On snitching and incentives; How Obama’s cronies in Chicago encourage bad behavior

Tue, Oct 27, 2009

Corruption, Taxation

Just saw this news story today.  Obama’s cronies in Chicago to Pay for Informing on Tax Cheats

You dirty rat.

Chicago and Cook County residents aren’t the only ones about to get shocking tax news; the city is debuting a “tax whistle-blower” plan that could turn neighbor against neighbor in Chicago’s business community.

The folks at city hall will pay cash bounties to informants who turn in business tax cheats around the city. The reward would amount to some sort of percentage of the tax money that the city recovers.

“It’s just another way of bringing people into compliance,” Revenue Department spokesman Ed Walsh told the Sun-Times.

“It would probably be … a business knowing that a competitor is not remitting a tax. An employee [of the tax-dodging business] could know that, too. Typically, you need to provide some type of incentive.”

If you think this sounds like a good idea, you are dead wrong.

This program isn’t about “reporting a crime” which is what we all ought to do when we see a crime committed.  The point is that it gives people A SHARE OF THE MONEY THEY HELP CONFISCATE!

Chicago is turning civilian spying into a state-backed business.

Whatever your feelings about the criminality/non-criminality of tax evasion (conscientious objection, etc), this program doesn’t have anything to do with citizenship and crime reporting. It is state-backed and rather than dissuade “bad behavior” actually encourages it.

Look at the procedure and then the incentive systems.

  1. Some one makes a report that they suspect you are cheating (whether it’s true or not).
  2. You are now under suspicion and the burden is not on another to prove your guilt (as with all tax audits) the burden is on you to prove your innocence.  A large and costly bureaucracy processes and then follows up on these investigations.
  3. If you are innocent, then what? You’re out your time, your good name, your reputation, etc.  Just like with an audit.  Except that with this program, any of your employees, competitors, enemies, etc, – a civilian IRS – can trigger a costly audit.
Any citizen can do this to you – hit you with an audit – just by reporting you.

What’s the incentive to falsely report people (or report them even though you don’t have hard evidence) in the hopes that in the audit something is discovered and you get paid?


What’s the incentive to go through your neighbor’s trash or to engage in entrapment (encouraging your neighbor to evade, then reporting it later)?


Ed Walsh, in the news story above, actually cites the example of “a business knowing that a competitor is not remitting a tax.”  And how would they know that?  Through corporate espionage, that’s how.  Or else, just based on “suspicion” because the competitor is outperforming them.

This program creates an atmosphere of distrust, of spying, of meddling in one another’s affairs and incentivizes people to take illegal steps in order to try and discover tax cheating.  In short, it encourages HORRIBLE behavior, worse than the behavior it intends to target, and dangles financial incentives in front of people if they do so.

One staple of Big Government is that it will seek to remedy a perceived injustice by means of an even greater injustice (think of their remedies to the perceived injustice to income inequality – redistribution by theft!).

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One Response to “On snitching and incentives; How Obama’s cronies in Chicago encourage bad behavior”

  1. seth snead Says:

    are u Fn for real coming from a Prez that appointed many tax cheats including Charlie Rangle tax cheat !! Tim Gitner tax cheat Rom Emanuel tax cheat now hes gonna come after us that didn’t pay taxes correctly ? are you for real how am i am i to pay my taxes correctly when the head chairman of the house ways and means comm,in charge of taxes Mr.RANGLE couldn’t even understand the tax code ?wtf?really ?the head guy in charge of taxes couldn’t even adhere to the tax codes he singed off on without knowing it , oh i didn’t know i had a huge realities deal i had no idea i was sposed to tell any one about that , oh and i didn’t know i had to pay taxes on it either ….i mean really if the people in charge of taxes i.e head of ways and means voted on it , and don’t feel like they should disclose all earnings or from realities , then why should i, are they above the law ? why should i fallow laws when the ones making it don’t adhere to it , and don’t even know what the law is ?i mean are these people really thinking that i am as stupid to believe their line of bullshit ? we cant pay for what we are doing now as far as the gov. is considered are we not already in a deficit? even before the wars yes when Clinton left office there was a deficit! oh yes prove me wrong !tell me there hasn’t been a deficit for at least 60 years ? and just cause there was a def. for so long that does not make it right to add more i don’t care what party your from this kinda spending is just stupid….. we can cut enough money from one program that does not cover every one,to pay for a plan that does cover every one? is just stupid as well, my 4 year old can tell u that wont work for if your spending enough on one program to cut waste out of it to cover every one then why did the first program not cover every one and if there is that much waste to cut , who’s to say the next program wont have just as much or more waste for it is ran by the same people ?