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The new robber barons

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In the Dark Ages, government officials used their police powers to enrich themselves. Powerful officials would seize travelers of means passing through their jurisdictions and imprison them in castle dungeons until the ransom was paid. Those practioners were called "robber barons."

Now in the 21st Century it appears we have a new breed of robber barons operating with impunity in America under the cloth of government.

In what sounds like a scene from "The Sopranos," a truck carrying newly manufactured boats up the East Coast was held hostage in New Jersey until the boat’s manufacturer paid more than $46,000.

The mob, however, wasn’t behind this operation. The perpetrator was a revenue agent for the state of New Jersey who stopped the truck last July at a weigh station on I-295. The agent informed the Hartsville, S.C.-based Stingray Boat Co. she wouldn’t let the truck continue on to Massachusetts until the company paid the taxes it owed to New Jersey. The company, according to the agent, owed business-activity taxes to New Jersey because it had a dealer there.

The company’s Controller disagreed since the dealer was an independent business and had already paid taxes to New Jersey, but he wired the state the money anyway because that was the only way he could free his boats from the castle’s dungeon in New Jersey.

Stingray’s comptroller, Barry Godwin, said in testimony before the House Small Business Committee that he didn’t have a choice. "It was show me the money and I’ll let you go, or you’re stuck."

Rep. Todd Akin, R-MO, was shocked and stated he’d never sat in a hearing on highway robbery before.

New Jersey is apparently only one of many states asserting that out-of-state businesses owe them corporate income taxes, gross receipts taxes, or franchise taxes, even if they don’t have employees or facilities in that state. Simply by doing business in that state makes those companies liable for those taxes the states contend.

The House Judiciary Committee approved legislation to exempt out-of-state companies from a state’s business activity taxes unless they have a physical presence there, but it was pulled from consideration after the National Governors Association strongly objected to the bill contending the legislation would cost states billions in lost revenue and shift more of the tax burden to locally owned businesses.

Legislation establishing a national standard for when businesses become liable for business activity taxes was recently re-introduced in Congress. Under the bill, businesses wouldn’t owe these taxes unless they use employees or services in a state for 15 days or more in a calendar year.

So, as more and more states impose business activity taxes on companies who simply sell a product there, costs to the consumer continue to rise. Now that the Internet allows companies to conduct their business anywhere in the world, it doesn’t make sense to tax them if they don’t have a physical presence or employees in that jurisdiction.

As more and more governments are scouring the bushes for additional tax revenue, they get less and less friendly to liberty. Some will even go so far as to force citizens to become part of the jurisdiction of that government only for the revenue dollars they see dangling out there. Such is the case with forced annexation.

The new robber barons are conquering new lands because the law allows it, not because they have anything to offer the residents in the areas to be annexed. Once again, it’s that old "show me the money" syndrome. To heck with the democratic process or allowing folks to make a choice regarding their future. It’s government’s way or the highway. Besides, just because something is legal doesn’t necessarily make it right.

Greedy politicians will always find a way to get what they want. Remember the Tax Anticipation Note scheme on the new government center in Waxahachie? After all, to quote Thomas Paine: "government even in its best state is but a necessary evil; in its worst state an intolerable one." Forced annexation is government in its worst state.

Citizens were rightly up in arms over government’s misuse of eminent domain procedures, so how does forced annexation differ from that?

All of this just goes to show actions that should be illegal did not stop in the Dark Ages. Those robber barons are alive and well in the 21st century.


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