Apparently they’re not talking about a sneaky way to cheat on your taxes, but about something called Charitable Lead Trusts that are completely above-board. Naturally, a tax dodge this good is mostly for the fairly wealthy, but if that’s your bracket this might be your racket.
How you can resist funding the government → other tax resistance strategies → charitable giving
Dear Picket Line, The—
has been a fine year for dodging taxes. Some underground work, some hourly work which I can adjust to make just enough to get by. And no taxes paid (if any) til year end.
looks different. I’ll likely get a salary job, teaching. Suppose I’m making too much money to avoid taxes. Can I give away enough money to stay under the line?
For instance, what if I could earn $17,500 without paying taxes — does that mean I could earn $37,500 and donate $20,000 to charity and get under the tax line that way?
—Overpaid in Peoria
Dear OIP—
Things are not so simple, I’m sorry to say. Let’s start by looking at your baseline. You earn $37,500 over the course of the year, and I’ll assume that’s your only income — no taxable interest, no capital gains, no big refund of last year’s state tax, etc. I’m also assuming you’re filing as a single, unmarried taxpayer.
Without using any special deductions, $37,500 becomes your adjusted gross income too. The standard deduction and personal exemption lower that to $29,550 in taxable income, on which you’d owe $4,075 in federal income tax.
Now let’s see if we can get rid of that tax bill by making donations to charity.
Charitable donations are taken as itemized deductions, so you’ll need to fill out Schedule A. The drawback with itemized deductions is that in order to take them, you have to drop your standard deduction ($4,850). This means you have to donate $4,850 to charity just to break even.
On the other hand, by itemizing you are also able to deduct medical expenses, state & local sales or income taxes, casualty and theft losses, etc. For this example, for simplicity’s sake, I’ll pretend you don’t have any of that, but if you do, each dollar of that is a dollar you won’t need to give away to hit the mark.
So how big do your itemized deductions have to be in order for you to hit zero on the tax line? You might want to sit down before you read this — $34,400. Which leaves you $3,100 to live on for the year.
There’s got to be a better way, right?
My first instinct is to tell you to use the tool that I rely on: the retirement savings tax credit. It’s a two-fer: you get a deduction for up to $3,000 that you put into an IRA or 401k, and then (if your Adjusted Gross Income is low enough) you get a credit that takes away at least some of the tax on what remains.
That parenthetical caveat, though, is gonna cost you. See: the itemized deduction doesn’t apply until after your Adjusted Gross Income is calculated. So no matter how much you give away, you can’t get your Adjusted Gross Income down low enough to qualify for the credit (the credit vanishes when your Adjusted Gross Income gets above $25,000).
So you can go ahead and take $3,000 of the $34,400 that you were going to give to charity and give it to your IRA instead. You’ll still be below the tax line, but you’ll still have to give the rest to charity. But look on the bright side — you’ll have saved for a whole year of retirement, assuming you’ve figured out how to live on $3,000 a year by then.
To make a long story short: if there’s a way to do what you’re asking, it involves getting advice from a craftier tax advisor than The Picket Line.
It’s much easier if you don’t earn the money in the first place. If you’d only made $27,500, you could put $3,000 in an IRA, give away $19,400, and end up with $5,100 to live on (not much of an improvement). If you only made $17,500 though, you could put $2,500 in an IRA, drop a nickle in the Salvation Army kettle, and tell the IRS to take a hike as you spend the remaining $15,000 yourself.
As a side note: since you’ve said you’re earning your salary as a teacher, I should remind you to save your receipts if you buy things for your classroom out of your own pocket. You can deduct some of this before calculating your Adjusted Gross Income (last I checked the maximum deduction was $250, but this may have changed in the recently-passed tax legislation).
Addendum: On I added a recommendation that OIP consider starting a home business and deducting expenses from that until he can get his income down.
Why haven’t I heard about this before?
A little-noted provision in the tax relief package to aid victims of Hurricane Katrina is shaping up as a windfall for charity and a drain on government coffers.
It allows donors who make cash gifts to almost any charity to deduct an amount equal to virtually 100 percent of their adjusted gross incomes, double the normal limit of 50 percent of income. The tantalizing prospect has set off a financial scramble among some wealthy donors and charities vying for their dollars.…
Moreover, some donors may be able to use the provision to take deductions this year for gifts made in past years. When taxpayers have more charitable deductions that they can use in a given year, they may carry them forward to future tax years. This possibility may further dampen tax revenues.
“Congress intended this, but I’m not sure they understood how big the tab is going to be,” said Mr. Sharpe, who has become a national town crier on the issue. “There are just so many ways a donor can use this bill to maximize their charitable giving.”
Normally, you usually can’t eliminate your income tax simply by making large charitable donations. It looks like , though, the rules may be different. Alas, the New York Times article is full of quotes but very vague about facts and details, and they follow a proud policy of not providing links to sources of more information.
I looked around a bit more and found this summary:
On , President George W. Bush signed the Katrina Emergency Tax Relief Act of . For “qualifying contributions” made in cash to public charities , this bill temporarily suspends the 50 percent limitation applied to charitable deductions in any tax year. (Charitable deductions for cash gifts to public charities are limited, under current tax law, to 50 percent of the taxpayer’s “contribution base” — roughly the donor’s adjusted gross income in the year of contribution).
The Katrina bill also provides a temporary exception to the provision under current tax law that reduces deductions for qualified charitable contributions by 3 percent of the amount by which the donor’s adjusted gross income exceeds stated dollar amounts.
The temporary provisions of the Katrina bill (as applied to gifts made by individuals) are not limited to contributions made to public charities whose mission is directly related to providing hurricane disaster relief.
That’s much clearer. Charitable giving isn’t a tax resistance solution for most people, because you have to give away so much money relative to your income that if you don’t have additional assets to live on, you’ll be living very thinly indeed. (See The Picket Line .)
But — if you do have a lot of assets, but you thought your income was so high that there was no hope of getting under the tax line, there’s hope! Pick a good charity, give generously, and you’ll have the satisfaction of giving your hard-earned money to the good folks instead of to the Dubya Squad this year.
Kay Bell at Don’t Mess With Taxes answers a question I’ve been wondering about: when I reach retirement age and have to start withdrawing money from my IRAs and other tax-deferred retirement accounts, is there anything I can do to avoid the tax hit?
Here’s an idea for people who are faced with this situation today:
[A] provision of the Pension Protection Act that was signed into law in , allows taxpayers who are [at least as old as] 70½ to directly transfer money from an IRA to a charitable organization. By doing so, these filers don’t have to include the transferred money in taxable income.
This provision only lasts , though, unless Congress renews it:
, if you don’t need the IRA money, you can instead shift it — as much as $100,000 each year — directly to your favorite charity. That way it doesn’t count as taxable income to you since you never got your hands on it. The drawback: You can’t deduct the gift [as an itemized deduction].
Bell goes on to discuss the circumstances in which you might want to transfer funds to charity this way, and other circumstances in which you might want to withdraw funds from the accounts and then donate them (which would add to your income, but which would allow you to take an itemized deduction).
I’ve had a busy week, and haven’t had much of a chance to keep up with news or keep The Picket Line up-to-date. Here are a few things that caught my eye as I tried to catch up:
- War tax resister Patrick Keaney wrote an eloquent open letter to U.S. President Barack Obama a few days ago.
- Musician Billy Bragg has threatened to stop paying taxes to protest the huge bonuses being paid out to Royal Bank of Scotland executives in the wake of taxpayer bailouts. He’s also encouraging others to join his resistance: “If you are a British tax payer and feel strongly about this issue, I invite you to join this campaign by simply writing a letter to the Chancellor informing him of your decision to withhold your tax payment until he acts on bonuses.”
- In the wake of the earthquake in Haiti, the U.S. government enacted a law allowing people who donate to relief efforts to declare donations they make in on their tax returns. This doesn’t change the maximum deduction limit, and the deduction remains one of the itemized deductions, so it will not be of practical use to many people, but if you’re still hunting for ways to get under last year’s tax line, this might help you.
- Contractors and companies who are delinquent in paying their federal taxes are supposed to be ineligible for new federal government contracts. But apparently, all along, all they’ve had to do is to lie about being good taxpayers to get as much government work as they can manage. The Obama administration says it plans to put some teeth in the rules, ordering federal agencies to double-check their contractors with the IRS before awarding contracts.
- Luzerne County, Pennsylvania is home to an unusually corrupt government culture (or maybe it’s just that they got caught). Federal authorities have charged 23 county residents with various corruption charges, including three judges and a county commissioner. And then the county government decided to hike taxes by 10%. Fred Heller said no. Why fund a nest of crooks? He’s recorded a protest song titled “Take This Tax and Shove It” and he’s started a campaign to get county residents to refuse to pay their taxes, at least until the government stables have had all their manure shoveled out.
Some things that were caught in my net while I was away in Boston :
- After hearing Katherine Fisher’s inspiring talk evening at the NWTRCC gathering, I did a little Googling.
Here’s a letter Fisher sent to her friends and family to explain her commencement of war tax resistance. Excerpt:
Participation in war violates my belief in the worth and dignity of every human being (the light within, as Friends call it). I am certain that if I were being drafted into military service, I would refuse to go, because I could not participate in killing another human being. Taxes are just one step further removed: instead of the government conscripting my labor and using it for war, I voluntarily trade my labor for money, which the government then uses for war. These two situations are morally very similar in my mind.
- Ken Brown, who is best known for his educational work in peace and conflict resolution studies, but who also was one of the founders of the War Tax Resisters Penalty Fund, died earlier . Here is an obituary that talks about some of his work and achievements.
- William Powers has written a book called Twelve by Twelve: A One-Room Cabin Off the Grid & Beyond the American Dream that’s based on observations he made while housesitting at the 12-by-12-foot cabin of a simple-living tax resister.
- While charitable giving is not a very effective way of eliminating one’s federal income tax liability in the United States, Paul L. Caron and Mary O’Keeffe at TaxProf Blog remind us that the situation is different in other countries (case in point: Canada).
War tax resistance in the Friends Journal in
Issues of the Friends Journal from give some additional hints of the reemergence of war tax resistance as a widespread practice in the Society of Friends… and also the first example of the backlash against it.
The lead editorial in the issue concerned “Taxes for War” and covered the war tax resistance of Quakers in England. The article begins: “Friends in England are under the weight of the same concern that occupies American Friends: what can, or should, we do about taxation for military purposes?”
…short of outright refusal to pay taxes there seems no way out for those objecting to militarism. The voluntary payments to U.N. funds, such as various Friends groups are making, will undoubtedly contribute to easing the moral burden, yet these sensitive donors would be the last ones to claim that their voluntary self-tax is a satisfactory solution to the problem.
The editorial then describes a quirk of British tax law by which if a taxpayer there “ ‘covenants’ a certain annual amount to a charity for seven years, the Internal Revenue will then, as The Friend (London) reports, pay over to the charitable organization ‘a sum equal to the tax normally payable on the amount of the covenant.’ The ‘charity,’ then, receives not only the contribution but also the tax paid upon it. On the average a subscriber to a charity will have to pledge one half of his normal tax payment in order to recover that proportion usually allocated to armaments.”
While “far from flawless” and while “this plan exists only in England,” this plan “nevertheless affords some moral relief,” the editorial states.
This is the first in-depth discussion of a practical war tax resistance method in the pages of the Friends Journal, but it is only “practical” to most of its readers in the abstract — as something Friends in the old country might do. As with the Journal’s earlier coverage of Quaker war tax resisters in Costa Rica, or of war tax resisters Milton Mayer, A.J. Muste, and Maurice McCracken, the magazine still seems most comfortable when talking about war tax resistance as something that other people do and American Quakers admire.
The article can be seen as a hunt for an excuse: “If only we had a law like the British do, we could resist our war taxes… maybe some day we will have one, perhaps we can even advocate for one, but until then there’s nothing we can do.”
Another example of the “there’s nothing we can do” point of view, in the same issue of the Journal, comes in a report on the Philadelphia Yearly Meeting, whose sessions were held :
Our sympathy was aroused for businessmen and taxpayers trapped in the war system and, recognizing our common sense of guilt, we acknowledged the fact that all enterprise is thus enmeshed.
The next paragraph begins “We were encouraged to break out of this trap…” but no mention of resisting war taxes follows.
The issue includes an article about the United Nations that includes this observation about those countries, like the U.S.S.R., that “have refused to contribute to U.N. projects of which they disapprove”:
There is a puzzling similarity between the attitude of these countries toward the U.N. budget and the attitude of those pacifists who refuse to pay income tax because they disapprove of some of the projects of the United States Government.
Note: “those pacifists” and not “those Friends” or “those Quakers.” Again, there’s deniability about whether Quakers are the sort of people who do this sort of thing.
But here is a letter-to-the-editor, from Wilmer J. Young of Wallingford, Pennsylvania, that shows how war tax resistance was beginning to reawaken in the Society:
The following letter, signed by Clarence Pickett and Henry Cadbury, was sent to about twenty persons:
Dear Friend:
Many Friends have for years felt uneasy about paying that part of their income tax which goes into preparation for war. A very few have refused to pay; but the majority of Friends have felt this to be an ineffective way to protest, or they have felt for various other reasons that this was not the way for them to bear witness for peace. At the same time, many of them have been unhappy at not bearing a clear witness in this regard.
The signers of this letter invite thee to attend a meeting of a small group of Friends who feel concern in this matter. We hope to discuss whether there is some action (perhaps not in violation of any law) which would be a clear indication of our position on war preparation, and might have some meaning both to the participants themselves, on one side, and to the general public, on the other. Our consideration will of course be looking toward next year, as it is already too late for this.
Most of those invited to this meeting attended it. There was an earnest and searching discussion for two hours. However, no consensus appeared and no action was taken.
Some of us who are clear that we cannot pay this tax can but wonder whether it is weak intelligence or misguided conscience that has led us to our decision.
The issue included a report on “The Peace and Social Order Committee of the Young Friends Committee of North America,” which
…concerned that many Friends have lost the meaning of the peace testimony, organized a peace caravan this summer. The seven Young Friends who joined in this Peace Caravan traveled in the Middle West asking Friends: “What does the Peace Testimony mean? Is it relevant to our personal lives and our national policies? If so, what is required of us?”
The article suggested some “Queries” that could be used to delve into questions like these, including this one: “Do we consider Christ’s teachings to love our enemies and do good to those who persecute us when we make decisions about our attitude toward military training and taxation for war?”
The same issue of the Journal contains the first example of backlash against war tax resistance I found in that magazine — a letter to the editor by Harold H. Perry in which he says that tax resisters are “by implication” showing a lack of support for all the good things the government does: not just the usual list of roads, schools, and the like, but even “many and considerable civilian services of the military establishments such as the work of the Corps of Engineers and much of the research that aids civilians, including medical and health benefits.” He acknowledges that some resisters redirect their taxes to things of less-questionable benefit, but says that “[t]his may be laudable theoretically, but if widely practiced or permitted would lead to endless confusion, imbalance, and injustice.” He concludes by encouraging Quakers to instead “work through established democratic machinery” to try to get their ideals reflected in government behavior.
Arthur Evans
, Quaker war tax resister Arthur Evans was imprisoned for his resistance. Here is an article from The Rhinebeck [New York] Gazette on the case, written by Adele Wehmeyer:
A friend of mine, 43 year old Arthur Evans, a medical doctor with offices in Denver, Colorado, was sent to jail by Judge Alfred A. Arraj of the Denver district court, for his refusal to pay his part of the income tax (about 50 pct.) which would be used for the annihilation of the human race. He sent it, instead, to the United Nations, to promote peace in the world.
In a statement circulated by him to his friends he says in part: “My lawyer, the judge, and other lawyers, tell me that there is no law, no constitutional provision that provides for the individual to refuse to pay taxes for annihilation. So I go to jail, for I will not, I cannot in conscience be party to financing the means to annihilation. The Jews under Hitler were taxed to buy their crematoriums. The same happens here — but it is not only the Jews who finance their means of destruction — it is almost every income earner in the United States. This is called democratic because we are all taxed alike.”
Letters of approval have been pouring in to Dr. Evans, and since he is only allowed to write very few, his mother in Philadelphia has taken up the task of acknowledging them, sending at the same time a typewritten sheet explaining the affair in detail.
A little over a century ago, in , another man (who is now considered one of America’s greatest) was picked up in Concord, Mass. on the way to his shoemaker, and brought to jail because he had refused to pay his poll tax to a government he thought misguided and evil because it allowed slavery and was also at that time waging a war with Mexico to extend its slaveholding territory. I mean, of course, Henry David Thoreau. Out of that incident came his famous Civil Disobedience, which influenced Gandhi and Nehru; Thoreau’s ideas are very much alive in many parts of the globe today. Strange, how history repeats itself!
Some day, perhaps after another century (if we escape a war of annihilation), Dr. Evans will be spoken of with appreciation and respect. We have a way of crucifying the great while they are with us, and of exalting them after they are gone. At present a medical doctor is doing laundry duty as a “trusty” in the Jefferson County Jail in Golden, Colorado, and he may like to hear from you.
How would the Friends Journal cover this? Would it, as in the earlier case of Milton Mayer (see ♇ 5 July 2013), mention it but try to downplay its connection to Quaker practice? Let’s see.
In the issue is a three-paragraph piece in the “Friends and Their Friends” section on the case:
Arthur Evans, Denver physician and member of the Society of Friends, went to jail on for three months because he has refused to pay part of his federal income taxes and because he would not produce his financial records.
For at least twenty years the doctor has paid to Internal Revenue Service only the proportion of his income tax which corresponds to the percentage of the national budget devoted to non-military purposes. The part he has not paid to IRS he has devoted to charitable purposes and to agencies working for world peace.
Not until , when he declined to file an income tax return, has he been personally pursued by IRS, which heretofore had subtracted from his bank account amounts he was refusing to pay.
So the magazine is forthrightly recognizing this tax resister as one of its own flock, though its coverage is considerably more subdued than even the example from the mainstream media that I quoted above. (Incidentally, if the Journal article is accurate and Evans was resisting as early as , this would put his resistance well in advance of that of the Peacemakers of , which I usually think of as the birth of modern American war tax resistance.)
The Evans case got another mention , in the issue, which reprinted excerpts from his letter to the Director of Internal Revenue (and which also explicitly identifies Evans as “a Friend”). “We doctors have pledged to serve life,” Evans wrote:
I find no way to finance mass murder — be it called war, defense, or security — and be true to this pledge. I care about life and the dignity of each individual, and desire to serve people everywhere, no matter who they are religiously, nationally, or racially.…
I cannot voluntarily fund that overwhelming part of my nation’s budget that finances acts based on retaliation, based on fear and hatred psychology, based on threats of injury and killing-in short, acts based on returning evil for evil.…
If this results in my going to jail for breaking laws that support injustice, slavery, death, and destruction, then in jail, with Martin Luther King, Henry David Thoreau, Peter, and Paul, I will attempt to serve wherein I can.…
“Thou shalt not kill” and “Thou shalt love thy neighbor [which includes thy enemy] as thyself” are precious laws of life to doctors and to all who would cooperate with the Christ.… Many men still believe… that they can deal with the evil acts of men by destroying the men who do these acts. Yet I know no one who believes that conflicts… are resolved by mass murder.… The majority have not yet discovered that love is the only power that overcomes evil.…
I will continue to pay that percent of my tax liability that goes for nonmilitary acts of my government and enclose $200 toward same. I am sending double the amount I am not paying for war to Quaker House at the United Nations for transmission to the United Nations Organization for its technical assistance program.
War tax resistance in the Friends Journal in
There was a noticeable lull in coverage of war tax resistance in the Friends Journal in .
The issue mentioned that the War Tax Concerns Support Committee of the Philadelphia Yearly Meeting was sponsoring “a demonstration on a theme that relates to sanctuary and war taxes: war tax resistance can help to stop the threat of nuclear annihilation and provide sanctuary for our children, our world, our consciences, and the homeless everywhere. A refugee in sanctuary will be among the speakers at the event,” which was to be held at the Federal Building in Philadelphia. “A key part of the demonstration will be the collection of refused tax monies, which will then be used to support local life-affirming work.”
There was also a notice that NWTRCC was collecting information about tax day protest actions for a press release it would be issuing.
The issue included an article by Patricia Gilmore about how the Boulder, Colorado, Meeting had come up with a plan to help Friends who were upset about their tax money going to the arms race but who wanted to respond with “something more creative than all this hassle with the IRS.” Excerpts:
It was noted that for a person in the 30 percent tax bracket who itemized deductions, a $100 contribution to the meeting for someone to work on peace concerns would mean $30 less to the IRS. In essence, the Friend’s $70 contribution would be matched by a $30 IRS contribution. At the monthly meeting, consensus was reached for a peace secretary/coordinator program. That’s when the real challenge began.
The meeting, to save itself disappointment, decided it would go no further until 50 percent of the $9,000 was raised from at least 20 families. Within two months $11,000 was raised from 58 people.
Among the program’s early accomplishments was to convince a Colorado member of the U.S. House of Representatives to sponsor the World Peace Tax Fund bill. They also engaged in vigils and protests, networking with other peace groups, publishing material on peace activism, advocating for conflict resolution education, developing speaker opportunities, pushing for a sister city project to link up Boulder with a city in the Soviet Union, among other things.
This seems to have been an attempt to try to build something approaching the plan anticipated by the World Peace Tax Fund bill — but from the grassroots up, rather than waiting for the politicians to grant it from above. It reminds me of the new Norwegian Peace Fund I learned about while I was in Colombia (see ♇ ).
That said, it only really amounts to tax resistance — even if you interpret that very broadly — for those donors who could take advantage of itemized charitable deductions. Really, it was more of a tax break than a tax resistance strategy. But it’s interesting to see that war tax concerns were part of what launched the project.
a notice in the issue of Friends Journal
The issue reported on one of the regional conferences that had come out of the new Friends Committee on War Tax Concerns — held in Greenwich, Connecticut . Excerpts:
Alan Eccleston, a member of New England Yearly Meeting and an active participant in the National Campaign for a Peace Tax Fund and the New Call to Peacemaking, spoke on “Opening Ourselves to the Spirit.” He emphasized that money is a very uncomfortable issue for many people. Effort must be made to avoid judging each other’s choices and pushing others into an impasse of guilt or fear. Our witness can be widely varied, as we search for answers together.
was strong in that spirit, as Friends shared openly their own questions and experiences. Worship sharing and group discussions emphasized personal support, and understanding the spiritual basis for our witness. Discussions covered lifestyle and choice of vocation, socially conscious investments, peace tax fund legislation, and group support for individuals. A strong group spirit was fostered at meals prepared by three of the participants, and during walks and worship outdoors in beautiful autumn colors. On , Friends were treated to a potluck dinner at Chappaqua (N.Y.) Meeting, followed by a panel of Friends sharing the “Experience of Concern for the Right Use of My Money.”
That issue also announced an workshop planned by the National Campaign for a Peace Tax Fund (which had evidently dropped the “World” part of “World Peace Tax Fund” by this time). Supporters of the legislation could learn lobbying techniques and other ways to support the bill at the workshop.
The “First International Conference of Military Tax Resisters and Peace Tax Campaigns” was held in . The Journal’s coverage didn’t come until , but here’s what they had to say:
More than 100 participants representing 14 countries shared personal histories and reported on the progress of the war tax issue in their homelands. International cooperation was the major focus, with participants experiencing fellowship and awareness that they were not alone in their concerns.
Participants were invited by the German Peace Tax Campaign, Ohne Rüstung Leben (Live Without Arms), the International Fellowship of Reconciliation (German branch), the German Mennonite Peace Committee, the German Quaker Peace Committee, and the Military Tax Boycott Committee of Bielefeld/Bethel. Organizations represented were Conscience Canada, Quaker Council for European Affairs, War Resisters International, National Campaign for a (U.S.) Peace Tax Fund, National Tax Resistance Coordinating Committee, Conscience and Military Tax Campaign, War Resisters League, and the Friends Committee on War Tax Concerns.
From their sharing, individuals discovered that people of conscience around the world are carrying the same concerns and struggling with the same complex issues of paying taxes that are used for military purposes. Conscientious objection to paying for war goes far beyond national policies to the underlying philosophical and moral base of conscience.
There were differences between the groups, of course. Some were political; some were religious (of these some were pacifist). Each U.S. group had its own approach, its own program, and its own constituency. In most of the other nations, one group usually embodied many facets, including legislative action, alternative funds for military tax money, and counseling. Each campaign has its own character related to its national situation. For instance, legislative action is strong in the United States and Britain, while the Canadian and Japanese groups are mounting challenges through the court system. In Italy, Catholic clergy are taking the lead.
In the course of the conference, participants began using the new network by writing letters to each other’s governments, exchanging materials and addresses, and sharing experiences and wisdom. They dreamed of integrating the issue of military taxes into the programs of all existing peace groups. Many also felt that the church is an important international organization which holds a great deal of power. Unfortunately, politicians are often able to use the churches as an excuse not to make morally imperative changes in policy, merely by saying, “Well, the church isn’t speaking out on this…”
Petra Kelly, member of the Deutsches Bundestag and the Green Party, spoke to the conference. She urged us to help reach a goal of civilian and nonmilitary defense, moving us away from deterrence and a “peace” that oppresses us. Nonviolence must be both the means and the end. She quoted German theologian Dorothee Solie, “There are things we must just do, to feel worthy of ourselves, to be able to look ourselves in the face…”
The conference agreed upon three major actions: 1) to propose to our groups a World Peace Tax (Alternative) Fund; 2) to publish war tax news in the War Resisters International newsletter; 3) to make September 1 an international day of solidarity on war tax concerns (already a traditional day of antimilitarism in many nations.)
In a recent speech, frequently quoted at the conference, Dorothee Solie spoke of the great European cathedrals, which took as long as 200 years to build. She said, “So a stonemason… never saw the finished building, only scaffolding and foundations and bits and pieces. It’s no better for us, who are building the cathedral of peace. We only see a few stones, but we must live with our dream, and learn from those who have begun the work before us.” The Tiibingen conference seemed to be an important foundation stone for the cathedral of peace we are all building.
Another conference was announced in the issue: “Employers & Employees: Responding to Conscience” which was described this way:
[A] conference for Quaker employers sponsored by the Friends Committee on War Tax Concerns, will be held at Pendle Hill, . Participants will examine the dilemma of a Quaker employer who is caught between the role of a tax collector and an employee’s concern for the military use of income taxes. Keynote speaker will be Kara Cole of Friends United Meeting; resource people will include tax lawyers. Attendance is limited.
Finally, a brief note in the issue, about four U.S. military veterans who had ended a 47-day fast and vigil in protest of the U.S. government’s proxy war in Nicaragua, mentioned that the four — Charlie Liteky, George Mizo, S. Brian Willson, and Duncan Murphy — planned to continue to “withhold war taxes.”
Some bits and pieces from here and there:
- In , you can attend an on-line “google hangout” on the subject of “War Resistance: Beyond the Rally,” sponsored by the National War Tax Resistance Coordinating Committee, the Center on Conscience and War, and the National Campaign for a Peace Tax Fund.
- Boris Yakubchik, an activist in the “effective altruism” movement has published some of his recommendations on frugal living — things he puts into practice so that he’ll have more money to be able to give away to good causes.
- In the U.S., a person who pays alimony can take it as a tax deduction; a person who receives alimony must declare it as income; and to take the deduction, the payer must include the taxpayer identification number of the recipient on their tax return. You’d think this would make it easy for the IRS to make sure that the numbers match up, and that people aren’t taking phony deductions for fictitious alimony, or failing to report alimony received as income. But according to a new TIGTA report, fully 47% of the alimony deductions do not have corresponding alimony income shown on the recipients return — amounting to “more than $2.3 billion in deductions claimed without corresponding income reported”. Peter J. Reilly dug a little deeper and found that the IRS only bothered to audit 4% of the pairs of returns showing discrepancies — that is to say, “you and your ex collectively have a 96% chance of getting away with something that is in your face blatantly wrong even though you are, in effect, ratting yourselves out.” He calls this “a scandal of epic proportions” and suggests that it’s going to encourage divorcing couples and tax advisors to game the system.
- How can the current U.S. tax system cope with bitcoins and other aspects of the emerging virtual economy?
That’s the subject of a new paper: A Whole New World: Income Tax Considerations of the Bitcoin Economy.
Excerpt:
Because these bitcoins can, in some circumstances, be used to purchase goods or services with a monetary value or where they can be converted to legal tender, the proper income tax treatment of bitcoin transactions presents both compliance and substantive questions for the IRS. …This article explores the current state of the law as it relates to bitcoins as well as proposed methods for applying existing federal income tax laws to the virtual economy.
- Hey, look: another IRS building temporarily evacuated when a worker opens a package containing a suspicious substance.
There’s a new issue of NWTRCC’s newsletter out, with content including:
- a report on the Fall 2014 NWTRCC national gathering from Ruth Benn
- some notes on practical issues of interest to war tax resisters including the possibility of reducing taxes through charitable giving, how to react to letters from the IRS, and the use of no-interest community investment loans to keep assets secure from collection
- a summary of Erica Weiland’s interview with Spanish activist Enric Duran
- a report from the New England war tax resister gathering and some notes about other events at which war tax resisters have done outreach recently
- some notes about internal NWTRCC business matters of concern to the membership
- Peg Morton profiles war tax resister John Lindsay-Poland
I’ve also seen some new interest in the tactic of tax resistance popping up here and there on-line. Twitter is full of people threatening to stop paying taxes with 140-character bravado over everything from police impunity to Obama’s immigration policy tweaks. That’s nothing to get too excited about, except that I haven’t seen so many people hit on tax resistance as a possible activist response to political issues all at once before.
Tax resister Gary Flomenhoft posted a couple of meditations recently at ClubOrlov:
- The Only Way to Stop the Empire
- “The only action that can possibly stop the empire in its tracks is cutting off its food supply — the tax money on which it lives. We have to starve the beast through divestment, capital expatriation, tax resistance, tax refusal and tax revolt. Former Secretary of State Alexander Haig told us this flat out in the 1980s when, being confronted with huge protests over U.S. Central American policy, he said: ‘Let them protest all they want as long as they pay their taxes.’ Truer words were never uttered by a U.S. official. Is there any evidence to contradict his statement? Has any other measure had any impact on the war machine? The honest answer is no. Millions of people around the world protested before the invasion of Iraq. These protests were ignored. No amount of protest or other efforts can stop it, because it doesn’t cut off the empire’s food supply of money and fear. Only by cutting off its funds by not paying taxes can we stop the empire.”
- Tax Revolt Methods
- Describes some of the methods readers might adopt in order to reduce or nearly-eliminate their federal taxes.
Also, The Moon Magazine recently reprinted my meditations on the “one-man revolution” of Ammon Hennacy, Henry David Thoreau, Leo Tolstoy, and Robert Frost.
In , I went through my annual ritual of carrying around a notebook and keeping track of every time I spent money. I do this to double-check that my spending is sustainable under my deliberately limited income.
In order to meet that goal, my taxable expenses should add up to less than the Adjusted Gross Income ceiling that I need to stay below in order to keep my federal income tax at zero. This year, that means $18,000 annually, or $1,500 per month.
My taxable expenses don’t include business expenses, which get subtracted from my gross business income before they have a chance to show up as Adjusted Gross Income. They also don’t include medical expenses, which I can pay for with pre-tax money via my Health Savings Account. And they don’t include contributions to tax-deferred retirement accounts (I contribute to an IRA and a SEP plan).
I took the numbers from what I explicitly spent this month and then added in a few more items: estimates for my utility bills based on those from previous months, an estimate of my average monthly expenses on cat stuff (my spending for my expensive, diabetic cat comes in bursts at irregular intervals, so it’s hard to account for by looking at an individual month’s expenses), my charitable donations (which I’ve been keeping track of throughout the year for the first time this year), and a few regular expenses that I didn’t happen to spend anything on this month but that I do spend money on throughout the year and so I felt I should include in the tally (hosting fees and domain name registration for this site, for instance). Here is what I found from this year:
| Category | Daily expense | Monthly expense |
|---|---|---|
| Total | $54.51 | $1,659.13 |
| Food (groceries) | $14.62 | $445.02 |
| Rent | $13.14 | $400.00 |
| Cat stuff | $5.48 | $166.83 |
| Commercial beer/wine/booze | $5.28 | $160.78 |
| Transportation | $4.43 | $134.90 |
| Utilities & internet | $3.29 | $100.10 |
| Charity | $2.21 | $67.39 |
| Coffee | $2.11 | $64.28 |
| Food (eating out) | $1.60 | $48.68 |
| Miscellany | $1.28 | $39.04 |
| California state taxes | $0.94 | $28.72 |
| Home-brewing | $0.11 | $3.39 |
(The numbers may not all add up quite right due to rounding. Also, I adjusted some of the 31-day October totals to correspond to the average 30.4-day month.)
I started separating California state sales tax into its own line item, and I have combined that with my expected California income tax bill (I don’t resist my state tax, just as a matter of picking my battles) for the “California state taxes” line.
There were a few unusual expenses of note this month. My cat had another health meltdown (I’ve tried to average the cat expenses over the year, so this month doesn’t stand out in the figures above as much as it did in reality). My big frivolous expense was to take a bus up to San Francisco to join a couple of friends at a Dean Ween Group concert. A generous friend bought me a ticket to the show, but between the Greyhound ride there and back, a CalTrain ride or two, dinner, and a round of drinks at the show, it turned out to be a pretty expensive free ticket.
I also spent one pamper-myself evening at a wine bar with a good book, and joined some friends for dinner & drinks at a Mexican restaurant one evening. About half of my monthly alcohol expenses come from the above three nights, which goes to show just how expensive it can be to go out and booze it up.
Those Greyhound & CalTrain tickets I mentioned amount for most of my unusually high transportation expenses this month. I also borrowed someone’s car to run some errands and topped off the gas tank before returning it, and I shelled out for some rain gear to wear while riding my bike, in preparation for the upcoming El Niño.
My coffee budget is higher than usual, too. Partly this is because we had some internet connectivity issues and I ducked out to a cafe where I could get on-line. Partly it’s because I’ve developed a taste for freshly-roasted beans I can get from a roaster down the street but that are pricier than what you can get on the grocery store shelves. And partly it’s just from enjoying popping in for a cappuccino somewhere from time to time and getting out of the office to work. This is definitely an area where I’ve lost some of my zest for frugality.
A supermarket near my house went out of business, so late in the month I stocked up on some things they were unloading cheap. I’m buying groceries and preparing meals for two people, which also boosts my grocery budget. I do most of my produce, eggs, and meat shopping at farmers’ markets, which can be more expensive than grocery stores, particularly for the eggs and meat. I should try a vegetarian diet some month as an experiment to see how just eliminating meat would effect my food budget.
There are clearly a number of areas in which I can tighten the belt further pretty easily if I want to.
I had some crazy idea several months ago that I might itemize deductions this year because my health expenses have been much higher than usual. But because I paid those expenses from my tax-free Health Savings Account, it turns out that I can’t also take an itemized deduction for them. However, before I figured this out, I started also keeping track of my charitable donations because if I were going to itemize, I could add those to the list of deductions (or some of them, anyway: only some of my donations were to tax-deductible charities).
Despite having read a pretty good book on the “effective altruism” movement earlier this year, my own charitable endeavors are pretty amateurish. Usually I hear about (or remember about) some cause or campaign I think sounds pretty neat, and then dash off a check for some amount that doesn’t seem like it will sting too much at the moment. The effective altruism people think I should find one charity that promises the most bang for the buck and then give them everything I can afford right away. They have a point. But for whatever reason I feel more motivated to give in the way that I do, and that extra motivation counts for something.
For what it’s worth, some of the causes I’ve supported this year include the Prisoners Literature Project, the Leukemia & Lymphoma Society, the War Tax Resisters Penalty Fund, the Chelsea Manning defense fund, a local community garden in progress, GiveDirectly, the Institute for Justice, an ad campaign targeting U.S. terror drone operators, a friend in the Avon Breast Cancer Walk, HelpMeSee, a couple of war tax resisters in bad financial straits, the GnuPG project, and Try Freedom Stories. I also try to send copies of my books to tax resisters who have to spend any time behind bars, but this is arguably promotional rather than charitable, I suppose.
Here’s how my current burn rate compares with past years (I’ve had to rejuggle the numbers a bit so that the categories remain the same from year to year; and in many past years I didn’t account for sales tax separately, which probably messes up the numbers a bit):
| Category | average | |
|---|---|---|
| Monthly total | $1,173.96 | $1,659.13 |
| Yearly total | $14,087 | $19,910 |
| Rent | $497.75 | $400.00 |
| Food (groceries) | $201.18 | $445.02 |
| Miscellany | $206.31 | $301.98 |
| Coffee/tea/beer/wine/booze | $111.85 | $228.45 |
| Utilities | $58.83 | $86.57 |
| Internet (hosting) fees | $13.95 | $13.53 |
| Transportation | $53.80 | $134.90 |
| Food (eating out) | $31.97 | $48.68 |
Some of the numbers compare awkwardly. For example, at some points in the past I have lived in places where utilities were included in the rent, which had the effect of raising the rent and lowering the explicit utility payments. Today, we pay the utilities ourselves, so the situation is reversed. I also get a reduction in rent in exchange for buying the bulk of our household groceries, so, when compared to past years, my grocery budget (and some of the drinks-of-vice and miscellany budget) is elevated as a result while my rent is artificially low.
A $19,910/year burn rate is not sustainable given my current technique of staying below the tax line by keeping my adjustable gross income below $18,000. If I want to keep doing this without digging myself in a hole, I need to trim some of the fat. Good to know. I’ve clearly started to slack on my self-discipline (since when did pampering myself at a wine bar become a good idea for gosh’s sakes?).
Here are the results from years past, if you’d like to compare:
Congress has lifted some limits on how much you can deduct your charitable contributions from your taxes this year, when those contributions are made to hurricane relief efforts.
This may allow you to greatly reduce or even eliminate your federal income tax by making large donations to such charities, something that is not usually easy to do.
Ordinarily, the law limits how much of your charitable donations you can deduct to a percentage of your Adjusted Gross Income (20%, 30%, or 50% depending on the nature of the donation). Also, this deduction is an “itemized” deduction, and is subject to limits on how much of such deductions you can take. The new law removes those two limits for certain types of charitable donations.
To qualify for the provisions of this new law, the donations must be made to an organization involved in hurricane relief efforts in the disaster areas proclaimed in response to hurricanes Harvey, Irma, or Maria.
Congress is wrapping up its tax legislation. Here is some of what I’ve learned about it — particularly those parts that might be important to people trying to eliminate their income tax as I do, by keeping our incomes low:
- This is expected to be costly to the U.S. Government. It is projected to lead to the government collecting $1 trillion dollars fewer in taxes over the next decade. This will likely show up as increased government debt, as the Republicans had a hard enough time doing the easy part (lowering taxes) and are unlikely to be able to muster enough courage to do the hard part (reducing spending). Republican optimists hope that by keeping this $1 trillion out of government hands and in the private sector, the economy will boom, leading to higher tax receipts after all, and so things will all balance out in the end. People who know how to run the numbers, though, don’t seem to be taking that scenario seriously.
- Early projections based on the House version of the legislation suggest that the number of “lucky duckies” who pay no federal income tax at all will rise somewhat.
- The bill reduces both corporate and individual tax rates. But for a lot of people, what really controls how much they’ll pay is not their rate, but how much of their income is subject to the income tax and how much is safely deducted out of harm’s reach. In any case, the lowest of the rates (10%) remains the same as before and covers just about the same amount of taxable income, so from the point of view of a low-income tax resister like myself, nothing much has changed here.
- Next year, the standard deduction had been scheduled to go up to $6,500, and the personal exemption to $4,150 — shielding $10,650 of a single person’s income from income tax. The new legislation eliminates the personal exemption, but boosts the standard deduction to $12,000 — thereby adding $1,350 to the amount that’s shielded in this way (people filing as married-joint, married-separate, or head-of-household also see rises to their standard deductions). Modifications to the child tax credit and credits for non-child dependents are meant to make up for the absent personal exemption for people with dependents.
- The bill eliminates some itemized deductions, but also eliminates the limitation on how much of such deductions you can take if you’re well-off. You will also be able to take a slightly higher proportion of your Adjusted Gross Income (60%, up from 50%) as a deduction for charitable contributions, and the law will become somewhat more generous about allowing you to take a deduction for medical expenses. I haven’t looked into this very closely, but it’s possible that this holds out some hope to high-rollers that they might eliminate their federal income tax through zealously pursuing itemized deductions.
- The bill would allow you to use tax-advantaged education savings accounts to pay for a child’s tuition at a private elementary/secondary school (in the past, these accounts could only be used for post-secondary education). This could be a useful tax shelter for people who would prefer not to inflict government-run schooling on their children.
- It’s surprising to me just how little actual change there is from the status quo. Everybody complains about the complexity of filing their income taxes, and politicians get lots of mileage about promising to let people file on the back of a postcard and the like. But after all of the wrangling, this new bill keeps the individual Alternative Minimum Tax and doesn’t even reduce the number of tax brackets — the cheapest trick in the “simplification” bag. It even introduces a lot of new complexity by means of its new method of taxing “pass-through” income — something that may cause some new headaches (or, may we hope, offer new tax-saving opportunities) to those of us with Schedule C income from sole proprietorships, gig economy work, or small businesses.
- I was also a little surprised to see neither the House nor Senate try to boost Health Savings Accounts. These are a more Republican-identified health care policy reform measure, and I would have thought that as they try to sabotage Obamacare that they would have put some effort into bolstering some of their own alternative ideas. No such luck. It makes me wonder if maybe Health Savings Accounts are a craze that has come and gone and that we might expect the program to atrophy at some point.
Here are some more tidbits about war tax resistance from back-issues of Friends Bulletin:
The issue had a fiery letter to the editor from John J. Runnings of University Meeting (excerpts):
Speak Truth to Quakers
A threshing session concerned with the morality of tax support for the arms race was held by the University Meeting. At that session it was revealed that some Friends still see the balance of terror as the only alternative to the repressive advance of Communism. They are caught in a bind between their revulsion to their complicity with the war machine and their fear of the repressive attributes of the Soviet power structure and the consequences of our failure to deter it.
It would be un-Quakerly and unkind to suggest that these excellent people take this position to avoid facing the uncomfortable issue of their complicity with the mutually assured destruction posture of their government. We must suppose that they have an inadequate knowledge of the theory of non-violent struggle.…
Quakers are understandably deeply concerned about the enormous amounts of money they contribute to the war machine and to the development of ever more abominable means of extermination, and they would like to withdraw their support if there were only some comfortable means of doing so. If there were only a law that would allow us to pay our taxes according to our religion — but since it is a matter of violating the law or violating our religion, most Quakers feel more comfortable violating their religion.
In a society so devoted to comfort, it is not surprising that Quakers, except for a few mavericks, have managed to remain law abiding through the Vietnamese war and through the development of the nuclear arsenal to its present level of civilization-destroying capability. And there is little hope that they will not remain law abiding until the world becomes a radioactive wasteland.
Perhaps the most telling repudiation of the theory of non-violent civil disobedience as an alternative to war is that even Quakers in the present moral extremity remain civilly obedient.
We haled non-violent action through civil disobedience as an excellent method for winning independence for India or for winning civil rights for black people; but so far as most Quakers are concerned things are not yet desperate enough to try to stop the arms race by responding to the Spirit and breaking the law.
The issue included minutes from the Intermountan Yearly Meeting, including item #8:
Meeting approved a minute of concern that members be encouraged to consider seriously the refusal to pay war and military taxes, or that part of their taxes which their conscience dictates, and to consider placing these funds in an escrow account. Further, that members encourage and support war-tax resisters with spiritual, emotional, and financial support and that we examine our fear of excessive government intervention in our lives which hinders our ability to act upon our moral decisions. Friends were also urged to support and actively work for the World Peace Tax Fund.
Also in that issue was a report from Boulder Friends Meeting (excerpts):
In , a group of Boulder Friends met seeking constructive ways to promote peace and to address the shift of government funding from human services to military programs. We were particularly concerned with the large percentage of our tax dollars that we were personally paying for war preparation.
Initially we considered two courses of action: (1) symbolic, illegal refusal of military taxes, and (2) creating legal tax shelters. While some individuals as a matter of conscience are pursuing a course of tax resistance, as a group we felt that our energy should focus first on constructive action, developing a method to legally divert our tax dollars from military uses. Our goals were to minimize individual tax contributions to the military and to involve our Meeting more deeply in an expanded peace witness.
After considering numerous options, we found the idea of augmenting the work of the Meeting by employing a staff person especially attractive. Current tax laws mean that the federal government effectively subsidizes gifts to the Meeting by those who itemize deductions. For example, for a person in a 30% tax bracket, a $100 contribution to the Meeting means $30 less tax due. So the taxpayer is giving $70 of her/his own money and $30 is coming from money which would otherwise have gone to the IRS. (Beginning in every taxpayer will be able to deduct at least a portion of such contributions.) This approach also enables Friends with larger incomes to divert money to a person in a lower tax bracket and frees this person to devote energy to vitally important community service.
The edition noted that the Walla Walla Meeting had also established an “Account for Undesignated Special Projects” as a way for people with war tax concerns to more easily take advantage of a tax deduction for charitable donations.
The issue included a note about an unnamed Australian Quaker to that country’s Commissioner for Taxes “explaining why the writer intends to divert the percentage of income tax which would be applied to defense projects, either to a Peace Trust set up by the Australian government, or to some other suitable institution, such as a Peace Research Institute.” That issue also gave an update on the Pacific Yearly Meeting’s “alternative fund for war taxes not paid to IRS” which had thus far collected over $3,000.
A brief in the issue noted that the “San Fernando meeting has decided not to pay 70% of the meeting house telephone bill tax, the portion that goes for war activities.” A similar note in the issue read: “Santa Monica Meeting has refused payment of the Federal Excise Tax on telephone service, a tax ‘long associated with war expenditures, beginning with the War Revenues Act of … our financial support of armed conflict would be unconscionable… We are also aware of our obligation to our fellow citizens and do not take this step lightly.’ ”
We Gave Away a Fortune: Stories of People Who have Devoted Themselves and Their Wealth to Peace, Justice, and the Environment, a book by Christopher Mogil, Anne Slepian, and Peter Woodrow, includes several stories of people who have given away large sums of money to charity, sometimes while living on relatively little themselves.
Some of these generous givers were motivated in part by war tax resistance concerns.
Edorah Frazer
When Edorah Frazer turned 25 she was due to receive some half a million dollars from her deceased father’s estate. She didn’t feel like she had any just claim on the money and in general felt guilty about her family’s gilded financial status relative to those around her, and she eventually decided she would give the money away. She didn’t get much support for her decision, certainly not from her family, but not even (at first) from the socially-responsible investment community she had connected with.
In , I turned 25 and received all my inherited money. Although I had been getting quarterly interest checks since my dad died, this was the first time I had access to the principal. I asked for it all to be sent to me… in its current form of stock certificates. I wanted to give the stock away directly, because I knew that if I sold it I would have to pay capital gains tax. I’ve been a war tax resister, so I wanted to avoid taxes, if possible. Not long after, $400,000 in stock certificates arrived in the mail.
I made charts about each stock. I was curious to see what heinous products I was helping to produce so I wrote down what each company produced, and I found out many interesting things — for instance, that the Morton Salt Company not only makes table salt, but the booster rockets for nuclear missiles. What a weird association! According to my calculations, my stocks were worth about $423,000. I also had $150,000 in cash and government bonds, but since there were no tax liabilities with that money I decided to deal with it later.
I sat at the kitchen table and took out two thick folders I had collected, one full of grant proposals from different organizations and another full of tax information. Then I looked at the stock certificates, all very flowery looking with different colors and embossed stamps. They looked like money but bigger and each stated the number of shares I owned in that company. I spread them all out on the kitchen table and started making phone calls. I called Haymarket [a socially-responsible investing group], I called an accountant and a variety of tax people to find out what I should do. It was mid-, one of the last days in the year to sell stocks or give money away for the tax year. I thought, “I’m going to give it away anyway, so why have a huge tax liability? I might as well just get rid of this stuff now.”
She opted to do so by putting all of her stocks in a donor-advised fund, which allowed her to take any tax deductions for the donation immediately, while giving her more time to decide how and when to distribute her donations to charity.
She then took stock of her income and expenses to see how much of the remaining inheritance she would need:
For six months after my giving, I recorded every dollar I spent and found out that I was living on about $14,000 a year. that was the first time I knew how much it would take to support myself. I always worked, but earned less than half my expenditures, counting on unearned income to make up the difference.
One night as I was falling asleep, I found myself calculating how much money I used each year from my inheritance and how many years I would be able to live at my current lifestyle if I didn’t give away any more. “Using $8,000 unearned income a year, in 15 years it will be gone!” And with a sense of panic, I woke up. Then I realized, “Oh, my God, that’s totally irrational. I’m not going to be living like this for 15 years — I’m going to be earning my living starting next year as a teacher.”
Betsy Duren
Betsy Duren inherited about $300,000 from a grandparent, and some time after began to give it away. On the way to telling that story, she mentioned her war tax resistance:
I think that one of the most basic problems in our society is how much money is thrown into the military — more than half our income taxes go to support it. That’s why I decided I would not voluntarily give the IRS anything, and in fact, I’d make it difficult for them to take it. At tax time, instead of sending a check to the IRS I sent a check for the same amount to the American Friends Service Committee, an organization that I believed would use it in the public interest. Eventually, the IRS started garnishing my wages, but then I found out from a war tax counselor that $75 per week is tax-exempt, so I asked my employer to cut back my pay to that amount. This stopped the IRS from collecting any money from me. Later I started free-lance computer work, and since I had no employer to take taxes out of my pay, it was easier to keep the money from the IRS.
My hope was that people who risked standing up to the IRS would help wake others up to how morally wrong it is for our tax dollars to build the military. I didn’t want to give money to build weapons that can kill millions of people, and I can’t pretend that my tax money is doing otherwise. The way I see it, people lack basic needs primarily because we are building military might to maintain U.S. economic domination over most of the world. The only way we’re going to have lasting peace is by redistributing wealth. Poverty, war, and suffering are caused by people who have more than their share of the pie trying to hold onto it.
Duren started by putting her inheritance into zero-interest, rotating, community loan funds while she researched how to eventually give the money away. As the loans matured, she gave the money away bit by bit, keeping $7,000 for her own use.
Robbie Gamble
Robbie Gamble and Martha Miller are two other big-givers profiled. Gamble learned as a young man that he was an heir to part of the Procter & Gamble company fortune. In the 1980s, he became a Catholic Worker volunteer and began living a life of voluntary “poverty” while at the same time periodically receiving (and giving away) large distributions from the trust that he inherited.
He mentioned his foray into tax resistance:
I had been paying $100,000 a yer in income tax. In , after the U.S. invasion of Grenada, I decided I could no longer pay war taxes; U.S. foreign policy was just too crazy. So the next time the trust company filled out my tax return, I sent a cover letter explaining in moral and religious terms that I couldn’t pay it. I refused to pay taxes three years until an IRS agent came to the trust company office and said, “We’l take this, this, and this…”
The fan and the shit are failing to practice social distancing as March comes to a close. If you want the latest on epidemiology, hygiene tips, or obnoxious things people have tweeted recently, you won’t find it here. But I will try to sift through the news a bit and find things that might be of some interest to those of us in the tax resistance fringe.
If among your fondest dreams is something to do with delivering the federal government’s budget a crippling body blow, you may have reason to smile right now. Tax revenue has got to be dropping fast: personal income is surely way down as unemployment claims are at unprecedented levels; probably also many self-employed people who don’t normally qualify for unemployment are out-of-work as well. Businesses are closing their doors and foregoing revenue. Industries like travel, professional sports, casino gambling, are taking across-the-board hits. So business income is in the shitter too. Capital gains? Remember those? Tariffs, Trump’s favorite go-to tax, also down as international borders close, shipping runs into quarantines, and customers dry up.
Boy would this be a good time for the government to dip into its rainy-day fund that it’s built up by running budget surpluses during the fat years.
Heh nope.
The budget deficit has ballooned during the Trump administration.
But that hasn’t stopped the politicians.
In desperation they enacted a bipartisan $2 trillion economy-goosing bill — a mix of loans and cash giveaways (and suspiciously-targeted tax breaks and the usual pork).
For comparison, the entire federal government budget is a bit over $4 trillion; the national debt is was about $23 trillion.
This new stimulus bill was on top of another bill enacted a little over a week ago that cut the payroll tax for and provided new tax credits for many companies, and also made more people eligible for federal unemployment insurance payments.
(I hear tell also that the older of the two bills includes a provision that allows tax filers next year to deduct $300 in charitable donations without itemizing. The bill also removed the cap on the itemized deduction for charitable giving, if you’re being especially generous this year. That could come in handy.)
This paragraph is based on preliminary news reports about the just-enacted law, and so may be wrong in some or many particulars: The new stimulus law includes a provision for sending $1,200 checks to just about everyone in America (plus $500 for dependent children). Early reports say that the checks will only go to citizens and legal residents with incomes under a certain threshold, which is based on the income on their 2019 tax returns, and that they’ll phase out as they approach that threshold. The checks will be treated as advance payments on a tax credit that will apply on the 2020 tax year’s filing, and so if your income is lower this year than in 2019, you’ll make any adjustment then if you actually qualify for more money than you ended up getting this year. I hear tell that they’ll be issuing checks even to people with an existing tax debt, so even a scofflaw like me might get a payout. That’d be hilarious. However, what about people who don’t file tax returns — either tax resisters who choose that method of resistance, or people with very low incomes who aren’t legally required to file? I haven’t heard how they plan to handle this.
Meanwhile, the IRS is sending almost all of its employees home, at a time of year when the agency would normally be having all-hands-on-deck to deal with tax filing season. The tax filing (and paying) deadline was pushed out a few months, to , which takes some of the pressure off, but still this is a pretty big deal. I’m going to go out on a limb and guess that an agency whose databases are still running fifty-year-old CoBOL probably doesn’t have state-of-the-art remote working capabilities, either. In any case, according to the union contract, in order for an IRS employee to work remotely they must have high-speed internet and “an alternative space that’s conducive to working.” Without those things, the IRS can’t force them to work, and has to put them on “weather and safety leave” instead.
The agency has already suspended deadlines for tax payments, installment payments, and offers in compromise payments. They’ve also put a halt to any new liens and levies initiated either by field collection officers or by their automated systems. They’ll also stop referring tax delinquents to private tax collection agencies, or reporting them to the State Department to have their passports denied. In short, their collections & enforcement division is taking a breather until mid-July at the earliest (and a lot of us can breathe easier too).
