In 2013, the IRS drained every penny from the bank account of a Georgia small business owner, taking $940,000 of cash with no warning and no formal criminal charges. 

That small business owner was Andrew Clyde, who would go on to fight the IRS for his money, win election to the U.S. House of Representatives and lead a successful charge to reform federal civil asset forfeiture law. 

“I personally believe they thought I was an easy target,” Clyde said. “All they really wanted was money.”  

Clyde, who runs a small gun shop in rural Athens, saw most of his inventory cleared out in the wake of a gun-buying frenzy sparked by Obama-era gun control efforts. But the IRS turned Clyde’s successful year against him with accusations of suspected money laundering. Under civil asset forfeiture laws at the time, that single unfounded allegation was enough to justify the theft of nearly a million dollars by the IRS. 

The civil asset forfeiture process exists at the federal, state, and local levels. It allows government agencies like the IRS and various police departments to seize assets they believe to be directly or indirectly connected to criminal activity. But CAF cases are filed in civil court, not criminal. The burden of proof is on the defendant to prove a negative – that they are not involved in illegal activity – even if they are never charged with a crime.

Armed with the truth of his innocence, Clyde was able to successfully fight the IRS in a six-month battle for his rights. He rejected multiple settlement offers from the IRS – one of which would have returned less than a third of his stolen cash – and ultimately walked away with all but $50,000 of his hard-earned money back in his account. 

Clyde was fortunate to have the time and the wherewithal to continue a protracted contest with the government. But other victims of civil asset forfeiture struggle to regain their rightfully earned money from powerful institutions like the IRS. Since cases are filed in civil court, defendants have no right to an attorney. Low-income victims tend to retreat in the face of a lengthy bureaucratic process that can lead to tens of thousands of dollars in legal fees, often exceeding the value of the very item they seek to recover. 

These pervasive problems led Rep. Clyde to join with fellow Georgia Reps. John Lewis and Doug Collins to pass civil asset forfeiture reform at the federal level for the first time in nearly 20 years. Signed into law by President Trump in 2019 as part of the Taxpayer First Act, the Clyde-Hirsch-Sowers RESPECT Act allows property owners to challenge asset seizures at a prompt, post-seizure hearing. Before the RESPECT Act, victims would wait months or even years before their case could be heard by a judge. 

The law also curbs the power of the IRS to seize cash for the vaguely defined offense of “structuring.” Banks are required to report cash transactions greater than $10,000. But if an individual or business frequently deposits or withdraws lower amounts from their account, the IRS had broad authority to seize that cash for structuring. The two individuals after whom the RESPECT Act is named, Jeff Hirsch and Randy Sowers, were respectively deprived of $446,000 and $63,000 under structuring allegations. They only saw their funds returned after years of expensive, high-profile litigation. 

A 2017 report by the Treasury Inspector General for Tax Administration revealed that the IRS “enforced structuring laws primarily against legal source funds and compromised the rights of some individuals and businesses.” In fact, in a sample of 278 structuring cases, 91% of those investigations carried no evidence connecting the seized funds to illegal activity. 

The RESPECT Act codifies into law a restriction on forfeiture for currency structuring, permitting the practice only when the funds are proven to be derived from an illegal source or used to cover up illegal activity. 

“With the RESPECT Act finally becoming law, law-abiding citizens can rest easy knowing they no longer have to fight the federal government just to prove their innocence,” said Rep. Collins, who sponsored the legislation. 

Though this legislation specifically targets IRS civil asset forfeiture, much work remains to be done. The attempted theft of Andrew Clyde’s business revenue is just one example among thousands. At both the federal and state level, government agencies – especially police departments – retain sweeping authority to seize property with no warrants, no warning, and no criminal charges. In 2014, police departments seized more than $5 billion in property value from American citizens – more than every criminal burglary committed that year. 

Several states have since passed model legislation reforming the practice of civil asset forfeiture. Four states have abolished the practice outright, with Maine becoming the fourth earlier this year. Meanwhile, sixteen states require a criminal conviction for most property forfeitures. These laws substantially protect the rights of innocent American citizens from the whims of the government. 

Congress and the thirty states that have not yet enacted their own civil asset forfeiture reform – including Clyde’s home state of Georgia – should work to implement concrete and workable protections against government abuse.  

Expanded unemployment benefits that paid many people more for staying at home than they received at their jobs prolonged the struggling job market and reduced employment, according to a new National Bureau of Economic Research working paper.  

These findings suggest that the federal unemployment insurance programs, extended through September 2021 by Democrats’ American Rescue Plan Act in March 2021, have exacerbated the supply chain crisis and unstable economy Americans are experiencing today.  

The working paper, authored by Harry J. Holzer, R. Glenn Hubbard, and Michael R. Strain, studied the effects of the expansion of unemployment insurance during the pandemic (FPUC) and the expansion of who qualifies for those benefits (PUA).

Starting June 2021, 18 states opted out of these programs, allowing researchers to see, through comparison, how these benefits impacted employment.

The authors presented difference-in-difference and event study estimates showing that the benefits reduced employment. Specifically, states that continued to participate in additional unemployment benefit programs (FPUC and PUA) experienced a 0.8 percent higher unemployment rate in July and a 0.7 percent higher unemployment rate in August than they would have if they suspended benefits: 

“We use these estimates in a simple counterfactual exercise to examine what the unemployment rate and employment-population ratio might have been if the 24 states and the District of Columbia that participated in FPUC and PUA through September had instead opted out in June. In those states, workers ages 25-54 would have had an unemployment rate 0.8 percentage point lower in July and 0.7 percentage point lower in August. Employment rates would have been 0.7 percentage point and 0.6 percentage point higher in July and August, respectively.” 

Additionally, in states that terminated the program early, the flow of unemployed workers into employment increased by two-thirds: 

“Using Current Population Survey data, we present difference-in-difference estimates that the flow of prime-age unemployed workers into employment increased by around 14 percentage points following early termination, or about two-thirds the size of the unemployed-to-employed flow among control states during the February-June 2021 period.” 

Further, if every state had opted out of UI programs in June, the national unemployment rate in July would have been around 0.3 percentage point lower: 

“We construct a counterfactual scenario for the labor market under the assumption that all states ended FPUC and PUA in June. In this scenario, the unemployment rates in each of July and August would have been around 0.3 percentage point lower, and the employment-population ratio would have been 0.1-0.2 percentage point higher.” 

Importantly, the study also explains that there is no evidence to suggest that the expanded unemployment benefits increased Americans’ welfare, describing welfare implications as “ambiguous.” 

Despite ample, growing evidence that massive welfare programs have negative effects on employment, Democrats continue to push for these kinds of policies.

Even during high inflation and the supply chain crisis, Democrats focused on expanding welfare programs in their reconciliation bill such as “free” childcare, federal paid family leave, and converting the child tax credit (CTC) into a monthly refundable payment. The Democrats' CTC proposal did not have a work requirement even though the program would send cash to recipients. Finding and keeping a job is the best way for families to live comfortably and happily -- discouraging employment is neither virtuous nor fiscally sound. Clearly, these kinds of policies do more harm than good. 

Americans for Tax Reform President Grover Norquist appeared yesterday on “Varney & Co.” on Fox Business to discuss Democrats’ path forward to pass their socialist tax-and-spend plan with host Stuart Varney.

Norquist discussed recent comments by Senate Majority Leader Chuck Schumer (D-NY) that Democrats would split the massive multi-trillion dollar legislation into several smaller bills.

Norquist predicted that this strategy will not work and is a simple admission that Senator Schumer isn’t capable of getting the votes he needs to pass the entire package:  

“Well, it’s an admission that Schumer cannot put together a package that would get the votes of Manchin and Sinema and the rest of the Democratic Senate. So, I don’t think it works. At the end of the day, you have to put it all together to get a reconciliation vote, which passes with 51 votes – you need to have it all in one package. You can’t say, “Here are ten spending bills let’s vote for all of them separately to show how generous we are with other people’s money” and not include the taxes. At the end of the day, both Sinema and Manchin have repeatedly said in writing that they won’t change the filibuster. Unless you get rid of the filibuster, or bend it, or put a hole in it, you can’t pass those separate bills because Republicans will filibuster them…He’s trying to do something to look like he’s doing something.”  

Norquist also explained that Senators Joe Manchin (D-WV) and Krysten Sinema (D-Ariz) have different priorities when it comes to negotiating the spending plan, making it difficult to find a compromise: 

“Manchin and Sinema oppose different types of taxes. Sinema doesn’t mind massive tax increases on “pollution.” Manchin doesn’t want to tax energy, but he is willing to tax businesses and individuals. There isn’t a single Fortune 500 company in West Virginia so he can support all sorts of taxes he feels hurt larger companies. There are eight Fortune 500 companies in Arizona – Sinema is not going to tolerate raising the corporate rate, she said so. That’s why it’s off the table.”  

Finally, Norquist noted the many other issues that President Biden faces in the new year including COVID-19, inflation, and his failed, socialist agenda:  

“Well, his first year he didn’t fix COVID, he didn’t improve the COVID situation, even with the vaccines, so that was his number one claim to fame, that’s why he said he beat Trump. Then, he created inflation which had been 1.3% or 1.4% and is now going up toward Jimmy Carter territory. He didn’t pass the permanent massive spending bills to buy his constituencies’ favor for the next election. So now he’s in year two with a COVID problem that he was supposed to have fixed and inflation problem in which he “doesn’t know where it came from!” So he’s got a whole bunch of self-inflicted wounds and his to-do list is what we just talked about: massive tax increases on businesses and self-employed people, all new sorts of regulatory regimes… He’s now running as Bernie’s co-president.”

Broadening the power of the state to steal private property is now part of Mayor Lori Lightfoot’s unorthodox solution to rising crime in Chicago. Lightfoot has renewed her calls to pass to the Victims Justice Ordinance, which would give the city the authority to file civil lawsuits against suspected gang members and take property thought to be connected to gang activity. 

While addressing gang crime is a worthy focus, passing the ordinance would give the city broad authority to seize cars, money, and other private property with no warrant and without ever charging someone with a crime. 

Though Lightfoot paints the ordinance as an anti-gang measure, the definition of “streetgang member” is left intentionally vague to cover parents, caretakers, family and friends. All of these innocent parties would be left open to having their property seized by the police for reasons beyond their control. For example, the grandmother of someone associated with an alleged gang member could have her car taken if her grandchild simply had access to the vehicle – and even if it was never directly used in illegal activities. 

Contrary to Lightfoot’s claims, defendants in these cases would not have the right to an attorney. Since the suit is filed in civil court, not criminal, the defendants must bear the expense of fighting the city for the return of their property. Moreover, the proposed ordinance shifts the burden to the accused to prove that they are not involved in gang activity. The deck is automatically stacked in favor of the state. These high legal costs and burdens tend to discourage innocent victims from pursuing the return of their stuff – despite having never been charged with a crime.  

To her credit, Lightfoot took a decidedly pro-police stance during a recent speech on public safety. She asked for more officers, detectives, prosecutors, and federal marshals to combat rising crime, in a stunning turnaround from her “defund the police” pledge last year to cut $80 million from the Chicago Police Department budget. 

Instead of helping to fight crime however, her concurrent proposal to expand civil asset forfeiture seems more like the government taking the opportunity to get in on it. It would do little to reduce gang violence and would unfairly penalize innocent civilians with the arbitrary seizure of their cash and possessions, all without a single criminal charge. 

The power of civil asset forfeiture has been abused by many law enforcement agencies for years. In 2014, police departments seized more than $5 billion in property value from American citizens – more than every burglary committed that year. 

Some states have exemplary laws restricting the ability of government agents to seize private property without a conviction. The purpose of these laws is not to undermine the government’s ability to seize property from gang members, but to secure adequate legal protection for innocent individuals who are unfairly targeted and harmed by such practices. Sixteen states require a criminal conviction for most property forfeitures, and in four states, civil asset forfeiture is banned outright.

Rather than remove critical legal protections against government theft, Chicago should look to these twenty states as a model for reform and take action to protect its residents from government abuse. The government should stay focused on their responsibility to fight crime.