Sunday, February 21, 2010

American flies plane into building because of law against "Scheinselbstständigkeit"

A few days ago, a guy flew a plane into a building in my old hometown of Austin, Texas. It seems that the man, an IT expert, was protesting the IRS, which was going after him after he failed to file his taxes one year. Specifically, he seems to have been upset about some law which he believed forced him to become an employee, thereby prevented him from staying a freelancer; he apparently thought he would make more money as the latter.

The New York Times quotes a man who says that the law from 1986 "has ruined many people’s lives" and adds, "Many software engineers and other such professionals say that the law denies them the opportunity to become wealthy entrepreneurs." Sounds like a pretty bad law.

But then I saw that the perpetrator had also written this as an explanation about why he did not file his taxes:

"To survive, I was forced to cannibalize my savings and retirement, the last of which was a small IRA. This came in a year with mammoth expenses and not a single dollar of income. I filed no return that year thinking that because I didn't have any income there was no need," he wrote.

That's absolutely batty and made me wonder what exactly this guy's income had been over the years -- had he been clearing 100,000 and now he is complaining about not having money because of the IRS? An attempt to find this out quickly led me to another article explaining what exactly the law is: what the Germans call Scheinselbständigkeit (if you read German and want to know about the situation here, see this), which could be loosely translated as "phony freelancing." Essentially, the government tries to make sure that companies do not simply categorize otherwise full-time employees as freelancers in order to get out of of various payroll obligations (such as health insurance and fringe benefits). But if that is what we are talking about, then workers would actually want the government to protect them. Which is why this other article claims:

The reality is that many employers are using the tax code to push their tax burdens onto de facto employees, and to avoid a whole host of laws that require they offer benefits and refrain from discrimination.

The author goes on to add:

Full disclosure: I worked for an employer on and off for several years that recently became notorious for having engaged in the practice of classifying employees as independent contractors. Being classified as a full-time employee when, indeed, I worked full-time for that employer would have significantly reduced my tax bills and provided me with a series of other benefits that I then lacked.

So there you have it -- this murderer in Texas paid far fewer taxes and had better benefits as an employee rather than a freelancer. If he had no money one year, it was because he had been fired and could not find work as a freelancer, not because of the IRS.

I am tempted to write that I can hardly think of anything stupider, but actually I can think of at least three things that compete: 1) I recently wrote of the American who claimed to have governmental insurance, said he liked it, but was against health care reform because he doesn't want the government involved in his health care; 2) the debate about whether this murderer in Texas was a terrorist, "simply" a criminal, or possibly even a hero; 3) the general rage that Americans seem to have against each other and their own government -- a rage that is not limited to the Tea Party on the right, but (as the support for this murderer shows) also on the left. Robert Reich recently voiced his concern about these fringe elements getting together in what he called the Mad As Hell Party, which would unify renters and ravers across the political spectrum.

Honestly, Germany could not be further away from the US here in a few respects, but in one respect the two countries were eerily close: on the very same day, a 23-year-old German walked into his old school and began killing people because of the bad grades he had received years ago. But that is where the similarities end, for no one in Germany made the news for any support of that murder, nor was the German murderer presented as evil incarnate -- the media spoke of his "distressed psychological state." Clearly, a person who does such a thing is troubled, but that does not mean the person is inherently or always evil -- it means that things had unfortunately gone terribly wrong, so you wonder how it could have been prevented. There is no talk of heros or evil madmen.

And of course, as I also recently wrote, Germany will have none of this talk about lower taxes, thank you very much. No rage against the German IRS here, just thousands of tax evaders confessing.

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