (pdf) to investigate and prepare to prosecute parents who protest the use of critical race theory (CRT) curriculums in public schools too vehemently. Ostensibly, the objective is to police violence against school board members, public-school administrators, and teachers. The risk is that the federal government potentially may criminalize righteous anger and First Amendment-protected vehement speech.
Getting the short end of the stick here are parental rights. Too many arrogant public-school officials and progressive politicians exhibit the following attitude: “Give us your kids, pay the taxes that fund the schools, then get out of the way so we can do what we want with your kids. We know what they need and you don’t.”
Such an attitude is outrageous, and Americans wouldn’t be caring parents if they didn’t energetically strive to protect their children from malicious indoctrination, whether into fantastical green catastrophism, CRT, Marxism, or any other dangerous ideology. An earlier generation of Americans fought a war over “taxation without representation.” The stakes were arguably lower then, because there was no threat of the minds of American children being poisoned by an alien, anti-American ideology. So today’s peaceful, if strongly worded, vigorous protests are entirely justified.
The fact that Garland apparently has a conflict of interest in this issue (his son-in-law allegedly profits from peddling CRT materials) is an interesting sidelight, but not the crux of this issue. What’s truly disturbing is the prospect of the FBI devoting more resources to monitoring outspoken parents than to addressing the thousands of people illegally pouring over our southern border and spreading throughout our country.
The above are three ways in which the federal government is increasing its surveillance and control over the American people. Is this Big Brother or is that too paranoid? What do you think?
Views expressed in this article are the opinions of the author and do not necessarily reflect the views of The Epoch Times.