Can We Put an End to Government Theft?

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Fri, Jan 30 - 9:00 am EDT | 4 years ago by
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Free Radical - Government theft

Two recent events suggest that the tide is slowly beginning to turn on government theft. And by theft, I’m not talking about taxes. I’m talking about the basic idea that what’s mine is mine to have and to use, and that the government doesn’t get to take from me simply because some bureaucrat thinks they can use my property better, or because police think a crime was committed but don’t want to be bothered to prove it.

You would think the idea that government shouldn’t steal would be as uncontroversial as the notion that citizens shouldn’t steal. Alas, it is not. Not only has government frequently engaged in blatant theft, but its actions have been legally protected by bad laws and even worse judicial oversight. But there are indications that change is on the horizon.

Though don’t get too excited yet, because at best we’re talking about small first steps in the right direction.

First, the good news. The Supreme Court agreed to hear a case that could have significant impact on property rights. It’s brought by California raisin farmers who were fined massive amounts by the government simply for selling their crop. You see, in America – the land of the free and the home of the brave – it’s rarely ever true that you can juts make a product and sell it. You must jump through hopes to produce your goods, then jump through more to sell them.

In this case the hoops were much more onerous and burdensome than simply registering or acquiring a license. A Depression-era regulation grants a board of bureaucrats the power to decide, in Soviet-style fashion, the proper product yield for a given year. They then force all producers to sell through government middlemen, who enforce the yield limit by siphoning off a percent from each farmer into a “reserve pool” that can eventually be either sold overseas for highly discounted prices or given away to schools for almost nothing.

This protectionist scheme hurts both consumers and, despite its intentions, producers.

It’s also unconstitutional, as the Fifth Amendment requires “just compensation” for government takings.

Raisin farmers were promised a return on their forced contributions, but over time saw ever dwindling returns. In 2003 the government confiscated 47% of their crops and provided zero compensation. Let me say that again. The government stole nearly half of all raisins produced without compensating farmers at all.

That was the last straw for Marvin and Laura Horne, who decided to start packing and selling their raisins without going through the government middlemen, which they believed allowed them to circumvent the reserve pool. The government, of course, disagreed. The USDA slapped them with massive fines and demanded payment for the raisins they kept out of the government’s thieving hands. The total approached a million dollars, which would essentially put the small, family-owned farm out of business.

Now after years of litigation and a few twists and turns, Horne v. Department of Agriculture is heading to the Supreme Court. The 9th Circuit – the most reversed of the circuit courts – ruled in favor of government theft and declared quixotically that the Takings Clause of the Fifth Amendment “affords more protection to real than to personal property.” In legal terms real property means land, while personal property is just about everything else.

It’s a distinction not justified by Constitutional jurisprudence.

When it hears the case later this year, the Supreme Court has the opportunity to breathe life back into the Takings Clause and make clear that the law does not allow for such blatant government theft.

The other bit of positive news comes from an unexpected source. As one of his last acts as Attorney General, Eric Holder recently announced new restrictions on civil asset forfeiture, which allows police and prosecutors to take money and property from citizens never convicted of a crime if they can plausibly argue a tangential relation of the property to a suspected crime. It is then put on the citizen to prove their innocence, or more specifically, the innocence of their property. And I kid you not, the government actually “charges” the property in question, which results in bizarre case names like United States v. $124,700 in U.S. Currency or Nebraska v. One 1970 2-Door Sedan Rambler (Gremlin).

Awareness of civil asset forfeiture and its abuse by police departments to rob Americans of billions of dollars ever year has grown significantly over the previous year. Building on the great work of organizations like the Institute for Justice, the Washington Post last year published an in-depth series on forfeiture abuse, exposing how police compete to see who can seize the most cash from innocent motorists and thereby bringing the issue out of niche policy circles and into mainstream consciousness.

In apparent response to this growing awareness, Holder’s order declared that “Federal adoption of property seized by state or local law enforcement under state law is prohibited.”

This is an important change because, as abuses grew over the years, some states moved to limit forfeiture. Unfortunately, local law enforcement thwarted those attempts at reform through use of a federal program called Equitable Sharing, which allowed assets to be seized through federal instead of state law, only then to be laundered back to the local authorities – minus a nice kickback for the Feds, of course.

Any move toward putting an end to this horrible practice is a major blow for liberty.

But it’s time for some cold water.

Now that there’s been some time for additional scrutiny, Holder’s move appears to be less significant than initial media coverage indicated. The order applies only to “adoption” cases, which are just a subset of the total Equitable Sharing program. And unfortunately, it’s a small subset at that. Jacob Sullum at Reason did the math and determined that “something like 86 percent of the loot that state and local law enforcement agencies receive through federal forfeitures will be unaffected by Holder’s new policy.”

That’s a far cry from the initial exuberant media assertions that Equitable Sharing was entirely coming to an end, and makes the move more symbolic than substantive. But symbolism matters, and often proceeds a broader shift in policy.

Unfortunately, President Obama’s nominee for new Attorney General, Loretta Lynch, is unlikely to build upon his preliminary reforms of the troubling program. The Wall Street Journal described her as “an enthusiastic grabber of private assets” during her tenure as U.S. attorney for the Eastern District of New York, and during the first day of her confirmation hearings on Wednesday, she responded to questions about civil asset forfeiture with the absurd claim that “the protections are there.”

The fact that the issue received time during her hearing is nevertheless evidence of movement in the right direction. As is the recent introduction of reform legislation in both the House and Senate.

Likewise, there’s no guarantee that the Supreme Court will rule the right way on Horne, though it seems likely. It’s still worth noting that it was almost ten years ago that the Court gutted the Takings Clause in Kelo v. New London, the infamous eminent domain case where the “public use” requirement for invoking eminent domain was expanded to the breaking point to include even transfers to private hands so long as the redevelopment promised nebulous public economic benefits.

Two of the five justices in the Kelo majority have since been replaced, though both were Democratic appointments replaced by the Democratic President Obama. But a lot can change in ten years, and the cases deal with very different types of takings. Saying that economic growth can satisfy the public benefit requirement, as the Court did in Kelo, is a far cry from accepting that zero returns on half of a farmer’s harvest satisfies the “just compensation” requirement.

Property and economic rights have been treated as the redheaded step-child of Constitutional rights since the New Deal. Neither of these two events will get to the root of that problem, which ironically enough originated from a single footnote. But that doesn’t mean they can’t make a big difference.

We already fork over large sums each year to pay for our bloated government. Is it too much to ask that the government not then be able to arbitrarily take from whatever remains without trial or compensation?

Don’t miss last week’s column: Will Conservatives Fall for the Carbon Tax Seduction?

Brian Garst is a political scientist, commentator, and advocate for free markets and individual liberty. He also blogs at and you can find him on Twitter @BrianGarst.

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