This looks about right
Payday Lending and Overdraft Protection | The Volokh Conspiracy
Back in 2007, the U.S. military was facing a problem. Soldiers, Sailors, and Marines were (and still are) awful with money. They were racking up massive debts, and scrambling to attempt to get their heads back above water. Bad credit became the #1 reason for security clearance denials. In order to attempt to dig themselves out, many servicemembers resorted to the ever-vilified payday loan. Members of the military are great targets for these loans, as they get reliable and predictable paychecks, and are pretty easy to pursue, locate, and collect from in case of default. The payday loan office became one of the staple businesses you’d see outside every military base (along with liquor stores, tattoo parlors, pawn shops, and strip clubs).
Of course, payday loans are notorious for having ridiculously high interest-rates, when measured on an annual percentage basis. Which makes sense, given that they’re typically targeted at people with bad credit. The higher the credit risk, the higher the interest rate. But simple logic has never really been the strong point of the top military brass. They were outraged that their soldiers were being “victimized” by these “predatory” lenders. Something had to be done!
How did they decide to solve this problem? The same way the government always solves problems. By declaring certain voluntary transactions to be illegal. They passed the Military Lending Act, which in essence, made it illegal to offer a payday loan to someone in the military (in reality, it capped the interest rate you could charge on loans to servicemembers, but capped it at a rate significantly lower than most payday loans typically charged). Problem solved, right?
Of course not. Prohibition never works. Like every other ban on voluntary economic transactions, it did more harm than good. As I’ve discussed before, you cannot possibly improve someone’s conditions by making a list of their various options, and taking away the option they actually chose. What was supposed to be a victory for the troops against the evil lenders who wanted to exploit them has simply caused servicemembers in financial distress to be forced into even worse options to obtain short-term cash.
Now that the payday loan office is unavailable to them (for their own good, of course), many have resorted to simply overdrafting their checking accounts. What do you know – it turns out the fees associated with that are pretty high – possibly even higher than the interest on a payday loan. This one is going to be a lot tougher to solve. Then again, when all the government has is a hammer, everything looks like a nail.
You see, overdraft fees are another common enemy of the anti-banking agitators. Calls for them to be capped (not just for the military, but for everyone) are rather common. Would this solve the problem? Of course not. It would just eliminate one more viable option (as well as causing banks to increase other fees to compensate, and/or eliminating a useful program that many people use responsibly for emergencies only).
If we were taking odds on how Congress and the DoD will respond to this phenomenon, the smart money would be on yet more restrictions and regulations on voluntary economic activity. Economic knowledge is severely lacking in the government in general, and in the military specifically. It’s an autocratic culture that presumes any problem can be solved by barking orders at people. But these problems won’t go away with more bans. People who need short-term cash, military or civilian, will find a way to get it. Making it harder will only serve to force them into even worse situations than before. As always, the best way to help those in need is to give them more, not fewer options.
P.S. A ban on payday loans specific to military personnel is in fact legally enforced segregation. Consider what the response might be if a business, even a commonly hated and vilified business, decided on its own accord, that it would refuse to serve any customers who happened to be in the military. Even if they justified it in the name of patriotism and protection, the negative PR would be tremendous. Imagine a smoke shop refusing to sell cigarettes to military personnel (because it’s bad for their health, and our soldiers deserve to be protected). The public outrage over this “discrimination” would be off the charts. The business would likely be sued and forced to reverse such a policy. But when it’s the government forcing businesses to discriminate (as was done in the Jim Crow south), people just seem to shrug it off.
I’m very very late on this one. The idea for this originally came to me a few weeks ago back when Obamacare was still dominating the headlines and 
Dude, Where's My Freedom? 
H&R Block – Subversive Libertarian Propagandists?
I love tax season, and not just because of the dancing sign-wavers wearing Statue of Liberty costumes on the street corners. Tax season is almost certainly the easiest time of the year to be a libertarian, as for a few short months, the general public suddenly remembers that the government has been stealing from them. Those who attempt to do their own taxes become aware of exactly how much money has been taken from their paychecks. People are often surprised, and not typically because the amount is just so small! Despite the American tax system being intentionally designed in such a way as to minimize the likelihood that the average citizen will ever think about it, this is the time of year when some people actually do.
It’s also the time of year that we see commercials for tax services, specifically for H&R Block. In recent years, they’ve adopted a somewhat interesting advertising strategy based on the premise that without the help of a professional, you are likely to pay more in taxes than legally required. Their most recent commercial claims that the government overcharged Americans a combined total of $1 billion last year. I’m not sure how they arrived at that figure exactly, but it’s kind of staggering to think about.
As far as I know, H&R Block primarily markets itself to middle-income families and working professionals (the truly wealthy who need expert tax advice are likely depending on personal tax attorneys and accountants). The implication of this ad is that the government has overcharged you. They have “your” money, and H&R Block can help you get it back. While it doesn’t go as far as to suggest that taxation in general is illegitimate, it certainly is openly suggesting that everyone would benefit by paying as little in taxes as possible, taking advantage of every possible deduction, subtraction, and loophole. There is no inkling of Joe Biden’s notion that paying taxes is “patriotic,” nor the slightest insinuation that any individual taxpayer might not be paying their “fair share.”
I consider this to be a somewhat subversive message, because it certainly runs contrary to what we’re often told by the political class – that taxes are a virtue, that true patriots love paying them, and that most people, especially the wealthy, absolutely wouldn’t mind paying a little bit more than is absolutely necessary. If any of that nonsense were true, H&R Block wouldn’t exist. They certainly wouldn’t base their marketing strategy around the premise of “Paying as little in taxes as you possibly can is such a great thing, you should pay us to help you do it.”
It’s also the kind of commercial that just might get people thinking. It might get someone to consider some questions, questions which may lead to more general contemplation about the government and the income tax system as a whole. Questions such as: “Why is the tax code so complex?” or “Why is it okay for someone to commit an error on their taxes in the government’s favor, but if you commit an error in your favor, you are heavily penalized or possibly even jailed?” Thinking about these issues is a small first step down the rabbit-hole of rejecting government authority entirely.
The ultimate irony in all of this is that, if you’re opposed to the income tax entirely, H&R Block is far from your ally. They themselves depend on the tax code being insanely complicated in order to generate potential customers. Any political proposition to “Put the IRS out of business,” would almost certainly put H&R Block out of business as well. They’re walking a very thin line here. They want Americans to possess a strong desire to obtain the highest possible tax refund, but at the same time, they certainly don’t want Americans to despise the tax system to the extent that they might actually vote for any meaningful reform. In a free market, H&R Block simply wouldn’t exist. They have a very bizarre love/hate relationship with the IRS in the sense that they are adversaries, but only a little bit. They’re like football players on opposing teams who shake hands and go out for a beer after the game.
The fact of the matter is that even if you believe taxation is a moral good, $1 billion in “unclaimed deductions,” (or whatever you want to call it) means that the government is stealing from the public at large. This is money that the government took out of your paycheck that you do not actually owe. In any other context, this would be a criminal offense. The notion that the onus is on you to correct them is absurd. If a business was found to be intentionally and repeatedly overcharging its customers and leaving it up to them to request refunds, the government would absolutely fine the owners and threaten them with length jail time. The public at large would be outraged at such a dishonest practice. And yet, when the government does it to us, we just sort of collectively shrug our shoulders and say, “Well, that’s just the way it is.”
But it doesn’t have to be. We don’t have to live under such a ridiculous and tyrannical system. Of course, to avoid this problem, we have a couple different options. One is to go to H&R Block and pay them a bunch of money, hoping that they might be able to find a couple poorly-worded grey areas in the tax code that you can take advantage of in order to save a few hundred bucks. Or, we can change our worldview entirely, and promote a society founded on voluntary cooperation, at which point all the government bureaucrats, IRS agents, and the H&R Block code-talkers will have to get jobs that are actually productive to society. Forget getting our “billion back.” I think we should aim a little higher. In 2012, the federal government alone took in over $2.4 trillion in tax dollars. Let’s get our $2.4 trillion back, America!