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Culture War Roundup for the week of July 10, 2023

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When was this era of capricious cruelty? Because it's not within my lifetime or yours.

It's within mine. It hit its nadir when the IRS decided to raid a co-op nursery school and refuse to release the children to their parents until they signed a form agreeing to be responsible for a share of the taxes. I think this was in the 1980s but it might have been the 1970s. But even without that sort of thing, the casual impersonal cruelty of the juggernaut is quite sufficient.

None of this remotely resembles the scenario you described where "Poor average guy somehow accidentally finds out he owes more taxes than his total net worth and the IRS impoverishes him and then goes after his parents."

I never said he was an average guy. Several people have assumed that because they have even less sympathy for a man who this might happen to (e.g. a dot-com bust principal or early employee) than to an average guy.

It's possible to have massive paper capital gains which you then owe taxes on, immediately prior to a bust, so while I am not a tax accountant myself, I can envision hypothetical scenarios where a heavily leveraged person might end up owing "more taxes than he ever actually had."

No leverage is required.

Color me skeptical, however, that this was common or that it didn't involve some financial shenanigans on the part of the alleged victim.

And this is just-worlding.

It's within mine. It hit its nadir when the IRS decided to raid a co-op nursery school and refuse to release the children to their parents until they signed a form agreeing to be responsible for a share of the taxes. I think this was in the 1980s but it might have been the 1970s. But even without that sort of thing, the casual impersonal cruelty of the juggernaut is quite sufficient.

I'm pretty sure I am at least as old as you. I'm not usually one to do the obnoxious "cite?" thing, but you're going to have to give me a link, because that story doesn't ring any bells and I'm highly skeptical that it's an entirely accurate description of the case.

I never said he was an average guy. Several people have assumed that because they have even less sympathy for a man who this might happen to (e.g. a dot-com bust principal or early employee) than to an average guy.

Okay, so give me an actual example of a rich guy this happened to, as you described it.

No leverage is required.

Then explain to me how it works. Seriously. I'll bet you cannot describe the mechanism by which someone literally owes more than they ever had. Capital gains taxes are only applied once you actually sell something. There has been discussion recently about taxing "unrealized capital gains," but that has not happened yet.

And this is just-worlding.

No, it's how the actual world works. You picked the wrong topic to play argument-by-vibes with me today, my friend. But go ahead, prove me wrong with some concrete examples.

I'm pretty sure I am at least as old as you. I'm not usually one to do the obnoxious "cite?" thing, but you're going to have to give me a link, because that story doesn't ring any bells and I'm highly skeptical that it's an entirely accurate description of the case.

The story appears in James Bovard's "Lost Rights: The Destruction of American Liberty", page 269. November 28, 1984, the Englewood Learning Center in Allen Park, Michigan. An excerpt appears here. This isn't how I knew the story; I read it in a news publication at the time. Of course, one of the reasons the "cite?" thing is so obnoxious is the challenger rarely changes their position when the cite is provided.

Then explain to me how it works. Seriously. I'll bet you cannot describe the mechanism by which someone literally owes more than they ever had. Capital gains taxes are only applied once you actually sell something. There has been discussion recently about taxing "unrealized capital gains," but that has not happened yet.

You owe ordinary income on certain stock grants when they vest. You may not be able to sell at that point because of insider trading rules. It's not about unrealized gains, it's about illiquid ones.

The story appears in James Bovard's "Lost Rights: The Destruction of American Liberty", page 269. November 28, 1984, the Englewood Learning Center in Allen Park, Michigan. An excerpt appears here. This isn't how I knew the story; I read it in a news publication at the time. Of course, one of the reasons the "cite?" thing is so obnoxious is the challenger rarely changes their position when the cite is provided.

Well, it's mostly obnoxious because the person asking for a cite isn't actually interested in seeing evidence, they just think it's a gotcha that means they win, and of course they are not going to change their position.

So having read your excerpt, I'll say this: if everything happened exactly as described in those paragraphs, it's certainly a case of some feds engaging in sketchy and almost certainly illegal behavior. But there are a lot of reasons I remain skeptical. The only references I can find to this egregious abuse of power, (in which IRS agents supposedly forced parents to pay for the daycare center's taxes?) is Bovard's book and a few rightie websites. The actual actions described make little sense and are almost cartoonish. If all you've got is an anecdote from a right-wing author who wrote a book about how awful and tyrannical the government is, you're being unreasonable in expecting that would "change my position" to agree with you that yes, this is the kind of thing the IRS does. It's certainly an egregious case, but it's also the kind of case with curiously little documentation, that is good fodder for right-wingers to circulate endlessly forevermore as an example of "This one time the IRS did this thing...." You made broad, sweeping claims about how the IRS used to act (at least you have backed down from claiming it is how they act today); is this all you've got?

You owe ordinary income on certain stock grants when they vest. You may not be able to sell at that point because of insider trading rules. It's not about unrealized gains, it's about illiquid ones.

Okay. So who was taxed on ordinary income on vested stocks that he couldn't sell, and was then impoverished by the IRS for it? I assume you're claiming the situation is that by the time he could sell, the stock value had tanked but the IRS still claimed he owed taxes on the value they had when they vested? I won't say that's impossible, but even as a non-tax specialist, that doesn't sound quite right, and I would, again, like to see an actual example of how this worked.

Well, it's mostly obnoxious because the person asking for a cite isn't actually interested in seeing evidence, they just think it's a gotcha that means they win, and of course they are not going to change their position.

Indeed.

The only references I can find to this egregious abuse of power, (in which IRS agents supposedly forced parents to pay for the daycare center's taxes?) is Bovard's book and a few rightie websites.

I've seen two versions of what paper the parents were supposed to sign. One was that the day care was a co-op and thus the parents were on the hook and had to acknowledge that. The other is the parents were agreeing to pay what they owed to the day care to the IRS instead. Why the story seems to have mostly disappeared down the memory hole (at least unless you want to dig into dusty old microfilms), I have no idea.

The actual actions described make little sense and are almost cartoonish.

More just-worlding. It sounds really bad so it couldn't have happened.

I've seen two versions of what paper the parents were supposed to sign. One was that the day care was a co-op and thus the parents were on the hook and had to acknowledge that.

If you are a member of a co-op, you must own a share in it, and even then, the IRS can't make you, personally, pay for its taxes. If the coop owes taxes it can't pay, it goes bankrupt, the IRS can seize its assets, and your shares become worthless. There may be some legal way to "reachback" to the owners of the coop, if it's believed they hid assets that came from the coop, but otherwise, this story does not make sense to me.

The other is the parents were agreeing to pay what they owed to the day care to the IRS instead.

This makes even less sense. They signed a paper saying "I will pay the tax bill for this coop, which I may or may not have any legal association with whatsoever?" With their kids being held hostage?

Even granted that you really want to believe that the IRS are lizard Nazis, does nothing about this have the faintest whiff of bullshit to you? Again I ask, is this story all you've got?

And anything to say about the apocryphal rich guy who was impoverished by the IRS for owing more money than he ever possessed?

Why the story seems to have mostly disappeared down the memory hole (at least unless you want to dig into dusty old microfilms), I have no idea.

I do.

More just-worlding. It sounds really bad so it couldn't have happened.

I'm not saying it couldn't happen, but if you tell me a story about goose-stepping Nazis holding children hostage at a daycare center, I am justified in being skeptical. If I told you about this one time some Republicans did something (and that's why Republicans are Nazis), and all I could point to was an anecdote from some lefty's polemical book, you would be telling me how ridiculous it is for me to expect you to take the story at face value.

Even granted that you really want to believe that the IRS are lizard Nazis, does nothing about this have the faintest whiff of bullshit to you? Again I ask, is this story all you've got?

I've got a story with references; you've got denying it, even when requested sources were provided, because you think the world is just.

ETA: Oh, and if you don't like that, here is one about the IRS seizing children's savings accounts to pay their parent's tax debts. It's not even from a right-wing source. But of course as soon as I find a horror story that you can't deny because of the source, you'll claim that the IRS acted perfectly reasonably and of course they did that.

I've got a story with references; you've got denying it, even when requested sources were provided, because you think the world is just.

I have patiently, painstakingly, and in detail gone over every point of this story and my reasons for skepticism. "You're denying a story with sources because you think the world is just" is not an honest, accurate, or credible summary of anything you have read in my response. Do not think because you are trying to make as much out of the tiny patch of ground you think you can hold regarding this daycare center that I have failed to notice you picking up your hat and quietly slipping away when pressed on every single other point I have disputed in your rant about all the things the IRS supposedly can and does do. This is not me succumbing to a just world fallacy and refusing to believe credible sources; this is you stubbornly clinging to a just-so story and squeezing your eyes shut and screaming when someone says "Wait a minute..." You have been around long enough, and argued other issues with sufficient complexity, that I do not for one second believe you can't actually see the logical problems here; you are just refusing to acknowledge any possible holes in your narrative because... they are holes in your narrative.

ETA: Oh, and if you don't like that, here is one about the IRS seizing children's savings accounts to pay their parent's tax debts. It's not even from a right-wing source. But of course as soon as I find a horror story that you can't deny because of the source, you'll claim that the IRS acted perfectly reasonably and of course they did that.

Okay, sure, want to argue this one? I'll let you start. Tell me your understanding of what actually happened, the law as it was applied, and why you think it was unjust.

"You're denying a story with sources because you think the world is just" is not an honest, accurate, or credible summary of anything you have read in my response.

I gave you a story. You demanded a reference. I gave you a reference. You rejected the story among other things because it described the IRS acting too much as cartoon villains. This is a rejection based on nothing but priors of a just world.

Do not think because you are trying to make as much out of the tiny patch of ground you think you can hold regarding this daycare center that I have failed to notice you picking up your hat and quietly slipping away when pressed on every single other point I have disputed in your rant about all the things the IRS supposedly can and does do.

You asked how someone could owe more in taxes than they ever had. I gave you a scenario. You then demanded examples. I don't know any examples who are famous enough you could verify them. People who are ruined usually aren't ruined quite as famously as Bernie Madoff or even the Wall Street Bets bunch. "Guy gets screwed by the taxman, ends up with his wages heavily garnished for years" is dog-bites-man.

Okay, sure, want to argue this one? I'll let you start. Tell me your understanding of what actually happened, the law as it was applied, and why you think it was unjust.

Why would I do that? I could go some effort and no matter what you'd declare it just. You've already demonstrated that. The IRS didn't literally break open the children's piggy banks to pay their parents tax debt, but they did the next best thing, but that's not enough for you to concede there was any injustice done, nor that this is a pretty cartoon-villain thing to do.

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