Texas plane suicide tax-protester ties back to IBM’s conniving in Washington.

This one surprised me from the New York Times.

It turns out that Joseph Stack, the troubled tax protester who flew a private plane into a government office in Austin, Texas, had a beef with a provision of the American tax code (IRS code) that was inserted because IBM, of all companies, wanted a tax break on its overseas operations!

The short of the immediate story is that Stack was a software programmer who felt that the IRS rules, which were very strict about whether a software programmer could be considered an “independent contractor”, were a thing that had been leading him to financial ruin. The rules had been put in place during the 1980’s, when it was felt there was some abuse in the provisions governing employees and independent contractors.

According to the article, this happened during the 1980’s pay-as-you-go era. Congress was looking to tighten up the “independent contractor” rules concerning software programmers, because many people (wrongly, it turned out) felt there were abuses with this. When people are employees, the government requires social security withholding and a whole bevy of other protections be attached to the work arrangement. If someone is an “independent contractor”, they are basically doing their own thing, and not subject to those rules.

Expats here in Japan know how much the Japanese play games with these distinctions, so it is no surprise that the same kind of thing happened (happens!) in America.

As a crackdown in the ’80’s, Congress made the test of being an independent software programmer very strict. And this was apparently in order to raise money for a tax break that IBM wanted on its overseas operations, worth $60 million a year at that time.

The law was sponsored by Senator Daniel Patrick Moynihan, Democrat of New York, as a favor to I.B.M., which wanted a $60 million tax break on its overseas business.

Under budget rules in effect at the time, any tax breaks had to be paid for with new revenues. By requiring software engineers to be employees, a Congressional report estimated, income and payroll taxes would rise by $60 million a year because employees had few opportunities to cheat on their taxes.

Sweet irony of this. I had just been talking about how IBM Japan and its American parent ignore rules put forth by the same Congress that it has been looking for big tax breaks from. I guess they are American enough when it comes to getting tax breaks from Congress, but not when the EEOC asks them to substantially answer an administrative charge!

IBM got its favorable tax treatment, and tens of thousands of software programmers got a tougher hurdle to prove that they were independent contractors.

The Times article says that the strict provision brought in no where near the money that the bill drafters thought it would. This means IBM got its nice tax break, but the rest of America’s taxpayers had to come up with the difference, since the “independent contractor” dodge in the software industry wasn’t what the Congress people thought it was.

The very Congressman behind the IBM tax break, the late Senator Moynihan of New York, even tried to reverse out the transaction, but to no avail.

Now, I feel sorry for the needless hurt Joe Stack caused. He killed at least one [other] person in his terroristic act. Usually, when we have problems with the laws, we don’t resort to turning small aircraft into lethal instrumentalities by flying them into buildings. So people of the Teabagger persuasion who look at this guy like a martyr or a hero are stretching it.

How would you feel if you were the family of the person Joe Stack killed in his attack? How was that any different than the 9-11 victim famiies?

But I will say this much: some things are out of control in America when it comes to Corporate Power and the Little Guy. And in so far as Joe Stack was “channeling” this frustration, it’s clear the way he felt. Even though his actions were nutty. (Frankly, however, I am surprised these kind of things aren’t happening even more in America, with so many guns and all. It just shows how restrained most people are.)

I don’t know if Joe Stack’s death is going to get Section 1706 of the IRS code repealed. But it should be disconcerting that the “zany nut” killers out there are starting to be very specific about the things they don’t like in our society. And it doesn’t sound so “tin foil hat” as much as actual grievances that push individuals over to the point of exasperation.

[Update: They actually have what he wrote on the net up still. It’s an interesting read, and makes you wonder how many others out there are looking at career difficulties that way.]

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