It's a common epithet these days: "Taxpayers are shareholders." You read it in online articles, hear it in the news, feel it reverberating in the air, see it in the bounce of people young and old who really have no idea about the truth.

Taxpayers don't own a single thing.

The idea that taxpayers are shareholders is a fraud foisted on the public by hucksters at the Federal Reserve and the Treasury. It's perpetuated by a myriad array of folk that includes purt'near everyone from the bum that shakes his fist at Wall Street to Comrade Barack – who also shakes his fist at Wall Street. Many of these people aren't malicious about it; they simply don't recognize the double speak for what it is. Hopefully my explanation will help them translate.

The logic goes something like this:

• The Treasury bought some shares of various publicly traded banks.
• The Treasury is part of the government.
• The government is a public institution, owned by "the taxpayers."
• Therefore, the Treasury and all it's assets are owned by "the taxpayers" too.

This logic is flawed, however, for several reasons that I detail below.

Taxpayers don't have rights or privileges

The constitution secures rights and grants privileges for people in two different classes. The first class is citizens, who are the constitution's primary concern. The second is every person, whether a citizen or not.

There is no constitutional basis, however, for the idea taxpayers are secured any specific rights or granted any specific privileges. The idea of "taxpayers" owning something is a chimera that politicians use to make people think that they have purchased something with their tax dollars. Of course, since paying one's taxes is compulsory, this type of purchase is hardly any different than "protection money" that a thug might require of a store owner for the service of not trashing his establishment.

The only reason that a taxpayer might have any right secured or privilege granted by the constitution is because he is also a citizen (or, for broader rights and privileges, because he is a person). Whatever ownership citizens might have over government, it has nothing to do with the fact that they happen to also pay taxes. This only makes sense when one considers that taxes are not required by the constitution. If congress suddenly repealed every tax in the legal code, nobody would gain or lose any more rights than they have right at this moment (whether the ability to protect those rights would be impaired is a question for another time and place).

What this boils down to is that, if government is owned by anybody, then it is owned by the citizens whom it was created to protect. Not taxpayers.

Government ownership != ownership by the people

Of course, government isn't owned by its citizenry. That is another myth propounded by pandering politicians. Government owns itself, and it has every intent on keeping it that way. Any belief otherwise is simply that – a belief, not founded in reality.

Government might have a responsibility to the people; it might be obliged to do (or claim to do) certain things for the people. But there is no real level of ownership, at least not in the sense that is implied when people state that government is "owned" by the people. Government is an entity unto itself.

For those who might question the government's status as an entity, one only has to look back to a 2005 Supreme Court decision called Johanns v. Livestock Marketing Association. In this case, SCOTUS, in it's infinite wisdom, ruled that the government has a right to free speech, and that it could even charge a subset of people/groups to pay for the dissemination of that speech, even when those people/groups disagreed with the speech for which they are forced to pay. (Specifically, cattle owners were required to pay for those stupid commercials that have the tagline "Beef. It's what's for dinner.") These people/groups were taxed in a targeted, specific manner against their will, and yet had no control – no ownership – over the product created with their money. Likewise, the general taxpayer has absolutely no control over what the government does or has.

TARP is not funded by the taxpayers

Another logical error people make is that the government used taxpayer funds to lend money to banks. It's a reasonable mistake, since the government tells people that they used taxpayer funds. But they didn't. So, where did the money come from?

Nowhere.

The Treasury is an ironic term: It doesn't actually have any treasure. Whenever it needs money, it snaps its fingers and voilá! money appears out of the thin air.

Since the money sprung from Geithner's fingers like Athena springing from the head of Zeus, it's fallacious to say that taxpayers have any right to the shares of banks purchased with that money. Perhaps future taxpayers will have some right to it, but even that claim is a little tricky, since the U.S. constantly runs a deficit that is unlikely to get smaller anytime soon.