Money $marts: Ignorance of the law is no excuse

GERRY KRAMER

There are many reasons to be upset with a federal government that has made a mess of just about everything — energy, healthcare, homeownership, taxation, immigration, deficits and debt, the economy, etc.

But hidden within this morass of ill-conceived policies is a more dangerous development: the passage of legislation that because of complexity, length and convoluted language is unfathomable, even to experts, never mind the average citizen. One of the core tenets of capitalism is the rule of law. But if no one understands the law, its application is subject to interpretation, thus arbitrary.

The federal tax code, for example, is more than 5,000 pages of arcane gobbledygook often containing contradictory rules. In a recent study, 46 professional tax preparers around the country were given made up financial data for a fictitious family and asked to complete tax return forms and calculate the taxes owed. Each of the 46 came back with a different amount with a spread of thousands of dollars among them. Which was correct? Who knows? The Internal Revenue Service might even come up with a 47th rendition. The fictitious taxpayer could get hit with additional taxes and penalties even with good faith compliance.

The 2010 healthcare legislation contains 2,700 pages, virtually unreadable. The Supreme Court heard oral arguments last week about the constitutionality of the insurance mandate (requiring everyone to have insurance or pay a fine). But the term “mandate” is not actually contained in the bill. Rather it is referred to as a “required contribution” which is defined in Chapter 48: Maintenance of Minimum Essential Coverage, (e) Exemptions, (B) Required Contributions: “For purposes of this paragraph the term ‘required contribution’ means… (ii) in the case of an individual eligible only to purchase minimum essential coverage described in subsection (f)(1)(C), the annual premium for the lowest cost bronze plan available in the individual market through the Exchange in the State in the rating area in which the individual resides…reduced by the amount of credit allowable under section 36B for the taxable year.”

Supreme Court Justice Antonin Scalia during oral arguments asked, “What happened to the Eighth Amendment,” referring to the cruel and unusual punishment prohibition. “You really want us to go through 2,700 pages. You really expect the court to do that?” Scalia was probably thinking “especially when no one in Congress actually read the entire bill before voting on it.”

Compared to the healthcare bill, the Dodd-Frank financial reform bill is a model of simplicity at only 849 pages. But it has already spawned 300 more pages of formalized questions related to just one provision known as the Volker Rule. Other federal regulatory agencies (e.g., the Commodity Futures Trading Commission) are busy writing more rules, adding even more complexity, vagueness and arbitrariness to compliance and oversight. Banks will be damned if they do, damned if they don’t.

Pretty soon everyone will be breaking some law. You won’t know it till you’re ticketed or arrested. But it won’t happen because of premeditated action; you can’t knowingly disregard what you don’t know exists. But ignorance is no excuse.

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Write to gerryk3001@yahoo.com.

© 2012 marconews.com. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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