Skip to content
Tax Strike Tactics

Foment Bank Runs

Tax resistance campaigns have amplified their impact by encouraging bank runs—that is, by asking people to withdraw their savings from banks. This can be an attempt to reduce the assets available to the government, or to crash the economic system and thereby put pressure on the government more indirectly.

If the government forbids people from withdrawing their own money, or is unable to meet the sudden demand for currency, the credibility of the banking system is called into question, which can make it difficult for the regime to continue in business. On the other hand, if the government allows people to withdraw their money, and if enough of them do so, this reduces the capital available to the banks, reduces their ability to confidently loan money (for instance, to the government), and can also shake the credibility of the system. The government may respond to such a crisis by further degrading the currency, but the long-term effects of this can also serve to undermine the government.

Example Reform Act Agitation

In the final days of the agitation in the United Kingdom that led to the enacting of the Reform Act 1832, the movement in favor of the Act augmented its tax resistance campaign with a run on the Bank of England. London awoke one morning to find that the resistance movement had plastered the walls of the city with posters reading “Go for Gold!” About £1.8 million in gold was withdrawn from the Bank of England in the first days of the campaign (out of roughly £7 million in the Bank’s possession). Some commentators believe this to have been the turning point in the campaign. The King soon invited Earl Grey to form a government with the authority to pass the Reform Act into law.

Example Anti-Czarists

In 1905, Russian socialists issued a manifesto in which they called on the proletariat to withdraw all of their savings from the banks in gold. They billed this as an act of self-defense, saying that the government had squandered its reserves on speculation, leaving it no money to pay its bills. The manifesto also emphasized its point by claiming that the wealthy had already sent their riches abroad to avoid the coming collapse.

Example War Tax Resisters

Some modern war tax resisters avoid depositing money in banks, but more as a boycott than a bank run—because banks operate as war financiers, because bank deposits are especially vulnerable to government seizure, and because the profits of banks are taxable.

The “Move Our Money” project claims that it has convinced Americans to shift more than half a billion dollars of their savings from banks to credit unions. “We stand against the bankers, CEOs, and lobbyists who have hijacked our democracy to serve themselves at the expense of everyone else.” In the United States, this has tax resistance implications, as credit unions do not generate taxable profits as banks do.

Example Enric Durán

Enric Durán of the Spanish indignados movement was a sort of one-man bank run. He took out loans from 39 different Spanish banks, under false pretenses, and then fled with the money—nearly half a million euros. He put the bulk of the cash into a variety of anti-capitalist activist projects, and publicized the action as his attempt to fight back against the banking system’s hijacking of the Spanish economy. Among these projects was one called Derecho de Rebelion (Right of Rebellion), which advocated mass tax resistance.

Notes and Citations