Pay Your Taxes into Escrow Rather Than to Government

Governments spend a lot of time and energy, and hire a host of political scientists and other such clergy, to try to convince their subjects that paying taxes is not only mandatory, but that it’s honorable, dignified, and charitable, and that conversely, failure to pay taxes is underhanded, shady, and selfish.

So governments and other critics of tax resisters and tax resistance campaigns are quick to deploy this available propaganda lexicon in their counterattacks. This can have the effect of putting the resisters on the defensive, message-wise. One way some resisters and resistance campaigns have tried to defuse this is through the use of escrow accounts.

The idea here is that instead of paying taxes to the government, the resister or resisters will pay their taxes into a special account that they will relinquish to the government at a future date if the government meets their demands. The message conveyed by this is that “we are willing to pay our share of money for the government’s upkeep — we’re not just keeping the money for ourselves — but we’re not going to do so until the government shapes up.”

Here are some examples of tax resisters and tax resistance campaigns that have used this technique:

  • In , Samoan chiefs met and decided to pay their taxes not to the German imperialist government, but to officers who were authorized to hand the money over to the Germans only if “a satisfactory settlement has been arrived at.”
  • In , a group of Catholic war veterans in Queens, New York began paying their property taxes into an escrow fund that they said they would refuse to turn over to the local government until it fired a Communist Party member from his post as a government advisor.
  • In New Guinea, in , natives in the Mataungan Association, upset at their political control being diluted in a local government that included immigrant representatives, set up its own tax agency and collected $29,000 “which, it says, it is holding in trust until the council reverts to its old native-only status.”
  • In the Friends Meeting at Cambridge established a “Peace Tax Fund” that worked partially as a redirection fund, but which also anticipated that some contributors would want to release the funds to the government if the government provided a way to do so that would not make them complicit in military spending.
  • Ed Guinan resisted his small business’s taxes by sending the checks to the U.S. Arms Control and Disarmament Agency. “They return it with a polite note saying that they cannot accept it, and we put it into a tax escrow account which cannot be used for normal business expenses.”
  • In , the Nashua Area War-Tax Resistance Support Group decided to keep the withheld taxes of its members in escrow “to be given to the government when policies change and when the money will be used for purposes other than war.” Resisters could reclaim their money from the fund if the IRS seized money from them individually, and meanwhile the interest earned in the account would be given to charitable causes.
  • New England War Tax Resistance set up three funds — a mutual insurance “penalty fund,” a “Direct Giving Fund” for resisters who wanted to immediately redirect their taxes, and an escrow fund which would hold on to resisters’ money in case they at some future point decided they wanted to settle with the IRS.
  • The Purchase Quarterly Meeting of Quakers set up something called the “Peace Tax Escrow Account” to which resisters could deposit their refused taxes and which the Meeting said it would turn over to the government if the government gave taxpayers a mechanism to pay such taxes without paying for the military functions of government.
  • In , District of Columbia politician Walter Fauntroy, upset at the District’s lack of political representation at the federal level, “asked city residents to file federal tax returns but withhold payment of federal taxes and place the money in an escrow account to be established by a group called ‘Taxation Without Representation Committee.’”
  • The Philadelphia Yearly Meeting of Quakers lost a court battle in which the IRS hoped to force them to withhold taxes from a war tax resisting employee. They began withholding the taxes as ordered, but rather than submitting them to the IRS, they put the withheld money into an escrow account and told the agency they’d have to seize it themselves.
  • In , the Chamber of Commerce in Tijuana, Mexico decided to withhold taxes in protest against inadequate security during a crime wave there. The group brought in accounting consultants to help them establish an escrow account, in the hopes that the gesture would discourage the government from classifying the member businesses as tax delinquents.
  • In , New York state assemblyman Greg Ball encouraged his constituents not to pay their Metropolitan Commuter Transportation Mobility Tax but to instead deposit the amount due into an escrow account which would not be relinquished until the Metropolitan Transit Authority were audited and reformed.
  • In , shopkeepers in San Juan, Argentina, protesting against competition from untaxed and unregulated street vendors, began paying their taxes into a fund that they say they will only relinquish to the government when it begins to crack down on the street vendors.
  • In , Markus Zwicklbauer, a 58-year-old tax consultant from Fürstenzell, Germany, began paying his taxes instead into an escrow account which he says he will release to the government if the government can show him to his satisfaction that it will be spent for the benefit of German citizens and not wasted on bailouts of other Eurozone nations.
  • A bar owner in Michigan in , struggling in the wake of an indoor smoking ban that discouraged her customers, organized a tax protest of similarly-situated businesses that involved paying taxes into escrow.
browse«»
Find Out More!

For more information on the topic or topics below (organized as “topic → subtopic → sub-subtopic”), click on any of the ♦ symbols to see other pages on this site that cover the topic. Or browse the site’s topic index at the “Outline” page.