I don't necessarily disagree that the government needs some funding for some activities, but I'm looking at the dual taxation nature of having import duties and income/capital gains tax. Pay an import duty on the stuff, and then if you sell it (and she most likely intended to sell it since Liberace is dead and they closed his museum) pay a capital gains tax or pay an income tax on any profit. It strikes me as overly intrusive. It's kind of like the question I asked another freeper. If you're being mugged and the mugger already has your wallet are you morally obligated to tell him about the money in your money belt?
I am not at all saying the govey needs funding. I am saying that generally people who attempt to hide enormous amounts of cash, valuables, etc., at a border crossing, need to be caught and investigated for criminal activity that may affect the general welfare of the US populace. If ultimately, the person can prove it is legally their own, ok, pay the fine for not declaring, and move on. Hiding 10,000 diamonds smacks of something that is highly illegal, and probably stolen, converted from laundered contraband, etc., things that would be illegal, and affect other peoples lives.
Based on your dual taxation argument, I get it! I agree with you. Screw the govey and their taxation nonsense.