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

We have reached the end of the NWTRCC national gathering, held this time at the Earlham School of Religion in Richmond, Indiana.

The bulk of yesterday’s portion of the conference was largely a series of workshops on subjects like:

• basic war tax resistance (what we call informally “WTR101”)
• the peace tax fund campaign
• military counter-recruitment and support for conscientious objectors
• advanced war tax resistance
• the history of Quaker war tax resistance
• “economic disobedience”
• the militarization of U.S. foreign policy and its alternatives: a case study in East Africa
• war tax resistance questions & answers
• conscientious objection to the military and taxes for the military

Some of these sessions ran at the same time, and for a couple of them (the WTR101 and history of Quaker war tax resistance) I was one of the presenters, so I only was able to take notes on one of the two “economic disobedience” sessions.

In that session, Erica Weiland began by summarizing my report on the Spanish “desobediencia integral” movement and then she brought us up to date with new developments. These include the fair.coop “Earth cooperative for a fair economy” and its alternative currency, the “FairCoin,” which is somewhat Bitcoin-like but is explicitly designed to promote a certain sort of economic model. (I’ve looked at some of the FairCoin outreach material, but whether from translation difficulties or my amateur economics knowledge, I can’t quite figure out what makes it tick.)

The war tax resistance movement in the United States has made some contact with this Spanish movement and we’ve started to explore situating our work in the terminology and framework of this “comprehensive disobedience” movement, which helps to connect our work with the emerging sharing economy movement, Occupy, the modern environmentalist movement, and things of that sort.

Erica was joined by Jim Stockwell, who gave us a more historical perspective of how this sort of thinking weaves into a long thread connecting decentralism, Georgism, cooperative villages, the thought of Ralph Borsodi, and other related ideas. Erica added some insight from her research into the cooperative movement among African-Americans in the Reconstruction and post-Reconstruction periods.

Erica then introduced us to some of what the Strike Debt group have been doing lately. This group grew out of Occupy and the Rolling Jubilee project.

One of the actions associated with this group was the purchase and retirement of a large amount of medical debt. They then purchased and retired some student debt in the same way. Debts like these are packaged into groups based on how likely the debts are to be recovered. Those debts that are very unlikely to be recovered, often because the debtor is too poor to pay, can be purchased for pennies on the dollar. By retiring these debts, the project can reduce the stress of collection agency harassment on such people. They are also trying to unionize students who have debt to particularly exploitative colleges to encourage them to strike collectively for debt relief.

The Strike Debt Operations Manual was republished a while back with a new chapter on tax resistance, which was largely based on NWTRCC literature.

We brainstormed some ideas for trying to connect the U.S. war tax resistance movement with a movement for a larger grassroots economic transformation. Some ideas we tossed around included:

• the use of community development loan funds (such as Equity Trust) as investments for our alternative funds or as ways of shielding assets from the IRS in less-visible zero-interest loans
• encouraging the various regional alternative funds to coordinate their grants so as to support projects that build new economic models in a more systematic and well-publicized way
• using redirected taxes to create a war tax resisters’ revolving loan fund
• creating an alternative fund that uses a different granting model — rather than giving grants annually at a particular time, give grants at irregular intervals in reaction to acute needs.

Yesterday, attorney Peter Goldberger, who has worked closely with the war tax resistance community for many years, brought us up to date on how the climate for pressing for the legal recognition of conscientious objection to military taxation in the courts has changed in recent years, particularly in the wake of the recent “Hobby Lobby” case.

When I read the “Hobby Lobby” ruling, I didn’t see much that seemed encouraging. There were some hopeful-sounding parts of it, like this bit from the majority opinion’s summary:

The belief of the Hahns and Greens implicates a difficult and important question of religion and moral philosophy, namely, the circumstances under which it is immoral for a person to perform an act that is innocent in itself but that has the effect of enabling or facilitating the commission of an immoral act by another. It is not for this Court to say that the religious beliefs of the plaintiffs are mistaken or unreasonable.

But the justices were careful to remind war tax resisters that we’re out of luck if we think we can use the Religious Freedom Restoration Act to assert the legal validity of our beliefs:

United States v. Lee, 455 U.S. 252, which upheld the payment of Social Security taxes despite an employer’s religious objection, is not analogous. It turned primarily on the special problems associated with a national system of taxation; and if Lee were a RFRA case, the fundamental point would still be that there is no less restrictive alternative to the categorical requirement to pay taxes.

The “Hobby Lobby” opinion itself expands on this a bit:

Lee was a free-exercise, not a RFRA, case, but if the issue in Lee were analyzed under the RFRA framework, the fundamental point would be that there simply is no less restrictive alternative to the categorical requirement to pay taxes. Because of the enormous variety of government expenditures funded by tax dollars, allowing tax-payers to withhold a portion of their tax obligations on religious ground would lead to chaos. Recognizing exemptions from the contraceptive mandate is very different…

The “Hobby Lobby” dissent goes so far as to describe the opinion as one that grants new powers of legal conscientious objection to just about everybody except tax resisters:

In a decision of startling breadth, the Court holds that commercial enterprises, including corporations, along with partnerships and sole proprietorships, can opt out of any law (saving only tax laws) they judge incompatible with their sincerely held religious beliefs.

If you hoped the dissenters might be more sympathetic to the use of the RFRA in war tax resistance cases, you won’t find much support for your hopes here. The dissenters for the most part seemed inclined to generally weaken the reach of the RFRA.

But again, this was all just my first impression, and I’m not a lawyer. Peter Goldberger is, and he’s worked in the area of conscientious objection and the free exercise clause for a long time, and he gave the “Hobby Lobby” decision a lot of thought and found some interesting angles.

For one thing, when the Supreme Court used conscientious objection to military taxation as a reductio in Lee and Hobby Lobby, it did so in cases that themselves did not concern conscientious objection to military taxation. They assumed that the government could not accommodate the beliefs of such resisters without “chaos” breaking out — that it would be too onerous for the government to accommodate such objectors. But there was nobody there to argue the objectors’ side and to present evidence that this was not necessarily true. Perhaps in a more direct case, objectors might be able to present evidence that would convince the court to revise its point of view.

The Hobby Lobby case also seems like it might usefully expand the right of conscientious objectors to military service. Previously the court had ruled that there was no constitutional right to conscientious objection, and so objectors enjoyed only those rights that Congress had chosen to grant them by statute. The language of Hobby Lobby seems to suggest that now, the government will have to prove a fairly strictly-defined compelling government interest if it wants to restrict the rights of draftees or military personnel who are or who become conscientious objectors for religious reasons.

For example, Goldberger suggests, Congress has defined legal conscientious objection to military service so that it only applies to pacifists — that is, to people who object to all war. It does not apply to religious objectors, for instance Catholics, who belong to a “just war” tradition which asks them to evaluate war by certain criteria and conscientiously object only to a subset of them. Goldberger suggests that the new RFRA standard, as elaborated in Hobby Lobby, could invalidate this and force the government to accommodate more varieties of religious conscientious objection.

Goldberger thinks this might also be a good time for a challenge from someone of the variety of war tax resisters who resists by putting the amount of the tax into an escrow account and telling the IRS that it may seize the money if it wants to, but that the resister is unwilling to pay it voluntarily. Since the IRS could accommodate the resister’s religiously-based conscientious objection, without undue difficulty for the government and without unleashing “chaos,” by simply seizing the money, perhaps the objector has a legal right not to be further penalized or subject to legal sanctions of other sorts for such a stand.

Finally, since Hobby Lobby (somewhat notoriously) decided that corporations can, under some circumstances, have some rights of their own under the RFRA, this may be a way to ask the Court to revisit a case similar to the Priscilla Adams case that it turned down on procedural grounds back in the day. Adams was a Philadelphia Yearly Meeting (a Quaker corporation) employee and a war tax resister. Her employer went to court to try to gain the right not to have to withhold taxes from her salary as this would force them to participate in violating her conscience.

Myself, I don’t see a lot of use in looking to the legal system for help, but I think this sort of thing is interesting and kind of fun to explore.

An article by Alba Muñoz that appeared in PlayGround a few days back examines the Troika Fiscal Disobedience Consultancy project (translation mine):

A Tax Haven For All: The Decisive Rebellion?

Disobedience.eu is born, a consultancy designed to resist the Troika

An old guy on my block used to say: “If you’re going to steal, steal big. Because if you stay small, you’re just a thief, but if you steal big you’ll be a millionaire. All it takes to be rich is to skim a little from everybody.”

“You make a lot of sense!” I thought. But the old guy never stole, at least not on a grand scale, and to me, frankly, the proof is in the pudding. The world is an unfair place, sir, and what are you going to do?

He who has the most pays the least, and this, at least when it comes to taxes, goes without saying: all of the companies in the IBEX 35 — those that are publicly traded and have the most liquidity in Spain — are located in tax havens and pay minuscule amounts to the Treasury in comparison to their earnings. Citizens, small- and medium-sized businesses, aren’t so fortunate with the tax collector.

It’s unfair, but legal. They bask in the sun on a private beach, and to the rest of us they leave only a miserable puddle to splash around in. Is there really nothing that can be done?

Beyond complaining, there’s a new plan — a yet untried option: drag our towels and camping chairs onto the private beach to say, “Hello, buenos días, good morning, guten morgen, we are also in the club.”

Just a week ago, last January 14^th, Disobedience.eu, the first tax rebellion consultancy meant for the common people, was launched.

It all began when the artist Núria Güell contacted Enric Duran, the activist known as the “Robin Hood of the banks” for swindling — or expropriating, you might say — some half a million euros from various financial institutions in 2008, with the motive of finding a way to buck the Troika. From there a small tax advisor emerged, the Troika Fiscal Disobedience Consultancy.

A score of European activists, and Duran from the underground, launched what may come to be the largest hack of the financial system in Europe, at least on the part of the citizenry.

“It starts by resisting the Troika through financial strategies, by playing with the law in the same ways as the neoliberal corporations,” says Güell.

The idea is to imitate Apple, Google, and Banco Santander — not for personal gain, but “to stop paying an illegitimate debt and to start financing the common good.”

“The Troika is dedicated to commandeering and privatizing the commons, it has a colonizing nature: all the countries that are subjected to it, like Spain, Ireland, or Greece, lose their sovereignty. We must create a parallel financial system.”

Fiji, the Cayman Islands, Liechtenstein, your home

If we were to do a math problem, it might go as follows: Say that John has a balance last trimester that comes to 2,000 euros VAT. John sends an email to Disobedience.eu with the amount he wants to resist (2,000 euros) and they will supply him with an invoice for that amount.

John will pay 8% for the service: management fees (1%) and a contribution to a common fund (7%). “The rest (92%), although recorded as paid, will not actually be charged. As far as I know, to forgive a debt is not a crime,” says Güell.

So John has an invoice that states that he has made a tax payment in Spain, although in reality no such thing happened.

“In the EU there is free trade, but in practice there is no common fiscal policy, and the justice system is not coordinated. The countries as a result have trouble obtaining information from one another. The big companies benefit from this, and now the little guy can do so as well. It would be very difficult for the administration of the country where he is consulting to know who has not claimed the income.”

John has evaded taxes, mimicking the techniques of the big multinationals, but for another purpose.

“92% of the money is yours. The idea is that you can dedicate it to projects for the common good, which are increasingly privatized or abandoned by the state.” For example, a support network for refugees or school libraries.

Desobedience.eu was inspired by the Coperativa Integran Catalana and the Right of Rebellion Collective, and will be linked to the international Fair Coöp collective. For this reason, Güell expects there will be a rapid increase of clients, projects, and affinity groups: “The assignment of the funds is up to each client. Nobody will be monitoring or checking on where it is going.”

Isn’t this a do-gooder form of tax evasion? How can you prevent “dishonest” evaders from using this tool?

Activists will sift the clients: “If a capitalist business wants to use this service to evade taxes, it will be turned down. On the other hand, a group of lawyers with a social focus have already been accepted.”

Gandhi versus Starbucks

The tax disobedience initiative has sparked interest, but also an understandable fear of possible legal problems. Güell asserts that the activists involved have everything sorted out: “The only people who run a real risk are those who put in their names to form the company, but they are insolvent and that protects them.”

Throughout history there are numerous examples of economic disobedience. “From the Boston Tea Party in 1773 to the Salt March of Mahatma Gandhi in 1930.” Though there are also much more recent examples:

In 2015 the residents of Crickhowell, a town in Wales, grew tired of paying much more in taxes than Starbucks and decided to declare themselves a tax-free town and to create a company in the Cayman Islands: “They initiated a collective action of tax resistance, and since then the State has not done anything.”

With the activists of Disobedience.eu there is more resolution to attack the core of the system than fear of the possible repercussions. Furthermore, for Güell, economic disobedience is better politics than voting in democratic elections.

“If we do not have autonomy with respect to the Troika and the markets, there is no way to advance the many initiatives that we put forward. They are the obstacle, because they are above democracy. The dictator is only a dictator if he has subjects; disobedience is the only way remaining to us. Furthermore, disobedience is intrinsic to democracy.”

The real hurdle is to go beyond the environmental activists and the more politicized minorities and to extend the initiative across the whole population.

“Workplace exploitation; inability to make ends meet; a rainbow assortment of pills for depression; daily suicides from eviction, foreclosure, or meaninglessness; and murderous barbed-wire over some fictitious dividing lines. Why dedicate your life to feed this machinery that only benefits a minority?” asks Güell.

“You just need to open your eyes to notice that Europe is at a dead-end, caught between the technocrats of the Troika and the anti-immigration nationalists. The European Union is no more than a financial plan for plundering social wealth and impoverishing the workers, a set of legalized financial crimes that act to transfer the income of citizens to the banks and large corporations.” And as such, the response should be collective and in the financial sphere.

As Aristotle told us, politics does not manage the public sphere, rather our everyday actions are what create policy.

The actual mechanism by which the tax evasion happens is left a little obscure by this article, but as best I can gather it’s something like this:

In Europe there is a value-added tax, which is something like a sales tax. It is added to the price of the good as it increases in value during its manufacturing stages, but intermediate goods that are sold to other sellers (for instance, goods purchased by merchants for resale) do not have more tax added to them.

If you’re buying something for resale, rather than paying the tax at the time you buy it, you indicate to the seller that you’ll be adding the tax to the price of the goods at the time you resell it, and then whoever sells the goods to you sells you the goods tax-free. An exchange of invoices allows the tax agencies, in theory, to follow the supply chain to whoever is responsible for collecting and remitting the tax.

But this process is frequently gamed. For instance, if the final seller is a sort of Potemkin business that vanishes before taxes are due, then the taxes never have to get paid. Or, apparently, if that seller is officially domiciled outside the European Union — say, in the Cayman Islands or something.

So what the Consultancy seems to be doing is to be providing invoices saying that they’re responsible for paying any value-added tax that ordinarily would be paid by a resisting small business. They charge the business for the cost of the goods, but they don’t bother to collect most of the money. So the business is off the hook for the tax, the Consultancy doesn’t generate any income that might make it liable, and everyone walks away a little happier.

Something like that, anyway.

They also seem to be doing some of their transactions (the percent of the invoice they do intend to collect, for instance) in “FairCoin” — a bitcoin-like currency. I’m not sure what advantages if any this gives to the Consultancy or the businesses that use it, but it seems like something that could boost the value of FairCoin as a currency, and maybe that’s the point.

The latest on the tax resistance front:

• Catalonia went to the polls to vote on whether to become an independent republic. Spain sent in armed, masked troops to violently impede the voters. This reminds me of what I wrote a decade ago about political authority:

  [B]y challenging the authority of the government, you call its bluff and force it to reveal its hand. If it has a strong, persuasive hand, well, there you go, and maybe you’re even persuaded. If it has a strong, coercive hand, suddenly people begin to feel its grip on their shoulders. If the hand is weak on either count, suddenly this too is exposed, and the power-behind-the-throne is revealed to be not so powerful after all.

  The point is that it may be important and useful to force the government to retrench from authority to its more concrete basis in coercion and persuasion, even if you do not have the power to overcome it once it has retrenched.

  I’ve been following the Catalan separatist movement for a while now, as they’ve hinted that mass tax resistance may be among the tactics they will choose (they’re laying the groundwork for people to pay their federal taxes to Barcelona rather than Madrid). I would not be surprised to see this as the next step after the independence referendum.
• The Greek government is increasingly desperate for tax revenue, as the citizenry are reluctant to cough up anything they expect, with good reason, will only go into the pockets of greedy speculators rather than towards the needs of Greeks. Among other things, the government has begun to add a large (50%) tax to coffee imports. The “Fair Trade Is Not For Sale” campaign aims to resist this tax by smuggling fair-trade coffee from Latin America into Greece, while using FairCoin (imagine Bitcoin if the face of Che Guevara were stamped on every coin) to fund the transactions.
• Meanwhile, the Den Plirono movement continues its work reconnecting the power to families who have been cut off for failure to pay the new taxes added to utility bills.
• Author Lou Cadle announced on Twitter that she plans to refuse to pay her federal income tax. She told the IRS:

  While I have income taxes due today, I have a bigger burden than taxes, something I owe more to than to you.

  That is what I owe to democracy and my nation and my fellow citizens.

  …paying income tax in the U.S.A. has now become a paycheck made out to “evil.”

  I therefore respectfully decline to pay income taxes at this time. I have this money in the bank, and I’ll pay it once this situation is taken care of which, I fear because of the cowardice of this Congress, might be a couple or more years.

• The American activist group CODEPINK is launching a “divest from the war machine” campaign, aiming to get various institutions to stop investing in arms manufacturers and the like. So far, not much about war tax resistance can be seen in the campaign’s preliminary material, but perhaps this will change as it gets closer to launch date.

In other news…

• Enric Durán reflects on the crisis in Catalonia, and how decentralized autonomous cooperatives are an alternative to independent states when considering models of rebellion against control by the Spanish government, in El Temps. Excerpt:

  [We] seek autonomy. We do not seek control of the territory in which we live. We seek to be free in our direct actions. Therefore, we build our parallel system of fees and taxes and make fiscal disobedience to the state, to any state. With these resources, we manage alternatives. We protect our activity even if it is not legally recognized or is disobedient to the State. In this way, we exercise the right to community self-determination. We do not recognize state sovereignty over our community actions.

  It means that we first recognize the decisions of our assemblies before any law — collective decisions that are open and have nothing to hide. We look for ways to not pay taxes and the added revenues derived from this we use for our community. Anyone can join these openly by participating in a local cooperative or group.

  Durán is currently championing a new bitcoin-like alternative currency called “Faircoin”, with the explicit goal of making transactions less taxable and less subject to the demands of the official banking system.
• NWTRCC has posted a new podcast — Why and How I Became a War Tax Resister — featuring interviews with people who have recently started resisting.
• The Bill Newmann Show on WHMP tackled War Tax Resistance on Wednesday.
• The Wall Street Journal notes that some local governments in California are raising taxes on newly-legal marijuana so high that the black market will be likely to continue to thrive.
• Newly released figures from the Pentagon say that the government of the United States has spent $250,000,000 every day for the past sixteen years on its Terror War. That doesn’t include what’s being spent by off-the-books secret agencies (where Congress hides a lot of Terror War spending), and it also doesn’t count veterans’ benefits (currently $46,000,000 per day for Terror War vets).