Taxing Times

It's that time of year again -- taxes are due. For many people -- those, apparently, who are happy to have paid too much tax to the government over the year in a kind of forced savings routine -- this is a time to look forward to refund checks and the additional consumerism they can create. For those like me who discover that -- yet again -- they just haven't paid enough on each paycheck, it is time to dig even deeper into one's pockets. However, for some, a band of dedicated crazies, this time of year is the season of the anti-Christ.

In ReasonOnline this month, Brian Doherty has an interesting piece about the folks of "We The People Foundation for Constitutional Education" who continue to believe that the US government simply has no right to demand of them payment of income taxes.

Americans have been protesting and avoiding taxes since before the U.S. officially existed. We are a nation born of tax protests. This tradition feeds the attitude that unites the serious, almost obsessed crowd here: the belief that they are the true patriots,staunch constitutionalists fiercely dedicated to the ideals that make America great. A radical transvaluation of values is going on right here in Crystal City. Far from being the very foundation of solid citizenry, acceding to the federal personal income tax is, among this crowd, an act of treason against what defines America: its Constitution and its "true laws" ...

The movement against the income tax has lately adopted one of the tropes that define an on-the-rise minority in modern America: Its members want to be called what they call themselves -- the "tax honesty" movement -- and not be slapped with the pejoratives that most people have known them by (if aware of them at all).

As Doherry points out these "cranks" have lost every single battle in every single court challenge they have laid against the government's income tax.

Never has any court anywhere -- much less the IRS -- accepted as valid any of the many arguments the movement offers for how and why there is no legal obligation for individuals to pay federal income tax. In fact, courts will fine you up to $25,000 for even raising them, insisting such arguments have been rejected so often by so many courts at so many levels that they are patently frivolous and time-wasting.

Of course, it doesn't help their credibility with me when they allow their conference to be lectured to by Mel Gibson's anti-semitic and Holocaust-denier father, Hutton Gibson, who gives "a rousing speech on the need to fight the New World Order to defend our traditional liberties and is cheered heartily. Many of these folks are not just "cranks" about the income tax.

In his role as general MC for the conference, [Bob] Schulz is clearly wearied by the obsessions of some of his audience members -- for example, the notion that hiring an attorney means abandoning personal sovereignty before the law, or that having a yellow-fringed flag in a room means you are under martial law. But he is generally polite about it, if in a pained way.

None of this would be an issue if we adopted the Jak King Voluntary Tax plan. This is the way I laid it out in June 2002:

Within a broader set of thoughts regarding movement toward a reduction in government, I have been sketching out my ideas for an altered tax structure. I thought I'd lay them out here in the hope that a debate is generated that will allow me to sharpen and focus my own thoughts.

[Note, although I am an anti-statist anarchist, I am also a pragmatist: I think there is little point in laying out idealistic end games without having some method of getting from here to there. The following ideas are a way of moving along that path.]

The basic principles for the tax scheme are that it should be essentially voluntary, and concerned with ensuring equal opportunities for all. Therefore, I would propose the elimination of all personal and corporate income taxes as they violate by their nature the voluntary aspect of taxation. I propose to replace the revenue with an all-inclusive sales tax on all goods and services with a few, well-defined exceptions (the figures below represent Vancouver costs of living and could be adjusted as required):

-- all non-prepared foods

-- shelter (to $12,000/year rent or the first $200,000 of purchase)

-- medical and dental services

-- educational services

-- financial services to $500/year.

The sales tax should be a single percentage across all categories of goods and services in order to reduce accounting and bureaucratic requirements.

My tax plan would also include a 100% estate or death tax. Those who approve of giving advantages to those who have not earned them but have merely acquired them through accident of birth (closet monarchists, all of them) can insert some other percentage into their model.

Finally, I would also grant the government revenues from criminal fines, all of which would be levied (above a certain minimum) based on the criminal's net worth. The purpose of this is to level out the cost of criminality (the current arrangement allows, say, the same $1,000 fine on a millionaire -- for whom it means nothing and therefore no deterence -- and a welfare gasper -- for whom it may mean starvation or worse.)

That would be it for government revenues -- sales taxes, death taxes, criminal fines. The use of the sales tax for the bulk of government revenues brings a great deal of volunteerism to the matter: The exceptions provide an important and necessary break for those goods and services which can be described as the necessities of life; above that, the more I choose to buy, the more taxes I choose to pay.

On the other side of the ledger, also to the good, the simplicity of the scheme allows for huge bureaucratic savings in both administration and compliance.

I have thought about this quite a lot since I first posted it, and I'm still very keen on the basic idea.