16 August 2010

Overpay your taxes in NC? The stationary bandits say "tough cookies, chump."

Popehat | Patrick | I Hand The Cashier A Ten Dollar Bill For A Five Dollar Purchase. She Gives Me Fifteen Dollars In Change.

Before 2009, policy at the North Carolina Department of Revenue was, whenever a taxpayer was marked by a computer as having overpaid his taxes, the money was returned.

Since 2009, the taxman has a more realistic policy: When a taxpayer overpays, the Department will stay silent, saying nothing. If the taxpayer realizes his error within three years (as required by statute), the Department will, maybe, grudgingly refund the money. Otherwise, the Department will spend the money on no-bid construction contracts, and laugh at how it put one over on the citizen.

Of course this only works in one direction: A citizen who inadvertently stiffs the North Carolina Department of Revenue will be forced to pay a penalty, may have his name tarnished as a tax cheat, and could get to enjoy an audit or worse. If not paid back immediately, the Revenue Department will react with the fury of the wounded innocent at being cheated of its rightful gains.

All of which may be perfectly legal, but is it right? That’s the question I’m here to pose: We teach our children to obey the government because, by and large, its laws are just.
Not me. I'm teaching my children to obey the law because the state has all the guns.

Bottom Elephant: Legality and morality are orthogonal.

If the right thing to do happens to correspond with the law then whoop-dee-do! that's an easy decision. But you do it because it's right, not because it's lawful.

Here's the decision matrix my kids will learn in state-run schools:

Legal Illegal
Moral do it don't do it
Immoral meh don't do it

Here's what my kids will learn at home:

Legal Illegal
Moral do it do it
Immoral don't do it don't do it

(Of course, in the intermediate, amoral case, it becomes a cost/utility analysis.)

Patrick continues:
But if the government is just another shark in the marketplace, if the government just follows the law of the jungle, shouldn’t we teach children to obey the government out of fear, and for no other reason? Unless of course, they can get away with it? That doing the right thing is for suckers and sheep, if you’re smart enough?

That’s certainly the lesson that the North Carolina Department of Revenue is teaching their parents.
Here, here.

If the government is fleeces the people they learn to fleece right back.

That's part of the problem with all the recent hoopla about where we sit on the Laffer curve. If the idea is that tax rates should be set based on how much money can possibly be extracted from the citizens then citizens will try and extract as much money from the state (and by extension, from everyone else in society). The game shifts from "what is it right for me to receive?" to "what can I get away with claiming?"

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