Links have been piling up in my bookmarks as I spent poring through back issues of The Mennonite.
International Tax Resistance News
- A new law in Samoa requires previously untaxed church ministers to pay income tax. Many, including those from the country’s largest church, are refusing to pay.
- Manoj Viswanathan has sounded the alarm: technology capable of decentralizing the economy is on the way, and since the current system of taxation depends on monitoring certain chokepoints of centralization, “these technologies pose a critical threat to the reporting system underlying domestic and international tax compliance.”
- The United States government has begun denying passports to people with large tax debts. If you’re one of the 362,000 or so Americans who owe more than $51,000 and you haven’t entered into an installment payment plan (I’m one of those), you will likely soon find that you cannot successfully apply for or renew your passport. While the government also has the legal authority to revoke existing passports from such people, it is not yet exercising that power.
- Guerrilla electricians in Greece continue to reestablish electric power to households who have had their power cut off for inability or unwillingness to pay the state utility monopoly’s bills which have been inflated to support the state’s austerity budget policies.
- Veterans of the successful campaign to abolish the “écotaxe” in Brittany held a celebratory picnic on the anniversary of the destruction of one of the highway portals that would have enforced the hated tax. In part the picnic was meant to show solidarity with those who had been convicted of criminal charges for the parts they played in destroying such portals, and in part it was meant as a show of strength to let the government know they would not tolerate any attempts to reestablish the tax.
- The increasing use of traffic-ticket-issuing cameras worldwide as a government revenue booster has led to a rash of direct action by the victim population. This usually takes the form of destroying, disabling, or blocking the cameras. Here are several recent examples:
- In Maharashtra, India, the Maratha Kranti Morcha protest movement has launched a tax boycott.
- Another “white powder” incident shut down an IRS office for a couple of hours.
- A new report sponsored by an above-ground alcohol industry interest group says moonshine is very popular in low- and middle-income countries as a response to the higher price of taxed above-ground liquor.
- Cigarette smuggling in the United States is disappointing those state governments that hoped for a big revenue boost from increased tobacco taxes.
The Crisis in Nicaragua
Protests against the Ortega/Murillo regime in Nicaragua have been brutally repressed by murderous government and paramilitary forces. Some parts of the protest movement have been engaging in tax resistance, but they have so far been unable to convince COSEP, a Nicaraguan business confederation that nominally supports the protests, to take such a strong action. In addition, an organizer of tax resistance in the Mercado Oriental was arrested and swiftly sentenced to a prison term.
- Tax attorney Theo Báez has been advising businesses of their legal right to delay paying taxes to the government until it comes into compliance with its legal duties.
- La Prensa reports that while tax collections in Managua plummeted in , they have begun to recover.
- Iván Olivares, at Confidencial, examines the prospects for a tax resistance campaign and concludes: “A tax strike would be effective only if it is total.” (translation mine):
Launched on as another variety of civic struggle against the dictatorship, the proposal to carry the thesis of civil disobedience to the extreme of applying a “tax strike” is still in force, but has not yet switched on, except in the Mercado Oriental.
On that date, the Academy of Sciences, and the Academy of Legal and Political Sciences, called for “civil disobedience as a national imperative to be put into operation immediately,” inviting employers, workers, students, and taxpayers to immediately suspend the payment of taxes to DGI, DGA, and city hall, in particular “withholding of Income Tax from salaries.”
Although the call for tax resistance enters the popular imagination as a civil form — and for that reason a legitimate one — of resisting the regime of Daniel Ortega, neither businesses nor individuals have responded with determination to the proposal, from fear or from caution.
Caution as demonstrated by the sources consulted for this article, who requested anonymity as they explained that people, business-owners and managers in particular, are afraid that the tax administration will fine them or, worse yet, temporarily take over operation of their companies or shutter their business.
Not all of the sanctions are catastrophic. There are cases in which the fine applied is equivalent to 2.5% of the amount not paid in the case of the monthly advance payment of the business income tax, or 5% in the case of the value-added tax or of income tax withheld from the salaries of employees.
“Technically, it’s an invalid appropriation of withholdings, and can be criminally sanctioned,” in addition to being shut down, fined, or temporarily put under government management, explained a source with extensive experience in tax matters.
That said, this source sees a variety of reasons to doubt that they would decide to take such extreme measures, beginning with “as far as I know, they have never applied them to anyone.” Another is that to close a business means sending its workers into unemployment, which implies that they will not receive taxes from the business or from those consumers.
But beyond believing in the mercy that any of these reasons implicitly assumes, the source points out fact that is easier to accept: “If the resolution is massive, the tax administration simply does not have the capacity to audit and penalize everyone at once.”
Larger Companies Have More Fear
If it is decided to penalize only some in order to set a precedent that strikes fear into the others, surely one of the larger ones will be chosen, which not only has more ability to defend itself in the courts, but also to negotiate, precisely because of its size.
Another source asserts that “although it may seem obvious, the businesses that take the least risk are the most powerful ones, for the simple reason that they are not big taxpayers but big tax collectors.
“The DGI, does not want to be bothered with them, because if they weaken them, this affects tax revenues, principally value-added tax withholding.” When the big companies that could take such measures don’t apply them, despite their intrinsic power, they are demonstrating “the cowardly face of big capital. If they would decide, the blow to DGI would be immense,” s/he says.
Róger Arteaga, former director general of Revenue, agrees, saying that “big capital has not wanted to go all-in. It is true that it gave its approval to the strike, but did so with fear and only temporarily.”
There is at least one group that risks more in a tax strike: import and export companies, which require clearances that can only be obtained once they have paid the corresponding taxes.
“If one of these business doesn’t make its monthly statement, or makes it but doesn’t pay, it falls into insolvency, and can neither import nor export. The only importers who could afford that ‘luxury’ would be those that have sufficient product already on hand, especially at times like these, when there is little movement of inventory,” explained one of our sources.
Small- and medium-sized businesses — both fixed-quota and general regime — can stop paying taxes as long as the situation does not normalize, and while this makes them vulnerable to penalties, it is not likely that this will occur, especially, again, if a critical mass applies this measure of fiscal chastisement.
How long can the government last without taxes?
Our sources note that before making tax payments, the employer must guarantee the salary of its employees, and that the decision not to pay taxes is “protected by the higher legal concept, legally enshrined in the national legislation, as the Act of God and the Force Majeure. Nobody is obligated to do the impossible, and the reason for this impossibility lies outside the control of the employer or employee.”
Citizens, on their part, could put pressure on big and medium-sized business, offering to act together if the Treasury moves against them.
“In this context, big capital must play a consistent role, acting firmly in the face of a Treasury that has granted them such special privileges. It would be their most authentic repentance for the eleven years of tax advantages they have taken in the shadow of power. That stain should be washed out right away,” they say.
As an expert, Arteaga proposes “that the businesses do not charge value-added tax, and the citizens not pay it. Income tax also. There are penalties, but the penalties and decisions of this government must be ignored, as they have no legitimacy. How long can the government last without taxes?” he asked.
“Tax resistance aims to respond to Ortega’s claim that he will stay on through : we must find a solution, and one of these is for the private sector finally to decide on civil disobedience of a monetary and tax nature,” he explained.
- Pedro Muñoz Fonseca, president of the executive committee of Costa Rica’s
Social Christian Unity Party, urged Nicaraguans to use tax resistance
against their government:
Social Media Tax Protest in Uganda
The government of Uganda has imposed a 5¢-per-day tax on using social media and other services. This was designed as both a revenue measure and a way of reducing what Ugandan president Yoweri Museveni calls lugambo (“fake news”). Amnesty International has been among those to see through the government’s rhetoric and cast the tax as “a clear attempt to undermine the right to freedom of expression.”
- Some people are circumventing the tax by using virtual private networks, “a trick learned during elections two years ago when the government tried to shut down social media.”
- Robert Kyagulanyi, a Member of Parliament better known by his musician
stage name Bobi Wine, whose election is in part credited to his success on
social media, has been at the forefront of protests against the tax.
He was arrested, along with
three reporters when a march protesting the tax was attacked by police
with tear gas and rubber projectiles, but they managed to escape.
- “My brother, I am not fighting you; I am fighting for you,” he said to the officers as he was being dragged into a police van.
- Summoned back to police headquarters for questioning, Bobi Wine was accompanied by several other Members of Parliament among others who came with him to show solidarity.
- Some of those who thwarted the arrests during the protest march have since been arrested themselves, charged with unlawful assembly, and banned by the government from participating in any such future protests.
- Students were arrested on charges of being “a nuisance” during a protest at Parliament; and human rights activist Stella Nyanzi had to be hospitalized after attempting to visit the students in jail.
War Tax Resistance Around the World
- ABC reports on war tax resisters in Valencia — “the new refuseniks”. War tax resisters there typically refuse to pay some percentage of their taxes, often basing this on the percentage of the federal budget that is spent on the military and similar items, and redirect this money to more worthy charities. They declare this deduction on their tax forms in such a way that the tax agency typically does not treat it as illegal tax evasion but as an error or mistake.
- The Global Day of Action on Military Spending Final Report has been released. It gives a summary of the various events that took place around the world, including several by war tax resisters and groups promoting war tax resistance.
- There’s a new NWTRCC newsletter out, with content including:
- Anne Baron reports on the Poor People’s Campaign
- Notes about private debt collection agencies pursuing tax resisters, and IRS impersonation scams
- Larry Bassett on the sung and unsung heroes of war tax resistance
- Ideas & Actions concerning weapons-free investing, responding to arguments against war tax resistance, a fast for nuclear disarmament, and more
- You can now listen to audio excerpts from the upcoming documentary The Pacifist, about war tax resister Larry Bassett, on Spotify.
- Erica Leigh pores through back issues of Conscience, the newsletter of the Conscience and Military Tax Campaign, an American war tax redirection group that slightly predates the founding of the National War Tax Resistance Coordinating Committee.
- I shared the story of my triumph over the IRS via the statute of limitations at NWTRCC’s blog.
- Raymond Hunthausen has died. As Catholic archbishop of Seattle, he took a
remarkably strong stand on nuclear weapons — famously calling the Trident
nuclear submarine program being developed nearby “the Auschwitz of Puget
Sound” — and began practicing war tax resistance in response. This earned
him enemies in Washington and in the Catholic hierarchy. Here are some of
the obits and remembrances:
- Raymond Hunthausen, retired archbishop of Seattle, dies at age 96 (National Catholic Reporter)
- Archbishop Hunthausen was a man of prayer, a man of God (National Catholic Reporter)
- He relied on God, not weapons of war (Catholic Sentinel)
- David McReynolds has died. He was a long-time War Resisters League and Socialist Party activist and was also on the staff of the Committee for Nonviolent Action which helped to spearhead war tax resistance as a tactic during the campaigns opposing the American war in Vietnam. He was among the signers of the “Writers and Editors War Tax Protest” in and of a similar public pledge .
- David Paul Irish has died. He was active with the Fellowship of Reconciliation, Women’s International League for Peace and Freedom, Peace Brigades International, and Witness for Peace. He was an advocate for war tax resistance in the Society of Friends, drafting a minute in favor of of war tax resistance that the Twin Cities and Minneapolis Meetings approved in .