In Greece the government has gone heavily into debt by trying to finance a government of benevolent largesse and poorly-enforced taxation. Y’know… like certain other governments you know. Now that the bill has come due and the creditors have more or less put the government into receivership, they’re trying to squeeze revenue out of the austerity- and recession-strapped citizenry as quietly as possible — for instance by hiking fees on everything the government provides, or by taking fees like road tolls that used to go to the government and instead selling the rights to collect them to private tax-farmers.
This didn’t go over as smoothly as planned, and a “We Won’t Pay” movement has been battling the new fees with a variety of tactics — including occupying and incapacitating toll booths, reestablishing electricity hookups to families who have been cut off for failure to pay the new rates, turning in their vehicle licenses rather than pay the increased license fees, and so forth.
Some clever person once said: “History doesn’t repeat itself, but it often rhymes.” And with that, I’d like to spend some time today on the successful tax strike targeting an agricultural water use tax in Queensland, Australia in 1927.
In 1926, the “loan mongering, money-wasting,” Queensland government, as one editorial put it, which had gone into debt to the mother country, began “inflicting taxation to meet the interest on all these devouring borrowings.”
Among the new taxes was one snuck in to the Water Act of 1926. At the time, nobody seemed to notice that there was a tax involved — “there was no mention of a tax; nor was there anything to foreshadow such a tax” — but the Act empowered a commissioner to charge a fee to farmers who, under the terms of the act, were forced to register any wells or water pumps they used. When the commissioner announced the fee schedule, it became clear that this was not just going to be a nominal paperwork-processing cost, but a revenue-raising tax on irrigation.
The farmers decided not to put up with it. Among their grievances and arguments were these:
- The farmers had suffered enough recently from increased taxes, as well as blight, drought, and increased railway freights.
- Because the price of commodities like cane sugar is fixed from year to year (I’m not sure if this refers to an explicit government-set price, or just the nature of competing with untaxed farmers who did not require irrigation) farmers could not pass on the cost of the tax to the consumer.
- The tax unfairly further disadvantaged those farmers who did not have a source of running water (or sufficient rainfall) on their property.
- The government had a policy of encouraging farmers to try to convert formerly unsuitable lands to agriculture, but now it seems to be penalizing the ones that succeeded.
- Farmers’ improvements on their lands, like their wells and pumping stations, were made with their own capital or by borrowing, without help from the government, so the government has no right to tax them. This contrasts with urban water users, who can rely on a government-subsidized water infrastructure.
- The tax was based on pump capacity, not on the actual availability of water, which meant that some farmers would be taxed on water they never used.
- It is because farmers are relatively unorganized that the government tries to shift the burden of taxes to them. “It appears as though it were an established fact known to those high up that the farmer is not organised, that he cannot show a solid front, and must of necessity take anything hurled at him. Anything at all, no matter how unjust, so long as the coffers in Brisbane are kept full.” If we let this tax go by, it will just grow larger and more taxes will follow.
- It is unjust to compel people “to pay a tax on rain that falls from the clouds on their land… this tax surpasses anything known in the history of the world for extreme depravity”
- It is counterproductive to tax people on the improvements they make to their property and to their businesses, as these things increase the prosperity of the country and the general tax base. “If a man improved his holding so as to make it produce more he was doing good for the country, and should be encouraged, rather than harassed. It was straight-out robbery to tax those improvements.” (Some also made the Georgist argument that the only valid tax is one on the unimproved value of land.)
- This is even worse for farmers who lease their land from the government, as they get taxed for making improvements to property that they do not even own.
Farmers in Queensland were organized in groups called “Local Producers’ Associations,” which were the means by which they organized and spread their tax strike. The first LPA to take on the tax was from Kalapa, and it came out swinging, passing the following resolution in :
That this association enters an emphatic protest against the action of the Government in making these undue levies against the primary producers of Queensland, who have invested their capital in improving properties for the sole purpose of sustaining livelihood either by means of watering stock or for irrigation purposes, by this excessive tax on water, which is certainly a tax on the progressive producer, and on unfortunate landholders, who have not running water on their properties. That the Council of Agriculture should be written to asking it to circularise Local Producers’ Associations in the State, requesting them to protest as a body, and advise the farmers to refuse to pay the tax; that a copy also should be sent to the Pastoralists’ Association, asking for any suggestions on the matter.
Other LPAs and other groups of farmers followed suit:
- In Ayr, in “the biggest meeting of farmers ever held in the Burdekin district” at which “Ninety per cent of the farmers of the district were present,” according to a news account, the group decided that if the Government did not respond satisfactorily to their protest, “the farmers should refuse to take out a [water] license… All present pledged themselves to refuse to take out a license.”
- A few days later, the Upper Ulam LPA met, and unanimously declared “that this Association stand firm in a refusal to register wells, and hereby solicit the earnest support and cooperation of all other LPAs and any other persons having wells on their properties.”
- The Richmond branch of the Graziers Association of Central and Northern Queensland then carried a motion “that all payment of water taxes be suspended” until the graziers as a whole could be consulted.
- 200 farmers from the Kalamia and Pioneer Mill suppliers, also in Ayr, unanimously declared that “failing to get relief from the Government, we refuse to take out a license.”
- The Mount Scoria LPA met, also in record numbers, and instructed its secretary to appeal to all other LPAs “to fall in line with those LPAs who have already decided to oppose the provisions of the Water Act by refusing to register or pay any tax.”
- In Rockhampton, the LPA “unanimously decided that all members pledge themselves to offer passive resistance to the operation of the Act by refusing to make the required applications or to furnish any returns, or to make any payments as demanded by the Act. Further, it was decided to invite all other LPAs and kindred bodies to adopt a similar attitude.”
- Byfield LPA passed a motion “refusing to register wells.”
- The Gums LPA “unanimously proposed that no information should be given regarding water in the district, which had been conserved by the settlers at their own expense, and that no licenses should be applied for.”
- Members of the Livingstone Shire council went on record supporting tax resistance: “I’ll fill my well in and remove my machinery before I’ll pay the tax,” said one. “I’m not going to register or take any action, and they can put me in gaol if they like,” said another. “If they try to put us all in gaol it will have to be a pretty big one to hold us. I think all the settlers should hold out.”
One must congratulate these Burdekin growers for their determination to refuse to pay the tax should the Irrigation Commissioner persist in his charges. Whilst the writer is always opposed to direct action it must be remembered that the circumstances of the present case are exceptional, and the growers at the very limit of their patience and tolerance, are driven to it.
That brings us up to . On , the government decided to withdraw the water tax. The tax resistance campaign had succeeded after only a month.
Never since that historical occasion when the cargo of tea was tossed overboard in Boston Harbor, has there been a more successful rebellion against an unpopular government impost, than that which has fairly bluffed the McCormack Government, into abolishing the obnoxious Water Tax. And it was such a surprise too; since David slew Goliath, and Oliver Twist knocked out Noah Claypole, never have we seen an obnoxious giant, and a political giant at that, so completely overthrown.
The clamor of those to be levied on, commencing double forte, multiplied, as time went on, into one unappeasable roar of refusal, which about put the broadcasting companies out of business. … “What has made ’em go off the handle?” members of the Government alarmedly asked. “They have stood the State Land Tax and Super Tax, the State Income Tax and Super Tax, the Totalisator Fraction Tax, the Machinery Tax, the Hospital Tax, the Unemployed Tax, the Additional Tax for unemployment, the Increased Cheque Tax, and the Motor Vehicle Tax, and others, like lambs, and still supported the Government with old time fervor… yet, when the water tax was announced they went mad and announced in loud voices that they would cheerfully test the Government’s hospitality in penal establishments, before they would pay the tax.” Such a volte face. The one-time timid, consenting taxpayers became roaring combatants, challenging the Government to go on with the tax. And the Government has thrown in the towel.…
…Undoubtedly those originally marked out as Water Tax victims have scored. Of course, “He who fights and runs away, will live to fight another day.” But the author of that proverb forgets to mention the loss of morale, signified by such a retreat. The moment a prize fighter’s knees begin to sag in the ring, his opponent considers victory assured. All cockfighters know, the instant a bird gives ground, and shows the least sign of weakness, the main is practically settled. Queensland taxpayers, having so successfully stampeded the Government, will adopt the same tactics in opposition to any further taxation…
Indeed, not long after, the Gayndah LPA, emboldened by the victory, asked their Shire Council “to show the amount of hospital rate separately on the rate notices, the idea being that the time may arrive when they would refuse to pay, and they would require to know the amount they would deduct from their rates.” A motion to begin such resistance immediately was brought up, and failed, but another motion passed, saying:
That a further protest be entered against the incidence of the hospital tax, and request that same be collected on an income tax basis. Failing this, that we refuse to pay further tax until the Act is amended as requested.
Although the government rescinded the registration fees, the Water Act was still on the books, and some LPAs continued to counsel their members not to register their wells and pumps. “A lot of farmers were under the impression that because of registration fee had been withdrawn, everything in the garden was lovely. But the regulations were still there, and farmers who were under that impression would receive a rude awakening. Only formal registration had to be made, but they would find that if they furnished the particulars asked for they would give the Government an opportunity to later on impose the charges.”
It wasn’t until that the legislature started debating a formal repeal of “the clauses which were vexatious to a section of the community and which unduly interfered with the rights of the individual”, and it was a few years before the Act actually underwent major revisions (and I didn’t try to decipher the legislatese to figure out what any of it meant).
The preexisting organizational and communications infrastructure of the Queensland farmers was key to rapidly organizing a tax strike and to maintaining solidarity. And that, in turn, was key to their quick victory.