The Confiscation of Wealth.

If you are a citizen of a Western country, you will undoubtedly have noticed a steady deterioration in the determination with which the police and legal authorities deal with crime and yet take an increasingly robust approach to charging penalties for civil offences.

Parking fines, speeding fines, TV license fines etc. are all the more common place in today’s society. From a rational point of view – it is entirely logical that as governments find themselves unable to pay their debts via normal taxation, they will become ever more efficient in creating more rules and penalizing the general public when they are in breach of them.

However, there has always been a common understanding that, no matter how petty the rule or outlandish the size of the penalty, you cannot have your wealth seized unless you have done something ‘wrong’.

That is why the recent New York Times article: “Law Lets I.R.S. Seize Accounts on Suspicion, No Crime Required” caught my attention.

ARNOLDS PARK, Iowa — For almost 40 years, Carole Hinders has dished out Mexican specialties at her modest cash-only restaurant. For just as long, she deposited the earnings at a small bank branch a block away — until last year, when two tax agents knocked on her door and informed her that they had seized her checking account, almost $33,000.

The Internal Revenue Service agents did not accuse Ms. Hinders of money laundering or cheating on her taxes — in fact, she has not been charged with any crime. Instead, the money was seized solely because she had deposited less than $10,000 at a time, which they viewed as an attempt to avoid triggering a required government report.

“How can this happen?” Ms. Hinders said in a recent interview. “Who takes your money before they prove that you’ve done anything wrong with it?”

The federal government does.

Whilst the fact that Mrs Hinders seems relatively benign about the matter and continues to soldier on providing her customers with honest Mexican fair, this case should be widely known and shocking in its precedent. In some countries, you no longer need to break any rules in order to have your wealth confiscated.

If this is the case, and represents the attitude of the IRS and the peers – surely the logical response is to continue to follow the rules but to also start placing one’s wealth outside of their grasp just to be on the safe side?