How you can resist funding the government → a survey of tactics of historical tax resistance campaigns → switch to alternative currencies → see also

I attended some workshops on matters economic. One, on “the underground antieconomy” was an uneducational polemic that I left early. Another, on emerging post-revolution start-from-scratch economic systems, was canceled because the instructor was apparently on some sort of Orange Alert blacklist and was detained at the airport (expect to see more of this sort of thing).

Another seminar I attended was about community currencies. These are paper money systems that exist alongside the familiar greenbacks. There are versions of this going on all over the place, and there have been attempts to get this sort of thing going for decades.

I was paying special attention to find out whether this sort of thing was a possible way to participate in a flexible, currency-based economy, without engaging in taxable activity. I didn’t think it was likely, but thought I’d pay some attention just in case.

The instructor was one of the organizers of Berkeley’s “BREAD” alternative currency, which had a five-year run but ultimately failed.

The long and the short of it was that I walked away without much excitement for the local currency concept (it doesn’t seem to offer many advantages over government money, and is at a great disadvantage competing against the effective government monopoly). And as a tax dodge, it’s a non-starter.

The IRS doesn’t even want you to get away with untaxed barter “income” — they’re certainly not going to decide that barter that’s mediated through some sort of notes or coupons is exempt (their guide on taxable income also includes sections on “kickbacks,” “illegal income,” and “pulitzer, Nobel and similar prizes” — they think of everything).

A frequently-expressed dream of the libertarian, anarchist, and tax resister far-out fringe is the idea of a replacement for government money. This, for many reasons, including:

  • The “inflation tax”: “Governments are almost always net debtors (that is, most of the time a government owes more money than others owe to it). Inflation reduces the relative value of previous borrowing, and at the same time it increases the amount of revenue from taxes.” If the government has a monopoly on issuing money, it can use this monopoly to manipulate the currency supply and generate a stealth tax that tax resisters can’t easily avoid.
  • Basic anarchist principles. American anarchists like Josiah Warren, William B. Greene, and Benjamin Tucker challenged the government monopoly on currency, and Warren’s labor notes are an ancestor of the Time Dollars variety of local alternative currencies currently found in some areas of the United States (for instance Ithica Hours).
  • Privacy / secrecy. If you can remove yourself from the government’s money system, perhaps you can keep it from finding out about your earnings and spendings altogether. So much of the early cyberpunk sci-fi took for granted that in the future, anonymous, encrypted micro-payments were going to be flying invisibly through the wires faster than any government could track them. (The founders of PayPal were in fact hoping to turn this sci-fi dream into reality and fully intended their service to empower people and disempower governments.) John T. Kennedy, writing of what he called economic secession, put it this way: “Think of how much less profitable taxation would be if government didn’t know how much money you earned or how much money you had. The Leviathan cannot extract the revenue necessary to sustain itself at anything like current levels without knowing where the money is.… if the means of economic privacy are available they must choose between keeping their own money in their own pockets or voluntarily turning it over to government. Then you’ll see economic secession on a grand scale.”

But actual alternative currencies have not yet taken off in any revolutionary way, although they are frequently prophesied. None have proven to be anywhere near as widely-accepted, flexible, dependable, and safe as the good old Euro, greenback, Yen, and their other government-issued companions.

I’ve been keeping my eye on things like LETS and the Ripple system, which automates LETS and expands its boundaries. Sounds interesting, but I’ve never purchased anything with LETS, or with Time Dollars, or with any of the other occasionally-proposed emerging alternative currencies like pre-paid phone cards, frequent flyer miles, and so forth. Nor has anyone ever offered me any of this stuff for any goods and services I might have to offer. It’s still dollars in my neighborhood.

But zipping through the wires around me is an alternative currency I’m only really aware of through rumor and journalism — the currencies used inside the worlds of massively multiplayer online games to buy things within the context of the game.

These things are huge, and with players beginning to sell their hard-won (or virtually-purchased) game-world belongings on eBay, it became possible to exchange virtual money for real goods, real money for virtual goods, or virtual money with real money. In , an economist took the time to figure out what the exchange rate was between EverQuest Norraths and U.S. Dollars, and he concluded:

[EverQuest has] the 77th largest economy in the world. [It] has a gross national product per capita of $2,266, making its economy larger than either the Chinese or Indian economy and roughly comparable to Russia’s economy.…

The nominal hourly wage is about $3.42 per hour, and the labors of the people produce a GNP per capita somewhere between that of Russia and Bulgaria. A unit of Norrath’s currency is traded on exchange markets at $0.0107, higher than the yen and the lira. The economy is characterized by extreme inequality, yet life there is quite attractive to many.

Note that when he says that EverQuest had the 77th largest economy in the world, he means the real world, not just the virtual world. The IRS does not tax this thriving economy, though most of its transactions are (in theory at least) easily-traceable. Julian Dibbell at Legal Affairs wonders why:

If you haven’t misspent hours battling an Arctic Ogre Lord near an Ice Dungeon or been equally profligate spending time reading the published works of the Internal Revenue Service, you probably haven’t wondered whether the United States government will someday tax your virtual winnings from games played over the Internet. The real question is, Why hasn’t it happened already?

…if you look on online marketplaces like eBay today, you will find a thriving, multimillion-dollar market in Golden Runic Hammers, Ethereal Mounts, and similarly exotic items — all of them won (and anything found or wrested from another player is “won” in the context of a game) or bartered for in this or that MMO quest, and many of them fetching prices in the hundreds, even thousands of dollars.

Dibbell tries to figure out how he would declare income earned in the course of the game if he did decide to. After all, the IRS’s instructions include sections on how to declare barter, graft, and…

…every conceivable form of income known to accounting. To read it once is to realize that you know nothing about income. Here you’ll find a description of gains, ill-gotten and otherwise, so irregular that they can be taxed only according to that form of guesswork known as fair market value. Here are stocks, options, retirement watches, and stolen goods (“If you steal property, you must report its fair market value in your income in the year you steal it unless in the same year, you return it to its rightful owner”).

He determines that “items acquired either through barter or as prizes in a game” is the closest category. But now it gets sticky:

Goods taken in trade or won at play are taxable the moment they fall into somebody’s hands, even if they are not sold for money. The more I read, the more I wondered whether reporting the amount I had brought home from selling virtual items on eBay was enough to satisfy the IRS.

What about the assets I bartered for or won in the game but never sold in the real world, the suits of armor stashed here and there with their easily established fair market value? What if I traded those assets for their value in Ultima Online’s official currency, the Britannian gold piece, rather than for dollars? Wouldn’t it be easy to establish their value in dollars nonetheless and, if I owed American taxes on the exchange, put a number on the deal that the IRS could grasp and love? And what about all the other MMO players out there — how long could the IRS be expected in good conscience to leave the resulting millions of dollars in wealth untouched?

Hilarious. Imagine opening the treasure chest behind the recently-defeated balrog to find that it was one-third empty thanks to withholding. Is the armor your character bought a business expense, and if so, how should you handle depreciation? Can you imagine?

But it’s either an army of IRS accountants and lawyers coming up with just this sort of absurd regulation, or the government allowing a huge virtual economy at which many of its citizens fruitfully labor for hours and hours, to go untaxed.

For more on alternative currencies, time dollars and the like, see also: The Picket Line and .

One variety of parallel economy is that practiced by users of “complementary currencies” — competitors with the federal reserve’s idea of legal tender. Another group is challenging the idea that money has no inherent value by creating money in the form of art.

BIAM is an Internet based art project, where artists from around the world can issue “original art money bills” as a global alternative currency. Art money measure 12×18 cm and is an original work of art by the artist hand. It has a purchasing power equal to 27 Euro when first introduced and increase in value by five Euro p.a. for 7 years. The increased value can be realized only when purchasing art from registered art money artists. Art money can be used to buy art or services from all the registered BIAM artists at up to 50%. Art money can be spent in registered BIAM shops and businesses up to a % set by the individual business. Art Money can be used as payment for accommodation at any BIAM host. Art money can also be spent at non-registered shops and businesses around the world where acceptance can be found.

Your news in brief:

  • Alternative currency schemes have been slow in getting traction for a variety of reasons, but it may be that their time has arrived. But it probably won’t be something along the lines of the local “Ithica Hours” but a weird cross-over whereby an on-line game world currency flings itself into meat space, as the QQ has in China.
  • If you’re interested in exploring alternatives to government-backed media of exchange, you may want to visit ReinventingMoney.com which covers all the bases.
  • The race is on: will it be the peaceniks and greens in the Republic of Vermont or the libertarians next door in the Free State of New Hampshire who skip the Union first?
  • Is it just me, or do there seem to be more “mysterious powder in envelope frightens IRS employees”-type stories cropping up in the news ?

Over at the always-entertaining Boing Boing, Douglas Rushkoff says that the best response an enterprising do-it-yourselfer might make to the current economic chaos would be to Print Your Own Money.

We think of the economy and its rules as given circumstances, when they are actually constructions.

In brief, the money we use is just one kind of money. Invented in the Renaissance, and protected with laws banning other kinds of money, it has very particular biases that lead to almost inevitable outcomes.

Following this is an interesting overview sketch of the history of the development of the government currency monopoly, and its consequences. Then, his prescription:

If we can adopt what we Boingers might call the “Happy Mutant Approach” to this crisis… this is not an entirely hopeless situation. Yes, corporations may lose the ability to keep us employed as the banking investment they depend on to operate dries up. But this corporate activity was always extractive in nature, getting (or, historically, forcing) people to buy mass-produced, and nationally distributed food and other goods that were once produced locally.

The collapse of centrally controlled commerce and currency simply creates an opportunity for local commerce and currency to revive. For people to learn to work and live together on a human, local scale — as the original free market advocate, Adam Smith, actually suggested. Admittedly, this would be a painful transition for many — but it’s better than maintaining dependence on a fiscal system designed from the start to turn people and communities into extractable corporate assets. (Think about that the next time you’re called up to “human resources.”)

Whether or not we’ve had time to fully embrace the Craft/Maker/cyberpunk/Boing ethos, our ability to provide for ourselves and one another directly, locally, even socially instead of entirely through centralized commerce, will determine how well we can navigate the near future.

For starters, check out the LETS system and other complementary currencies for how to make your own currency, Bernard Latier’s book The Future of Money free online, and Local Harvest for Community Sponsored Agriculture opportunities near you.

Money can be just as open source as any other operating system. It used to be.

A handful of interesting things that stumbled on our internets recently:

  • Over at the LegalMatch law blog, Kate Langmore reviews the prospects for a tax resistance campaign by opponents of California’s Proposition 8.
  • An ex-cop is working on a reality TV show designed to catch cops breaking the law. In the first episode, they catch cops lying to obtain a search warrant and then film them busting into their targeted house — only to find Christmas trees growing where they expected to find a marijuana farm, and surveillance cameras transmitting their surprised expressions back to KopBusters central.
  • Wendy McElroy has been journaling a year of frugality at her blog — getting the jump on what’s likely to become an increasingly popular genre.
  • At Tax Update Blog, Joe Kristan reports that the IRS’s “Offers in Compromise” program doesn’t seem to have much to recommend it:

    If you watch too much late-night cable television, you probably have seen commercials that make it appear that paying federal taxes is no big deal, because you can always work out a “pennies on the dollar” deal. Don’t count on it.

    One tax attorney writes:

    I regularly tell my clients that Offers in Compromise based on doubt as to collectibility are a crap shoot. You can meet all of the suggested requirements and the IRS can still legally reject your Offer merely because it feels it’s not in its best interests.

    Of course, by the time you find out that the Offer is not in the government’s best interest you have voluntarily given it all of the information it needs to seize your assets and have also given them at least an additional year (the filing of an Offer extends the statute of limitations) to collect the tax.

  • Kristen McKee’s working on some pre-new year’s resolutions. “One thing I’ve noticed in my deschooling process is my shift from helpless victim, to active participant, in many different areas of my life,” she writes. One of those areas is taxes: “In the past, I paid my taxes the easiest way I could figure out so I could get the most money back, or the way I knew most others to do it. This year I am trying to be true to what I really feel is important and learn how to minimize or eliminate the taxes I pay that go to fund a war.”
  • Francois Tremblay investigates how shared belief generates power and notices the charmingly naïve and unashamedly naked liberal ideology hanging loose at Check Your Premises.
  • More local currency news: Introducing the Milwaukee Bucks.

I’m freshly home from the holidays and am getting back to my email and my feed reader and the rest of that big ol’ interweb after some good family time.

So, today: a few bits and pieces that accumulated during my absence:

  • First up: among the things that happened while I was away was that I got roped into Facebook by some pals who like to play word games long-distance. Those of you who have also given in to temptation may be interested to know that there’s a NWTRCC Facebook group as well as a more generic tax resistance group on Facebook.
  • Frida Berrigan notes that the United States remains the world’s leading arms exporter, fueling wars and arms races worldwide.
  • Don Bacon comments on the coming increase in the size of the U.S. military and how the military plans to go about boosting its headcount.
  • A number of commentators gleefully point out that the brand of shoes recently flung at Dubya during a press conference in Iraq by Muntazer al-Zaidi are flying off the shelves.
  • A fascinating new look at the role of the Watergate scandal’s “Deep Throat” by George Friedman sees the destruction of Richard Nixon as a behind-the-scenes power play by J. Edgar Hoover’s rogue secret police against political control of the out-of-control agency — and sees the Washington Post’s reporting of Deep Throat’s revelations not as the act of a paper courageously fighting the powers-that-be and bringing truth to light, but as hiding the real truth in order to take sides in a back stage coup.
  • Charles Hugh Smith gives us some more of his insights into the coming expansion of the informal economy. According to Smith, in the still-coming economic downturn “very few can operate a formal business profitably, and so they close their doors and scrape up a living in the informal cash economy. Local government will see its revenues wither and eventually insolvency will force a radical re-thinking of government revenues, expenses and services. Until then, watch for the informal economy to grow and the formal economy to wither.”
  • Jesse Walker at Hit & Run looks at alternative currencies and shares some details I hadn’t heard before — for instance this bit about Argentina: “At the depth of the country’s last economic crisis, about half the nation’s provinces issued their own money rather than rely on the central bank. I knew about the barter-based currency that emerged in Buenos Aires at the time, but I didn’t realize the search for homegrown monetary alternatives had been so widespread.”
  • ntodd at Pax Americana shares the developmental stages toward Active Peace

    One interesting aspect of the five-stages theory seems to be that the next one only becomes visible or understandable to you once you have attained the one before. In this way, each stage represents a “perspective”, both individual and social, and social “organisms” can be said to progress through the stages as well as individual ones.

So lately I’ve been being very urban homesteader — baking bread, brewing beer and sake, making yogurt, weeding the garden, canning soups. I’ve been looking for a paying gig, too, which I think partially explains my sudden explosion of home usefulness: it gives me something productive to do while I wait for résumés and bids to be ignored.

What I haven’t been doing much is writing anything substantial for The Picket Line. Sorry ’bout that.

Meanwhile all sorts of interesting things have backed up in my bookmarks, waiting for me to add some insight or context before passing them on for you to enjoy. I think instead I’ll just let them spill out here and trust you to fill in the blanks:

Most of us have lived through a handful of big collapsing bubbles now. Don’t you get that old déjà vu feeling when you see all of the flailing going on in Washington these days — all the frantic hand waving and deck-chair-rearranging and confident assertions of batty soothsayers with pseudoscientific models and charts?

Could it be that we might wake up some morning to find that the whole kit and caboodle — the dollar, Wall Street, the federal government — has gone out Enron-style?

Dmitry Orlov spoke at a Long Now Foundation seminar in San Francisco a few days back. He sees many similarities between the situation the U.S. is in today and the situation the Soviet Union was in shortly before it disintegrated. You can read the transcript of his talk on his blog.

In some ways, ironically, the fact that people in the Soviet Union had already taken pains to create ways of nurturing relationships and creating livelihoods in parallel to the crushing totalitarian ambitions of the state made it easier for people to adjust to the wrenching changes that took place in the wake of that state’s implosion. Easier, that is, than Orlov anticipates things will be for us in the U.S., who have become far too used to relying on the system to provide for our needs.

But at least in my neighborhood, there’s a thriving renaissance of thinking about economic alternatives — ones that, even if they aren’t consciously designed with financial apocalypse recovery in mind, could be nice tools to have in the box should that event come to pass.

Representatives of several such experiments have come together recently to brainstorm at Bay Area Community Exchange, which had its first meeting last week:

The group met to brainstorm the possibility of “a local currency and/or bartering network in order to facilitate a more just and sustainable local economy” in the San Francisco bay area. War tax resistance was one of many explicit goals of the project, which also included: “community participation in and control over local economy which would better reflect community values, the collapsing economy and the associated rise of poverty, better pay equity and fuller employment, development of stronger community relations, more environmentally sound production of goods and reduced energy use for distribution, supports local workers and withdraws support for exploitation of workers abroad, to enjoy life more [with] less time working at a desk job and more time gardening [and] taking care of family etc., greater self and community sufficiency as peak oil becomes a challenge.”

It is gatherings like these that give me some hope that creative minds will find a way to get to the other side of all of this madness and maybe learn a thing or two from it.

Folks interested in alternative currencies (and these days it seems like a lot of people are looking for some alternative to the greenback), will be delighted to know that there’s a new magazine, Community Currency Magazine, devoted to the subject.

Tax law professor James Maule takes a first look at the possible tax consequences of alternative currency plans. These alternative currencies seem to be experiencing a renaissance these days, but there is a lot of ambiguity in how alternative currencies are treated in the tax law:

The consequences of the use of [an alternative currency called] Equal Dollars should be easy to determine, but there is no explicit authority answering the question.

Years ago, in Rev. Rul. 79-24, 1979-1 C.B. 60, the IRS concluded that gross income includes the value of property or services received in exchange for other property or services. About a year later, in Rev. Rul. 80-52, 1980-1 C.B. 100, the IRS concluded that the same result was reached even if the bartering was not direct but implemented by an organization crediting its members with trading units. Several years later, in Rev. Rul. 83-163, 1983-2 C.B. 26, the IRS concluded that members of a barter club must report gross income when they receive services through a barter exchange. The organizations operating these barter exchanges are required to comply with the barter exchange reporting requirements.

The IRS has also concluded that organizations that provide a venue for individuals to exchange services on an informal, noncommercial basis and that do not give the participants any rights or impose any obligations with respect to the exchange are not barter exchanges subject to the reporting requirements. Thus, in private letter rulings, the IRS has concluded that nonprofit organizations issuing “Time Dollars” or similar credits for services provided by individuals to other individuals are not barter exchanges subject to the barter reporting requirements, chiefly because in the instances it reviewed, there was no guarantee that the recipient could get anything for the “Time Dollars” issued to the person.

The IRS has specifically declined to answer the question of whether the participants in the program have gross income. Turning to the statute, unless an exclusion can apply, the recipients of the Equal Dollars have gross income because when they receive those dollars they receive something that has value, that can be used to acquire property or services of comparable value, and that are theirs to use unfettered by any restrictions or limitations.

When one works through a list of possible exclusions, it’s unreasonable to conclude that the Equal Dollars are received as a gift. A person who bargains to receive half of her salary in Equal Dollars isn’t the recipient of a gift. Filling employee accounts with amounts that the employees can use to acquire goods or services isn’t the making of a gift because transfers by employers to or on behalf of employees by statutory definition cannot be gifts.

It’s very difficult to conclude that the receipt of Equal Dollars represent imputed income, which the IRS as a matter of administrative practice declines to tax and which some theorists claim isn’t income in the first place, because imputed income situations involve people doing work for themselves, such as mowing their own lawn or cooking their own meals.

Consider, for example, the $700 of Equal Dollars received by the organization’s CEO. How is that any different from receiving a gift certificate for $700 worth of services of products at a retail establishment? It isn’t. Professor Deborah Geier has reached the same conclusion, in “When Helping Hands Have to Pay Taxes,” an article [a letter to the editor, really — ♇] published on page A24 of the edition of the New York Times.

As for the compliance questions, there aren’t enough facts [in Annette John-Hall’s article about a Philadelphia alternative currency plan] to determine what the organization and the participants are doing. Perhaps the recipients are reporting income, and perhaps they are not. Whether the details of the Equal Dollar program fall closer to the barter exchange or closer to the “Time Dollars” arrangement on the spectrum of “U.S. currency-free transactions” is unclear, and thus whether the organization described in John-Hall’s column should be reporting cannot be answered at this point. The facts of the “Time Dollars” private letter rulings are sufficiently different from those of the “Equal Dollars” arrangements to make it risky for someone to reach a conclusion based on the general facts that fit into a newspaper column. Lurking in the compliance cluster is the situation that will arise when someone reports Equal Dollars as earned income in order to qualify for, or increase, the amount of his or her earned income tax credit.

That’s a good point. If something may be considered income for tax purposes or may not be, and nobody knows for sure, it might not be the government that decides to press the point. For some people, it can be economically advantageous to declare questionable income as “taxable” earned income in order to qualify for (or enhance) refundable credits.

In some ways, the use of Equal Dollars is tantamount to the creation of a separate currency system within the economy. So long as Equal Dollars can circulate only within the limited world that accepts their use, the tax issues aren’t unlike those arising when a barter exchange or trading club sets up ways to measure members’ economic positions through devices other than a national currency. If, however, the use of Equal Dollars or their equivalent become so widespread that they displace the use of national currency on a grand scale, the tax issues, especially the policy questions, will be cast in a totally different light.

Maule thinks that if Congress adopts a laissez-faire attitude to alternative currencies, people and businesses will come up with all sorts of ways to recast their income and profits in this way in order to avoid taxes, which Congress will never tolerate. Alternatively, if Congress crafts precise rules to limit which sorts of alternative currency transactions are taxable and which are not, this would just become an invitation for those businesses that can afford the craftiest lawyers and accountants to monopolize the alternative currency field (which would destroy anything that is currently appealing about it).

His prediction: “Ultimately, the Congress needs to deal with these issues. Unfortunately, it, like most legislatures, usually waits until people sort things out for themselves, making it more difficult to prescribe sensible rules because a coalition of those wanting special exceptions, those wanting transition rules, and those unwilling to change their reporting practices prevent the legislatures from writing on clean slates.”

Of course what looks like a bug to us is probably considered a feature to folks on the inside. Why bother going through the process of legislating if there isn’t a group of entrenched interests with a large financial stake in the outcome who are willing to spend some money in exchange for influence?

protesters holding signs reading “Boycott the Household Tax,” “Don’t Register, Don’t Pay: We’re Not Paying the Household Tax,” and “Tax the Cheats that got us into this Mess.”

Opponents of the “Household Tax” in Ireland are leading a mass tax resistance movement

The photo above comes from Ireland, but the news I have about the anti-austerity tax resistance campaigns in Europe comes from Greece today:

Some bits and pieces from here and there in the libertarian corners of the web:

  • At the Bleeding Heart Libertarians group blog, which tries to use intellectual arguments to meld libertarian instincts with liberal sensitivities, Matt Zwolinski makes a libertarian case for good manners. Good manners? Really? Really. They’re by no means as trivial as they’re often treated by ethicists:

    It is a mistake, first of all, to think about rules regarding the location of forks as paradigmatic of manners and etiquette. It is a mistake, too, to suppose that there is no important distinction to be made between the rules of etiquette and the principles of manners. And it is a mistake for libertarians, especially, to disdain all this business as the stuff of authoritarian busy-bodies.

    …Societies… need rules to keep people from bumping in too each other too roughly. The state is one potential source of those rules. Morality is another. But we should not… neglect the importance of etiquette. Especially if, as libertarians, we want to minimize the role of the state as rule-maker and enforcer.

    …I would think, moreover, that libertarians would find the topic of good manners theoretically interesting. Manners and etiquette are, after all, kinds of spontaneous orders.

  • Wendy McElroy, at Laissez Faire Today, writes about Freedom and Frugality. Excerpt:

    I no longer believe the American dream is functioning. My choice is to earn and spend less in order to control my own time and to avoid fueling the State through more taxes. I have called this choice “frugality,” but some people are more comfortable with the term “voluntary simplicity.” The point of such simplicity is not to save every possible penny. It is to ensure that your time and money are expended on your goals. Voluntary simplicity can be viewed as a “business plan” for getting the most out of life. Ask yourself what your goals are and what is necessary to get there. Of equal importance, ask what is not necessary.

  • Paul Bonneau, at Strike the Root, notes that libertarians can be just as susceptible as liberals and conservatives to squabbling over symbolic elements of ideological tribal belonging when they’d be better off making friends and knowing who their real enemies are.
  • Matthew Feeney, at Reason, reports that Alternative Currencies Rise as the Eurozone Crisis Worsens.

Some bits and pieces from here and there:

Some bits and pieces from here and there:

In earlier Picket Line entries, I’ve attempted to translate sections from the latest edition of the Spanish Handbook of Economic Disobedience (see , , , , , , , and ).

Today I’ll continue:

The community economy

It can be defined as the pooling of resources for the collective enjoyment of the people who interact, without accounting for the flow of trade. It functions under spontaneous reciprocity, relationships of affinity, mutual aid, and high levels of trust; without expecting compensation in return for what has been shared.

Some ecovillages and repopulated cores spent years functioning with a community economy such that all members of the community held their income and expenses in common with the aim of covering their basic needs. This is the case, for example, of Lakabe, in the valley of Artzibar, Euskalherria.

In many places they include free clothing stores and all sorts of second-hand goods, which are left behind and taken without any sort of auditing. The freestores, like libraries but for any sort of thing, are collective warehouses where everyone leaves what they only use occasionally in order that other people can also use it.

Community gardens, resistance boxes [places where people can deposit extra money, or get money when they’re in need, named from their use during labor strikes], public free meals, are among the other ongoing or periodic examples that show us how a market-free economy is not a utopia but increasingly a part of our reality.

Barter

Non-monetary acts of the exchange of goods, services, and know-how. A direct verbal agreement between the offerer and bidder that satisfies the claims of both parties in relation to the fairness of the exchange.

Multi-reciprocal barter: Alternative currencies

Alternative or local currencies are a tool that goes beyond direct exchange, facilitating multi-reciprocal exchanges and establishing value for goods, services, and know-how that are exchanged. They are also part of the key to relocalizing the economy, promoting human relationships and economies of proximity at the local and bioregional level. It generates a social market open only to activities that incorporate ethical, ecological, and social criteria that permit all people to interact fairly and without middlemen.

Alternative currencies are an opportunity to reduce the hegemony of capitalism. They could gradually replace the euro while guaranteeing abundance, as each individual participates in the creation of resources to meet collective needs, putting their skills and know-how at the service of the community.

An exchange network can be put into motion by a small, critical mass (30–40 people near or far would be sufficient) who associate at the local level to boost economic relations based on trust and proximity, over a range of bioregional action.

As a tool of the transition that inevitably coexists with the capitalist economy, we must promote a mixed system in which the LETS system and the exchange of money complement each other. The LETS (Local Exchange Trading System) system establishes the guidelines for promoting networks of local exchange in which there is no interest on the exchanges. Currency is generated when an exchange takes place (the bidder has a positive balance equal to the agreed value of the exchange, and the claimer is dinged with an equivalent negative balance), permitting a deficit according to the rules of the network.

When it comes to currency exchange, it is usually allowed to change official money (Euro) for liberated money but not the reverse, since the undertaken path is to reduce the hegemony of the capitalist economy.

In addition we mention the transparency required for this new way of understanding the economy based on trust. For this, we use the virtual systems of administrating networks of exchange, which are nothing more than internet software applications and that serve to register the exchanges.

These software applications are much like those used in banks to manage our accounts, with the difference that the basic data of balances and transactions are accessible to all members of the network.

The systems that are supported by the exchange of paper money are essentially fragile, besides the danger of counterfeiting and the cost of printing the currency, they hide fluctuations that occur in the system because we do not know the quantity of money that each person has.

The CES (Community Exchange System) is a management system for alternative currency (online software) with more than 10 years behind it, developed in South Africa. It has thousands of users and more than 500 exchange networks spread throughout the world. The diverse integrated cooperatives and bioregional networks of exchange (Ecoxarxes) that exist so far in the state are being the drivers of CES up to the point where in three years there are already 150 CES networks in the state, being far and away the most prolific place in the world in this system of exchange. However, despite its potential, this software has some weaknesses that limit its expansion and use, so that a more intuitive and agile version is in the works for their next version: the Integral CES. See www.ces.org.za and www.integralces.net.

The transitory relationship with the capitalist economy

To construct a counter-economy is a necessary duty if we want to expel the capitalist economy from our lives. It is evident that for many of the projects of transition we need injections of euros in order to set them in motion. To make use of the capitalist economic resources of a legal character (wages, unemployment, inheritances, scholarships) may not be enough, and here we come to the role of actions of economic disobedience that we have discussed in these pages.

This is a question about which we have to define our own strategy, on a case by case basis. At last, we will have reference to a method that can be very useful for driving the process of transition previously expounded: crowdfunding or collective microfinance.

Crowdfunding is a system of co-financing of projects and initiatives through collective cooperation, where each individual acts as a “patron” by providing some amount of money to drive some project.

Its primary mission is to promote, beyond the individual rewards in exchange for donations, the creation of common goods promoting liberated knowledge. Some examples of this type of platform are www.goteo.org or www.verkami.com.

Among those on the point of launching is Coopfunding.net specifically for helping cooperative and self-managed projects, which has already been used in the Beta period for the “Prison Cannot Hold Disobedience” campaign which, among other projects, has served to assist in the dissemination of this handbook.

I’ll stop here today. There are about five or six pages to go.

While I was working my way through the Spanish Handbook of Economic Disobedience and trying my hand at some amateur translation, interesting links were accumulating in my bookmarks. I’ll share some of these today:

Some links from here and there:

Some recent news related to tax resistance:

  • ESat reports on a tax strike in Bahir Dar, Ethiopia, saying more than 500 merchants have been jailed for tax refusal, and others have closed their shops rather than pay.
  • Manoj Viswanathan: “Tax Compliance in a Decentralizing Economy”. Excerpt:

    Tax compliance in the United States has long relied on information from centralized intermediaries — the financial institutions, employers, and brokers that help ensure income is reported and taxes are paid. Yet while the IRS remains tied to these centralized entities, consumers and businesses are not.…

  • The government of India abruptly stopped acknowledging large-denomination rupee bills as legal tender . This was meant to disrupt the underground cash economy, and force people with large cash reserves to show themselves. It seems to have worked. The government reports receiving 25% more income tax returns this year than last. Governments around the world are toying with ways to discourage cash in favor of more-easily traced and surveilled methods of payment.
  • The Municipal Corporation of Gurugram was formed in , and wasted no time claiming to govern and tax the region. Recently, representatives met from 46 villages that the Corporation has brought under its thumb. They unanimously voted to refuse to pay property tax to the MCG, saying that it lacks authority to tax them.
  • Kwame Anthony Appiah, a philosopher whose books I’ve appreciated (see ♇ 18 August 2008 and 11 January 2011), has apparently taken on the job of writing an ethics advice column for The New York Times Magazine. In a recent column, he attempts to answer “Is It O.K. to Protest Trump by Withholding Taxes?” He concludes that no, it isn’t, and rambles on with some unsophisticated claptrap about democracy and civil disobedience. I have yet to read a newspaper “ethics” column that was worth reading. Something about the advice column format seems to make philosophers lazy.

Some tax resistance links that have scrolled by in recent days:

  • Did you miss the national gathering of NWTRCC? Catch up by reading this blog report on the gathering, videos of panels and presentations, photos, reports from the various workshops, and coordinating committee business minutes.
  • I noted that a chapter of one of the largest political parties in the Democratic Republic of the Congo had called for a tax strike against the Kabila autocracy. That call has now been joined by organization Lucha, based in North Kivu, which is asking citizens to stop paying taxes, utility bills, fees, royalties, and licenses until Kabila steps down.
  • Departing IRS chief John Koskinen, in his final news conference, warned that continuous budget cuts have pushed the agency to the breaking-point. A catastrophic malfunction of the agency’s decrepit information technology “is not a question of whether, simply a question of when,” he said. In addition, budget cuts and personnel losses have reduced the agency’s ability to credibly deter tax evasion. “If people think that many others are not paying their fair share or that they’re not going to get caught if they cheat… our voluntary compliance system will be put at risk,” Koskinen said. “A 1% drop in the compliance rate translates into a revenue loss of over $30 billion every year.”
  • Howard Waitzkin, in Monthly Review looks at some of the prospects for would-be revolutionaries in “the Global North,” including the potential for tax resistance as a revolutionary activity. Excerpt:

    Besides direct action, revolutionaries can change what we do with our money, especially in the realms of taxes, investments, and local economic activities. Such changes can disrupt, undermine, and create space for further revolutionary actions. We in the 99 percent persist as the main funders of the capitalist state, which passes our money on to corporations that exploit workers, destroy nature, raise the earth’s temperature, and keep us in permanent war and perpetual inequality. We need to change our habits of giving up our money, and if enough of us do so, the capitalist state no longer will be able to prop up the capitalist economy for the benefit of the ultra-rich.

    Tax resistance can take several forms. For more than a century, pacifists in the United States have resisted taxes that pay for war, some eventually going to prison but the vast majority, like me, suffering no substantial harm as a result. As a card-carrying conscientious objector, I openly resisted half of my income taxes for more than a decade during and after the Vietnam War. If one honestly declares one’s income, there is nothing illegal about claiming a war deduction of 50 percent, which is the approximate percentage of the federal budget that pays for past, present, and future wars. Later, with a young daughter, I was starting to feel inconvenienced and a little bored by appeal procedures inside and outside the Internal Revenue Service because of open tax resistance. So I reluctantly made the same decision that Trump and his ilk make, to avoid taxes through loopholes rather than resistance of conscience.

    The problem with either explicit or implicit tax resistance is that we number in the thousands rather than millions. “Death and taxes,” the two inevitabilities, as we are taught, seem hard to resist, but corporations and rich individuals understand very well that at least taxes actually are not inevitable. In Latin America, tax resistance usually proceeds according to the Trump model for corporations and the rich, but ordinary people can succeed in massive tax resistance through non-reporting or under-reporting of income. During the dictatorships in the Southern Cone, the autocratic governments had trouble raising sufficient tax revenues, despite extensive attempts through bureaucratic and police surveillance, and tax resistance became one of many tactics to bring down those regimes. Ironically, a major motivation in Cuba for allowing expansion of private small businesses involves a perception that private-sector business activities were expanding anyway, along with rampant tax evasion; if permitted officially, small businesses could generate substantial taxes for social programs. Even in Cuba, tax resistance has interacted with political organizing in Poder Popular and community-based organizations to enhance popular participation. As a revolutionary strategy in the United States, tax resistance must flourish, so millions of us stop functioning as the main financiers for the capitalist state.

  • John Stoner, at Mennonite World Review, invites Mennonite taxpayers to find the courage to be a conscientious objector. Excerpt: “In the United States, conscription has ended and we as persons are not conscripted for war. But war goes on unobstructed, because our money is conscripted. We could be conscientious objectors to war by being conscientious objectors to taxation for war. So, why aren’t we conscientious objectors to taxation for war?”
  • Businesses in Tunisia have responded to surprise tax hikes by vowing not to pay.
  • 10 million American taxpayers were hit with penalties for failing to pay their quarterly estimated taxes on time. This number has risen 40% since the beginning of the decade. The IRS seems to believe this is because of an increasing number of people working in the “gig economy” who aren’t aware that they are legally responsible for making these quarterly payments.
  • Michael Goldstein brazenly commits a federal crime by urging people to refuse to pay the federal taxes that purchase our next nuclear war. It’s also a crime to incite tax resistance in Italy, apparently, but La Legge per Tutti can help you find the contours of that prohibition.
  • Unicorn Riot has posted a series of articles on Alternative Economies & Community Currencies in Greece. And Commons Transition has published an in-depth study of the Catalan Integral Cooperative.
  • I’m going to try to wait to comment on the tax bill oozing through Congress until something actually becomes law, but Calvin H. Johnson couldn’t wait. He says that the proposed tax cuts will push the U.S. federal debt past the point where it threatens the stability of the fisc. And not a moment too soon.

Finally, this interesting data point on American politics destroys the polis:

Using smartphone-tracking data and precinct-level voting, we show that politically divided families shortened Thanksgiving dinners by 20–30 minutes following the divisive 2016 election. This decline survives comparisons with 2015 and extensive demographic and spatial controls, and more than doubles in media markets with heavy political advertising. These effects appear asymmetric: while Democratic voters traveled less in 2016, political differences shortened Thanksgiving dinners more among Republican voters, especially where political advertising was heaviest. Partisan polarization may degrade close family ties with large aggregate implications; we estimate 27 million person-hours of cross-partisan Thanksgiving discourse were lost in 2016 to ad-fueled partisan effects.

Another reason why you should ignore the presidential elections.

Some links from here and there: