The Hidden Key to the Illegal Immigration Door

I have scolded my Leftie friends who blame the "fatcat Republicans wanting cheap labor" for illegal immigration. Yet, the immigration inertia in Republican-controlled D.C. is painfully obvious. Maybe the Lefties are correct on this. I dived in.

I am not happy with what I unearthed.

The US government estimates that there are 10 million illegal immigrants in the US. (Here in Southern California, that is no secret). A recent investment bank report puts the figure closer to 18-20 million.

Wages in the U.S. are subject to income tax. Your employer effects "payroll deductions." If your employer fails to do so, the company (and even the owner) is personally liable for failure to withhold. This is the key to compliance with our income tax system.

A corollary law (26 USC 1441) plugs a loophole. It requires that certain "withholding agents" (like an employer, or a bank, or other entity that moves money) withhold 30%, or some smaller percentage (14%) from payments the agent makes, where the money is likely US-based income.

So if 10 Frenchmen (that is, non-U.S. taxpayers) come to the US and are paid $1 million each by Pepsico for their fine soccer match performances, Pepsico will withhold from each payment a 30% "backup withholding" amount. Each Frenchman may thereafter file a U.S. tax return, showing that under the French-US tax treaty, a different outcome is warranted. Perhaps the 10 Frenchman each get a refund of some or all of that 30% that was withheld. But if they do not bother to file, the U.S. keeps the money. (Just like the payroll withholding that your employer does, every 2 weeks.)

Great. So what?

We have 10 million to 20 million illegal aliens in the US. In theory, they earn money in the cash underground economy. The persons who pay them should withhold payroll taxes, but they don't.

In theory, those illegals travel back to Mexico and give the money to their Mexican families or the like. These folks shuttle back and forth across the border.

But a problem has arisen. In that past few years, clever financial services companies have decided that they can earn big fees from facilitating the "wiring" of monies by illegal aliens to Mexico or the like. In other words, the illegal alien no longer has to travel back to Mexico; instead, he can "Western Union" the money back to Mexico.

How much? $36 billion a year wired to Mexico, and climbing...

Now, there is no need to travel back to Mexico. Just wire the money, instead. Is it any wonder why the number of illegal aliens has swollen, to 10 million (or 20 million, depending upon whose numbers you believe)?

OK. But Western Union is a "withholding agent" under 26 USC 1441.* (See Footnote) As a withholding agent, Western Union is withholding taxes from all those wire transfers.....right?

Nope. (It took me hours to find out why.)

Bureaucrats in the Treasury Department issued regulations which are vague, but give Western Union and companies like it the plausible excuse to facilitate billion-dollar tax avoidance:

"Code of Federal Regulations Sec. 1.1441-4 -- Exemptions from withholding for certain effectively connected income and other amounts.

...(b) Withholding is not required under Sec. 1.1441-1 from salaries, wages, remuneration, or any other compensation for personal services of a nonresident alien individual if such compensation is effectively connected with the conduct of a trade or business within the United States and-- ....(iii) Such compensation is for services performed by a nonresident alien individual who is a resident of Canada or Mexico and who enters and leaves the United States at frequent intervals."

There it is, folks. There's the key. CFR 1.1441-4(b)(iii). No chicken-sh*t politician ever put that up for a vote. And I certainly don't remember voting on the issue of granting income tax immunity to illegal aliens from Mexico and Canada. I don't remember voting on creating a de facto $36 billion+ dollar annual subsidy -- a giant sucking sound? -- of cash moving out of the southern U.S. to Mexico. I don't remember any vote here in California, determining that 10 million workers would be exempt from both California and federal income tax, despite our annual $10 billion budget deficit caused largely by the skyrocketing schooling and medical costs for illegal aliens.

I visited a Western Union branch last week, at a Circle K convenience store. Alas, there was no procedure in place to ascertain whether the money sender was a Mexican who "enters and leaves the United States at frequent intervals." So how would the part-time Circle K clerk - aka, the Western Union agent - know that a backup withholding exemption applied?

This is it, folks. This little loophole is the reason for the immigration "inertia" in Washington. Billions are being made (i.e., via marketcap) off of these transfers. For example:

--Western Union (subsidiary of First Data Corp) - $30 billion market value.
--Total System Services Inc. - $5 billion market cap.
--Wachovia Corp. - with a - $80 billion market cap (happy quote: "We're the first major bank" to allow customers to "send money to friends and family throughout Latin American and Caribbean countries as well as Mexico.")

___

* -- Is Western Union a "Withholding Agent"? Absolutely. According the IRS Publication 515:

Withholding Agent. You are a withholding agent if you are a U.S. or foreign person that has control, receipt, custody, disposal, or payment of any item of income of a foreign person that is subject to withholding. ...You may be a withholding agent even if there is no requirement to withhold from a payment or even if another person has withheld the required amount from the payment.

Although several persons may be withholding agents for a single payment, the full tax is required to be withheld only once. Generally, the U.S. person who pays an amount subject to [Non-Resident Alien](NRA) withholding is the person responsible for withholding. However, other persons may be required to withhold. For example, a payment made by a flow-through entity or nonqualified intermediary that knows, or has reason to know, that the full amount of NRA withholding was not done by the person from which it receives a payment is required to do the appropriate withholding since it also falls within the definition of a withholding agent. ...

Liability for tax. As a withholding agent, you are personally liable for any tax required to be withheld. This liability is independent of the tax liability of the foreign person to whom the payment is made. If you fail to withhold and the foreign payee fails to satisfy its U.S. tax liability, then both you and the foreign person are liable for tax, as well as interest and any applicable penalties....

It's Unanimous: Effete Thugs' Bullsh*t Exposed

The effete thugs of the elite MSM have again suffered a unanimous defeat in the appeals court.

The New York Times, whose reporter is a target in the case, cannot bring itself to disclose that the Appeals Court ruled against its frivolous claim, unanimously. Instead, this tortured language -- anything to avoid using the "U" word:

Seven judges participated in yesterday's decision, which noted only that a majority of the court's active judges had not voted in favor of a rehearing. Two active judges did not participate, for unexplained reasons. One judge, David S. Tattle, published an explanatory concurrence. None of the judges noted a dissent.

***

Bummer likes a free press. Bummer likes a press that can be a conduit for whistleblowers, in government and industry. Bummer understands that a free press and whistleblowing will be seriously impacted if the powerful forces that are attacked are able to punish the reporters via criminal indictment. Bummer also understands the argument that a reporter's sources may be less willing to provide information, if there is a credible threat that the reporter might be compelled to reveal the source, someday.

But the "chilling of my sources" argument is a fake, emotional non-issue here, and the effete thugs of the MSM, who have enjoyed a perception of complete immunity, know it (like some punk UN sub-diplomat who double parks his car with diplomatic license plates for 2 hours in a rush hour traffic lane, so that he can have a smoke and a cocktail before heading home to his Stateside mistress). What is at issue is whether there exists ANY third party (like a judge) with the power to supervise abuses of the strong 1st Amendment rights of the press.

Of course there is. Our whole system relies on checks and balances....

Lawyers have privilege with clients, but courts and the bar can pierce the privilege when fraud is involved. Doctors have privilege, but courts and the state medical board can pierce the privilege when fraud is involved. Ministers have privilege, but courts can pierce the privilege when fraud is involved. Reporters have privilege, but ___ can pierce the privilege when _____ is involved.

This one ain't hard. Really.

What is technically at issue here is whether a judge, with prima facie evidence of a felony, can issue a subpoena to a reporter. That's this case. This detail is the heart of why the MSM's "absolute immunity" demands are not credible. In theory and reality, it will be months, and likely years, before a reporter would ever be compelled to appear in response to a judge-issued subpoena. By then, the "story" - the whistleblowing - has occurred. The claim that a whistleblowing expose will be halted by sinister political or business forces is false -- unless such forces have paid off the judge. But bribing of judges is a fake issue. The related claim that the threat of future exposure of the source will cause the source to clam up is also false. A source that breaks a legitimate story will be a hero, not a villain. A reporter who breaks a legitimate expose will win a Pulitzer, not an indictment.

But a source that knowingly floats forged or libelous material? Or a reporter who knowingly traffics in such? Of course they will be forced to think twice, before they do it. I'm in favor of that. (Remember Mary Mapes and Bill Burkett?)

What will happen (we can only hope) is that fraudulent "sources" - spin meisters - will be chilled, because they will know that their false statements in support of a false story might come back to haunt them. What will further happen (we can only hope) is that reporters who are gaming the system by seeking and/or failing to vet fraudulent sources ( Mapes and Burkett) will be chilled from doing so. That is exactly the 'balance of chill' needed. Legitimate sources and legitimate reporters - by which I mean ones not engaged in fraud - will be unaffected by it all.

And if a reporter, and/or the source, is forced to stop for 3 minutes and think, "Hmm..Am I committing fraud? Am I stepping over the Sullivan case's 'actual malice' line?," then good, that is exactly the required analysis, and the burden, that other Privilege Holders in our society must engage in. Weclome to adulthood.

Reporters and the Press, who enjoy the benefits of a strong (yet limited) immunity, must accept the tiny burden that goes with it - "Don't Use the Privilege To Further a Fraud."

This one ain't difficult. Don't believe the arrogant, effete thugs demanding absolute immunity. Absolute immunity corrupts - absolutely.

Johnny, Turn Off That Radio... I Don't Care Who These "Beatles" Are.

Brian Anderson explains today in the L.A. Times why Liberal Talk Radio will not be successful in the near future. His thesis is that the audience for Liberal Radio is very small. Why? Because:

- Left political correctness prevents Liberal hosts from being entertaining. Basically, Left Radio is dry and not funny.
- Many of the Left's core audience are ethnic, and are already served by niche radio. Volvo-driving C-list celebrities' endless talk show drivel simply cannot compete with their would-be listeners' more culturally relevant urban radio.
- Right Radio gets a daily supply of fodder in revealing that day's left bias of the MSM; Left Radio (currently) has no such daily flow of material, other than to rail against Bush, which gets unfresh, quickly.

Anderson then notes that some on the Left want to silence, or neutralize, the Right Radio phenomena, via government-mandated "equal time" under a "Fairness Doctrine."

Personally, I'd be fine with that. Not in a political sense (of course), but for the pure entertainment. Because by extension, I would howl with laughter if the front page of the NYTimes, and every AP Wire story, had to carry a real-time rebuttal in the adjacent column. The Left MSM elites would implode. Of course, it will never happen.

Basically, I agree with Anderson. He has deconstructed what I believe to be a truism, which is that in the current political environment, the Left's message (as it relates to radio) consists mostly of ad hominem demonizing the Right. (Break that down: They cannot parody themselves, due to PC; their speakers and audience is white liberal, hence they can't use the "N" word; and they've been the excuse makers for the debacles of the MSM the past year.)

And that's why it just isn't very entertaining, and why in a consumer-driven market, it won't get much notice.

A Penny for VDH's Thoughts

When I was a kid, I collected coins. Buried on the penny were the initials, "VDB," an enigmatic reminder that a Victor D. Brenner was the designer of the Lincoln bust.

Decades later, the initials "VDH" have begun to assume almost VDB-like stature. Victor D. Hanson continues to exhibit a post-9/11 insight that you'd think would require decades of hindsight. His latest is a must read, but chew this piece of mad VDH Science:

"Have we forgotten that ... the present loudest critics [of the pre-emptive, Iraq-based anti-terror war] had plenty of chances to leave something better than the mess that confronted the United States on September 12? Or that at a time of war, it is not very ethical to be sorta for, sorta against, kinda supportive, kinda critical of the mission — all depending on the latest sound bite from Iraq?"

VDH then walks through past Mideast policies, classified as Realism, Punitivism, Bribery, Laissez Faire and the New Americanism.

On Realism: "These people are either crazy or backward, and usually both. We are interested in them only to the extent they pump oil and deter Communists."

On Punitivism: "We bomb, send a message, and then leave — swatting the hornet’s nest and then staying clear when the stingers buzz out from the hive. ...Nothing is as dangerous in war as striking but not defeating an enemy, showing contempt without the real ability to humble and humiliate him."

On Bribery: "We have given somewhere around $57 billion in aggregate aid to Egypt.... That Mohamed Atta and Dr. Zawahiri came out of Cairo is logical rather than exceptional, as [are] ...rumors of illicit weapons programs."

On Leaving Them Alone: "September 11 was the wage of decades of American appeasement and neglect — a pathological Middle East left alone to blame others for its own self-induced mess...like a spoiled child allowed to act up because it was incapable of serious mature behavior and because the ensuing tantrums were not worth the messy efforts at remediation."

On the New Americanism: "We’ve seen some very strange things since this war started on September 11. But nothing is quite as odd as the past architects of failure weighing in ...as the Bush administration finally sets right three decades these people’s flawed policies."

Pax Americana, mon vieux.

I Told You. And You Didn't Do It, Did You?

I told you to short the Dow.

You didn't do it, did you?

Well you missed the window. Listen up, next time.

Um....Duh

AP Item:

The Oregon Supreme Court on Thursday nullified nearly 3,000 marriage licenses issued to same-sex couples by Multnomah County a year ago, saying a single county couldn't take such action on its own. The court said ...the county had no authority to issue licenses to gay couples.

So I guess the U.S. won't be pulling out of Iraq, as a result of the Marin County Board of Supervisors passing that resolution demanding a withdrawal?

And Maxine Waters can't tell Condi Rice what diplomatic ventures to pursue?

A Lucid Leftie

BummerDietz is a moderate. He infuriates Lefties, and Rightwingers, equally.

Loony Lefties are more fun to pick on, though, because they tend to carry pretensions of intellect more so than Cultist Righties. Hence, they are more satisfying to take down.

Since I have skewered Loony Lefties so robustly for the past 6 months, let me give some kudos to a Leftie. NY Times Op/Ed Columnist Nicholas Kristof, who almost inevitably toes a quaint dogmatic socialist/liberal line, today breaks out of his fenced pasture and pens a poignant, spot-on analysis of the public's attitude towards the "Press." It is difficult enough to formulate and communicate insights into our world; it is even more difficult to analyze oneself, yet Kristof absolutely nails it.

Kudos to Kristof for his piece, "A Slap in the Face." Frankly, I'm too lazy this morning to properly edit it with the appropriate "...'s" -- so just note, I have significantly cropped the full article.

Read the whole thing, it's good:

A Slap in the Face by Nicholas Kritof

"...[T]he climate for freedom of the press in the U.S. feels more ominous than it has for decades. It's crucial for us to reflect on why this is happening now - and a major reason, I think, is that we in the news media are widely perceived as arrogant, out of touch and untrustworthy. Public support for the news media has all but evaporated. A recent report from the Pew Research Center, "Trends 2005," is painful to read. The report says that 45 percent of Americans believe little or nothing in their daily newspapers, up from 16 percent two decades ago.

"The safety net for American journalism throughout history has been...it's been public approval of the role of the free press. Public approval is our life-support system, and it is now at risk.

"It's not just right-wingers who distrust the media these days. ...Indeed, it's a rare news organization that is trusted by more than one-third of the people in either party: the one thing Democrats and Republicans agree on is that the news media are not trustworthy.

"If one word can capture the public attitude toward American journalists, I'm afraid it's "arrogant."

"Unless we can recover the public trust, our protests about reporters' going to jail will come across as self-serving whining. And we'll wake up one day to find ourselves on the wrong side of history. "

Mommy, I'm Frustrated, Irritated and Exhausted By My Chores

English has inadequate words.

For example, English does not have a specific word that means, “ ---: The sense of social embarrassment and discomfort shared by members of a group, directed towards someone they observe who is engaged in anti-social behavior, where the actor not only fails to recognize how poorly his words or actions are perceived, but also mistakenly believes the group approves of his behavior, which delusion serves to further exacerbate the discomfort and angst felt among the group members.”

Now that would be a cool and useful word. Let's create it: "Booraise."

Not quite sure what my new word "booraise" means? Read the following NY Times Op/Ed. The essay is so not-funny, that I had the horrible realization that the writer might, in fact, be serious, and as such, readers are provided a look into a the mindset of a spoiled, borish socialist brat, pining for a return to the days when proletarian maid would clean up his domiciliary mess.
I was overcome with -- "booraise" -- upon finishing the piece:

Volunteer Workers of the World, Unite
By NICOLS FOX

Bass Harbor, Me. — IT began in the 1970's. Or at least that's when I became conscious of it. People began cleaning up after themselves in fast-food restaurants. I had been living abroad and didn't know about such things.... Cleverly, the restaurants made this choice not only easy but gratifying. Customers were given the sense of being good citizens or helping out the teenage minimum-wage workers who wiped off the tables.

I was never fooled. I knew what was going on. We were doing the restaurant's work and if we didn't we felt guilty. ... In fact, it was a manifestation of the Great Labor Transfer. Companies... were looking for other ways to cut costs and saw an entirely new pool of workers who didn't have to be paid.

...[C]uriously in a country so adamantly anti-Socialist, people began to take pride in doing it, and to look down upon those who still wanted to be served.

....A good part of the increase in productivity during the past two decades can be credited to the Great Labor Transfer. We've taken on more than anyone thought possible. But it can't last.

Someday, consumers will become passive refuseniks or revolt. Or they will simply collapse with exhaustion, unable to take on one more task. I don't know when that point will come, but when it does, expect a fierce downturn in the economy. Happily, it should be followed by an upsurge when companies have to hire people to do what we've been doing and everyone once again has money to spend.

For my part I'm frustrated, irritated and exhausted. And I don't think I'm alone.

Chips Fall on the Lying Jackies

I believe the Senator Mel Martinez is a liar. I believe he had full knowledge and intent regarding the "Talking Points Memo." I believe he, and his staff, were intentionally lying about being the source of the memo.

I hope that his opponent in the next election uses this transgression against him, and that the voters throw him out of office for it.

Mike Allen of WAPO is also lying. Like Eason Jordan and various CBS producers (like Mapes), he knowingly pulled a fast one, using a suspect document in a manner to attack Republicans, and then compounded the problem by lying about it. Lucky for him, the Martinez sourcing will likely deflect criticism, and Allen won't be fired.

We Don't Feel The Need To Read Them Books

I envy and admire the observations and writings of David Brooks, columnist for the NYTimes. I don't necessarily agree with all his opinions, but when I have an inkling about writing something, he always seems to have written it the next morning, and, of course, he actually knows how to think and write, and I'm just learning.

On a daily basis, I am amazed at the increasingly muddled, contradictory and "sufficient because they are my emotions" status of the policy and philosophy arguments of my friends on the Left. (Jeez....they were so damned good at it, 20 years ago...weren't they?) Nowadays, those conversations are infused not so much with logical arguments and linkage to The Meaning of Life, but rather with the concept of how my Left friends "feel" about something. Maybe it's just Hollywood. I float a Big Idea discussion about, for example, some issue of the day and its relationship to the good of the Collective, over time, versus the good of a certain individual, or small group. Y'know, classic stuff, the mainstay of political thought. And the response, within a minute, goes silly. "I just don't feel that Bush is...blah blah blah." or "In a world where oil companies start wars for profit, I just think.... blah blah blah." Perhaps it's the same frustration that people have when they discuss something with hard core Born-Agains -- the discussion just hits a brick wall, in 30 seconds. Because one side won't participate in a meaningful manner.

That's an odd development, in my daily little corner of the world: Highly educated professionals, who once were the most open-minded thinkers and discussers I could imagine, now pretty much reside in the "quality of discussion" category as the central-casting version of the stereotypical closed-minded, hard-core religious converts.

Brooks nails it today in his column, diplomatically asking why so many on the Left...well, are so unschooled in the "Classics", and not in the habit of debating the Big Thoughts. Excerpts (but read it all!):

...Conservatives have thrived because they are split into feuding factions that squabble incessantly. As these factions have multiplied, more people have come to call themselves conservatives because they've found one faction to agree with.

...In the early days of National Review, many of the senior editors didn't even speak to one another.

...It's been like that ever since - neocons arguing with theocons, the old right with the new right, internationalists versus isolationists, supply siders versus fiscal conservatives. The major conservative magazines - The Weekly Standard, National Review, Reason, The American Conservative, The National Interest, Commentary - agree on almost nothing.

... When modern conservatism became aware of itself, conservatives were so far out of power it wasn't even worth thinking about policy prescriptions. They argued about the order of the universe, and how the social order should reflect the moral order. Different factions looked back to different philosophers - Burke, Aquinas, Hayek, Hamilton, Jefferson - to define what a just society should look like.

Conservatives fell into the habit of being acutely conscious of their intellectual forebears and had big debates about public philosophy. That turned out to be important: nobody joins a movement because of admiration for its entitlement reform plan. People join up because they think that movement's views about human nature and society are true.

Liberals have not had a comparable public philosophy debate. A year ago I called the head of a prominent liberal think tank to ask him who his favorite philosopher was.... [O]n this subject he stumbled and said he'd call me back. He never did.

Didn't call back?

Please Make It Illegal for the Other Guy To Speak

San Francisco, to try to regulate blogging?

Gosh, do you think that maybe, just maybe, the Leftwing city workers might "enforce" a little harder against centrist and right-of-center blogs? If my unregulated blog were to be an advocate against, say, a mayor' s issuance of gay marriage licenses in violation of state law, do you think that maybe - just maybe - the City would try to shut me down (and charge me with a "hate crime")?

Ahh, the Left, the Left, what is to be done with the Left......the irony-free zone of the Leftist brain:

Historical irony: The seminal U.S. Supreme Court case of Yick Wo v. Hopkins, 118 U.S. 356 (1886).

In the 1880's, about 30,000 Chinese had moved to and lived in the San Francisco Bay area. Many Caucasian and Hispanic Californians did not like this influx of Asians, and as a result both the state as well as many localities began passing laws that specifically discriminated against them.

A San Francisco ordinance prohibited operating a laundry located in a wooden building without the consent of the Board of Supervisors; laundries in brick or stone buildings needed no comparable approval. By itself the law seemed a reasonable exercise of the state's police power, since the wooden buildings were vulnerable to the many fires that plagued San Francisco and other nineteenth-century cities. At the time, over 95 percent of the 320 laundries in the city were located in wooden buildings, and of these, two-thirds had Chinese owners.

The Board of Supervisors granted permission to operate laundries in wooden buildings to all but one of the non-Chinese owners, but none to the 200 Chinese applicants. A Chinese alien (who for over 100 years has been mistakenly identified as Mr. "Yick Wo"; in fact, his name is not known; "Yick Wo" is Mandarin for "Chinese Laundry"...- BummerNote) had operated a laundry in the city for many years, was refused a permit. When he continued to run the business, he was arrested and convicted under the ordinance.

The Supreme Court reversed the conviction, because the law was administered in a grossly discriminatory fashion. Yick Wo v. Hopkins is the first instance of the Court inferring the existence of discrimination from data about a law's application, a technique that would be used again in the 1960s to strike down statutes discriminating against Blacks.

BergerQuiddick - Guilt and Spin

Bummer has previously railed against Sandy Berger’s attempt to prevent the 9/11 Commission from seeing some Clinton administration notes that would blunt the accusations being made by John Kerry against Bush.

“No, it was all an innocent mistake,” was the spin, and the MSM went with it. No MSM mention of the obvious - that Kerry campaign advisor Berger was falsifying documents to try to affect the presidential campaign.

Today, Berger is pleading guilty. Yet the spin continues – the NY Times still pushes the following "inadvertent" spin drivel:

"Mr. Berger admits to compounding the mistake after removing the second set of documents on Oct. 2, 2003, the associate said. In comparing the versions at his office later that day, he realized that several were essentially the same, and he cut three copies into small pieces, the associate said. He also admitted to improperly removing handwritten notes he had taken at the Archives, the associate said."

Notice how the NY Times omits the critical fact – that Berger destroyed the documents by cutting them into little pieces with a pair of scissors. The NY Times cut out the scissors reference, in order to maintain the façade that this was “inadvertent.”

Let's see if I have this correct:

"Although Mr. Berger removed a memo, and then went back and fetched additional copies of the memo drafts, and then went to his office and sliced three of those copies into tiny bits - with a big pair of scissors from Office Depot, because his home shredder had a wiring short - it is clear that is was all just a misunderstanding."

OK, great, I've got it. And those Watergate burglars were just some drunks who just happened to stumble into the wrong apartment complex... .

***

Cheers to the WAPO - it reports the entire story and does not pretend that this was "inadvertent."