Thursday 22 October 2015 – Two International NY Times articles capture my eye and imagination:
“The black hole in Starbucks’ tax strategy: Obscure London affliate is focus of EU regulators investigating illicit deals”
“Irwin A. Schiff, fervent opponent of income taxes, dies at 87”
It has been often said that the only two certainties in life are death and taxes.
Yet despite these certainties, most of us wish to deny our mortality for as long as possible and many folks will go out of their way to avoid paying taxes.
“Render unto Caesar the things that are Caesar’s, and unto God the things that are God’s.”(Matthew 22:21)
This phrase has become a widely quoted summary of the relationship between religious and secular authority.
The original message, coming in response to a question of whether it was lawful for Jews to pay taxes to Caesar, gives rise to multiple possible interpretations about the circumstances under which it is desirable for people to submit to government authority.
Some read the phrase “Render unto Caesar that which is Caesar’s” as unambiguous at least to the extent that it commands people to respect state authority and to pay the taxes it demands of them.
Paul the Apostle also states in Romans 13 that we are obliged to obey all government authorities, stating that as they were introduced by God, disobedience to them equates to disobedience to God.” (Wikipedia)
“Tax resistance is the refusal to pay tax, because of opposition to the government that is imposing the tax or to government policy or as opposition to the concept of taxation in itself.
Tax resistance is a form of direct action and if in violation of the tax regulations, a form of civil disobedience.
Examples of tax resistance campaigns include those advocating home rule, such as the Salt March led by Mahatma Gandhi, and those promoting women’s suffrage, such as the Women’s Tax Resistance League.
A tax protester is someone who refuses to pay a tax on constitutional or legal grounds, typically because he or she claims that the tax laws are unconstitutional or otherwise invalid.
Tax protesters are different from tax resisters, who refuse to pay taxes as a protest against the government or its policies, not out of a belief that the tax law itself is invalid. Tax protester claims have most prominently been made in the United States, which has a large and organized culture of people who espouse such theories, but have also been observed in some other countries.
Legal commentator Daniel B. Evans has defined tax protesters as people who “refuse to pay taxes or file tax returns out of a mistaken belief that the federal income tax is unconstitutional, invalid, voluntary, or otherwise does not apply to them under one of a number of bizarre arguments.” (Wikipedia)
Irwin A. Schiff was one such tax protester.
“Irwin A. Schiff, who built a national following by arguing that income taxes were unconstitutional and spent more than ten years in prison for evading taxes and for helping others to do the same, died of lung cancer on Friday at a hospital affliated with a Fort Worth federal prison.
He was 87.
At his death, Schiff was an inmate serving his third prison term, a 14-year sentence handed down in 2005.
Schiff sold more than 250,000 copies of six self-published books, including How Anyone Can Stop Paying Income Taxes, The Great Income Tax Hoax and The Federal Mafia: How the Federal Government Illegally Imposes and Unlawfully Collects Federal Income Taxes.
His writings became widely cited in the literature of the tax honesty movement and of right wing organisations challenging the legitimacy of the federal government.
Robert L. Schulz, chairman of We the People Foundation for Constitutional Education, which scrutinizes the constitutionality of government activity:
“Schiff acted on his beliefs and stood for tax honesty.
In a society where there is so much fear of government, and in particular of the IRS (Internal Revenue Service), he was probably the most influential educator regarding the illegal and unconstitutional operation and enforcement of the Internal Revenue Code.” (International NY Times, Thursday 22 October 2015)
Schiff may have spoken Truth to Power, but he paid for his convictions with both his freedom and his life.
So, as Power is difficult to combat without matching or superior force, some may try to avoid taxes by way of tax havens or tax loopholes.
A tax haven is a state, country, or territory where, on a national level, certain taxes are levied at a very low rate or not at all.
Individuals or corporate entities can find it attractive to establish shell subsidiaries or move themselves to areas with reduced or nil taxation levels relative to typical international taxation.
This creates a situation of tax competition among governments.
Different jurisdictions tend to be havens for different types of taxes, and for different categories of people or companies.
A study of 60 large US companies found that they deposited $166 billion in offshore accounts during 2012, sheltering over 40% of their profits from U.S. taxes.
Tax havens have been criticized, because they often result in the accumulation of idle cash, which is expensive and inefficient for companies to repatriate.
The tax shelter benefits result in a tax incidence disadvantaging the poor.
Many tax havens are thought to have connections to fraud, money laundering and terrorism.
While investigations of illegal tax haven abuse have been ongoing, there have been few convictions.
Lobbying pertaining to tax havens and associated transfer pricing has also been criticized.”(Wikipedia)
“When European regulators started digging into the tax practices of Starbucks, they asked a lot of questions…
Starbucks paid the Netherlands €2.6 million in corporate tax on a pre-tax profit of €407 million – less than 1%.
Tax avoidance is a sore point in the US where large companies routinely try to minimize their tax bills.
In Europe, these cases hit a raw nerve, especially in countries where citizens have been squeezed by years of austerity.
This issue stokes friction among member nations jockeying with one another for jobs and investment.”
(International New York Times, Thursday 22 October 2015)
So, should one pay taxes?
If not, how does one avoid paying taxes?
“Money provided by taxation has been used by states and their functional equivalents throughout history to carry out many functions.
Some of these include expenditures on war, the enforcement of law and public order, protection of property, economic infrastructure (roads, legal tender, enforcement of contracts, etc.), public works, social engineering, subsidies, and the operation of government itself.
A portion of taxes also go to pay off the state’s debt and the interest this debt accumulates.
Governments also use taxes to fund welfare and public services.
These services can include education systems, health care systems, pensions for the elderly, unemployment benefits, and public transportation.
Energy, water and waste management systems are also common public utilities.
Colonial and modernizing states have also used cash taxes to draw or force reluctant subsistence producers into cash economies.” (Wikipedia)
As much as I grumble when paying taxes, I want to believe that services I cannot or would not provide for myself or my community are being provided for by my and others’ tax contributions.
I may not always agree with how a government spends our monies, but governments are, in theory, if not always in practice, representative of their citizenry and acting on the citizens’ behalf.
Governments are a necessity unless we ourselves wish to take over what government is responsible for.
Interestingly enough there has been the odd individual who has taken up a banner and declared himself and his property a sovereign state onto its own.
This has been enough of a trend to even inspire Lonely Planet to publish a “travel guide” called Micronations: The Lonely Planet Guide to Homemade Nations.
“According to the 1933 Montevideo Convention on the Rights and Duties of States, a nation needs only four things to exist:
1) Permanent population
2) Defined territory
4) Capacity to enter into relationship with other states
The Convention goes on to claim that statehood is independent of recognition by other nations.
In what is known as the Declarative Theory of Statehood, if you meet the four above-mentioned criteria and say you are a counry, then you are a country, no matter whether anyone else agrees or not.
“Legitimate” nations of the world don’t care much for the Montevideo Convention, rather preferring to work within the rival Declarative Theory of Statehood which posits a nation has to recognized by a global community to be considered legitimate.
So what kind of a person wakes up, spits out bitter pills and decides that they are the self-appointed leaders of their own independent state?
In 1969, concerned about an oversupply of wheat, the government of Australia announced new restrictions for farmers.
Leonard Casley, a farmer from regional Western Australia, was gutted.
With thousands of acres of wheat ready to go, he was informed that he was only permitted to produce about 100 acres.
After a failed campaign to change the policy, Casley believed that there was only one option for him: secession.
According to an old English law, upon which Australian law is based, the government may not threaten a person’s livelihood.
The Hutt River Province officially declared itself a new country on 21 April 1972.” (Lonely Planet, Micronations)
Perhaps here is a solution?
If you are the government then you decide if and how you are to be taxed.
If you abide in a land not your own then the powers that be will feel compelled to tax you.
So, folks, lock your doors, make a flag, declare your independence!
Be prepared for the possibility that secession might not be accepted by the land you wish to secede from, but presevere!
And if you ever find yourself in the hamlet of Landschlacht by the shores of Lake Constance, look for the red and white underwear flag of New Zion (population: 2) on an isolated balcony, declaring that King Adam I is Lord and Master of a proud and sovereign state on what was once Swiss soil.
It’s good to be the King!