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It has been 20 years since Congress tightened the rules on civil forfeiture, but following unanimous approval by Congress, President Trump signed the Taxpayer First Act (H.R.3151) into law last week. This law curbs the IRS's power to seize cash for "structuring" offenses.
Under the Bank Secrecy Act of 1970, banks must report any cash transactions greater than $10,000. But if someone frequently deposits or withdraws their cash in amounts under $10,000, the IRS could seize it for “structuring.” Even though their money was earned legitimately and despite the fact that they were never charged with a crime, in 2012, the IRS seized nearly $63,000 from Randy and more than $446,000 from Jeff. It took years of litigation and high-profile coverage before they won their money back.
Structuring can be a Kafkaesque nightmare for small-business owners, especially for entrepreneurs like Jeff and Randy who work in cash-heavy industries: Jeff runs a convenience store distribution business with his brothers on Long Island, while Randy is a dairy farmer in Maryland.
Nor were the above isolated incidents.
Between 2005 and 2012, the IRS used civil forfeiture to seize nearly $200 million in over 2,100 cases. Roughly half of all seizures involved amounts under $34,000—hardly the proceeds of the sprawling criminal enterprises structuring laws were supposed to target.
The law (called the "RESPECT Act") puts in place a common sense requirement that should have been there from the beginning:
the IRS can now only seize property for structuring if it’s “derived from an illegal source” or if the money were structured to conceal criminal activity.
The law codifies a policy change made by the IRS in 2014 due to multiple lawsuits and associated publicity. That change resulted in a dramatic drop in associated forfeitures ($31.8 Million in 2014 to $6.2 Million in 2015).
The law also requires that judges promptly review structuring seizures, a process which previously took months or even years while a citizen's funds remained in the hands of the government before a challenge would be heard.
Previous Civil Forfeiture Coverage
(Score: 3, Insightful) by ikanreed on Thursday July 11 2019, @08:27PM (19 children)
That's why they keep flooding the market with cheap loans for the ultra-rich so your strategy of saving gets punished with massive inflation*.
*It's not a conspiracy theory if the fed up and says 2%/yr inflation is an objective** in their own annual reports [federalreserve.gov]
**That objective is based on an entirely bullshit economic theory [federalreserve.gov] pulled straight out of an Austrian anus with no ability to explain the occurrence of relatively simple phenomena like stagflation
(Score: 0) by Anonymous Coward on Thursday July 11 2019, @09:03PM (7 children)
The idea to targer 2% inflation comes from Austrian economics? That makes no sense if you know what Austrian economics is.
No, I think you got confused between Australian and Austrian, because it is a magic number come up with by Australian central bankers.
(Score: 2) by ikanreed on Thursday July 11 2019, @09:25PM (6 children)
Yes, I'm gonna make the case that Friedman follower John B. Taylor was basically an Austrian, and the extent to which he qualifies as "Chicago school" is not represented in the Taylor rule at all, being that it's based on papers like Stabilizing powers of monetary policy under rational expectations
(Score: 0) by Anonymous Coward on Thursday July 11 2019, @09:40PM (5 children)
If they are Austrian they wouldn't recommend a central bank tries to set interest rates at all...
https://www.progress.org/articles/austrian-economics-explained [progress.org]
(Score: 2) by ikanreed on Thursday July 11 2019, @09:47PM (4 children)
Let's call this "give an Austrian power in a central bank and suddenly they think setting bank policy is a great idea". Greenspan too.
(Score: 0) by Anonymous Coward on Thursday July 11 2019, @09:51PM (3 children)
No, lets not. Posers and politicians trying to call themselves Austrian have nothing to do with the ideas of that field of thought.
(Score: 2) by ikanreed on Thursday July 11 2019, @11:26PM (2 children)
Just describe themselves as adherents, constantly promote its ideas, ideologically fight other schools, even as it leads to crisis after crisis. Just not true scotsmen.
(Score: 0) by Anonymous Coward on Thursday July 11 2019, @11:41PM
Austrian economics is against central banking, you are just attempting to redefine a term to smear a bunch of people with your stick covered in falderal.
(Score: 1) by khallow on Friday July 12 2019, @12:42PM
And the whole thing was done just to do an ad hominem attack on a theory of inflation and unemployment - which has substantial evidence in support of it. Don't you have something better to do with your time?
(Score: 2) by shortscreen on Thursday July 11 2019, @09:04PM (2 children)
By now I'd say it's gone beyond that. The banksters don't have to care whether you deposit your money, spend it on goods and services, store it under the mattress, or simply burn it. If a bank doesn't get enough deposits, the fed can print money and "loan" it to them at 0%. If a megacorp doesn't sell enough crap this quarter, they can just borrow money at .00001% and use it to buy back their own stock, then hand out executive bonuses when the stock price goes up.
Wall street has nearly become a perpetual circle jerk machine.
(Score: 3, Interesting) by ikanreed on Thursday July 11 2019, @09:32PM
It's not quite perpetual though.
The free loans cause inflation for "us" because real estate is, in some ways, an unbreakable investment vehicle, and they can charge as much rent as it takes to make their profit, and we have to live somewhere. The Wall Street corporate owners have been buying up more and more land and houses with their free money tap, raising our prices through the roof. At some point the rent seeking and loan sharking will actually exceed the net productivity of the American worker. At that point, there won't actually be anything monetary policy can do to save even the high end market from crashing. There won't be any real value left to buy.
And the fallout from that, it's seeming in my own very subjective ill-informed position, isn't just going to make 2008 look like nothing, it's going to make 1929 look like nothing.
(Score: 0) by Anonymous Coward on Thursday July 11 2019, @10:09PM
I like how old fashioned your ideas are, showing you really fail to understand the scope of the scam. Zero percent interest on a loan is about to be considered high. -5% will be a good deal.
(Score: 4, Informative) by Thexalon on Thursday July 11 2019, @10:22PM (1 child)
Yes, they do say that's an objective, and they have good reasons for thinking that:
It starts with 2 observations: (1) Money is like manure - if you spread it around, it helps things grow, if you pile it all in one place, it's just a big stinky mess. (2) There are some extremely rich people out there.
Now, if you have 0% inflation or even deflation, then what the rich people are likely to do with their money is the rich-person equivalent of stuffing it in their mattress. They have little reason to do otherwise, and it's by far their safest course of action. But that runs counter to the policy goal of spreading around the money, so you need to convince them to move it somehow.
One way of doing that is to create a financial loss if they choose to neither spend nor invest their money. Do that, and they'll invest it in stuff, allowing businesses to form and grow. And inflation acts as that financial loss with relatively little government intervention (it's far less hands-on than, say, the government taking some of that money by force and deciding to give it to somebody else).
You can make yourself immune to the ravages of inflation by investing your money in something. If you want that something to be a physical object, you could always consider real estate or a local small business, but those aren't the only options. Or if you don't like the US dollar's chances, you can always put it into a foreign currency or a commodity.
The only thing that stops a bad guy with a compiler is a good guy with a compiler.
(Score: 3, Insightful) by ikanreed on Friday July 12 2019, @02:30AM
I guess I should have been ready for a serious discussion of fiscal policy.
In theory, that would be okay. The idea of lightly disincentivizing naive savings, by encouraging investment through overnight interest rates I mean.
However, all the controls for money supply are aimed at what has become increasingly small numbers of increasingly large traditional banking institutions. Who are increasingly engaged in "non-traditional" financial products(i.e. they buy stock and bonds with their easily acquired money). Which means when the fed throws open the gates, a 3% drop in overnight rates represents maybe, maybe a 0.3% change in APR for things like a home loan, since it doesn't really change the math of whether it's better to make a loan to Joe IDoActualWork or buy AA+ rated bonds from WeBuyHousesWithCashAndRentThemOut LLC.
So... the housing prices goes up because WeBuyHousesWithCashAndRentThemOut LLC just bought a third of them with the easy money, and it's barely any easier for your to afford a loan. And your wages are stagnant, even though inflation is happening.
Turns out that inflation is almost entirely in the form of fixed real estate asset costs. And none of it is you getting paid more. Under the hood, it's stagflation, the economy isn't getting better, yet prices are going up. To the instruments of the fed, it's healthy good inflation, because they're seeing GDP rise, as WeBuyHousesWithCashAndRentThemOut LLC is making tons of purchases and the housing market is still moving.
Anyways, what I'm trying to say, is how rich people are right now, putting money in their mattress, isn't investing traditionally, hiring, training, and building, but rent seeking(or buying stock in companies that do the rent seeking for them). And the Fed's theory of inflation is increasingly at odds with the reality of investment.
And it's screwing us. And it's dangerous. And it's one area where I don't specifically blame trump, because when this should have first been fixed, Obama was afraid to take the hit of having rates raise during his tenure, and stocks approaching reality in cost, and endangering Hillary's chance of winning(lol).
(Score: 2) by fyngyrz on Friday July 12 2019, @12:11AM (2 children)
Best interest rate I could find for savings today was at Ultima Bank Minnesota for those aged 18 and under, which was 3.04% with no minimum. Putting $10k in that particular savings account would net you about $3548 over ten years. If you withdraw it before you turn 18, there's a stiff penalty, too. So you'd have to get your $10k in before you were 18, and not pull it until you were over 18. How many under-18 year olds have $10k to stick in a bank for ten years? But lets roll with it anyway...
If you can't make $10k work harder than that, you're not trying. And that's not taking inflation into account. But you really have to.
3.04% in from the bank, minus the current 2% rate of inflation (presuming that rate doesn't continue to rise as it has been), means your effective interest rate is 1.04%, and your actual gain is $1096 in today's purchasing power — and for this, you lose the use and leverage of $10k for ten years.
Bank interest rates favor the bank. They make oodles lending out multiples of your money with a multiplier freely supplied by the central reserve. [investopedia.com] You... will not. You'll make a little... but inflation (right now) is running at 2%, and that will chew the leverage of your apparent $3548 gain right up.
If you can't beat that just reselling... whatever... on EBay, you're really not trying.
That's without even considering the open doors that banks provide to creditors, lawsuits and other not-necessarily-legit takings that can arrive via the (in)justice and tax system. There's a basic truth here: They can't take it if they can't locate it. So a home safe isn't really the most secure option when it comes to the organizations that banks whore themselves out to as those operations can also invade your home and business, but it is at least more secure than a bank where they don't even have to stir themselves. They just execute a computer order, and poof, your money's gone. It doesn't take a whole lot of clever to go considerably more secure than a home safe, either, so no one can find it but you.
--
The spawn and grandspawn say I never listen to them.
Or something like that.
(Score: 0) by Anonymous Coward on Friday July 12 2019, @01:16AM (1 child)
I. Can't. Even. But,...OK.... You do you, I guess. Go ahead and keep your money in a home safe. Or hide it under your mattress. Same difference, really. I just hope you don't have any burglaries. Or that your house doesn't burn down. Even assuming that neither of those happens to you, you still have the problem that your money is depreciating in value due to inflation. For my part, I'm going to stick with keeping my money in index funds for long-term safekeeping. While I won't ever join the ranks of the ueber-wealthy with that strategy, at least I have a pretty decent shot at being able to retire within the next 10-15 years in relative comfort. Not exactly rich, but not dirt poor either. Of course, my solution doesn't really address the problem of civil forfeiture but then, once you strip away the paranoia, yours doesn't either.
(Score: 2) by fyngyrz on Friday July 12 2019, @02:55PM
You are demonstrating a pretty serious reading comprehension problem. I'd see someone about that if I were you.
--
When I dunk my cookies, I think of you.
I hold them under until the bubbles stop.
(Score: 2) by Rosco P. Coltrane on Friday July 12 2019, @01:40AM (2 children)
That's why they keep flooding the market with cheap loans for the ultra-rich so your strategy of saving gets punished with massive inflation.
Who said anything about saving?
My safe is my checking account and my ATM: I stick my wages in it every month, and I withdraw cash from it when I need it.
My savings are in the form of precious metals (gold of course, but also industrial metals such as palladium, platinum, rhodium). They're a lot less liquid than cash of course, but they're immune from inflation. And they're in my safe also...
(Score: 2) by ikanreed on Friday July 12 2019, @02:49AM (1 child)
Well, I'm not gonna tell you how to invest, but your plan does sound a bit like and egg and baskets risk.
Not as bad as cash in a safe mind you, but it has risk.
(Score: 2) by Rosco P. Coltrane on Friday July 12 2019, @04:47AM
Less risky than a pension plan :)