Human Events Blog

Stimulus for Tax Cheats

One of the many reasons that giving control of your life to the federal government is a bad idea is that the centralized State is a blind giant.  Ideology causes it to ignore the lessons of failure.  Its power overloads its senses.  Its obsession with its own growth causes it to ignore its core responsibilities, which tend to limit its power, rather than expanding it. 

Case in point: the Associated Press tells us that “Thousands of companies that cashed in on President Barack Obama’s economic stimulus package owed the government millions in unpaid taxes,” according to congressional estimators.

“The Government Accountability Office, in a report being released Tuesday, said at least 3,700 government contractors and nonprofit organizations that received more than $24 billion from the stimulus effort owed $757 million in back taxes as of Sept. 30, 2009, the end of the budget year,” the AP continues.

Among other scofflaws, we’re talking about an “engineering firm that received a $100,000 stimulus act contract, but owed $6 million in taxes,” and “a security firm that owed $9 million, mainly in unpaid payroll taxes from the mid-2000s.”  The latter company is described as having “a history of being uncooperative, missing deadlines, and repeatedly filing appeals.”

The Internal Revenue Service described these as an “extreme cases of noncompliance.”  They’re particularly extreme when one considers that pulling in tax money is one of the chief functions of the government.  It’s good to know our payroll taxes are being handled so carefully!

How did this happen?  It seems that “federal law does not prohibit tax delinquents from getting government contracts or grants, though there are provisions that enable the government to withhold payments in some cases.”  Of course, that doesn’t mean the people spraying dollar bills out of that “stimulus” fire hose couldn’t have exercised some basic responsibility and vetted the recipients of the billions appropriated from our children.

It’s funny how spending is always such an urgent business that we can’t even read the legislation, or carefully investigate the individuals and corporations we are compelled to subsidize.  On the other hand, even the smallest spending reduction is an agonizing process which stretches out for months, while Democrats denounce budget cutters as heartless monsters who want to kill as many women and elderly people as they can.

Senator Carl Levin of the Homeland Security and Governmental Affairs Subcommittee told the AP “it’s been known for years that a few federal contractors and grantees don’t pay their taxes.”  That sounds like a good reason to have a much smaller federal government, with far fewer contractors and grantees. 

Say what you will about those evil capitalists, but at least they keep track of their accounts receivable.  It would be nice if the $3.6 trillion federal government took our tax money as seriously as Blockbuster Video takes their late fees for movie rentals.


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