How you can resist funding the government → a survey of tactics of historical tax resistance campaigns → manufacture & sell alternatives to taxed goods → underground economy → varieties of, “Solidarity Economics”

Ethan Miller’s essay Solidarity Economics has thought-provoking and encouraging things to say about the potential of the underground economy that exists almost invisibly all around us:

“economy” is not just about supply-and-demand markets. In its largest sense, economics is about how we as human beings collectively generate livelihoods in relation to each other and to the Earth. The human economy includes all of the varied social relationships that we create in the course of meeting our needs and pursuing our dreams.

Capitalism, with its “free market economy,” its “jobs” and its “wages,” is only one part of how we actually create and maintain livelihoods in our families and communities. When we peel away the misleading idea of one giant “Economic System,” we can begin to see the workings of many different kinds of economies that are alive and well, supporting us below the surface. These are not the economies of the stock-brokers and the “expert” economists. These are our economies, people’s economies, the economies that we build with our everyday lives and relationships.

These include: “Householding economies,” “barter economies,” “collective economies,” “scavenging economies,” “gift economies,” “worker-controlled economies,” “ ‘pirate’ economies,” and “subsistence-market economies.”

These categories name only some of the many diverse, non-capitalist economic relationships that are interwoven throughout our lives. The project of identifying these relationships is a project of hope, one that allows us to begin de-colonizing ourselves from the devaluing and degrading ways-of-seeing that have been imposed on us by the Economics of Empire. We can begin to see, instead, the powerful spaces of freedom that already exist in our midst.…

Solidarity Economics begins here, with the realization that alternative economies already exist; that we as creative and skilled people have already created different kinds of economic relationships in the very belly of the capitalist system. We have our own forms of wealth and value that are not defined by money. Instead of prioritizing competition and profit-making, these economies place human needs and relationships at the center. They are the already-planted seeds of a new economy, an economy of cooperation, equality, diversity, and self-determination: a “solidarity economy”.

Though the capitalist economy has devalued or hidden these seeds from us, we can use them as starting points for our alternative economic organizing. The project of solidarity economics is to water these seeds — to identify and expand the spaces of solidarity that already exist and, in the process, create new and larger ones.

Sudhir Alladi Venkatesh explores the underground economy of Chicago’s South Side, in The Boston Globe’s Field Notes from the Underground:

Most of us could probably identify hidden economic activity in our own communities and indeed in our own homes. Inner cities have their crack dealers, but the shady economy can also include kids selling lemonade, bars that host poker games, carpenters who work under the table, neighbors who offer day care. In fact, trying to uncover each and every unregulated exchange would seem implausible.

Academics and policymakers continue to try, however, in large part because the costs of unregulated and hidden economies are so high. The tax coffers are depleted when income is not reported. Many underground workers are working for less than minimum wage, and most are failing to report their income. And when we throw in drugs, sex work, and guns, we are of course forced to consider even greater social problems.

How big is the underground economy? The General Accounting Office and the Internal Revenue Service produce estimates every few years that differ widely, but one government study calculated that $500 billion in income fails to be reported each year. Another estimate, based on consumer behavior, suggests that 4 out of 5 Americans turn to the unregulated world for goods and services which would raise the $500 billion figure appreciably.

But the underground economy is more than just a set of cash transactions. Cash, as it turns out, isn’t necessarily the preferred medium of exchange: on Chicago’s South Side, barter is just as common. I interviewed the owner of an auto body shop who threw out his cash register because customers were paying their bills in kind. They offered him cellphones, microwaves, furniture, and IOUs. He, in turn, started selling these goods from the back of the store, and now auto repair constitutes only a fraction of his income.

Venkatesh, author of Off the Books: The Underground Economy of the Urban Poor, observes how these oases of underground economy interact with the above-ground economy and the government that is parasitic on it and jealous of its competitors. “Watching how these communities self-regulate,” for instance through real-life mutually-acceptable private mediators of the sort often found in theoretical anarchist literature, “I witnessed sophistication and creativity not usually associated with neighborhoods of concentrated poverty.”

In “Ghetto Capitalism”, Patrick Radden Keefe reviews Sudhir Venkatesh’s Off the Books and looks at how people who are least able to afford the costs of participating in the government-regulated and -taxed above-ground economy find and invent alternatives in the underground economy.

Kay Bell at Don’t Mess With Taxes has pointers to some useful resources for people who want to take advantage of federal, state, and local tax incentives for energy-efficient and alternative-energy home improvements.

And The Wandering Tax Pro gives us the skinny on the most advantageous tax treatment of home office expenses by people who are employees of their own one-person corporation.

Kerry Howley of Reason reviews Sudhir Alladi Venkatesh’s Off the Books: The Underground Economy of the Urban Poor. I’ve linked to other reviews of this book here before; I’m looking forward to reading the book myself (and I’ll share my thoughts when I do) but, alas, it seems like everyone else in San Francisco with a library card feels the same way.

Some bits and pieces for your Sunday browsing pleasure:

Wise Bread summarizes some of the options for opting out of the money economy:

If you know you can get by with little or no money, then you have the flexibility to follow your own path, to take risks, to refuse to knuckle under to people who don’t have your interests at heart. That’s why it has always fascinated me.

Taxpatriate renunciate satyagrahi Jeff Knaebel shares his liberatory program:

The Nation-State is the sword over our collective heads. This system of organizing a society of six billion human beings doesn’t work. Its institutionalized structural violence is destroying humanity and the earth. States have murdered more than 230 million human beings in the past 100 years. A system that places the power of planetary incineration into the hands of a few psychopathically aggressive tyrants is clearly insane. It is impossible to reform a system whose very foundation is organized criminal violence, lies and deceit. It must be abandoned, as a sinking ship. Don’t fight it. Just quit supporting it, quit cooperating with it, quit paying taxes to it. Simply leave it. Build your own ark, or look for like-minded others to join, forming islands of light in a sea of darkness.

Remember Joe Darby? He’s the soldier who, when he saw the Abu Ghraib abuse photographs, decided to blow the whistle. How’d America treat him afterwards? Well, he was promised anonymity, but Defense Secretary Donald Rumsfield outed him on television. Then it hit the fan:

His wife had no idea that Mr Darby had handed in those photos, but when he was named, she had to flee to her sister’s house which was then vandalised with graffiti. Many in his home town called him a traitor.

“I knew that some people wouldn’t agree with what I did,” he says.

“You have some people who don’t view it as right and wrong. They view it as: I put American soldiers in prison over Iraqis.”

That animosity in his home town has meant that he still cannot return there.

Philip Brewer at Wise Bread reviews Ragnar Benson’s Ragnar’s Guide to the Underground Economy. Excerpts:

The basic calculation that Benson does is this: An income of about $50,000 a year lets you live a comfortable middle-class life. However, earning $50,000 a year takes quite a bit of work. Suppose, instead, you earned about $30,000 a year, and then didn’t pay taxes? Depending on where you live, the net income works out to be about the same. As Benson puts it, “Personally, I have always found it much easier to earn 30 grand than 50!”

The book begins with the basics of operating in the underground economy: You work for cash, you avoid having a bank account, you leave no paper trail. (There’s also a comparison with less-drastic tax cheats who, for example, pocket cash payments while paying taxes as usual on payments by check or credit card.) There’s a discussion of the practical aspects of running a business that can’t be accredited or bonded, and has to be very careful about advertising or otherwise drawing attention to itself.

The bulk of the book, though, is a series of case studies of specific people working in the underground economy. There’s a section about a man who cuts up and delivers firewood. Another finds fossils and sells them to schools and scientific supply companies. Another gathers pine cones for sale to tree nurseries. There’s a chapter on service work like house cleaning and pet care. There’s a chapter on skilled work like carpentry, gunsmithing, or chimney sweeping. The book wraps up with a look at some of the downsides of the underground economy, such as the difficulty in getting medical insurance and not qualifying for social security or medicare.

Alex Raskolnikov has written an interesting, exasperating paper on The Cost of Norms: Tax Effects of Tacit Understandings.

The gist of his argument is that the various informal social norms and standards by which people come to arrangements — without having to draw up contracts or seek mediation by authorities — are quite valuable things. Because they are valuable things, when people rely on them in social situations, they are exchanging things of value without reporting this to the tax authorities and thus the State is missing out on lots of money.

One example of this shady underground economy of social norms is the one that is reported to exist in rural Shasta County. Don’t read this before bedtime if you’re prone to nightmares:

[Shasta County’s] farmers and ranchers build their relationships not by reference to their legal rights and obligations, but by relying on longstanding and pervasive norms of neighborliness. Neighbors help neighbors build, inspect, and repair fences, retrieve stray cattle, maintain the water supply, execute controlled burns, staff volunteer fire departments, and so on. They do not ask each other for payments, they do not enter into contracts, and they reject out of hand the idea of calling lawyers every time they do not like something their neighbors have done. Shasta County’s system of social control is built on shared understandings that are always unwritten, almost always unstated, and frequently unsupported by (or even contrary to) the relevant legal rules.

The world is clearly an uglier place than anybody knew, but Alex Raskolnikov has opened our eyes. Worse: “Shasta County is anything but unique. Researchers studying everyday commercial interactions have found similar informal practices everywhere they looked.”

…Shasta County inhabitants routinely engage in all sorts of commercial transactions that, if formalized, would produce tax consequences for one or both parties. Neighbors borrow (“rent,” in tax speak) each other’s equipment. They help each other with chores such as fence building and maintenance; that is, they provide services to each other. Occasionally, one neighbor supplies the other with building materials for a joint project. For tax purposes, this transfer may be characterized as a sale, depending on the circumstances.

Even this cursory analysis suggests that in the world of neighbors helping neighbors, one thing they may help each other do is reduce their tax liabilities.

In conclusion:

Social welfare would be improved if the government could cheaply identify these norms and start treating them as legally binding contractual terms for tax purposes.

How would this improve social welfare?

Norm-based transactions allow taxpayers to reduce their tax burden, in effect shifting it to other taxpayers. The new law [one that would treat all of these norms as though they were formal contractual agreements, and tax them as such] will reduce these undesirable effects, that is, it will diminish the cost of norms.

In other words, by taxing the norms, you diminish their cost (you know, to society). For various reasons, though, it would be impractical and possibly even undesirable for the government to identify and formalize all such norms. For this reason, Raskolnikov suggests that the government use some heuristics to identify a subset of those norms that is likely to mask economic transactions with the potential for a big tax bite.

So the informal norms in Shasta County are safe… for now. “To be sure, these dealings sometimes allow inhabitants to reduce their tax liabilities, but there are good reasons to accept this cost and move on.”

I’ve just learned of the U.S. Solidarity Economy Network. It looks as though it may develop into a useful resource for people working to build and strengthen alternative economies to those taxed and regulated by the government.

At Sunni and the Conspirators, Sunni Maravillosa encourages folks to consider some self defense against the upcoming trillion-dollar bailout fleecing. Excerpt:

First and foremost, the socialist cesspool will be funded by taxpayers — so we need to withdraw that tangible support. The Picket Line is an excellent resource for information and inspiration in that regard. Individuals who can’t easily get entirely out of the IRS’s clutches can almost certainly find ways to maximize deductions and such to reduce the money stolen from one’s income.

Everybody can turn to grey markets for goods as well as services. Roadside produce stands, Craigslist, Etsy, the handyman who’ll fix your various repairs for cash, with no receipts or records — are ways to exchange value outside of the taxers’ reach. Turning to those entities first should become a matter of habit — a principled habit — for those wanting to withdraw support from the USSA kleptocracy.

In a follow-up post, Sunni expanded on this:

The teeth behind [our] warning is that we shrug, as much as possible: we withdraw our activities from the aboveboard market, where inflation and taxation will eat at us with increasing vigor as the government tries to suck our lifeblood to pay bankers who’ve been misrepresenting themselves and cheating us a myriad of ways all along.

Many will argue that they cannot afford to risk becoming tax resisters, especially in such troubled times. As I said yesterday, I do understand that such a move is easier for some, both physically and mentally. If you’re having difficulty wrapping your head around dropping out in this way, consider some of the implications of staying within the system:

1. People who stay in the system will bear the costs of all these nationalizations, in terms of tax increases and a declining value of the USSA dollar.
2. As such, they will have less of a buffer between their income and ability to support themselves and the fluctuations in the mainstream economy.
3. Less diversity in one’s income streams means greater risk; this shakeup is far from over, and many of the aftershocks of the moves already made have yet to show themselves.
4. Less diversity in the type of income (viz., the USSA dollar) one receives means greater exposure to risk if that type of income becomes unstable or devalued.
5. Being in the system might actually make one more of a target, as new taxes, enforcement of extant taxes that are largely overlooked, and/or seizures of assets may radically change the economic landscape.

As an individual who values freedom, do you really want to maximally support what is an increasingly collectivist and overtly fascist system? Because that’s what you’re doing when you allow yourself to stay under the thumb of their rules, regulations, and reporting that add to business costs but add nothing of value.

This looks like it could be a useful part of the solidarity economy: TeachMate

TeachMate.org is a service that helps people who wish to learn things find others who wish to teach them. You may think of it as of a dating service in education. We are also very fond of the idea of teaching for teaching: you can find people who’d love to teach you something in return for you teaching him another thing.

The essence of this service is simple: whoever teaches — learns. There are few simple things we wish our user could find out:

• You don’t need to be a professional to teach. Instead, you have to teach to become a professional.
• You don’t need to pay money for learning or ask for money when you teach someone.
• Learning is not about the degrees, it’s about the process and what you can do with your knowledge.

Last night, after my Spanish/English tutoring swap, I stopped by counterPULSE for a discussion / workshop about “Surviving the Economic Meltdown One Neighborhood at a Time.”

Among the participants were some of the organizers and founders of organizations like the Institute for Urban Homesteading, San Francisco Food Not Bombs, the Really Really Free Market, JASE economy, Network of Bay Area Worker Cooperatives, the Transition Initiative, and Nowtopian/Shaping San Francisco.

Participants saw the current economic woes as an opportunity for bottom-up innovation of new styles of economic organization. They compared the present calamity to past economic crises that had given birth to inspiring radical social movements and experiments, and saw the potential for more of this today.

There was a mix of nostalgia for radical movements of the past (and modern attempts to revive them) and some frustratingly vague and superficial discussion of possible new innovations. Because nobody wanted to dominate the discussion, nobody was really able to go into much depth in their area of specialty. So the conversation sort of hopped from idea to idea without settling down much, but this drew the outlines of the gestalt anyway.

There was lots of talk about grand and dramatic and bold and unlikely aggressive actions against the current set of haves on behalf of the current set of have-nots: Seize the produce from the supermarket shelves and give it to the poor, seize the foreclosed houses and give them to the homeless, seize the undeveloped vacant lots and asphalt streets and golf courses and turn them into vegetable gardens, declare a Jubilee and declare all debts null and void.

All of this struck me as the sort of daydreaming that should be done with your mouth closed. I’ve developed a reflex that allows me to tune out any sentence that begins with “We need to…” which helps at times like this.

Some things that interested me from this gathering:

• Though it was a very leftist group, in which having a Marxist or socialist orientation was a point of pride, a surprising amount of the discussion involved people and local communities taking a proprietary interest in what is currently considered “public” or government property. For instance: the idea that neighbors should get together to seize streets and redevelop them as community gardens was applauded.
• The assumption that the economy has finally and totally hit the wall and that everything is gonna crumble hard into something that’ll make the Great Depression seem not so great was widely accepted, in fact uncontroverted.
• The meme in which the wicked Federal Reserve has despoiled our money and sneakily replaced it with debt — something I’m used to encountering in libertarian circles — was also to be heard here, and was met with nods and affirmations.

Over all, however, I didn’t come away with much of interest. If I’d heard about the event earlier, I might have prepared and brought something of my own to present. But as it is, I had nothing that I thought was sufficiently developed to share, and what I heard from other people didn’t sound very practical — mostly just nice-sounding wish lists, and hopes for grand gestures that the folks in power won’t tolerate and that the folks agitating for them don’t yet have the wherewithal to carry off.

I think, though, that some of this was due to the necessarily quick and superficial presentation of some ideas and projects that might be a lot more inspiring if presented in a more in-depth and thorough way. There does seem to be a lot of innovation going on in this group, and I was encouraged to find people seeing the current economic situation as an opportunity rather than a tragedy.

At FSK’s Guide to Reality, the proprietor reminds us that the perfect is the enemy of the good.

With the government’s tendrils woven throughout the economy, it’s tempting to throw up your hands and give up on trying to make personal economic choices that aren’t tainted by complicity with state coercion. But this is a cop out. Everyone is capable of making choices that expand the realm of freedom and individual responsibility and that reduce the influence and power of crooks and politicians. What’s important is to start doing it.

That said, I often find myself frustrated at FSK’s seeming lack of creativity in finding agorist solutions when they exist all around us. As Sunni writes in the comments to his post:

Right now, the agorist counter-economy is non-existent.

Perhaps for you, and perhaps in your location, but not elsewhere. I’ve been making and selling a variety of candies — mostly caramels and truffles — for a few years now. I know of others who have a more general approach, but they still consistently and actively seek out informal exchanges of goods and services rather than the licensed and taxed guy with a storefront on Main Street. Some people consider garage sales, Craigslist, and Freecycle groups part of the counter-economy.

By its very nature, “the” counter-economy is harder to see and track, but it’s there, and probably closer than one realizes. Any time a neighbor borrows a power tool instead of buying (or renting) it, or a friend helps another with his vehicle, it’s counter-economic.

It’s the way humans have done business for far longer than shops set up outside the home, with only credentialed individuals permitted to engage in certain activities — and that’s an important key to turn in others’ minds, it seems to me.

Sunni has written a follow-up to her comments at FSK’s Guide to Reality that I blogged about a few days back. Here are a few excerpts from Sunni’s post asking “just what is the ‘counter-economy,’ anyway?”:

Barter is one of a number of truly free-market exchange processes available to interested individuals. Some people use the term “counter-economy” for this, to more clearly separate it from the gov-monitored and -approved mainstream economy: the economy where licenses and permits are required, where one is increasingly prohibited from working from one’s home; where taxes and subsidies interfere with prices; where taxes are stolen at many steps in the process of creating, distributing, and selling goods and services; where, ultimately, it is impossible to separate the state from the economy, because the latter is conceived of as originating from the former — and thus rightfully must be taxed, supported, analyzed, adjusted, planned, bailed out, databased, monetized, mined, prioritized, specialized… in short, thoroughly controlled. Seen in this context, though, it should be obvious that the terms are backwards. The market that is free of state interference is the real economy; the state’s version originated much later, and to the degree any statist version succeeds in thwarting, subverting, or eliminating free trade, it successfully counters the free market. Semantics isn’t my focus today, however; identifying and expanding all manner of non-coercive, minimally-taxed exchange is.

Somewhat similarly, barter has come to have a more specific meaning than it used to; and my current favorite online dictionary helpfully buttresses my suspicion. Barter has a French etymology; its root means simply “to do business, exchange”. Nowadays it means, according to this source, “to trade by exchanging one commodity for another” … but isn’t money a commodity of sorts? Well, if it has intrinsic value, it would be; but what intrinsic value do certain patterns on pieces of special paper offer? Even for those of us who grok the meaning of “fiat”, there can be value in obtaining some of those pieces of paper in return for a good or service; doing so allows us to transact business with those who’re only comfortable in receiving that kind of payment, for starters.

All of the above is largely background to help elucidate why I cannot wrap my mind around statements such as this from FSK: “Right now, the agorist counter-economy is non-existent.” Even allowing for definitional differences, such a statement is mind-boggling. Aren’t the simple acts of neighbors lending each other tools and/or helping out with big jobs counter-economic? Aren’t Craigslist, Freecycle, and similar hubs counter-economic? I’d even say that garage sales, and to a lesser extent, auctions are counter-economic. Auctions have been somewhat regulated for a long time now, and more than a few locations are starting to apply that mentality to garage sales as well.

I hope that those of you who’ve expressed uncertainty about your ability to barter are now busily reorganizing your mental landscapes regarding what you might offer in a free trading environment.

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.

The good news is that I’ve got a paying gig that’s keeping me very busy. The bad news is that I’ve been very busy, and haven’t been able to update The Picket Line as much as I’d like.

Today: a bunch of links I thought were interesting enough to share but that I’ve given up hope about being able to weave in with some original commentary.

• Michael Kinsley tactlessly wonders where the buck stops on the torture policy.
• The European Court of Human Rights has denied an attempt by The Peace Tax Seven to establish that a country’s unwillingness to allow people to legally refuse to pay for military spending is a violation of the rights and freedoms set out in the European Convention.
• Craig Hancock caught me on film at the San Francisco Tea Party rally. Twice.
• The number and percentage of Earned Income Tax Credit claims that are fraudulent — those in which the person claiming the credit doesn’t qualify for it — has increased exponentially in recent years, and the IRS hasn’t been able to keep up.
• Isaac Stanfield is reading David Beito’s Taxpayers in Revolt: Tax Resistance During the Great Depression and is blogging his observations along the way.
• Winslow Wheeler tells us what to expect from the upcoming military budget and what deceptions and spin you’ll be seeing in the news coverage about it.
• Beware of religions whose symbol is a man being tortured to death.
• Vargarquista at anarkismo.net writes about Smuggling as a strategy of tax resistance (Spanish). This is a particularly urgent subject in countries that rely more on sales and value-added taxes than on taxes like poll taxes and income taxes that individuals can more directly resist. If the “FairTax” scheme that some are pushing in the United States ever came to pass, this would become more of an issue in the U.S. as well. (“Smuggling” is my best translation of “el contrabando,” but the author seems to include a lot of different sorts of underground-economy activity under that term.)
• Here’s another article about the Basque country war tax resistance activists who have been making noise recently: Colectivos antimilitaristas y de mujeres promueven la objeción fiscal a los gastos militares en la campaña de IRPF (Antimilitarist and women’s groups to promote war tax resistance in income tax season)
• David John Marotta has an intriguing idea about manipulating the timing of traditional-to-Roth IRA transfers and recharacterizations so as to maximize your tax-free capital gains. It’s somewhat complex but very clever. Basically, you do a traditional-to-Roth conversion into several different Roth accounts using as many different investment strategies. Then file tax extensions so that you extend the amount of time in which you can recharacterize those conversions. Wait and see which of your new Roth accounts appreciate the most; keep those (if any) as Roth accounts in which the appreciation will remain tax free and pay the taxes on the principle now. For the rest, recharacterize them as traditional IRAs again, and avoid paying taxes on them now. Follow the link for details and a more leisurely and clearer explanation.
• Radley Balko at The Agitator reminds us of this section from Dubya’s address to the nation on March 17^th when he was launching the Iraq War:

  And all Iraqi military and civilian personnel should listen carefully to this warning: In any conflict, your fate will depend on your actions. Do not destroy oil wells, a source of wealth that belongs to the Iraqi people. Do not obey any command to use weapons of mass destruction against anyone, including the Iraqi people. War crimes will be prosecuted, war criminals will be punished and it will be no defense to say, “I was just following orders.”

  I love the smell of moral clarity in the morning.

Sarah Fisch takes a good, close look at some of the participants in the underground economy in San Antonio — “a vast and diverse ‘shadow economy,’ a bajillion financial transactions by countless folks whose necessities are paid for through means not accounted for by the GNP, not measured in the Dow Jones, and usually not registered with the IRS.”

Some bits and pieces from here and there:

• Every year, on tax day, Steve Magin comes into town and visits the IRS offices, offering to pay his taxes in full if they’ll assure him that none of the money will go to pay for war and armaments. The agency representatives, of course, offer no such assurances, and so Magin keeps his checkbook in his pocket and sends the tax money to charity instead. Here’s some more about Steve and his protest.
• Another “suspicious powder” incident shuts down the IRS office in Ogden, Utah. The powder turned out to be nontoxic, but kept the building shut down for a long time during the Hazmat team and FBI crime scene investigation.
• I’m sure nobody saw this coming: as states have been piling cigarette taxes higher and higher, tobacco smuggling has skyrocketed — to the point where about half of the smokers in Arizona and New York are smoking cigarettes smuggled in from elsewhere. The smuggling trade has naturally proven a boon to the underground economy and to the organized crime groups who try to monopolize it.

A couple of things of note:

• Ruth Benn of NWTRCC has written up some of her notes on the “Innovative Social Justice Networking Techniques” panel with Mira Luna and Kwan Booth from the NWTRCC national gathering earlier this month.
• Phil Hodgen, from International Tax Law specialists the Hodgen Law Group, ponders the question what if one spouse is renouncing U.S. citizenship and the other isn’t? How do you fill out Form 8854 to figure out whether you are a “covered expatriate” who has to pay a hefty exit tax?

Some bits and pieces from here and there:

• Don’t Tread on Mike does some brainstorming on “how to start doing agorism.”
• The IRS has put together a set of its web pages that explain its collection process, or at least those parts of it they care to make public.

Robert Neuwirth at Foreign Policy has written an encouraging article about what he calls “System D” and the headline writer calls “The Shadow Superpower” — more-or-less: the underground economy, but a version of it that seems to be growing in sophistication and numbers of participants. Some excerpts:

System D is a slang phrase pirated from French-speaking Africa and the Caribbean. The French have a word that they often use to describe particularly effective and motivated people. They call them débrouillards. To say a man is a débrouillard is to tell people how resourceful and ingenious he is. The former French colonies have sculpted this word to their own social and economic reality. They say that inventive, self-starting, entrepreneurial merchants who are doing business on their own, without registering or being regulated by the bureaucracy and, for the most part, without paying taxes, are part of “l’economie de la débrouillardise.” Or, sweetened for street use, “Systeme D.” This essentially translates as the ingenuity economy, the economy of improvisation and self-reliance, the do-it-yourself, or DIY, economy.

Today, System D is the economy of aspiration. It is where the jobs are. In 2009, the Organisation for Economic Co-operation and Development (OECD), a think tank sponsored by the governments of 30 of the most powerful capitalist countries and dedicated to promoting free-market institutions, concluded that half the workers of the world — close to 1.8 billion people — were working in System D: off the books, in jobs that were neither registered nor regulated, getting paid in cash, and, most often, avoiding income taxes.

In many countries — particularly in the developing world — System D is growing faster than any other part of the economy, and it is an increasing force in world trade. But even in developed countries, after the financial crisis of 2008-09, System D was revealed to be an important financial coping mechanism. A 2009 study by Deutsche Bank, the huge German commercial lender, suggested that people in the European countries with the largest portions of their economies that were unlicensed and unregulated — in other words, citizens of the countries with the most robust System D — fared better in the economic meltdown of 2008 than folks living in centrally planned and tightly regulated nations. Studies of countries throughout Latin America have shown that desperate people turned to System D to survive during the most recent financial crisis.

Some bits and pieces from here and there:

• Marijuana has been decriminalized, at least to some extent, in many jurisdictions in America. This has brought the industry above-board, and has exposed it to taxation. Under federal law, businesses involved in the marijuana trade cannot deduct their business expenses from their gross profits when figuring their income tax. This is a result of the great piling-on of the Just Say No era, when politicians were falling all over themselves to come up with new ways to stick it to dope smokers. This puts above-ground marijuana vendors in a bind, as “it is conceivable that [this law] could require [such] a business to pay more in tax than its total profits for the year.” Tax professor Benjamin M. Leff has a possible solution: organize as a 501(c)(4) social welfare organization. Meanwhile, marijuana purchasers should be aware that the federal government is making a big profit on anything they purchase in the above-ground market, and should for that reason prefer to purchase from the same underground dealers they’ve trusted for years.
• A number of American churches want to keep their tax-exempt nonprofit status without heeding the legal ban on political endorsements that accompanies it. 1,600 of them backed up this opinion with civil disobedience — defiantly making overtly political stands from the pulpit, and sometimes even recording them and turning the recordings over to the IRS. So far the agency has done nothing in response, and many are speculating that it feels that in a churches vs. IRS battle, the IRS is most likely to end up with a black eye, no matter what the law says. But now the Freedom From Religion Foundation is forcing the issue. The Foundation has filed a lawsuit asserting that the IRS is illegally permitting religious non-profit groups to engage in political activity it forbids to non-religious non-profits.
• The IRS commissioner sent a memo to agency employees about the expected impact of “sequester” budget cuts. Excerpt:

  We will continue operating under a hiring freeze, reduce funding for grants and other expenditures and cut costs in areas such as travel, training, facilities and supplies. In addition, we will need to review contract spending to ensure only the most critical and mandatory requirements are fully funded.

  Despite current and planned efforts to cut expenses, our greatest expense, by far, is employee pay. As our budget is reduced for the remainder of the fiscal year, it appears a number [5–7 per employee this year] of furlough days will be necessary given the size of the anticipated budget cut to the IRS.

  Colleen M. Kelley, president of the National Treasury Employees Union, noted that “the IRS is operating this filing season with 5,000 fewer employees than just two years ago. Now, IRS employees face potential furloughs and the loss of pay for a week or more; and all federal workers are continuing to function under the threat of at least a partial government shutdown when the current continuing resolution expires on March 27.” In addition, she says, “IRS employees… have had their pay frozen for over two years.”

Erica Weiland has summarized her keynote speech on Economic Disobedience and War Tax Resistance, which she delivered at a conference in Eugene, Oregon, on Wednesday. Excerpt:

When we heard about this work in Spain, it was clear to us that war tax resistance is economic disobedience, the refusal to cooperate in an economic system that is built on war, militarism, and the perpetuation of human suffering. It was also clear to us that a variety of movements that also practice economic disobedience are allied with us in this struggle. When people refuse to pay debts to ruthless debt collectors, resist foreclosure, set up bartering networks that don’t report bartering as income, set up gift economies that avoid the IRS bartering regulations, organize lending circles for low-income borrowers, counsel high school students on alternatives to military service, squat abandoned houses, organize tent cities for the homeless regardless of bureaucratic and inhumane regulations, and struggle against corrupt landlords and employers, we are engaging in economic disobedience. The economic system we live under is not set up to support us, so we should withdraw our support from the system whenever feasible.

And here’s some more information about the Spanish movement that is the inspiration for this work: an interview with Enric Duran on the Shareable site and the video Come Back: A Story We Wrote Together (subtitled in English) which tells the story of Duran’s bank heists and how a coalition of pioneers used the funds to build a parallel solidarity economy.

I’ve got an article about the Spanish desobediencia integral movement up at Shareable. Here’s how it starts:

Spanish war tax resisters and activists from the 15-M, or indignados, movement (the Spanish version of “Occupy”) have joined forces to organize a sharing economy network and to nourish it with redirected taxes.

How this came about is an interesting story, and though their project is decidedly edgier and more confrontational than most of what goes on under the sharing economy umbrella, we can learn a lot from what they have accomplished.

Shareable also conducted an interesting interview with Enric Duran which they published a couple of weeks ago.

Some bits and pieces from here and there:

• A new website called earthineer is designed for the do-it-yourself, homesteading sorts… and it is developing a barter & marketplace feature that looks like it could be very useful to those of us trying to move as much as possible into the solidarity economy. (ᔥ Claire Wolfe)
• Some families in Sligo and in Carlow, Ireland, barricaded their neighborhoods to prevent the installation of water meters that are going to be facilitating a new stealth tax on water.
• The Richmond Times-Dispatch did a profile on war tax resister and gay-rights activist Jon Klein.
• The snack bar at the headquarters of the Internal Revenue Service in Washington, D.C., was shut down when inspectors found rodent droppings and other health violations.

The Cooperativa Integral Catalana has released a new third edition of its Manual de Desobediencia Económica (Handbook of Economic Disobedience).

It is mostly unchanged from previous editions, with a few updates, a slightly expanded section on alternative currencies, and an expanded section on tax resistance. I’d attempted a translation of an earlier edition in September 2013, and you can find those translations at the following pages:

13 September 2013

Introduction

20 September 2013

Introduction to Civil Disobedience, Economic Disobedience, and Comprehensive Disobedience

21 September 2013

Exercise the Right of Rebellion: Join the Manifesto of a New Rebel Dignity

23 September 2013

Tax resistance as a strategy of rebellion; Auditing the national debt; Mechanisms for resistance to the value-added tax

24 September 2013

Bankruptcy, squatting, cooperative housing, and other techniques

25 September 2013

How to stop collaborating with the banks

26 September 2013

Collectives

27 September 2013

Alternatives to the system; integrated cooperatives

28 September 2013

The community economy, barter, alternative currencies, the transitory relationship with the capitalist economy

29 September 2013

Alternative cooperative finance, self-management cores; Living the comprehensive revolution

Here are my translations of the new sections:

Practical Guide to Income Tax Resistance

Everyone can practice war tax resistance

The state collects taxes throughout the year from everyone in society, and it does so in many ways, not only via the income tax. This money is destined in large part for the army, internal security, payments on the debt, and other undesirable expenses.

Your income tax return represents a magnificent opportunity to recover this money and redirect it to a just end. Therefore:

• Anyone, whether or not they have income, whether they get a paycheck or not, whether they are registered or not, may fill out a tax return and reclaim money from the state to redirect to an alternative and constructive project.
• The return can have an amount due, a refund, or a big zero; in each case you can still resist.

What is tax resistance?

It’s the unwillingness to collaborate with the State in military spending, the military, the internal security apparatus, the prison system, the monarchy, the national debt, and other undesirable expenses — active disobedience at the point of filing the tax return. It technically consists of sending a part of those taxes to a project that works in the defense of the progress of social solidarity. It is inspired by war tax resistance, which for years has successfully operated in Spain, and extends this to other budget items that we also consider unjust.

We call for complete tax resistance to the State in order to redirect the taxes to a budget autonomously managed by local, grassroots collectives, much more deserving of sovereignty than the government institutions that force subjection on the population.

Where is the money redirected?

The redirected money promotes work for peace, social justice, cooperative development, environmental improvement, human rights, the support of transformative struggles in other nations, etc.

With this money projects are able to be continue working for a more just and equitable society. These are the redirection alternatives: any collective or organization that works in a non-hierarchical form for a more just society.

Grassroots collectives and non-profit organizations such as associations, ecological groups, cooperatives, cultural associations, etc., that are not directly liked to the Administration or to partisan politics.

What for?

As the crisis becomes more acute, people are becoming more and more familiar with economic concepts. Debt, risk premium, liquidity, and one word in particular: cuts.

The government scissors, held by capital on both handles, inside and out, seem to have no restraint. The various government branches, whatever party they belong to, cut spending here and there. Sectors as sensitive as health care, primary education, or pensions are tapped.

“When the government violates the rights of the people, insurrection is for the people and for each portion of the people the most sacred of rights and the most indispensable of duties.” — Declaration of the Rights of Man and Citizen of 1793

Tax resistance is, in reality, an assertion of the right of rebellion, to disobey on behalf of the common good in the face of situations like those in which we are living.

We are committed to the common good, and for that reason, we declare ourselves rebels against the Constitution, unsubmissive to the State, and disobedient to all of the authority that it represents.

Tax resistance was one of the strategies of civil disobedience that led India to independence from the British Empire; now it may be a key strategy for us to gain independence from global capitalism.

How is it done?

Here follows a technical discussion of how to use the electronic filing system used in Spain to apply for a refund of taxes by filling in an amount “for tax resistance” for a miscellaneous-withholding line-item.

Then it is reiterated that anyone can object in this way, regardless of their employment situation or whether or not they will owe taxes on their return. People are encouraged to decide for themselves how much to resist and redirect: perhaps as little as €1, or an amount like €890.87 which represents the amount of military spending per capita in Spain.

“In any case, tax resistance is, above all, a public and collective action of denouncing the injustice of the economic system, and a challenge to society. The act of resisting is much more important than the quantity resisted; therefore, any amount, however small, is valid.”

If the Treasury rejects my resistance, what can I do?

Occasionally, the Treasury will not give up the money reclaimed or demands what it was not paid on returns that demand refunds. It might be the case this year that the Treasury will not audit us, and the next year it will. Or the other way around (just because they don’t allow our resistance one year is no reason to be discouraged to try it again next year). The Treasury could even try to reclaim from us the amounts we haven’t paid or that — in their opinion — they have over-refunded to us during various years. In such cases, you should be aware that the Treasury cannot reclaim anything that is more than four years old.

For this reason, and particularly for tax resisters who resist significant amounts each year, the alternative destinations that receive the redirected money must provide escrow accounts in which they keep at least a portion of those funds during those four years.

The provisional or parallel returns (when the Treasury detects the resistance and reclaims the redirected money) may be appealed, and this does not involve any fees or expenses (sometimes one of those recourses is effective).

Given that, it is best to continue to rely only on people who, supported by personally-known groups, want to conduct a campaign of denouncing undesirable government spending.

What sanctions do I risk?

Once the provisional or parallel return is confirmed, if we don’t pay what they demand of us, the administration may attach interest to the amount starting from the filing deadline and continuing until the payment date.

This process is described in your tax return documentation; in no case is the tax resister accused of anything or receives any sanction. There will never be a criminal prosecution (a tax offense requires a larger “fraud” of more than 120,000 euros).

What if I cannot afford to repay the amount I redirected?

The worst that can happen if the Treasury detects your tax resistance is that you will be on the hook for double the amount: the money we redirect to the alternative destination and, if we are unlucky and the Treasury discovers us, we are required to repay the Treasury. In such a case, if we resist a small amount, redirecting only a quantity that we judge will not be a problem for our finances: 50 euros, 30, 10… so that, if the Treasury detects it and charges us a second time, it won’t break our bank. We will have added one more objection and with it our voice against these immoral, unuseful, and undesirable expenses.

It is also true that the Treasury may wait some years before revising our return, even after we have paid some amount in our tax return (with the amount of tax resistance withheld) or we have had some amount refunded (with the amount of tax resistance added).

The Treasury has a maximum of four years to reclaim from us what they call errors in our return, or unjustified figures, or whatever legal terminology that occurs to them to reject our position of tax resistance.

What can we do in such cases? There are distinct possibilities: the escrow accounts mentioned earlier, or simply asking whoever you redirected your taxes to for a refund, if the redirector cannot cope with the demands of the Treasury, depending on the quantities involved and the personal situations of the resisters, and keeping in mind that four year statute of limitations.

A Tax Resistance Fund is necessary as a common tool for everyone who participates in a campaign of tax resistance. A common fund to cover costs that may hit any person or collective that participates in this tax resistance campaign, because of the consequences of the possible acts of the Treasury against tax resisters.

In the Alternatives to the System section, there are some new paragraphs:

The economic relations that exist in the autonomous economic system (SEA) form part of the theory of the social and solidarity economy. The SEA has the objective of developing and providing an economic framework to serve the people, that satisfies their needs, by means of economic empowerment and collaboration.

Social currency represents and/or substitutes for an exchange relationship between two people, created after offering something and not receiving equivalent compensation at the same time. It does not represent a debt so much as an agreement, or rather a confidence that serves us to close the circuit of exchange, receiving that which we want or need. Thus, money vanishes, flows, and allows for multi-reciprocal exchanges and puts into circulation new products and services.

For this reason there must be tools designed that encourage a space for exchanges (internet platforms) and that facilitate the extension of exchange as a modus vivendi.

It’s important to pay attention so that the criteria of valuation do not devolve into relations of exploitation or fraud that could affect the confidence of people. In this sense, the personal dimension of the process of exchange transcends the buyer/seller relationship. A reciprocal, supportive, or exchange valuation can apply the same hourly rate.

Integrated cooperatives like the ecoxarxes form part of the same autonomous economic system, and all of the money (each ecoxarxa has its own currency) are interrelated and are reciprocally exchangable.

More information:

• IntegralCES Internet Platform
• Ecoredes
• Primer on alternative economy and social currencies

Lastly, the integrated cooperative is a point of reference and coordination from which collaborative and collective means are generated such that any of the previously-mentioned processes may be chosen and used, from legal tools (cooperatives) to telematic or internet tools, and, especially, forms and plans of action to strengthen self-reliance and self-organization.

Some international tax resistance news:

United States

• J.D. Tuccille, at Reason, takes a look at Americans who stay outside of the banking system and otherwise engage in the “underground economy.”
• The Pope came to visit, and gave a shout-out to Catholic Worker activist and war tax resister Dorothy Day in his address to Congress. It’s been amusing watching politicians and activists from just about every ideological niche try to claim the Pope as one of their own… it reminds me of the old saw about the blind men and the elephant. Or maybe it’s similar to how so many different ideologies, practices, and beliefs all claim to be interpretations of the real teachings of Jesus — nowadays we all get to interpret the Pope in our own way too… Is the Pope Catholic? Perhaps with a lower-case “c”.
• New York restaurants are using “sales suppression” software to underreport receipts for tax purposes, to the anguish of the local taxfeeders. This, according to the opponents of the practice, means the restaurants “can offer lower food and beverage prices, and afford higher rents, than honest restaurants can.” Perish the thought.

Catalonia

• A coalition of nationalist parties won the recent Catalan election, which they were billing as a referendum on independence. They have vowed to begin to separate from Spain within the next couple of years. Part of this independence campaign has already begun, with a number of municipalities, businesses, and individuals paying their federal taxes to the state government of Catalonia. “The key element that will permit us to exercise and maintain our independence will be the collection of all of the taxes by the government of Catalonia,” according to planning documents of the coalition. The state currently forwards those taxes on to the central government, so this form of tax resistance is largely a symbolic gesture. But the new government hopes to make this currently somewhat-illicit process official and then, eventually, to cut off the central government. In case of conflict with the central government over how taxes are to be paid, they may launch a blockade of the federal tax offices so as to encourage people to file with the Catalan tax authorities instead.

India

• The Patidar community in Gujarat, which has been agitating for some sort of government-protected minority status for several months now, is incorporating bank runs and tax resistance in an “economic non-cooperation” movement.

Ireland

• The Gardai in Dublin have forbidden the Anti-Austerity Alliance, which has been central to the anti-water tax protests and nonpayment campaign, from having a permit to conduct house-to-house fundraising, on the grounds that the funds raised might be used to further illegal activity. “The collection permit has been refused,” said Garda Chief Superintendent Orla McPartlin, “because I believe that the proceeds of the collection or a portion thereof would be used to facilitate protests sponsored by the Anti Austerity Alliance.”

Pakistan

• Merchants across Pakistan have been conducting strikes to protest a new withholding tax on bank transactions. “If the government does not accept our demands,” said Naeem Mir, one of the strike leaders, “we will observe a series of shutter-down strikes… in the four provinces and in each and every small and big city in protest against the cruel taxation measures of the so-called business-friendly government.” The new taxes are being blamed on IMF-required austerity and on the expenses of Pakistan’s version of the “war on terror.”

Greece

• The economic crisis in Greece has crushed what was already a pretty weak state of “taxpayer morale” — the “won’t pay” movement that practiced noncompliance with taxes and road tolls helped bring down the government and sweep a left-wing coalition into power. One of this new government’s officials, deputy finance minister Alexis Haritsis, was a “won’t pay” activist. Greeks are turning away in disgust from the official economy in general, increasingly turning to barter to get their needs met.

Italy

• Fifty condominium owners in Prino, Italy, have organized to stop paying the “IMU” municipal property tax in response to the city’s neglect of public spaces, including a filthy public square with a broken fountain that’s become a rubbish heap, poor upkeep of drainage that leads to flooding, and bad traffic management. A letter announcing the strike, signed by all fifty, was sent to the mayor and other city officials.

Some links that have graced my browser in recent days:

• The Troika Fiscal Disobedience Consultancy is “building a European network of companies which support a European tax disobedience movement.” In short, they’re trying to use the same bag of tricks that multinational corporations use to evade taxes on their profits in order to build an alternative economic network of European dissidents. Fair.coop also has some commentary on the campaign.
• The Scotsman looks back at the Poll tax protest [of] 1990: When Strathclyde council issued 250,000 warrants.
• Abolitionist Quakers from Philadelphia pioneered “fair trade” ideas with their attempts to build a network of producers, merchants, and consumers to support alternatives to slave-produced products. Here’s a look at the experiments they tried and the challenges they faced.
• Italian pacifist Turi Vaccaro climbed up a satellite dish at a U.S. military base near Niscemi, Italy, and, over the course of about 34 hours, with manual hand tools, did about €800,000 in damage.
• 24 Greek toll-hike protesters were acquitted of charges related to a protest action they participated in last April.

The Satyagraha Foundation for Nonviolence Studies recently came to my attention. It has a few pages that touch on tax resistance, including:

• An interview with Kathy Kelly. Excerpts:

  Street Spirit

  Did the U.S. government ever press charges against Voices in the Wilderness for violating the sanctions?

  Kathy Kelly

  They would bring us into court with some regularity. It was curious because at one point there was a $50,000 fine. I thought, “What are you going to take — my contact lenses?” I just had to laugh. I mean, I haven’t paid a dime of taxes to the U.S. government as a war tax-refuser since 1980. So there is nothing they could take from me. The people that would go over were in the same boat. So good luck collecting from them!

  Spirit

  But as it turned out, they did fine your group $20,000, didn’t they?

  Kelly

  Yeah, they finally took us into court. And I think Condoleezza Rice inadvertently might have saved us. This is speculation on my part, but this much is true. Chevron settled out of court, acknowledging that they had paid money under the table to Saddam Hussein in order to get very lucrative contracts for Iraqi oil.

  Condoleezza Rice was the international liaison for Chevron while it was paying money under the table to get these lucrative contracts. So when we finally had our day in court, Sen. Carl Levin’s staffers were still digging up this information and it was beginning to become public evidence that Chevron, Odin Marine Inc., Mobil and Coastal Oil had all been paying money for these oil contracts under the table to Saddam Hussein.

  So there were big fish in the pond that broke the sanctions and there were little fish in the pond that broke the sanctions. I think some of the big fish said, “That is one hot potato. You drop that hot potato as fast as you can, and don’t make a big deal because those people are little fish but they’re mouthy little fish.” So they never tried to collect a dime from us. The money was just sitting there.

  Spirit

  Well, what exactly did happen to you when the U.S. government took you to court for violating the sanctions?

  Kelly

  We were found guilty and were fined $20,000. Federal Judge John Bates wrote in his legal opinion that those who disobey an unjust law should accept the penalty willingly and lovingly.

  Spirit

  Unbelievable! A federal judge lectures you about lovingly accepting this unjust fine using the words of Martin Luther King?

  Kelly

  Yes. We said to Judge Bates, “If you want to send us to prison, we will go, willingly and lovingly. We’ve done that before already. But if you think we will pay a fine to the U.S. government, then we ask you to imagine that Martin Luther King would have ever said, ‘Coretta, get the checkbook.’ We are not going to pay one dime to the U.S. government which continues to wage warfare.” At that time, supplemental spending bills appeared every year, sometimes two or three times a year, and congressional representatives and senators continued to vote yes on those spending bills for the military. So we said, “No, we won’t pay a dime of that fine.”

  Spirit

  You have also been a war tax resister for a long time.

  Kelly

  I’m a war tax refuser. I don’t give them anything.

  Spirit

  Oh, you’re not a 50 percent withholder, like many war tax resisters. You’re a 100 percent withholder?

  Kelly

  Yes, I’m a 100 percent withholder. I think war tax resistance is important but I happen to be a refuser. They haven’t got one dime of federal income tax from me since 1980.

  Spirit

  Why did you begin refusing to pay federal taxes entirely?

  Kelly

  I won’t give them any money. I can’t and I won’t. I won’t pay for guns. I don’t believe in killing people. I also don’t want to pay for the CIA, the FBI, the corporate bail-outs or the prison system. But particularly, I began as a war tax refuser. I wouldn’t give money to the Mafia if they came to my door and said, “We’d like you to help pay for our operations.” I’m certainly not going to pay for wars when I’ve tried throughout my adult life to educate people to resist nonviolently.

  Spirit

  How have you gotten away with not paying federal taxes since 1980? Do you keep your income low?

  Kelly

  Many years I have lived below the taxable income. But in 1998, someone from the IRS came to my home. I had in some years claimed extra allowances on the W-4 form. And I just don’t file. I haven’t filed since 1980. Now, that’s a criminal offense and they could put me in jail for a long time for that. If I was earning over the taxable income, I would just calculate how many allowances I have to claim so that no money is taken out of my paycheck. It says in the small print on the W-2 form to put down the correct number of allowances so that the correct amount of tax is taken out. Well, that’s easy. The correct amount of tax to take from me is zero, so I just do the math.

  Spirit

  Why do you think they haven’t come after you?

  Kelly

  Well, they have come to collect taxes. But I don’t have a savings account, and I don’t own anything. The IRS is like my spiritual director [laughs]. I don’t know how to drive a car, and I’ve never owned any place that I’ve lived in. I just don’t have anything to take.

  Spirit

  So has the IRS given up on even trying to collect?

  Kelly

  Once they came out to collect in 1998 when I was taking care of my dear Dad, who was wheelchair-bound, and a bit slumped over in the chair. Dad liked to listen to opera and I had a really awful old record player playing a scratchy record. I had been in the back of the house and I didn’t know she was coming, so I ran down to answer the door while the record player was making such a horrible noise. The apartment was fine but it only had a few sticks of furniture.

  The woman asked me if I was going to get a job, and I told her I couldn’t leave my father. Then she asked if I had a bank account, and I said no. She said, “And you don’t own a car?” And I told her I didn’t even know how to drive. Then she just kind of leaned toward me and said, “You know what? I’m just going to write you up as uncollectible.” And I said, “That’s a very good idea.” [laughs] They’ve never tried to collect since. There was just nothing to take! Zero. Nothing.

• Correspondence between Bart de Ligt and Mohandas Gandhi. Here’s some of what de Ligt wrote in late 1929:

  On your side, you state that those who set themselves against Western wars pay, nevertheless, taxes, which are used by the State for war and the oppression of the colored peoples. That is quite true. In fact our anti-militarist struggle also is as yet only something very relative, and it must go on extending. But in any case, we have fixed clear and inflexible borders: we refuse absolutely all direct, personal participation in war and in its social and moral preparation. But several of us employ still other means of fighting against it.… Moreover, a few of us have already decided individually to refuse to pay any taxes, whilst the organization of which I am a member has already several times been the propagandist of collective refusal of taxation. But whereas refusal, even on a very restricted scale, to do military service has been morally and socially efficacious, the refusal to pay taxes by a restricted number of citizens only has so far had very little result, as the authorities, in confiscating property and inflicting fines, take possession of sums much larger than a direct payment of taxes would have brought them. From this point of view, your compatriots have already given some impressive examples of collective refusal, although they also were not able to avoid regular unfair demands of the Government.

  I think “the organization of which I am a member” may have been War Resisters International. Gandhi’s response to this point is an interesting one:

  A non-violent man will instinctively prefer direct participation to indirect, in a system, which is based on violence and to which he has to belong without any choice being left to him. I belong to a world, which is partly based on violence. If I have only a choice between paying for the army of soldiers to kill my neighbours or to be a soldier myself, I would, as I must, consistent with my creed, enlist as a soldier in the hope of controlling the forces of violence and even of converting my comrades.

  You can find more of Bart de Ligt’s thoughts on tax refusal, non-violent struggle, and Gandhi’s campaigns in the essay The Effectiveness of Non-Violent Struggle, also on the Satyagraha Foundation site.

And from the academic and related worlds:

• A paper by Jay A. Soled and Kathleen DeLaney Thomas on Revisiting the Taxation of Fringe Benefits notes that many companies are compensating their employees with “a cornucopia of fringe benefits, including frequent-flier miles, hotel reward points, rental car preferred status, office supply dollar coupons, cellular telephone use, home Internet service, and, in some instances, even free lunches, massages, and dance lessons.” Some of these are proving difficult for the government to effectively tax as income.
• Gregg Polsky has come up with a potentially useful way of using Roth IRA conversions to keep money away from the tax collector.
• Cass Sunstein reviews attempts to discover how much money is hidden away by the rich and powerful in “tax havens”
• Benjamin Powell and Edward Peter Stringham present Public Choice and the Economic Analysis of Anarchy: A Survey.
• Richard Lavoie tries to discover the elements that contribute to a “taxpaying ethos”.
• Maciej Bartkowski looks at what causes people to break out of their apathy and join risky movements for social change, in Forming a Movement: Cognitive Liberation.
• Anthony C. Infanti, reviewing Robin Einhorn’s American Taxation, American Slavery looks at Tax As Urban Legend, saying “the stories that we tell ourselves over and over again about taxation and politics in America are little more than the stuff of urban legend.”
• Molly F. Sherlock and Donald J. Marples give us an Overview of the Federal Tax System.
• Peter Boettke tells us all about Elinor Ostrom, Vincent Ostrom, and the Bloomington School.

Some links that have slid past my browser viewport in recent days:

• The Syracuse Post-Standard digs into its archives for a look back at a 1997 tax protest highway blockade on the Onondaga Nation.
• One tally of Spanish war tax resisters says that last year about 500 people redirected €57,500 to 88 alternative projects, the most popular of which was Stop Mare Mortum, which assists international migrants and refugees.
• Kirk Johnson at the New York Times looks at counties in southwest Oregon where popular anti-tax sentiment has grown to the point where citizens have been able to largely defund their local governments through the ballot box.
• Peter J. Reilly assesses the new IRS policy of deputizing private debt companies to pursue delinquent taxpayers, and he concludes: “You Should Just Hang Up On IRS Collection Calls, Legitimate Or Not.” This is for two reasons: 1) there are still a lot of scammers out there impersonating the IRS who try to fool people into paying them money, and it may not be easy for the average Joe to distinguish “legitimate” collection calls from scammers; and 2) the “legitimate” private debt collection agencies can’t negotiate or adjudicate the amount of your debt, nor can they seize the money from you. All they can do is badger you about it. So your best bet is just to stonewall them, ignore them, and wait patiently for the statute of limitations to run out on your debt.
• Laura Saunders, in the Wall Street Journal, notes that many online sellers and workers in the gig economy fall into an income-reporting shadow:

  A loophole is helping gig-economy workers, online sellers and home-sharing hosts cheat on their taxes.

  Under a law enacted in 2008 and later clarified by the Internal Revenue Service, many online-platform businesses that connect buyers and sellers and take credit-card payments, such as Airbnb, TaskRabbit, Etsy and ride-sharing firms, fall into a special category.

  These businesses have to report a provider’s income to the IRS only if that person earns more than $20,000 and has more than 200 transactions. In that case, the company sends both the provider and IRS a Form 1099-K listing gross income.

  By contrast, freelance workers who don’t use such platforms often face a much stiffer reporting threshold of $600 for Form 1099-MISC. For example, if a hardware store pays a plumber $750 directly for work done, the store is supposed to send both the IRS and the plumber a 1099-MISC listing that amount.

• Here’s another example of the Greek “Won’t Pay” movement reconnecting the power at a home where the power was shut off for failure to pay the utility bill. The Greek government has hiked its monopoly’s utility charges in recent years as a sort of hidden tax.
• Norm Lowry, at NWTRCC’s blog, shares his experiences talking with other inmates at State Correctional Institution Dallas about war tax resistance.
• The political philosophy is a little sophomoric and pedantic, but the message is encouraging: Will Wilkinson at Vox writes: It may be time to disobey the commander in chief: With his assault on the rule of law, President Trump has undermined his legitimacy.
• Larry Bassett, a long-time war tax resister who, because of an inheritance, engaged in an unusually-large tax refusal this year, is now also the focus of a documentary-in-progress: The Pacifist.
• Marco Mori advocates a low-risk tax resistance strategy for Italians that seems to involve withholding taxes as long as possible, putting up with the civil penalties and interest, and only paying at the last minute before your case becomes a criminal matter. I don’t know Italian, so have to piece things together from Google Translate.
• The shit-stirrers and would-be provocateurs at 4chan’s “/pol/” forum (which stands for “politically incorrect,” but is largely just puerile racist caricatures), struck upon the idea of trying to invent a #NoTaxForBlacks (or #NoTaxFromBlacks) movement. They would do this by means of a variety of more-or-less plausible-looking meme images, crowdsourced by the /pol/glodytes. Ostensible Black Americans (fake Twitter accounts with names like “Tyrone Johnson”) would post these, saying they were refusing to pay taxes based on roughly the same sort of grievances that have motivated #BlackLivesMatter. The way this was supposed to play out so as to titillate the 4chan crowd was that unsophisticated black people would go along with the ruse and refuse to pay tax, this would give the government an excuse to cut welfare and to arrest more black people for tax evasion, ergo much lulz for 4chan.

Just when I think I’ve heard it all about the troubles at the IRS, everything turns out to be worse than I heard:

• Remember a few weeks ago when I told you about how the IRS was rolling out a new way for people to sign on to their on-line systems, and that it was a bit invasive, difficult, and buggy? And then remember last week when I told you how the rollout was going poorly and generating a lot of push-back? Well, the awful just continues to pile up and now the IRS is scrapping the new sign-on process and going back to the drawing board. Meanwhile, some seven million people may have tried to use the new process to log in, a process that included sending in “selfies” for biometric testing, which attracted the ire of privacy advocates. The contractor who designed and operated the identification verification service says these people can request to have these selfies deleted. Reading between the lines, I think this contractor is going to try to force everybody to use the back-up plan that was already in place for if the automatic selfie-check didn’t work: to have a video chat with an employee who would “eyeball” the chatter to see if their identity matches up with what’s on their paperwork. This isn’t really any less invasive than the selfie method, but maybe it triggers people’s “big brother” alarms less. It’ll certainly be less automated and therefore more expensive and time-consuming.
• But the IRS is no stranger to doing things the more expensive and time-consuming way. For example, their mail-sorting and -opening machines have been broken for a long time, and IRS employees now have to do the work by hand. This means that if you send them a check, it takes them longer than it should for them to get that check out of the envelope and into the U.S. Treasury. This delay also means the government loses out on interest they could be earning on that money. How much interest? About $165 million a year. It would only cost $650,000 to buy completely new machines, or $365,000 to repair the broken ones.
• And remember how last week I told you how the IRS had stopped sending out some enforcement notices to taxpayers? Taxpayers were getting frightening notices suggesting that the IRS didn’t think they’d filed their taxes, when in fact their tax returns were sitting in an enormous pile of tax returns the agency hadn’t gotten around to processing yet. So the IRS said it would stop sending out a few types of notice until it got all that sorted out — but said that it couldn’t stop sending out a bunch of others because it might mean they’d lose their chance to go after genuine tax scofflaws. Well, now they’ve thrown in the towel and said they’ll stop sending out a dozen more types of notices including the balance due, balance due second notice, notice of intent to levy, and withholding compliance letters that are standard issue to tax resisters like myself.
• And remember how last week I told you that the IRS had a backlog of some 14 million unprocessed tax returns and other taxpayer correspondence? Turns out it’s more like 24 million. Meanwhile: “The agency sought to fill 5,000 positions for several campuses across the country in time for this tax season but was able to hire fewer than 200.”
• In other news, the IRS is eager to reduce the size of the underground economy by demanding more reports on gig workers and others who get irregular payments through platforms like Paypal, Venmo, Etsy, and Zelle. But this isn’t going smoothly either. It seems to be raising more resentment than tax money, at least so far. And it’s easy to bypass. If you pay someone using one of these platforms and explicitly say you’re paying for goods or services, maybe it’ll eventually get reported as income. But if you don’t say this, as far as the platform is concerned maybe you’re just sending a gift or reimbursing someone for part of a meal you shared where they picked up the tab. Is today’s IRS going to send auditors out to make sure nothing falls through the cracks this way? Yeah sure.

In other news:

• The tax strike against the Edmonton Incinerator continues to attract more strikers as the early adopters prepare for their first day in court.
• Turkish opposition politician Kemal Kılıçdaroğlu announced that he plans to refuse to pay his utility bills until president Erdoğan withdraws 50% price hikes instituted at the beginning of the year. Some Alevist cemevis have also stopped paying.
• The ragtag human guerrilla war against the traffic ticket robots continues, with robots succumbing to human attacks or being frustrated by human ingenuity in the U.K., Australia, Brazil, Italy, and France in recent weeks.