In much of Europe, and some other places, the value-added-tax — a tax that is applied to the price of the sale of goods — is a major source of funding for the government. This tax, like sales taxes in many of the United States, is collected from the consumer at the time of the sale by being wrapped into the price of the goods sold, and then is remitted by the seller to the government.
This makes it hard for individual tax resisters to resist these taxes directly. One reason I have heard for why tax resistance is less prominent in the “conscientious objection to military taxation” movements in Europe (where promoting varieties of “peace tax fund”-style governmental accommodation for such objectors is more common) is that objectors there have less opportunity to simply refuse to pay, because they are never asked simply to write a check but instead the government squeezes the money from them in dribs and drabs.
Mainstream people who talk seriously and with some expertise about federal taxes and budget shenanigans in the United States frequently daydream about shifting our largely income- and wage-tax-based system to a consumption-tax system like the value-added-tax. There would be enormous political hurdles involved in making that happen, but push may indeed come to shove some day.
For that and other reasons I was curious as to whether tax resisters in countries with a value-added-tax had come up with any plans for confronting it. Here is an example I found, from a left-wing anarchist, not in Europe, but somewhere in South America. It’s pretty vague on details or examples, but shows some of the thinking on the subject (semi-competent translation mine):
Contraband as a Strategy of Tax Avoidance
Anarchist action against indirect taxes.
On a previous occasion was discussed tax resistance as an anarchist action that aims to prevent the state from monopolizing the collective budget. But being mindful of the limitation of the aforementioned, it was understood that it only spoke of this strategy as possible to apply to those taxes that people must pay voluntarily, that is to say those that are known as direct taxes. But that which remains to be covered are those known as indirect, which impact our pocketbooks as much or more, extracted in a more shameless and silent form. To be more clear, the direct taxes are those for which we fill in forms that we provide to the tax collector, while the indirect do not have to wait in such a line (that we make), but are collected by being included in the price of goods.
And what type of goods are those that carry this tax? It depends on how cynical the current government is, but basically almost anything has, at the present anyway, a value-added tax known as VAT. True enough, various populist governments decided to wash their consciences by leaving some goods in your shopping cart out of this tax, but do we realize how very many are not exempt? But that’s not all. At the same time before you buy another tax is marked up: the tax on wages — have you seen how much is deducted from your paycheck each month? These and other taxes, whose names only accountants understand, are precisely those that take from us without even asking and that are technically outside of our power to evade.
The practical, mathematical consequences of these taxes is ironic, because we are paying for the real value produced by the workers, but the extra profit — stolen — remains with the employers of these workers, with a new profit that is kept by the state; in this way the product increases its value not only exponentially but by it they, the employers and bureaucrats, manage to live well and parasitically off of the worker, who is its real creator. While we think that this happens only with goods, it also happens with various services — maybe our time spent when we work in an internet cafe is recognized with the meager salary we obtain, while the boss, sitting on his bum, comes by every night to collect the rest of the profit? Very well, but it is not only him who bums it: also presidents, senators, and bureaucrats at all levels live off or your work (your work? does it suit you?)
More irritating still is the deduction that they make for us in the same salary when, because the government said so, 5%, 10%, and even more is subtracted from your check long before you cash it. And us, hoping for health and education, but all that comes is cronyism and corruption. And we could go on about what they deduct from us when we use public transit, and their famous fuel taxes, or when we pay the entrance to some amusement. Each and every one of these occasions they are squeezing our pocketbook, and we do nothing about it.
Enough already; if with direct taxes we can [resist], the indirect taxes cannot beat us. First, we have to continue demystifying them. These taxes are not natural, much less necessary, but are the base material that feeds that state that controls us. Moreover, despite what they tell us, they can never be the only or the major way to fund the public works and tasks — for that we have autonomous self-government, mutual aid and horizontalidad, and while it may seem like rewarmed romantic anarchist rhetoric of the last century, the reality is that today more than ever we can realize these values.
To do away with indirect taxation can be done by dealing directly with the producers of what we consume, going to find them before they become supermarket or multinational profiteers of their products, creating horizontal networks between consumer groups and workers, not mediated by speculators, that allow a dialogue to be established in the relationship beyond that which can operate in the “laws of the marketplace.” At first it can be done with small producers, and gradually go looking for more. Though we should not kid ourselves, if we do not seek as workers to take ownership of the factories, the power of exchange will always be held by the owning class.
Still, this possibility is a great way of demonstrating to the workers that to give money to the government is unnecessary, and also that they must not take it away from us, and neither should we let it be so easy for them to collect. To propose tax avoidance is not so unrealistic. The partnership of consumers and producers is the way out.
But there is something better: a certainly effective practice that they also have demonized, but now we can make of it an ethical and political opportunity: According to the Royal Academy of the Spanish Language, the definition is: Trade or production of goods prohibited by law to individuals, and the word can be no other: Contraband. This is precisely the opportunity of inflicting damage on the state by reducing taxes, maintaining consumption without tax. While contraband is normally illegal smuggling of merchandise from outside which are not worth it for us to buy, it also is to cheat the edicts [bandos] of the government, to go against [contra] the law, to make and promote Contraband [contrabandos].
Contraband is the way of producing and exchanging without taxation materializing in-between, and this can be done by coming to agreement with the producers, but also promoting autonomously self-managed enterprises that sell directly without intermediaries. Another alternative is to encourage the informal sector, that is not in hiring, but in registration with the state. If there is no registration with the state, neither should there be taxation, and this would permit prices to fall steadily. Contraband is not only a form of struggle against capital, it’s a lesson in generating social relations that are not mediated by written law but by the agreement between those involved. It is to open paths of respectful consensus between consumers and producers, and is just as respectful to allow for disagreement. It is to create a market without tariffs, without restrictions of access beyond the necessities and capacities of everyone.
To create a world without taxes is possible, and is as easy as beginning to conspire among ourselves as equals.