I've noticed recently on my personal blog that a couple commenters have been plugging Peter Hendrickson's Cracking the Code (CtC) anytime I mention taxation, so I figured it might be a good idea to address this and mention that I do not endorse the tax protester movement, for several reasons.
Here's a snippet of the last comment, written by someone who goes by the name "Redman," in response to a post yesterday in which I merely linked an article by Paul Craig Roberts explaining that Obama's tax plan is really an attack on the middle class.
All this commotion is just watering the lawn while the house burns down. Get the book, get the facts, learn what the law says and to whom it applies and stop this slavery.
Apparently I'm causing a "commotion" by linking to an article. Or maybe Redman is implying that Roberts's analysis itself is commotion incarnate. Either way, it's hardly an original sentiment because the first sentence of that paragraph essentially is the motto of Hendrickson's website, Lost Horizons. Full slogan: "Where real Americans help put Leviathan on a starvation diet, 'cause everything else is just watering the lawn while the house burns down."
Now, I really don't mind if people use my blog as a forum through which to plug books or other blogs. As long as comments pertain to the topic at hand and don't belittle or libel anyone, I'm pretty much cool with whatever. And I fully agree that taxation effectively renders us slaves to the omnipotent state. Anyone who doesn't realize that just isn't paying attention. However, I'm still not interested in buying what these guys are selling.
For starters, tax protesters worship at the altar of the Constitution, a document for which I have no affinity whatsoever. I don't buy into the argument that income taxes are illegal and/or unconstitutional -- I believe they are immoral, but that's a far cry from arguing that the government doesn't have a legal right to collect them. Sadly, it does.
Moreover, even if it is true that the feds shouldn't have a legal right to collect these taxes (for whatever reasons, constitutional or otherwise), the fact remains that government is the ultimate arbitrator in determining the outcomes of conflicts it provokes. Perhaps the majority of Americans truly are misled and could find Nirvana in this book, but the fact nevertheless remains that the state prides itself on initiating violence to evoke conformance, regardless of what its "laws" actually say. In other words, tax protesters need to convince federal judges of the merits of their arguments, not me. Maybe the majority of taxpayers really don't need to file income taxes -- I wouldn't know, I haven't read Hendrickson's book yet -- but the fact of the matter is, the feds believe we do, and that's usually what counts in the end. I didn't invent tyranny; I just oppose it.
Finally, I'm not necessarily interested in legally avoiding taxes; I'm interested in not being robbed in the first place. And I'm certainly not interested in taking on the federal behemoth alone, especially one that systematically reminds us it is determined to rule arbitrarily and in its own favor. Fighting a losing battle in immoral government courts (if almost every case involving tax protesters is any indication) and being sentenced to years behind bars, subsequently leaving my wife without a husband and my son without a father, is not my idea of making a difference.
What I am interested in, however, is helping everyone realize that taxation is theft. I would be willing to exercise civil disobedience, peacefully protesting immoral taxation and even risking temporary incarceration if that means raising public awareness. But don't expect me to be a martyr and die for the state's sins.
What I find truly intriguing is the CtC supporters' almost universal unwillingness to tip anyone to the central argument of this book, as if it's some big mystery. As Jim Ostrowski has asked in an LRC blog post on the subject, is it just all about selling books? If we're really on the same side in protesting taxation -- albeit using varying methods -- why all the secrecy?
Simply put, I would rather spend my time making a moral and philosophical case against taxation in general, arguing for the drastic reduction or outright elimination of taxes and ultimately helping to effect an ideological movement that will render the need for tax protestation moot in the first place.
As they say, nothing is so powerful as an idea whose time has come. Rather than fighting futile, self-sacrificial battles, our efforts would be put to much better use if they were used to effect a sea change in public opinion. Revolution is undoubtedly overdue, but without ideology on your side, your cause is doomed.
Comments
Absolutely correct! Taxation is theft, no matter how it's diced or sliced via the Constitutional advocates.
Thanks for the mention but for the record, I'm no tax protester. Secondly, I really enjoy Who's Your Nanny? and check it daily for new news. Concerning CtC, pls read the book and then judge it's content; you may be pleasantly surprised at what it contains.
We agree, taxation is theft. Why stand around and pontificate on the obvious while letting the evil Uncle Fedster steal from you because of your ignorance? Read the book a couple of times, check the FACTS, and act accordingly.
well...
Why make this case of mutual exclusivity? The fight has to be waged on more than one front, and since you are willing to sacrifice in one venue, that doesn't mean sacrificing in the other venue is necessarily any more painful than the former.
I just don't buy your argument here. It relies on a straw man approach to judging the actions of others to which you admittedly don't even possess knowledge to counteract.
Our founders exhausted every possible means of peaceful protest on technicalites as well as principle, as you can read in Patrick Henry's address, before escalating to ultimatum.
Drewzer-
I was BJ VanDuren's understudy for the Scarecrow in our 6th grade adaptation of The Wizard of Oz. Maybe I'm just repressed.
The Hendrickson followers don't tell you the theory espoused by the book because they can't. It's too obscure for most followers to understand (they just *know* it's true.) And for those who put the effort into understanding, it's too embarassing to repeat outside of their group (everything boils down to a silly definition of the word "includes.")
You may find you have more in common with the conscientious tax resisters than with the constitutionalist tax protesters. The former -- most typically pacifists, anti-war activists, and members of traditional peace churches like the Quakers, but also including a set of anarchists and libertarians who believe as you do that taxation is robbery -- use a number of techniques to resist taxation. Some of these techniques are illegal civil disobedience; others are legal methods of tax avoidance (such as reducing income below the income "tax line").
You can find lots of information about this crew of folks at NWTRCC (dot org) or at my blog ("The Picket Line") or by searching Wikipedia for "tax resistance".
ref.: Java,
HERE'S THE LIBERATING TRUTH IN A NUTSHELL: The income tax is a benign, Constitutional tax that simply doesn't apply to the earnings of most people; and the law, scores of United States Supreme Court rulings, and every other relevant authority all say so in no uncertain terms. Knowing that fact, along with how the tax works, how it can be misapplied, and what can be done when it has been misapplied is the difference between being an exploited victim of a decades-old scheme that is a national disgrace and being the sovereign citizen of the American republic that the Founders of this great country designed and intended for themselves and their heirs.
We not only need to eliminate the IRS who has been afforded the legal authority to harrass and intimidate those who are not part of the congressional clique, we need to clean house in Washington, D.C. Instead of taxing the CEOs who were only doing what the liberals were telling them to do--take it when they can--Barney Frank, Chris Dodd, Kennedy, Pilosi, Harkin, and other lifelong professional political schemers need to be brought to task, made to admit their misdeeds, and pony up. They need to take the money wage-earners worked hard to earn (so congress could steal it from us by way of the IRS) out of their own pockets and put it into the porkulous coffers--or return it to the victims of their theft (us). Unfortunately,the Franks, Pilosis, Kennedys, and other ultra-liberal crooks (and weak-jointed "moderates") are too strong and too many to let reason and personal choice reign. Only when the antiChrist Obama and his cronies are impeached and imprisoned will logic finally have a chance to reclaim our country. Taxation of income is amoral. Taxation of income with representation is reprehensible. But what do we do? Vote. Check. Write letters. Check. Voice our concerns in public. Check. Try to educate others. Check. Try to understand the other side. Check. As long as the foxes are running the henhouse, our creativity through the "enjoyment" of working for others will forever be buried under that proverbial basket. What else is there short of bearing arms?
Before I begin, in the interests of full disclosure, I am proud to consider myself a friend of Pete Hendrickson, he appeared several times as a guest on my radio show, and I am about to write an article analyzing why so many libertarians and freedom lovers seem to unable or unwilling to listen to his message.
I have not had the time to write it yet, but perhaps that is a blessing in disguise, because now I can include the views expressed in this article to the curious mix of anti-Hendrickson "arguments" that have made the rounds out there in the libertarian community.
I will warm up for the task by making a few responses and clarifications here on this board. I realize this thread is old, but an answer must be made anyway.
***
First, about this from Bothwell:
"I do not endorse the tax protester movement, for several reasons."
"Tax Protester" is a dysphemism. It is a loaded expression used to stereotype and negatively portray those Americans who, in any way, and for any reason, oppose, question, or even attempt to make sense of our current Federal income tax law.
It is really IRS terminology. Go to their website, and to Quatloos.com and you will see this term repeated over and over. Statist tax lovers invented and perfected it, just like it was Karl Marx who came up with the word "capitalism" to describe free markets and free people.
Anyone who uses this term generally supports the current tax system, though they may make a lot of loud noises and whine a lot about taxes. I cringe when I hear libertarians using this term, especially to describe Pete Hendrickson.
The reason is that term "tax protestors" describes people who are angry about the tax, don't like it, and even refuse to pay it. The closest these true tax protestors get to analyzing the law is when they say, as is their wont - "show me the law"(that says that their earnings are taxable).
These people may know that taxation is wrong, like Bothwell, but, also like Bothwell, they don't really know why it's wrong, and they've never done enough research to know. They mostly just posture and yell, but in the end, the government gets their money and/or puts them in jail.
There are some, like Irwin Schiff, Larry Becraft and others, who have done research to support their positions. They didn't do enough research, couldn't really support their positions legally, and were bested by the government in court. However, even these men don't deserve to be called "tax protestors."
Pete Hendrickson isn't protesting anything, he simply did a lot of research and made a discovery - which he is trying, at great personal cost, to share with other people who care about freedom. Trever Bothwell is supposed to be such a person, and it is more than a little disturbing to hear him using statist tax-cop terms to describe Peter Eric Hendrickson, whose book Mr. Bothwell admits he hasn't even read.
(I thought "examiners" were supposed to actually "examine" the things they write about - but I digress.)
Now that I have ranted on the improper use of inappropriate and pejorative terms such as "tax protestor," let me move on to the misunderstanding of Bothwell when he says "Apparently I'm causing a "commotion" by linking to an article."
No Mr. Bothwell, that isn't what the commenter meant - what he meant by "commotion" was simply all this talk of tax reform in general, and all he meant to say was that talking about fair taxes and all that other "tax reform" stuff is pretty much bullcrap when our whole statist society is crumbling around us. Not to mention that all these plans are constructed as "revenue neutral" which means that they don't shrink the size of government one iota. The Hendrickson angle is simply that true tax reform is right there for the taking already if we all just knew the damn law of the land.
Now to more specifics:
"For starters, tax protesters worship at the altar of the Constitution, a document for which I have no affinity whatsoever."
If we ignore the TP slur, we are left with a statement and link with a lot of truth. Yes, Hendrickson is a Constitutionalist. He does believe in it, and his position is partly based on it. Bothwell would have us believe that this is evidence against Hendrickson. He attempts to supports this with an excellent article on the Constitution, which seems to make the following claims:
1. The Constitution can't be so great, because it's failed to secure our liberty.
2. Some people opposed the Constitution in the beginning, and many Americans don't know that, or that many of the things those anti-federalists feared have come to pass, therefore...
3. The Constitution was a mistake.
Well, there is a lot of truth to what Bothwell says here. I agree that the Constitution has failed to secure our rights; however, it was clearly stated from the beginning that the Constitution wouldn't be enough by itself. The people had to be vigilant, and be ready to fight and die for their freedom - Constitution or no.
By the way, let's note that by his own admission, Bothwell is not such a person:
"I'm certainly not interested in taking on the federal behemoth alone,"
"being sentenced to years behind bars, subsequently leaving my wife without a husband and my son without a father, is not my idea of making a difference."
"don't expect me to be a martyr and die for the state's sins."
I think that these quotes are the words of a faux-libertarian - a coward who doesn't have the courage of his convictions. The founders of this country had families too, and they took all these risks Bothwell mentions - the risks that he is unwilling to take.
People who want to be free sometimes have to take those risks. Sometimes they even lose their families. Pete Hendrickson has a family too, and he is taking those risks. He is alone too, terribly alone, and for that matter it is largely due to the cowardice and intellectual sloth on the part of media people like James Ostrowski and Bothwell that he IS alone.
Should he quit? Bothwell would quit in Hendrickson's place – he admits it. Many men would, but not those who truly love freedom and truth. Some men, when they get the truth by the tail, simply will not let go. Through these men come humanity's greatest achievements. Should the Founders have quit when the British got rough?
Still, I admit that we may very well have been better off without the Constitution, but that is not the same as saying that it doesn't mean anything, or that it cannot be used to protect our rights. Here's the point - if there is some requirement in the Constitution – a requirement that if properly understood and applied, can reduce our tax burden or make us transfer less wealth to the government, and we're ignoring its existence - then that is stupid. And that is exactly what we're doing.
Failing to explore any way that a greater understanding of the Constitution could help people, and putting down those who study it, calling them “worshipers at the altar of the Constitution” and the like is distinctly unhelpful. It smacks of the post hoc fallacy, where it is assumed that since “we had the Constitution, and freedom was lost, therefore the Constitution is of no use to us if we want our freedom back.” This is throwing the baby out with the bathwater. Indeed, the odds are high that, no matter what form our government took, the same pattern would have transpired eventually.
As to this:
"I don't buy into the argument that income taxes are illegal and/or unConstitutional -"
Yeah, that's all very nice and good, but, Pete Hendrickson doesn't make either argument. If Bothwell had bothered to EXAMINE Hendrickson's claims he would have known that. Instead, he falsely characterized PH's position...again sounding much like an IRS agent.
Bothwell goes on – continuing to confuse the reader with statements like “government is the ultimate arbitrator in determining the outcomes of conflicts it provokes.” which is, I guess, supposed to be a real fancy way of saying, “you can't win, so don't fight at all.” I'm sorry but this makes no sense. By this logic, no one should go to court to defend themselves against any government charge really, because after all, the government “prides itself on initiating violence to evoke conformance, regardless of what its 'laws' actually say.” So... Bothwell appears to be saying that - even if you have the law right, you should knuckle under anyway?
It gets worse. He says “I'm not necessarily interested in legally avoiding taxes; I'm interested in not being robbed in the first place.” I guess I'm at a loss as to the difference between the two. If you don't legally owe a tax – isn't that both “legally avoiding” it AND “not being robbed in the first place”? I think Bothwell is either confused here, or he's trying to confuse.
For example, he says “Maybe the majority of taxpayers really don't need to file income taxes – I don't know […].” Again, this is a claim that Peter Eric Hendrickson would NEVER MAKE, because Title 26 Subtitle F Chapter 79 Section 7701 (a)(14) tells us “The term “taxpayer” means any person subject to any internal revenue tax.” So, you cannot be a “taxpayer” and then claim you didn't need to file taxes, regardless of the reason. Perhaps Bothwell doesn't know this; after all, he hasn't read the book or, presumably, the law either.
This is also apparently true of Jim Ostrowski, who Bothwell mentions in this paragraph:
“What I find truly intriguing is the CtC supporters' almost universal unwillingness to tip anyone to the central argument of this book, as if it's some big mystery. As Jim Ostrowski has asked in an LRC blog post on the subject, is it just all about selling books? If we're really on the same side in protesting taxation -- albeit using varying methods -- why all the secrecy? ”
Ok, now let's get to it. Mr. Ostrowski didn't want to hear the central argument in the book. The reason is that it took work, and it would have forced him to go against the Austrian position on income taxation.
I will try to do this in a nutshell, but it won't be easy.
First, understand that there are direct taxes and excise taxes. A direct tax is a federal tax on your head, on whatever you have. The Founders put it in their stupid Constitution that the only way such a tax could be levied is through apportionment. We don't do Federal direct taxes in America anymore.
An excise tax is a privilege tax – a piece of the action. If you are engaging in some kind of federally sanctioned, licensed, or otherwise federally created activity, then the Feds can levy an excise tax on that activity. The IRS will tell you that our current federal income tax is a direct tax. If you want to believe them, go ahead. However, the law and history are quite clear. Our income tax is an excise.
The problem is that our excise tax is being administered like it is a direct tax. How? Through all the definitions, forms, and information returns we are given, we volunteer that we are engaging in that federally privileged activities. A key part of
How does the 16th Amendment figure into all this? It doesn't really. We had an income tax ever since 1861, and the legal character of that tax never changed from then to now. The amendment just clarified a legal tax battle that was fought long ago and forgotten. The issue was over whether a tax on income derived from existing property could be sustained as an excise, when in that past, the Supreme court had ruled that a tax on property was a direct tax. The amendment simply clarified that income could be taxed, as an excise, without apportionment, regardless of the source the income was derived from. The amendment never changed the income tax from an excise tax to a direct tax. Nor did it say that income = everything that comes in.
It couldn't say that, because then the tax would change from a piece of the action, to a piece of all of everyone's action, which would mean it would no longer be an excise, but a direct tax. One cannot declare every activity that men engage in to be government sponsored “action.” Contrary to what Mr. Bothwell seems to think, this declaration has not happened. The evidence is clear. First in the Constitution, which delineates and restricts the two classes of taxation – direct taxes, which must be apportioned, and duties, imposts, and excises, which must be uniform throughout the United States. Please bear in mind that Article 1 Section 8 Clause 4 of the Constitution, requiring that direct taxes be apportion, was never repealed.
Second, in the seminal decision following the passage of the 16th Amendment, Brushaber V Union Pacific, the court stated “...the Pollock Case did not in any degree involve holding that income taxes generically and necessarily came within the class [240 U.S. 1, 17] of direct taxes on property, but, on the contrary, recognized the fact that taxation on income was in its nature an excise entitled to be enforced as such unless and until it was concluded that to enforce it would amount to accomplishing the result which the requirement as to apportionment of direct taxation was adopted to prevent, in which case the duty would arise to disregard form and consider substance alone, and hence subject the tax to the regulation as to apportionment which otherwise as an excise would not apply to it. ”
That clearly means that if an excise were to be openly enforced as a direct tax, it would have to be treated as one.
They went on to clarify that the “...confusion is not inherent, but rather arises from the conclusion that the 16th Amendment provides for a hitherto unknown power of taxation; that is, a power to levy an income tax which, although direct, should not be subject to the regulation of apportionment applicable to all other direct taxes. And the far-reaching effect of this erroneous assumption will be made clear by generalizing the many contentions advanced in argument to support it... ”
Jim Ostrowski, Ron Paul, Walter Williams, and many others think that our modern federal income tax system started with the 16th Amendment, and they are all clearly wrong. The game is simple. The character of the income tax is limited by the very definition of an excise tax itself. It's the activity that generates the receipts that determines if it's income or not. If it's government action, it's an excise and you owe the tax. Like if you work for the government, your salary is excise taxable, definitely. If you sell firearms, or some other federally licensed activity, you owe.
How do the rest of us end up owing? Someone submits an information return on us that says we received income, and we have to rebut it, or it will be assumed to be correct. Notice all the requirements for information returns? Notice how they've increased over the years? That is how we all become liable for the tax. How does THAT process work? Through custom legal definitions that mislead us into thinking that our activity is taxable when it isn't. Those same definitions are used to bully people into filing those returns on us.
For example: when you work for someone, they call you their employee. All it means to you is that you do work for the person and they pay you. Ahh, but what it means to the IRS is different. Title 26 Subtitle C Chapter 24 Sect. 3401 (c) states that “The term 'employee' includes an officer, employee, or elected official of the United States, a State, or any political subdivision thereof, or the District of Columbia, or any agency or instrumentality of any one or more of the foregoing.” When a law includes something, then what is not included is excluded. If commenter Java doesn't know this basic legal axiom, then he needs to go read up on how laws are written.
“Inclusio Unius est Exclusio Alterius is the latin expression of this legal axiom. Anyone can go read some laws and quickly realize that they are written exactly this way. The point about all these federal tax laws is that, in the final analysis, they hardly apply to anyone, but no one knows that any more because no one bothers to read the laws and the history. We all just fill out our forms and do what we're told. Back in the 30's, less than 4% of Americans filed federal tax returns. They've gotten much more thorough since then.
The way the system works is, whenever a company owner asks anyone in the accounting or tax industry, or the IRS, whether he has to withhold taxes or not, they will ask him if he has any employees. When he says yes, they don't instruct him on the fine points of the IRS code; they tell him the laws says he must withhold.
The amazing thing is that about 10 million bucks have been refunded to Pete and to those who have had the smarts to read the law and the guts to act on it. We are talking complete refunds of all federal and state taxes withheld, and social security and medicare too. It's time everyone stopped and took notice of this unprecedented phenomenon. Pete Hendrickson is the first person EVER TO DO IT. Now hundreds more have done it too.
No one has gone to jail yet, it's been over 6 years, and the refunds are still flowing. The government has now stooped so low and is so desperate, that they are trying to force Hendrickson to change his tax returns. Why would that be so important if all the government had to do is just cart the man off to jail?
No.
Hendrickson is on to something – something really big, and the silence and sniping of all these libertarian lambs is starting to really piss me off. Why don't you read the book instead of spreading a lot of disinformation, Bothwell? As to Ostrowski and Lew Rockwell, let me tell you something, the Austrians don't know everything, and when they don't know something, they act like little kids instead of learning about it. You can ask a man named Antal Fekete about it.
As a libertarian Examiner, I think a much better examination of this issue is called for, even if you do hate the Constitution.
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