On Taxes

Taxes are not something most people joyfully or gleefully pay. They are not something that most people claim to benefit from. But people defend taxation for various reasons; they are voluntary or compulsory. Taxes are what some describe as the cost of living in a certain area or to enjoy certain services that this money is supposedly collected for. And then some say all taxation is theft.  Apologists will denounce anyone who dares to "cheat" the system and keep some of their own money. They are a guilty pleasure and an unseen control mechanism to a lot of people.

Tax Time is here and not too many smiles will be found, unless you work for the Government that is...

Individuals and companies, from the last day of January to the 15th of April every year, sit down to try and figure out how much of their money has been taken by the Federal Government and if they can expect some of it back or if they will be forced to "give" some more. The Federal Income Tax has been enforced since 1913 and ever since that time people living in this country have been required to pay part of their wages to support government programs and fund Federal Institutions. Trillions of dollars are taken from the paychecks of citizens before they ever see it.

Why are you defending theft?

There is a saying "Taxation is Theft". Some believe this is an error and that the statement is false in all degrees. But is it? Is taxation theft? The legal definition of theft is the generic term for all crimes in which a person intentionally and fraudulently takes personal property of another without permission or consent and with the intent to convert it to the taker's use (including potential sale). With that said, one can question if the pay of a man for his labor is his property of that of the government for which he lives under. Questions can arise if the man has voluntarily submitted himself and his wages to the seizure of his property or if under the definition of theft has been the victim of a crime. Since those persons outside of government employment are in the private sector and those persons have not submitted the wages of their labor voluntarily, but by threat of violence or imprisonment the definition of theft can be applied to the act of taxation of income.

"If, then, taxation is compulsory, and is therefore indistinguishable from theft, it follows that the State, which subsists on taxation, is a vast criminal organization far more formidable and successful than any “private” Mafia in history". -Murray Rothbard-

Those that are in Employment of the government, in whatever capacity and at whatever level, (federal, state or local) are the beneficiaries of these extorted monies as their paycheck.

It has been said that these government workers "pay their own wages because they are taxed also". This is a fallacy. As a person is taxed at a percentage of their income, a person cannot pay into their entire paycheck. If they paid the entirety of their own wages it would be known as volunteering or slavery.

Oliver Wendell Holmes Jr., American Jurist and Associate Justice of the Supreme Court of the United States from 1902 to 1932 is quoted as saying, "Taxes are the price we pay for a civilized society." This is a popular thought of those who I would say taxation is a guilty pleasure or who feels that their wants should be funded by public means extorted from individuals instead of private and voluntary contributions. The very nature of this statement brings to mind a incredibly different question altogether for me. "Do we have a civilized society?"  That is a question left for another time.

A society based on the theft of wealth cannot be a moral and civil society. The very action of theft is against civility. But in this thought, we can ask ourselves these questions.

Does the act of paying into a general fund benefit the individual outright as much as it would if he would have funded whatever it is by voluntary means?

Can the value of these institutions to the general public be in contest to the value by the individual?

If a man be forced to fund policies and departments that they find immoral, unneeded, or in conflict with their religious or philosophical beliefs.

Murray Rothbard writes in his work "The Ethics of Liberty" that the size of government can be directly affected by the coercive nature of taxation. If the State were to suddenly abolish all taxation and thereby fund their departments and programs through completely voluntary means the size and scope of government would dramatically shrink.

This should be and is touted as the goal of the Neo-Conservatives and Republican Party,but is in complete contrast to their actions and policies. The same can apply to Democrats and Neo-Liberals, as their policies and actions tend to be based more on helping people, excessive taxation steals the money from people they are attempting to help.  It robs businesses of capital and forces higher prices, unemployment and subsequent poverty.

Where does all of this money go?

The mainstream belief is that these monies go to pay for services and programs inside and outside the United States. That would be nice, IF IT WERE TRUE. What is not taught to most Americans is that all the money that is taken in the form of the Federal Income Tax is used to pay off a loan for the previous fiscal year’s budgets. Who is this loan from?  The Federal Reserve loans the US government money at an interest rate. They then sell this debt (or securities) to foreign and domestic banks and individuals. The US Government pays these notes of security to the holders upon payment to the Federal Reserve of its loan. Of course the Federal Reserve does not pay the interest earned to the holders of the securities and instead makes a profit from the transactions. Interesting that a private bank that holds an enforced monopoly on the issuance of money is turning large profits off of the debt of a nation.

You might be wondering why the US debt has skyrocketed in the past and why it is so astronomical now; that is the nature of the Federal Reserve System. Since all money the government, and by mandate of the rest of the country, uses is owed back to the Fed with added interest; and the only way to pay it back is to take out a loan the next year, it is inevitable that this debt is unpayable. For a better explanation, I would recommend the book The Creature From Jekyll Island by G. Edward Griffin.

Is it cheating to keep your own money?

There are Tax Apologists out there that will become irate when an individual or company is found out to have offshore or international banking accounts in order to skirt paying taxes. The idea that someone who finds a way to keep his or her own property from seizure is seen as a criminal or seen as the bad guy has never really made sense. It is the same as someone who sets an alarm on their car or home: they are protecting their property and assets. The keeping of their own wages or property is the essential goal of Tax abolitionists which is to free everyone of the burden of theft of wages. It’s baffling to think that anyone is against this, but I think the emotional and illogical thought people have is, " If I have to pay then so does everyone else." i.e. the fair tax. To be certain there is nothing fair about the Fair Tax, it is still funneling money away from commerce and savings and it still only applies to certain groups and individuals.

The Fair Tax advocates will debate all day long that their system is better than what we have now, and I will not disagree, however I will say this: it is far from an ideal way to handle things. The entire idea of collecting money to fund programs and departments that the original "victim" may not have voluntarily given to is still present. The idea that money is still being diverted away from private enterprise and given to a bloated, inefficient and expanding government hasn’t changed. The same idea that Rothbard stated is still there: if the department or program cannot be funded by voluntary means it should not be fit to survive on public funding. Much like private business, if customers do not value the product or service, the company will fail and cease to exist. In the opposite of public departments and government offices, there is no measuring stick or ruler to determine if the service is viable beyond the edicts of bureaucrats and politicians wants.

To name a few things that tax monies are used for that would most likely not be funded by voluntary means.

The NSA and its wiretapping programs- Seen as a violation of privacy by a majority, this office and its "service" most likely would fall.

Animal Shelters that euthanize animals- This is a partial subsidy most often and the shelter may or may not survive with voluntary contributions.

The Militarization of America's Police forces and the brutality that they commit on a daily basis-If these police departments were reliant on the surrounding communities support and contributions there would be less of a chance they would commit the heinous acts that they do. Killing family pets and even people are becoming everyday occurrences in America. Changing the way they are funded could force them to rely on community service and protection services without the God Complexes a lot of them have.

Calling on more taxation.

There is a growing movement in America, an added Tax movement. The Robin Hood Tax or The Wall Street Tax is the next big thing for gluttons for monetary punishment. This new tax would add tax onto Wall Street transactions. If any sane individual thinks that this would not have a detrimental effect on the Stock Market, they are gullible and economically ignorant. Any addition to transactions coming from Wall Street would hamper the degree and volume of daily transactions. This would have a negative impact on the formation and expansion of companies and corporations as they will stifle new markets and products. These new taxes, like all others, will be passed to the end consumers, YOU AND I. When a new tax or regulation is added to a transaction of a corporation, the owners of that company will want to reduce any interference in their ability to turn profits (after all everyone is after a profit). That is the reason most of us have jobs; to profit off of our skills and labor. The owners will pass their cost of compliance to regulation or the collection of new taxes down the line until it hits the product on the shelf where the end user, the consumer, picks up the higher price.

As an Anarcho-Capitalist, I understand that this is hard for some to understand and takes much more than a simple blog post by a relative unknown person for many to grasp the concepts I have laid out here. That is why I encourage further reading into the failure and immorality of taxation.  The works of Ludwig von Mises, Murray N Rothbard, Lew Rockwell and so many more are easily found online. Take the time and educate yourself. Learn and apply, it really is that easy.


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Taxing Voluntary Trade. It's what the government does best.

Did you know that businesses and individuals that use bartering to acquire products and services are held to rules from the IRS? The simple act of mutual trade between people is subject to oversight and increased taxation by the Federal Extortion Agency. So what are the rules and what are the penalties for not complying? Is there a way around the hand of government?

Just another way for the Government to steal wealth.

The IRS lays out a few things businesses should know before they mutually trade with others.

Barter exchanges.  A barter exchange is an organized marketplace where members barter products or services. Some exchanges operate out of an office and others over the Internet. All barter exchanges are required to issue Form 1099-B, Proceeds from Broker and Barter Exchange Transactions, annually. The exchange must give a copy of the form to its members and file a copy with the IRS.

Bartering income.  Barter and trade dollars are the same as real dollars for tax reporting purposes. If you barter, you must report on your tax return the fair market value of the products or services you received.

Tax implications.  Bartering is taxable in the year it occurs. The tax rules may vary based on the type of bartering that takes place. Barterers may owe income taxes, self-employment taxes, employment taxes or excise taxes on their bartering income.

Reporting rules.  How you report bartering varies depending on which form of bartering takes place. Generally, if you are in a trade or business you report bartering income on Form 1040, Schedule C, Profit or Loss from Business. You may be able to deduct certain costs you incurred to perform the bartering.

*According to the IRS website

All of this is a clear indication that the IRS thinks that whether currency is exchanged or not, the transfer of products and services is subject to taxation.

“In 1982, the IRS recognized barter as legal tender and barter exchanges as third-party record keepers, like accountants and banks. The exchanges must report barter income to the IRS on form 1099B”, says Karen E. Klein in a 2012 article for Bloomberg Businessweek.

Even though the government has taken this stance against voluntary exchange a free market system has come about. In an article posted to LewRockwell.com, writer Karen De Coster gives an explanation of a localized system of community barter. The Roanoke Valley Time Bank is a website devoted to help local individuals find help, services and other things on a system of barter and what the system calls “Time Dollars”. These dollars are obtained by helping or bartering some time, products or services to other members, time dollars can then be used on personal wants or needs, simply posting the job or product details of what is wanted and others barter their time dollars to help you. What a fantastic idea! What beautiful Anarchy this is!

 The mission statement for the Roanoke Valley time Bank is as follows:

“The mission of the Roanoke Valley TimeBank is to foster the well being of our community by providing a member-driven network of services that strengthens social bonds, encourages reciprocity, enhances our local economy, and builds on a  foundation of respect and equality.  Exchanges among members are recorded, honored, and rewarded through the use of "Time Dollars," a currency of equally valued services that empowers people to utilize their assets and enhance their lives, neighborhoods, and communities.”

Roanoke Valley Time Bank is part of a larger network of nationwide Time Banks.

This subject originally found its way into my brain via an article in a local newspaper by a tax preparer. He makes a point that though businesses and individuals are required to report these mutual trades very few actually do. I suppose others find this kind of theft undue and inhibitive to the creation of wealth or capital. In an age where one could seek out professional help through the internet on a voluntary basis, federal regulators try their hardest to punish cooperative help and to burden the individuals with compliance to unsavory rules and regulations.