Some historical and global examples of tax resistance →
United States →
Chicago property tax strikes, 1930–33 & 1977
David Beito, who has written the book on property tax resistance in the U.S. during the Great Depression, profiles one of the movers-and-shakers of that movement — John Morgan Pratt — on History News Network.
Excerpts:
John Morgan Pratt led probably the largest tax strike in the United States since the Era of the American Revolution.
In , Pratt quit his newspaper job to take the helm as executive director of the Association of Real Estate Taxpayers (ARET), an organization of real-estate taxpayers in Chicago and Cook County.… , ARET organized a major tax strike.…
ARET functioned primarily as a cooperative legal service.
Each member paid annual dues of $15 to fund lawsuits challenging the constitutionality of real-estate assessments.
The radical side of the movement became apparent by when ARET called for taxpayers to withhold real-estate taxes (or “strike”) pending a final ruling by the Illinois Supreme Court, and later the U.S. Supreme Court.
Mayor Anton Cermak and other politicians desperately tried to break the strike by threatening criminal prosecution of Pratt and other ARET leaders and revocation of city services.
ARET’s influence peaked in , with a membership approaching 30,000 (largely skilled workers and small-business owners).
By this time, it had a budget of over $600,000 and a radio show in Chicago.
But it suffered a demoralizing blow in when the U.S. Supreme Court refused to hear a case it had brought.
Buffeted by political coercion and legal defeats, and torn by internal factionalism, the strike collapsed in .
A while back, I started looking for examples of ways tax resisters have organized mutual aid pacts to help diffuse the effects of government retaliation.
In the course of doing the research, though, I started collecting examples instead of a larger variety of collective projects resisters and their sympathizers have used in support of tax resistance.
Here are some of the examples I found:
Tax resister “insurance”
For instance, the Breton Association in
France, which organized to “form a common stock or fund… to indemnify the
subscribers for any expense they may be put to by their refusal to pay any
illegal contributions imposed upon the public.”
Another example was the Association
of Real Estate Taxpayers in
Chicago, which formed a cooperative legal fund to fight an offensive legal
battle against the tax.
American war tax resisters today can use the War Tax Resisters Penalty
Fund to defray penalties and interest seized by the
IRS.
The fund is raised as-needed by asking subscribers to contribute an equal
amount.
The oath of the Regulator tax resistance movement in the North Carolina
colony bound its signers to “bear an equal share in paying and making up
[the] loss” if “any of our company be put to expense or under any
confinement.”
Communes, collectives, and co-housing projects.
Some tax resisters have formed mutual support communities.
Whiteway Colony
was founded to try to live up to Tolstoyan ideals. The members of the
Bijou and
Agape communities live below a taxable
income so as to avoid paying taxes.
Supporting resisters as an employer
Some members of the Restored Israel of
Yahweh ran a construction business and agreed not to withhold federal
taxes from the wages of those employees who were fellow-members and who were
resisting taxes.
Vivien Kellems refused to withhold
taxes from her employees’ wages, saying: “They are all free American
citizens, thoroughly capable of performing all of the duties and
responsibilities of citizenship for themselves. And so, from this day, I am
not collecting nor paying their income taxes for them.”
Charles Kanjama recently urged Kenyans
to begin a tax resistance campaign, and said that to foil pay-as-you-earn
withholding, “participating employers and employees can enter into a
voluntary contract to convert monthly employment into quarterly or
half-yearly employment, thus effectively delaying tax liability for several
months.”
British nonconformists and women’s suffrage activists a century ago also
used this tactic. Auctions became rallies, with speeches and banners and
crowds that could number in the thousands. Supporters would pack the auction
house and refuse to leave their seats. On some occasions, violence broke
out. In some cases, auctioneers refused to handle goods that had been seized
for tax refusal.
Simply boycotting the auctions and refusing to buy seized goods is one way
communities offer support. It was part of the Quaker “Discipline” to refuse
to buy seized goods. When Valentine Byler’s horse was seized for non-payment
of the social security tax, “no Amish came to bid on the horses and, due to
a lack of bidders, they went for a good price, with the harnesses ‘thrown
in’ by the auctioneer.”
Pay cash so as not to leave a paper trail
Jessica Ramer and a
Claire
Files contributor brought this idea up. If you pay in cash
whenever you can, you give the recipient the opportunity to decide whether
or not to declare the income.
Cash tips are easy to under-report. I asked about that recently and was
told that most people pay with credit card/debit card and that the
government now uses a percentage method for tips. They look at the charged
meals, look at the number of total meals served, and then look at the
charged tips to figure out how much cash tips you received.
(100 meals served. 50 paid with card, tipping 15%. the government
calculates 15% from 100 meals even if cash tips are only 10%)
You can help out by tipping more when paying with cash or better yet, when
you pay with card, put 1% tip on it and put the rest out as cash. I even
leave a note for the server saying “this is your money, don’t
tell your boss, or the government. share it with the buss boy if that is
the policy.” This will help lower the average tip figures, but
still give the nice server what they have earned.
Use barter to avoid taxable/seizable transactions
Karl Hess found people willing to barter with him as he was dodging
IRS
seizures:
The other day I welded up a fish-smoking rack for a family in Washington,
D.C. It will earn me a year’s supply
of smoked fish. At about the same time, I helped a friend dig a foundation.
He’ll help me lay the concrete blocks for a workshop. Part of my pay for a
lecture at a New England college was the use of the school’s welding shop,
to make some metal sculptures. Three such sculptures have paid my
attorney’s fees in maintaining the tax resistance which is the reason
barter has become such an integral part of my life.
Manufacture and sell goods as alternatives to taxed products
Before the American Revolution, colonists who opposed Britain’s economic
control boycotted British products and began to produce homespun cloth,
alternatives to tea, and so forth. Gandhi’s independence campaign in India
made the wearing and production of homespun cloth central to the opposition,
and the Salt March was focused on the illegal production of untaxed,
non-foreign-monopoly salt.
An example today is home-brewed beer (which beats the excise tax on
alcoholic beverages).
Buycotts and boycotts that favor resisting businesses
One report from World War Ⅰ-era America noted that this was a technique used
by those who opposed the “Liberty Bonds”:
Efforts to prevent banks from handling the bonds have centered chiefly in
Wisconsin, Minnesota, North Dakota, South Dakota, Montana, Missouri and
Oklahoma. The President of a Wisconsin bank has advised the Treasury that
his depositors, mostly Germans, or of German parentage, have withdrawn
many thousands of dollars from his bank because he aided the First Liberty
Loan.
These depositors, he added, had taken their accounts to two rival banks on
the understanding that those banks would not aid the second Liberty Loan.
The two banks, he reported, were not aiding the loan in any way.
Many banks have felt the pressure of German influence in this propaganda,
reports indicate. So pronounced was the movement that the States of
Minnesota, North and South Dakota, and Montana recently decided that they
would withdraw State funds from any bank which did not support the loan.
Social boycotts / shunning / noncooperation with tax collectors
Adolf Hausrath writes of Roman-occupied Judaea,
The people knew how to torment these officials of the Roman customs with
the petty cruelty which ordinary people develop with irreconcilable
persistency, whenever they believe this persistency to be due to their
moral indignation. In consequence of the theocratic scruples about the
duty of paying taxes, the tax-gatherers were declared to be unclean and
half Gentile.… among the Jews the words
“tax-gatherersand sinners,”“tax-gatherers and Gentiles,”“tax-gatherers and harlots,”
“tax-gatherers, murderers and robbers,” and similar insulting
combinations, were not only ready on the tongue and familiar, but were
accepted as theocratically identical in meaning. Thrust out from all
social intercourse, the tax-gatherers became more and more the pariahs of
the Jewish world. With holy horror did the Pharisee sweep past the lost
son of Israel who had sold himself to the Gentile for the vilest purpose,
and avoid the places which his sinful breath contaminated. Their
testimony was not accepted by Jewish tribunals. It was forbidden to sit
at table with them or eat of their bread. But their money-chests
especially were the summary of all uncleanness and the chief object of
pious horror, since their contents consisted of none but unlawful
receipts, and every single coin betokened a breach of some theocratic
regulation. To exchange their money or receive alms from them might
easily put a whole house in the condition of being unclean, and
necessitate many purifications. From these relations of the tax-officials
to the rest of the population, it can be readily understood that only the
refuse of Judaism undertook the office.
A social boycott of tax collectors was practiced in the years before
the American revolution. John Adams wrote:
At Philadelphia, the Heart-and-Hand Fire Company has expelled Mr. Hughes,
the stamp man for that colony. The freemen of Talbot county, in Maryland,
have erected a gibbet before the door of the court-house, twenty feet
high, and have hanged on it the effigies of a stamp informer in chains,
in terrorem till the Stamp Act shall be repealed; and
have resolved, unanimously, to hold in utter contempt and abhorrence
every stamp officer, and every favorer of the Stamp Act, and to
“have no communication with any such person, not even to speak to
him, unless to upbraid him with his baseness.” So triumphant is the
spirit of liberty everywhere.
Harassment of tax collectors was a signature action of the Whiskey
Rebellion. An early published resolution of the rebels read in part:
[W]hereas some men may be found amongst us, so far lost to every sense of
virtue and feeling for the distresses of this country, as to accept
offices for the collection of the duty:
Resolved, therefore, That in future we will consider such persons as
unworthy of our friendship; have no intercourse or dealings with them;
withdraw from them every assistance, and withhold all the comforts of life
which depend upon those duties that as men and fellow citizens we owe to
each other; and upon all occasions treat them with that contempt they
deserve; and that it be, and it is hereby most earnestly recommended to
the people at large to follow the same line of conduct towards them.
Tax collectors were tarred-and-feathered in America, both before and after
the revolution — the violent expulsion of tax collectors was a frequent
technique of the Whiskey rebels. Tax collectors have been the targets of
violent reprisal at many times and in many places. Because of this,
governments have often had to pay high salaries — or, frequently,
percentages of the take — to convince collectors to take on the job, which
only increases the resentment of those being collected from.
During the French Revolution and its aftermath, customs houses were burned
by mobs, tax rolls were destroyed, excise collectors were made to renounce
their jobs and then were run out of town — or in some cases killed.
The first Boer War was triggered when an armed group of Boers seized a
wagon that was being auctioned after it was distrained for resisted taxes.
The Whiskey rebels threatened to destroy the stills of those distillers
who complied in paying the excise tax.
Boycotts / social boycotts of non-resisters
If a tax resisting movement is large enough, it may be able to dissuade
people from paying taxes through boycotts or social boycotts of people
who are tax compliant. In Massachusetts, a group enforced a boycott of
taxed British imports by declaring that
…we further promise and engage, that we will not purchase any goods
of any persons who, preferring their own interest to that of the public,
shall import merchandise from Great Britain, until a general importation
takes place; or of any trader who purchases his goods of such importer:
and that we will hold no intercourse, or connection, or correspondence,
with any person who shall purchase goods of such importer, or retailer;
and we will hold him dishonored, an enemy to the liberties of his country,
and infamous, who shall break this agreement.
Maintain solidarity in the face of divide-and-conquer tactics
In
Germany, the government attempted to break a tax resistance movement by
offering to moderate its enforcement efforts against people who could show
that they had limited means. Karl Marx, who was promoting the resistance at
the time, saw this as a divide-and-conquer tactic:
The intention of the Ministry is only too clear. It wants to divide the
democrats; it wants to make the peasants and workers count themselves as
non-payers owing to lack of means to pay, in order to split them from
those not paying out of regard for legality, and thereby deprive the latter
of the support of the former. But this plan will fail; the people realizes
that it is responsible for solidarity in the refusal to pay taxes, just as
previously it was responsible for solidarity in payment of them.
Keep a record of the “sufferings” of resisters
The Quakers responded to persecution by keeping careful records of
individuals who had suffered thereby. In the archives of Quaker meetings,
you can find lists of people who had resisted militia taxes or tithes for
establishment church ministers, and what property was distrained by which
tax collector.
Sign petitions and public advertisements, engage in public protests
When the American Amish were trying to resist compulsory enrollment in the
social security system, 14,000 of them signed a petition to Congress.
During the Vietnam War, public advertisements were taken out by tax
resisters. In , for instance,
448 writers and editors put a full-page ad in the New
York Post declaring their intention to refuse to pay taxes for the
Vietnam War. The signatories included James Baldwin, Noam Chomsky, Philip K.
Dick, Betty Friedan, Allen Ginsberg, Paul Goodman, Paul Krassner, Norman
Mailer, Henry Miller, Tillie Olsen, Grace Paley, Thomas Pynchon, Susan
Sontag, Benjamin Spock, Gloria Steinem, Norman Thomas, Hunter S. Thompson,
Kurt Vonnegut, and Howard Zinn.
Protests, rallies, pickets, and the like have been a part of many
large-scale tax resistance campaigns.
Hold resisters’ property as an informal trustee
Some resisters who are vulnerable to property seizure find sympathetic
friends who are willing to hold the resisters’ property in their
names as a way of foiling seizure. Some war tax resister
alternative funds function
partially as “warehouse banks” that hold deposits of war tax resisters.
When a frustrated tax collector seized Ammon Hennacy’s protest signs
as he was picketing the
IRS
office — claiming that he planned to auction them off to pay Hennacy’s tax
debt — a friend of Hennacy helped him make new signs, each one marked “this
sign is the personal property of Joseph Craigmyle.”
Keep in contact with resisters and express support
After the press reported that Valentine Byler’s horse had been seized by the
IRS
as he was plowing his field, he got letters of support from all across
the country.
Form groups for mutual support & coordinated decision-making
Here there are too many examples to list.
Give financial aid to evicted rent strikers
When the Irish Land League launched its rent strike, it claimed that
“The funds will be poured out unstintedly to all who may endure
eviction in the course of the struggle. Our exiled brothers in America may
be relied on to contribute, if necessary, as many millions in money as they
have thousands, to starve out the landlords and bring the English tenantry
to its knees.”
Comfort and aid imprisoned resisters
The trick to supporting imprisoned tax resisters is to respect their real
needs and desires. When “someone interfered,” as Thoreau put
it, and paid his taxes in order to spring him from his night in jail, they
thought wrongly that they were doing Thoreau a favor, “for they
thought that my chief desire was to stand the other side of that stone wall.”
Juanita Nelson tells of the support she received in jail, where she had
been taken in her bathrobe from her home. Her supporters took the time to
learn how to support her in a way that was appropriate to her resistance:
Two fellow pacifists, one of them also a tax refuser, had been permitted
to come to me, since I would not go to them. I asked them what was
uppermost in my mind, what they’d do about getting properly dressed?
They said that this was something I would have to settle for myself. I
sensed that they thought it the better part of wisdom and modesty for me
to be dressed for my appearance in court. They were more concerned about
the public relations aspect of getting across the witness than I was. They
were also genuinely concerned, I knew, about making their actions truly
nonviolent, cognizant of the other person’s feelings, attitudes and
readiness. I was shaken enough to concede that I would like to have my
clothes at hand, in case I decided I would feel more at ease in them. The
older visitor, a dignified man with white hair, agreed to go for the
clothes in a taxicab.
They left, and on their heels came another visitor. She had been told that
in permitting her to come up, the officials were treating me with more
courtesy than I was according them. It was her assessment that the chief
deputy was hopeful that someone would be able to hammer some sense into me
and was willing to make concessions in that hope. But he had misjudged
the reliance he might place in her — she was not as critical as the
men. She did not know what she would do, but she thought she might wish to
have the strength and the audacity to carry through in the vein in which I
had started.
And she said. “You know, you look like a female Gandhi in that robe.
You look, well, dignified.”
That was my first encouragement. Everyone else had tended to make me feel
like a fool of the first water, had confirmed fears I already had on that
score. My respect and admiration for Gandhi, though not uncritical, was
deep. And if I in any way resembled him in appearance I was prepared to
try to emulate a more becoming state of mind. I reminded myself, too, that
I had on considerably more than the loincloth in which Gandhi was able to
greet kings and statesmen with ease. I need not be unduly perturbed about
wearing a robe into the presence of his honor.
Support the families of imprisoned resisters
When Gandhi was preparing the groundwork for a tax refusal campaign in
India, he noted that the Indian National Congress “should undertake
to feed the wives and families of those who may be imprisoned.”
Study the law, give legal support
When Elizabeth Cady Stanton was contemplating a tax resistance campaign for
women’s suffrage in the United States, she noted, “One thing is
certain, this course will necessarily involve a good deal of litigation,
and we shall need lawyers of our own sex whose intellects, sharpened by
their interests, shall be quick to discover the loopholes of retreat.”
Combine redirected taxes for dramatic charity giveaways
Larry Rosenwald wrote, of this technique, “To sit on the Grants and
Loans Committee of New England War Tax Resistance, and to dispense the
interest on refused taxes to a youth group in Chelsea, a video for cable
television on United States involvement in Central America, and a
people’s garden in Roxbury is to be reminded of the ideal community,
however blurred and fragmented, that war tax resistance is done on behalf
of, in the hope of helping to make it clear and whole.”
Can you think of any I’ve missed?
I look forward to seeing more Chicago newspaper archives become freely available some day, but until then, we can get peeks at some of the coverage of the large-scale property tax strike of the 1930s there in articles like this one from The Argus.
Lew Rockwell recently interviewed David Beito on The Lew Rockwell Show about the widespread and well-organized property tax resistance in the United States during the Great Depression, particularly in Chicago:
Beito is the author of Taxpayers in Revolt: Tax Resistance During The Great Depression, which tells the story of these resistance campaigns.
On Rockwell’s show he talks about what he found during his research, and the two of them speculate as to what lessons tax resisters in the next great depression might be able to learn from those in the last one.
Today: some things from hither and yon that have caught my eye, but that I haven’t managed to weave into a Picket Line post yet:
Thanks to Amazon’s on-line reader, you can read excerpts from Gregory Vistica’s Fall From Glory: The Men Who Sank the U.S. Navy concerning the anti-WMD activism of Archbishop Raymond Hunthausen, and the FBI / Naval Investigative Service / Knights of Malta campaign to discredit him.
Hunthausen at one point resisted a portion of his federal taxes to protest against the United States government’s policy of threatening to attack its enemies with nuclear weapons.
Here’s an old article from The Libertarian Forum about a property tax strike in Chicago in that bears a lot of resemblance to the organized Chicago property tax strikes of the 1930s. I wonder if we’ll see more of this during the current economic troubles.
Here’s an undated report about Australian war tax resister Robert Burrowes.
“Robert has been refusing to pay part of his taxes in ‘legal tender’ (as stipulated by Regulation 58 made pursuant to the Tax Act ) because he does not want to contribute to military expenditure.
Instead he has attempted to pay ‘in kind’ with such constructive and symbolic items as shovels, trees and Aboriginal land… and by donating the balance of the claimed money to various peace and development organisations.”
There’s other stuff on-line about Burrowes’s case but I haven’t had time to look into it yet.
Glenn D. McMurry wrote up some memories of his time at Bethel College in the 1930s, including his recollections of Benny Bargen.
I had the opportunity of living in the Bargen home for an entire summer session.
That experience further confirmed my knowledge of Bennie’s character.
He was a dedicated Christian and a staunch pacifist, believing and practicing all forms of non-violence.
In conversations with Bennie one could almost be persuaded that all wars in which our country had participated could have been prevented by pacifist methods.
Non-violence for Bennie didn’t end with his war philosophy.
He didn’t want any of his money to be used for violence of any type.
Therefore, in order not to pay federal tax on his income, he would accept only a very low salary.
The Bethel administration wanted to raise his salary.
They tried every loophole in the book to help Bennie, and still conform to his desire to pay no income tax.
He remained content to live on his meager salary in order to be true to his moral beliefs.
To live out such a life style, Bennie had to make decisions that made life difficult for his family.
Near poverty became the family’s lot!
The administration gave the most meager housing.
Usually it meant an upstairs apartment requiring his climbing to the top with great difficulty [Bargen’s legs were paralyzed from polio].
It didn’t bother him, but it bothered Esther, his very dedicated wife.
She had high aspirations for herself and her two children, and she found it difficult to attain them because of Bennie’s demands.
Even his eating habits were affected.
He would figure his calories and eat only the minimum amount of food he felt he needed to keep alive.
In excerpts from his book Experiments in Moral Sovereignty, taxpatriate Jeff Knaebel investigates the link between war and taxes, as exemplified in Thomas Paine’s observation that “In reviewing the history of the English Government, its wars and its taxes, a bystander would declare that taxes were not raised to carry on wars, but wars were raised to carry on taxes.”
The good news is that I’ve got a paying gig that’s keeping me very busy.
The bad news is that I’ve been very busy, and haven’t been able to update The Picket Line as much as I’d like.
: a bunch of links I thought were interesting enough to share but that I’ve given up hope about being able to weave in with some original commentary.
The European Court of Human Rights has denied an attempt by The Peace Tax Seven to establish that a country’s unwillingness to allow people to legally refuse to pay for military spending is a violation of the rights and freedoms set out in the European Convention.
The number and percentage of Earned Income Tax Credit claims that are fraudulent — those in which the person claiming the credit doesn’t qualify for it — has increased exponentially in recent years, and the IRS hasn’t been able to keep up.
Vargarquista at anarkismo.net writes about Smuggling as a strategy of tax resistance (Spanish).
This is a particularly urgent subject in countries that rely more on sales and value-added taxes than on taxes like poll taxes and income taxes that individuals can more directly resist.
If the “FairTax” scheme that some are pushing in the United States ever came to pass, this would become more of an issue in the U.S. as well.
(“Smuggling” is my best translation of “el contrabando,” but the author seems to include a lot of different sorts of underground-economy activity under that term.)
David John Marotta has an intriguing idea about manipulating the timing of traditional-to-Roth IRA transfers and recharacterizations so as to maximize your tax-free capital gains. It’s somewhat complex but very clever. Basically, you do a traditional-to-Roth conversion into several different Roth accounts using as many different investment strategies. Then file tax extensions so that you extend the amount of time in which you can recharacterize those conversions. Wait and see which of your new Roth accounts appreciate the most; keep those (if any) as Roth accounts in which the appreciation will remain tax free and pay the taxes on the principle now. For the rest, recharacterize them as traditional IRAs again, and avoid paying taxes on them now. Follow the link for details and a more leisurely and clearer explanation.
Radley Balko at The Agitator reminds us of this section from Dubya’s address to the nation on when he was launching the Iraq War:
And all Iraqi military and civilian personnel should listen carefully to this warning:
In any conflict, your fate will depend on your actions.
Do not destroy oil wells, a source of wealth that belongs to the Iraqi people.
Do not obey any command to use weapons of mass destruction against anyone, including the Iraqi people.
War crimes will be prosecuted, war criminals will be punished and it will be no defense to say, “I was just following orders.”
I love the smell of moral clarity in the morning.
During the last great depression, there was a well-organized, widespread, property tax strike in Chicago, Illinois.
In it looked like another one might be in the offing.
Here’s how Murray Rothbard covered the story for the Libertarian Review:
Tax Rebellion in Illinois
In recent months, a mighty property tax strike has been sweeping the northern suburbs of Chicago, and, for once, the ideological and organizational leadership of the rebellion is being provided by libertarians.
It all began with a recent massive property reassessment in the northern quadrant of Cook County, Illinois.
The reassessments suddenly boosted property taxes by very large amounts: most raises were in the 50–65 percent range; other tax bills increased by as much as 300 percent.
When the property tax bills were sent out, the citizens of the North Shore reacted with shock and anger.
At first the reaction was outraged but inchoate: phone calls bombarded the Cook County Assessors Office.
Complaints also deluged the Chicago Tribune, which initiated public knowledge of the firestorm of grievance by printing some of the complaints in a front-page article.
Many of the letters were a cry from the heart, asking, in effect, where is the leadership, where is the organization, that can organize and redress my grievances?
Thus, one outraged taxpayer wrote: “I bitterly resent the government trying to steal my house from me, and that’s what they’re doing.”
Another poured out his frustrations in the Chicago Tribune article: “I just don’t know what to do.
It’s frustrating as hell.
I hear people talk about a revolution, but I don’t know how to revolt.”
As soon as the article was published, libertarian activists from the Libertarian Party of Illinois and the National Taxpayers United (the Illinois affiliate of the National Taxpayers Union) saw their opportunity and seized it.
A meeting was arranged in Evanston between representatives from the LPI and NTU, and an Evanston resident quoted in the Tribune article.
The meeting formed a Taxpayer’s Protest Committee, with Leonard Hartman, the quoted Evanston resident, at its head.
James Tobin, 31 year old economist and bank auditor and Illinois NTU head who was to become the principal leader of the tax rebellion, urged an outright tax strike; he was ably seconded by Milton Mueller, chairman of the Libertarian Party of Illinois.
The committee decided to call a “town hall” type meeting in Evanston to see if the property taxpayers would be willing to go along with an outright tax strike — a refusal to pay the assessed taxes.
Notice of the meeting ran only in the early editions of the Chicago Tribune; largely, the organizers relied merely on word-of-mouth.
The committee expected about 50 people to appear at the meeting, which was held on the night of in the Evanston Public Library.
Instead, 200 citizens showed up.
Harmann, without a libertarian background, argued for a legal protest: paying the taxes while protesting and appealing, the assessments.
But James Tobin far better expressed the radical spirit of the meeting by calling for an open tax strike.
“We all know we’ve had big taxes thrown on our backs,” Tobin charged.
“And now it has come down to what we’re going to do about it.
Are we going to let city hall control our lives, or are we doing to make enough noise for them to listen to us?”
It is particularly gratifying to me that my Conceived in Liberty was brandished aloft by Tobin as he explained why it was not “unpatriotic” to refuse tax payments, giving examples from the book of early American tax revolts.
Tobin asserted that “We’ve gotten to the point where we are afraid of our government, afraid of what it can do to us.
It’s time somebody stood up and pointed the finger!”
Tobin also presented a well-thought out set of demands for the tax strike.
The demands included: (a) extending the deadline for property tax payments by three months; (b) freezing assessments at the old rate, so that taxes do not go up along with government-created inflation; (c) no increase in tax rates without a publicly-announced referendum; (d) allowing small groups of taxpayers to obtain referenda for reducing tax rates; and (e) full amnesty for the tax strikers.
The sentiment of the crowd was overwhelmingly in favor of the tax strike, which was only opposed by two persons.
Typical of the sentiment was the charge by a German immigrant in Evanston that when he attempted to challenge the increased assessment, the assessors told him that he had to wait until he received his bill; but after he received the bill, the office told him that he would have had to challenge the assessment before the bill was sent.
“These are Nazi tactics!” the man charged.
The organizers passed the hat at the meeting and raised over $400 for printing and for an advertisement in a local paper.
More important was the excellent publicity generated by the meeting: a Tribune article, a page three article in the Chicago Daily News replete with pictures; and coverage by two TV stations and several radio stations.
As the rest of the North Shore was leafleted, meetings burgeoned in other townships, such as Glenview, Palatine, and Wilmette.
The New York Times gave full coverage, plus photographs, to a later meeting in Evanston, held on at the First United Methodist Church.
The meeting of 350 homeowners “shouted their approval” as Jim Tobin charged that “Taxes are immoral,” and nationwide TV coverage showed “Taxation is Theft” placards being brandished at these Illinois tax protest meetings.
Tobin told the cheering throng that “you can never call a tax fair when you are forced to pay against your will.
It’s immoral to force me to pay for educational facilities when I don’t have any children to send to school.
It’s immoral to force the elderly and retired to pay for schools that are no use to them.”
In this way, Tobin escalated the analysis, and raised the libertarian consciousness of his listeners by widening the attack to the public school system itself — the “consumer” of the bulk of all property taxes across the country.
In its issue announcing the strike, the Illinois Libertarian, the newsletter of the Libertarian Party of Illinois, concludes its informative article by saying that “How effective the strike will be is dependent upon many unpredictable things.
But by any standard, our efforts thus far have been extremely rewarding, and if the politicians aren’t paying attention they’ll be sorry.
The strike may not cripple the county government or even come near it, but even so, thousands of people have either taken actions or been exposed to ideas which question the very legitimacy of government.”
But, in a sense, this thoughtful conclusion underestimates the impact of the Illinois tax strike.
For the later New York Times article indicates clearly that the politicians have indeed been paying attention, and are scared stiff.
The pattern of the New Jersey income tax protest movement of last year is repeating itself, with politicians scrambling to cover their flanks.
Thus, when Tobin and a throng of protestors showed up at the governor’s office in Chicago to demand a special session of the legislature to redress the grievances, the “discomfited” Governor James Thompson promised to consider the request, and “expressed sympathy with the group’s aims.” At the Evanston meeting, several government officials showed up to try to explain the tax increase.
They were received with “jeers and boos”, but despite that, “the officials gave sympathetic responses and some concessions to the taxpayers’ demands.”
Thus, George Dunne, chief executive officer of Cook county, pledged at the meeting to support a move in the legislature to roll back property taxes.
The same pledge was made by the counsel for Thomas M. Tully, the Cook county assessor.
The counsel, Dan Pierce, agreed with the protestors that he doesn’t understand why the county’s budget is so high.
“There’s no question that the taxes are too high,” Pierce conceded; he particularly didn’t understand why school district budgets had doubled in the last seven years of Cook county, at a time when school enrollments were declining.
Thus, libertarians have leaped to discover and give voice to the anti-government and anti-tax grievances of their fellow citizens.
Not only have they been mobilized for libertarian action and educated in libertarian ideas, including opposition to the public schools and the idea that taxation is theft, but the politicians have begun to knuckle under to their vociferous demands and actions.
Politicians, scared of their jobs and of the voters, will buckle under pressure.
This has already been demonstrated in Illinois.
Finally, the tax rebellion shows the great importance of libertarian activists and organizations — such as the LPI and NTU — already being in place to take advantage of and take the lead in mass protests and mass movements.
I haven’t heard any talk of property tax strikes lately, though many people have been protesting their appraisals via legal channels and getting their bills lowered that way, and many others have just stopped paying individually.
During the Great Depression, there were organized property tax strikes in parts of the United States, notably in Chicago.
Almost half a century later, the dragon reawakened.
Here’s how the New York Times covered it :
Taxpayer Revolt Gains in Chicago
Chicago, —
“Taxes are immoral,” intoned the speaker, and 350 normally sedate, mostly elderly homeowners shouted their approval.
Their shouts reflected a wave of anger that has swept through Cook County’s northern quadrant, including several Chicago neighborhoods and suburban communities, since the county recently imposed large property tax increases in the area after reassessments.
The mood also resembled discontent of varying degrees generated in many sections of the country by inflated property values, taxes and local government costs.
Protesters here have vowed to bring down taxes or bring down those who imposed them, and many have joined a tax strike in an effort to bring that about.
There are some indications that theirs may be the first such protest in the country to bring substantial results.
The crowd was gathered last night at the First United Methodist Church in Evanston, a North Shore suburb, for the latest of several protest meetings.
At each meeting, anger over tax increases ranging in many cases from 40 to 300 percent has been fanned by the same speaker, James L. Tobin, a 31-year-old economist who works as a bank auditor.
“You can never call a tax fair when you are forced to pay against your will,” Mr. Tobin told an Evanston audience.
“It’s immoral to force me to pay for educational facilities when I don’t have any children to send to school.
It’s immoral to force the elderly and retired to pay for schools that are no use to them.”
The crowd cheered again when Mr. Tobin, a graduate economist with a master’s degree from Northern Illinois University, urged them to continue their tax strike, despite threats that it could result in their losing their homes.
Mr. Tobin is president of the Illinios chapter of the National Taxpayers Union, a 40,000-member group organized to curb tax burdens.
Unlike the New York area, where tax increases have generally been moderate and where some suburbs, such as Nassau County and Westchester, have even had slight reductions in their property taxes, a number of other areas in the country have seen tax increases and protests similar to the one here.
Such areas include Los Angeles, Boston, Detroit, and Maryland’s Prince Georges County, a Washington suburb.
However, all of the tax protests have proved short-lived and ineffective.
“Don’t Know How to Fight”
“Generally, they don’t hold very long,” said William Bonner, executive director of the National Taxpayers Union, in a telephone interview from Washington.
“The people don’t know how to fight the officials.”
Mr. Bonner said his organization did not recommend tax revolts, such as the one organized here .
There is disagreement here over the effectiveness of Mr. Tobin’s call for withholding taxes, but the movement is clearly getting the attention of public officials.
Mr. Tobin, who owns a four-apartment house here, has said that many homeowners, like him, are refusing to pay.
But the office of Edward Rosewell, county treasurer, said that while tax collections lagged behind schedule before the deadline, millions of payments poured in the final day.
There is no indication of final delinquency figures.
Delinquent taxpayers are subject to a 1 percent penalty.
After , a speculator could pay their taxes and eventually, unless he is repaid, become the owner.
One official reaction came recently from Gov. James R. Thompson.
The 6-foot-6-inch Governor appeared discomfitted when confronted by the slightly built Mr. Tobin and a throng of protesters in a hall of the State Office Building here.
“We’re here asking you as one of our employees to call a special session [of the Legislature],” Mr. Tobin told the Governor.
Mr. Thompson expressed sympathy with the group’s aims and promised to consider the request, but he has not given an answer yet.
At ’s meeting, the crowd that cheered Mr. Tobin repeatedly shouted down public officials who appeared on the platform with him to try to explain the reasons for the tax increases and how they were assessed.
But, despite the jeers and boos, the officials gave sympathetic responses and some concessions to the taxpayers’ demands.
One official, George Dunne, who as president of the County Board is Cook County’s chief executive officer, said he would support a move in the Legislature for a tax rollback.
Another, Dan Pierce, counsel for the office of Thomas M. Tully, the county assessor, said Mr. Tully would urge the Cook County delegation to support a move in the Legislature for a lid on property tax increases.
One reason for the vehemence of the protests is a new system of tax assessment affecting this year’s tax payments.
In the past, assessments have been based on “bricks and mortar,” or original construction costs, a system that gave tax advantage to older houses.
But last year, Mr. Tully began a system of taxation based on market values — prices at which homes of similar quality were being sold.
In some cases, this resulted in property tax increases running as high as 300 percent.
The county reassesses one-fourth of its property each year.
, it was the turn of the northern quadrant.
Among those hardest hit were Mr. and Mrs. John Keeley, who own a modest 100-year-old frame home with three bedrooms in Wheeling, a community on the northern edge of the county.
Mrs. Keeley, who is 61 years old, said in an interview at her home that her taxes had risen from $1,253 last year to $3,371 this year.
Crimp in Retirement Plans
“We’re not retiring yet, and at this rate we won’t ever be,” she said.
Her husband, a self-employed printer, is 64.
“I don’t understand it,” she continued.
“The school enrollment keeps going down, and some schools are closed, but they keep asking for more money.”
Mr. Pierce, of the tax assessor’s counsel, said he, too, was puzzled by the need for higher budgets.
The assessor’s office, he said, assesses taxes in accordance with the county budget, which is set to meet the needs of the county’s 642 different taxing entities, including cities, villages, school districts, and park districts.
“There’s no question that the taxes are too high,” Mr. Pierce said, noting that many school districts were raising budget requests at a time when enrollments were declining.
He cited several suburban school districts where the budgets had risen from 25 to 100 percent since , and said the budget for the city of Evanston had doubled in that same period.
For the northern quadrant over all Mr. Pierce said, the assessed valuation of property for tax purposes had risen 9 percent in the last year.
“A good question,” he said, “is whether they need all that money.”
Tobin apparently found his niche: he is still the Director of the National Taxpayers of Illinois today.
Ironically, there’s another economist named James Tobin, an economics “Nobel” winner, who is a (notorious?) Keynesian and whose name comes up from time to time these days when people propose a new global tax on financial transactions, sometimes calling it a “Tobin Tax” in his honor.
Governor Thompson rejected the demand to reconvene the legislature a few days after this article hit the press.
The government pulled out that classic steam-releasing technique of convening a committee to study the problem.
This only made things worse, since the committee recommended switching the quadrennial property reassessment to an annual one, which, in the midst of the 1970s inflation, would have added up to more frequent tax increases.
This all was going on at around the same time that Proposition 13 in California turned a similar tax revolt into a successful state constitutional amendment.
Illinois voters didn’t have the same sort of referendum power built into their state constitution, so they were stuck with petitioning elected officials or engaging in civil disobedience.
Citizens Refuse to Pay Taxes; 140 Million Not Collected During Past Four Years
Editor’s Note — Chicago is not alone in its financial muddle.
A score of major American cities are drifting toward the same bog.
The Chicago crisis may be duplicated over all the country.
This concluding installment of a series of stories about Chicago’s plight tells how and why taxpayers went on “strike,” precipitating the city into its struggle against bankruptcy.
By Ray Black United Press Staff Correspondent
Chicago, (UP).
— A taxpayers’ revolt brought Chicago to the brink of bankruptcy.
“Taxes are too high; assessments are unfair,” home owners, shop keepers and business men protested.
“We won’t pay.”
They did not pay.
More than $140,000,000 in taxes for remains unpaid.
While 88 per cent of the taxes was sent in, only 65 per cent of the assessments was met and the and tax statements lie on the city treasurer’s desk unsent.
The muddle dates from a reassessment a few years ago.
Middle class folk complained that $15,000,000,000 in personal property, trust estates, bank deposits and other holdings of the rich had been left off the tax rolls.
Irate home owners organized, retained attorneys.
A test case was brought in behalf of Mrs. Lillian Cisar, an Oak Park widow.
She refused to pay taxes on her home because the assessment was unfair.
County Judge Edmund K. Jarecki heard the case.
Tax Rolls Void
“Scandalous and a crying shame,” he said of the tax apportionment.
“What can be fair about an assessment that deliberately omits $15,000,000,000 of taxable wealth?”
Judge Jarecki declared the and tax rolls void.
Since the roll was based on that of , it also presumably is illegal.
The decision was appealed to the Illinois supreme court .
Unless the high court reverses Judge Jarecki, the whole taxing scheme of the city and county will have to be revamped before taxpayers can be compelled to pay.
Last Tuesday, Superior Judge Charles A. Williams issued a writ of mandamus compelling the board of review to place the $15,000,000,000 of personal property in the tax lists.
If the supreme court upholds that order, enough valuation would be added to cut the tax rate in half.
But how soon the complicated tangle suits, appeals and writs can be cleared up so money will actually start pouring into municipal coffers again is problematical.
The state legislature, meeting in special session to pass laws to remake the tax machinery, is at logger heads.
One relief bill was killed in a test vote.
It will be reconsidered next week.
As the matter stands, citizens howled about their taxes, refused to pay them and a court upheld them.
They are in revolt with legal sanction.
Thieves Stole Money
Appeals of officials and civic leaders that home owners pay now and trust to later court rulings for reapportionment have gone unheeded.
Not a cent in taxes has been paid since Judge Jarecki’s ruling.
The Chicago Tribune, in an editorial headed “A Stout Thief on a Starved Jackass,” placed the blame in these words:
“The voters elected officials to steal the public funds.
The officials stole the funds.
To replenish them, they raised taxation and stole more funds.
“Theft and taxation climbed together.
Corruption and collapse were twins from one cradle.
“This impossible structure of graft was about to fall of its own weight when bad times came to take the taxpayers on the other flank.
That settled it.
In Chicago the very machinery for levying taxes had to break down under its sins.
Other cities went to ruin without that added cause.
“American democracy has given its demagogic and dishonest political system enough rope, but the system has hung not itself, but the democracy.
Charlatans of reform, brainless windbags, greedy almoners, sour bigots and fat scoundrels have crossed the country as a plague of locusts and the fields are bare.”
Whatever the cause, the crisis grows hourly more acute.
There is a tenseness even where want, cold and hunger have not yet laid clutch.
Sometimes the decisive turn in a tax resistance campaign has come when the resisters have coalesced into a formal group with the authority to organize and coordinate resistance actions.
Today I’ll give some examples of this.
The Great Confederated Anti-Dray and Land Tax League of South Australia formed in the to fight taxes associated with a recently-enacted Road Act, and, once organized, the League was successful in its fight.
Organizer Jonathan Norman remarked to a meeting of the League in : “They had before them an example of what might be achieved by union.
In everything they had been victorious; the dray-tax. which from time to time was threatened to be enforced, was ultimately abandoned altogether.
The various memorials from the different hundreds, backed by the memorial of the united delegates, had caused the Government to introduce an amended Act, which promised almost everything they desired.”
When Charles Ⅹ and his ministers threatened to bypass the elected legislature and start taxing and spending on their own initiative in , French liberals declared that since such actions violated the constitution, the people were under no obligation to pay for them with their taxes.
Taxed landholders in Brittany formed the “Breton Association” to coordinate their resistance.
This Association had a two-fold object.
They proposed, in the first place, to refuse to pay any illegal tax, and in the second place to raise by contribution a common fund for indemnifying any subscriber, whose property or person might suffer by reason of his refusal.
The members subscribed each ten francs.
In the event of any tax being imposed without the consent of the Chambers, or with the consent of a Chamber of Deputies created by any illegal alteration of the existing law, payment of the tax was to be refused, and the money subscribed was to be employed in defending and indemnifying the persons who should so refuse, and to prosecute all who might be concerned in the imposing, or the levying of such illegal taxes.
The association enacted a trigger mechanism for an organized tax strike and a process for collecting and distributing a mutual insurance fund.
In this way they were able to present a credible threat to the planned royal usurpation — so much so that the newspapers that dared to print the Association’s charter were prosecuted and their editors imprisoned.
This only served to fuel the movement: “The associations spread over the greater part of the kingdom; they embraced more than half the Chamber of Deputies, and a very considerable number of peers.”
The Rebeccaites formed Farmers Unions which met in secret to discuss the same sort of grievances that, in disguise, Rebecca and her sisters would address vigilante-style, and which corresponded with each other in a regional network.
One farmer said: “This Union among us is a very excellent thing if all join.
When they elect members of Parliament they do just as they please, and we have no voice, but here we have.
There is no way of putting things to rights till we get up this Union, and then we can do as we please and think best.
If we had had this Union many years ago we should be better off than we are now!”
The Women’s Tax Resistance League formed in when about twenty women from existing suffrage groups came together in London “with the single-minded aim of starting ‘an entirely independent society quite separate from any existing suffrage society with the object of spreading the principles of tax resistance.’ ” League organizer Margaret Kineton Parkes explained that it “included Suffragists from every camp, Conservative, Liberal, Socialist, as well as non-party, and was making every effort to get a large number of influential women to refuse to pay taxes” because “[t]he isolated refusal to pay was ineffective and only caused trouble to the refuser; but a large and unexpected number would cause considerable trouble to the Government and would bring the question at issue home to them.”
Elias Rishmawi was among those who organized tax resistance in Beit Sahour during the first intifada.
He remembers how important it was to have formed a network of committees so as to distribute communication and decision-making in anticipation of Israeli military disruption by means of curfews and arrests of the resistance leadership.
Direct action-oriented pacifists in the United States came together in to form Peacemakers.
“[T]his is not an attempt to organize another pacifist membership organization, which one joins by signing a statement or paying a membership fee,” they announced.
By the group had about 2,000 members, about 150 of which were resisting taxes.
A second group, War Tax Resistance, promoted the tactic within the anti-Vietnam War activist community.
In , the National War Tax Resistance Coordinating Committee formed to help a variety of groups that included war tax resistance as part of their work to coordinate and share resources and expertise.
During the Great Depression in the United States, taxpayers’ leagues, some of which organized property tax strikes, proliferated in the thousands.
Such groups “spring up like mushrooms,” one critic complained, “every time you go out in the morning, you find more of them.”
These leagues attacked the taxes on multiple fronts — not only organizing tax strikes but also coordinating legal suits and pressuring political figures.
A proposed sales tax boycott in Ottawa in
was boosted by the group Human Action to Limit Taxes.
“As individuals we are lost,” one resister said.
“But as a group we would have some impact.”
In the Birmingham Political Union of the Middle and Lower Classes formed.
It would play a strong role — and would advocate tax resistance — in the battle to pass the Reform Act of .
But it also began as a war tax resistance group, asking its members to sign the following oath:
That in the event of the present ministers so misconducting the affairs of the country as to make it probable we shall be involved in a Continental war [with Belgium], we will consider the propriety of checking so mischievous an event by withholding the means as far as may lay in our power, and will then consider whether or not refusing to pay direct taxes may not be advisable.
Similarly, the Catalonian “National Union” began life as a committee to direct a tax resistance action in and grew into the organizing party for an ambitious reform movement: “its demands included the entire reorganization of the vital forces of the nation: fiscal and administrative reform, the amelioration of the judicial system, the introduction of an effective system of compulsory education, the improvement of the provincial governments.”
A variety of local groups, with independent organizations, were key to the victory of the Anti-Poll Tax movement.
In Danny Burns’s book on the Poll Tax Rebellion, he stresses how important it was for the success of the campaign that people formed and ran their own small-scale, neighborhood resistance groups, rather than ceding control of the movement to the various established left-wing partisan and labor-union groups who wanted to use the movement to their own ends but were also afraid to identify themselves too closely with the law-breaking resisters.
Prior to the Anti-Poll Tax campaign, many people’s only experience of politics was a traditional Labour Party or trade union meeting — the sort of meeting where the top table takes up 90% of the discussion; where the only items discussed are those decided by the executive committee; where half the meeting time is spent discussing procedural motions or the order of words in a resolution; where political factions throw rhetoric across the room in angry and unproductive exchanges.
Essentially, boring meetings which stretch long into the night.
Hundreds of thousands of people have been to these meetings just once and never returned.
To engage people in a mass campaign, the Anti-Poll Tax Unions had to challenge this culture of organisation.
They had to make people feel wanted and included and give everyone a sense that they had a role.… This immediate form of organisation also meant that people weren’t patronised by those who had political experience.
In the local groups, people didn’t need permission to act, they just had to get on the phone to their neighbours and get something going.
People stay involved in political campaigns if they can contribute in the way that they feel is most effective.
Very often this is not by sitting in boring meetings.
…most of the successful Anti-Poll Tax Unions operated on a principle of parallel development.
Rather than trying to assert majority control or spend hours reaching consensus, people were allowed to get on with what they thought was most important.
Everything could be done in the name of the Anti-Poll Tax Union, which existed to coordinate activity against the Poll Tax, not to specify its exact nature.
However, he also notes:
…it was sometimes in the places where the Anti-Poll Tax Unions were weakest that resistance was strongest.
For example, St. Pauls was almost the only area in Bristol which couldn’t sustain an Anti-Poll Tax group.
Local people didn’t feel the need to set up new groups because, as in many inner city areas, they already had strong networks of solidarity, and there was already a high level of general hostility to officials of any sort.
… By the end of , three times as many people had turned up to court to contest their cases from St. Pauls than any other area.
White supremacists in Louisiana met in
to form “The People’s Association to Resist Unconstitutional Taxation” to coordinate their resistance to state and city taxes enacted by the reconstruction government there, and to provide legal support for resisters.
Property owners of Silver Lake Assembly met in to decide how to respond to a property tax they felt was being illegally put over on them by a government with no authority to do so.
They decided to respond as a group, “and perfected an organization for the purpose,” issuing a resolution saying that they “individually and collectively will resist the payment of the so-called taxes.”
an early tax form, from when paperwork was fired in clay
Tax agencies live by bureaucracy and paperwork.
Many of the earliest examples of writing in the worlds’ museums are tax records.
But some mischievous tax resisters have discovered that this is a vulnerability that can be targeted.
For example, , a video blogger going by the name “StormCloudsGathering” considered the idea of “filling out thousands of random tax returns with nonexistent names and numbers… so suddenly they get flooded with a bunch of returns that don’t make sense…”:
What’s even more brilliant about [this] option is that even non-U.S. citizens — people living in other countries — could participate.
You could send in hundreds of tax returns even if you’re an Indonesian.
You know: Americans can live in Indonesia, and they’re required to file taxes… there’s no way for them to be sure, just because it’s coming from Indonesia, that it’s not a valid tax return.
They would have to do the investigation, and that costs resources.
He recommends filing in the name of particular, offensive, multinational corporations, but I think the average person would have a difficult time filing a sufficiently complex return to serve as a convincing decoy in such a case.
Another option would be to file corporate returns for nonexistent corporations, or individual returns for phantom (or dead) people.
War tax resister Ed Hedemann has already made plans for what he calls “zombie war tax resistance” — filling in years of tax returns ahead of time and putting them in pre-stamped envelopes so that his survivors can continue to file (but, of course, refuse to pay!) after he’s gone.
“Why give the government a break from having to deal with your resistance when you die?”
he asks.
Hedemann also makes a point of periodically filing Freedom of Information Act requests for any information the IRS and other government agencies have been collecting about his activities — hundreds of pages — and he’s put together a guide for other tax resisters to follow in making their own requests.
Currently in the U.S. there is an epidemic of tax fraud in which the fraudsters file for phony tax refunds in the names (and taxpayer identification numbers) of other, real people.
This often causes the tax collection bureaucracy to swing into action against the victims of the identity theft, which is both a waste of resources and a way of further alienating the population from the government and its tax bureaucracy — potentially a model that a tax resistance campaign could benefit from.
The IRS has made a big shift in recent years from processing paper income tax returns, filled out by hand, to electronic filing.
This is more efficient for the agency, as it no longer has to hire as many people to laboriously transcribe the numbers from paper returns into its computer databases.
The agency estimated that it cost about 35¢ on average for the agency to process an electronically-filed return, compared to an average of $2.87 for a paper return.
This suggests that one way to make a minor dent in the agency’s budget and efficiency is simply to file paper returns rather than file electronically (this is still a legal option for individual filers, even those who go to professional tax preparers).
But if this became a strategy of a mass-campaign it could even cripple the tax collecting bureaucracy.
George Jakabcin, IRS assistant deputy associate chief information officer for systems integration, said in that the agency “would be in a world of hurt” if even half of the people who had switched to electronic filing at that time decided to switch back.
“We no longer have the capability to process the additional 43 million returns manually.
We no longer have the facilities, we don’t have the IT infrastructure in place to support them, we don’t have the people, and some would argue that we are beginning to lose the expertise.”
The IRS has tried to crack down on people who send them paperwork just to waste their time.
They have come up with something called the “frivolous filing penalty” and can use this to ding you $5,000 each time you file any sort of paperwork with them that takes a position they consider to be “frivolous.”
They can do this immediately and on the whim of whichever bureaucrat is handling your forms, without going to court, and you are only allowed to appeal your fine before a judge if you pay it first!
War tax resister Karl Meyer wasn’t about to let the IRS think it could intimidate him with such tactics.
So in , when the “Cabbage Patch Kids” dolls (each one slightly different) had become ubiquitous, he invented when he called “cabbage patch resistance” — filing a different, blatantly “frivolous” tax return every day.
He was assessed $140,000 in penalties in alone (though the penalty was only $500 back then).
The IRS never collected the money though.
The best it could manage was to seize and sell his car, for a little over $1,000.
“Constitutionalist” and “sovereign citizen”-style tax protest groups in the U.S. are fond of harassing tax officials and other government employees with lawsuits, liens, bogus quasi-official court filings, and so forth.
In one example, Eddie Kahn’s “Guiding Light of God Ministries,” filed some 2,000 misconduct complaints against IRS agents.
A newspaper article about a subsequent legal case against the group noted that:
Some agents have said that their supervisors ordered them to back off from audits or collection efforts in the face of [such] threats, just to avoid investigations by the Treasury inspector general for tax administration.
Some paperwork tricks are more like “hacking” in that they treat the IRS as a system that processes input and produces output, and note that certain examples of pathological input can result in output unanticipated by the system designers.
For example, the IRS gave out $20 million dollars in the filing season when people figured out that if they substantially overpaid a tax return with a bad check, the IRS would cut them a hefty refund check before they noticed they’d been had.
Here are some more examples of paperwork hacks being used against the tax collecting bureaucracy:
South Carolina’s state government recently passed a law that required all organizations that “directly or indirectly advocate, advise, teach or practice the duty or necessity of controlling, seizing, or overthrowing the government of the United States, the state of South Carolina, or any political division thereof,” to register their activities with the South Carolina Secretary of State and pay a five-dollar filing fee.
A member of the Alliance of the Libertarian Left (which probably qualifies, at least in its more ambitious moments) decided to register, but with a twist:
When belligerence and inhumanity prevail, the peaceful and the humane must find honor in being categorized as the enemies of the prevailing order.
Please keep me updated as to the status of our registration.
I look forward to hearing back from you as to our official recognition as enemies of your state and its government.
… P.S. I am told that there is a processing fee in the amount of $5.00 for the registration of a subversive organization.
Our organization is in fact so dastardly that we have refused to remit the fee.
Prussian farmers in used the bureaucracy against itself.
A New York Times report noted:
[T]he big agrarians… are determined to resort to sabotage of all the tax laws…
[A correspondent in East Prussia says] “They have all filed protests and demanded that they be relieved from paying the tax until the protests are settled.
That means a delay of at least three years in collecting the taxes, and it is said that the Provincial Treasury is inclined to grant this request.
The big agrarians declared that they would do the same thing with all the tax laws.
In Berlin the people might decree what pleased them, they (the agrarians) would not pay the taxes or subscribe to the compulsory loans.
They want to sabotage the whole taxation system that they hate, and consequently they want to make so much work for the Treasury officers that the latter don’t know which way to turn.”
During the Beit Sahour tax strike against the Israeli occupation, Elias Rishmawi worked to get a suit challenging the legality of the tax accepted by Israel’s court system.
He remembers: “I had never had an illusion that the Israeli supreme court would give any justice to Palestinians.
… [T]he appeal formed the legal coverage by which I and others were able to continue resisting from one side not paying taxes, since there is a case in court and they cannot force me pay until the case is solved they cannot take any actions against us since we have this case, and we kept challenging the system through different means.… This was impossible to achieve without the legal coverage of the supreme court.
Because then, I and the others, would have been considered as inciters and then might be imprisoned for ten years.
That’s why we needed that coverage.”
An early form of resistance to Thatcher’s Poll Tax was called the “send it back” campaign.
The idea was that people would register for the tax, as required, but would accompany their registration with questions that would require further manual processing by the individual councils that were processing the tax:
Government regulations state: “…if for any reason you consider that you are not a ‘responsible person’ please let me know and return the form to me without completing it.”
Stop It wants people to take up this offer by writing to ask if they should be the “responsible person” and suggests they ask who will have access to the information supplied and why the authorities require exact dates of birth.
The implementation of the tax was dependent on an accurate register and the protest campaign could make the register “wildly inaccurate,”… Labour MP Brian Wilson, chairman of [the anti-poll tax campaign called] Stop It, said: “It is a campaign of obstruction within the law that does not lead people to incur the substantial penalties that are built into the legislation.”
The aim was to have the legislation amended or abandoned.
For this and other reasons, the councils were inundated with paperwork, for which they were unprepared.
“Councils sat under a mountain of paper.
Everything they did seemed to create more work,” wrote campaign historian Danny Burns.
He quotes from the Poll Tax Legal Group:
The paper-work involved with administering the charge is enormous — and likely to get worse.
Backlogs switch from one area of activity to another.
Indeed, local authorities cannot really do anything without generating more paper-work.
Kate Harvey, a tax resister for women’ suffrage in 1913, once wrote: “I have just received the first demand note for this year’s taxes.
I have torn it up, put it in the envelope in which it came, and re-posted it to the Tax Collector.
I suppose it is now reposing in his rubbish basket.”
The Association of Real Estate Taxpayers in Chicago during the Great Depression led tens of thousands of property owners to demand reassessments of their property, which effectively swamped the Board of Review and allowed the property owners to legally delay tax payment.
One way a tax resistance campaign can claim victory is by convincing the government to either formally rescind the tax, or to recognize the legal validity of tax resistance.
Charles Ⅰ went around Parliament to create a new property tax, and John Hampden famously said “no” in .
He lost his court case, but the next Parliament legalized his resistance by voiding the “ship-writs” tax and declaring the court judgment against him invalid.
American Amish, after a long campaign of lobbying, lawsuits, civil disobedience, and public relations, successfully won an exemption to the U.S. social security system, including its tax, and also canceled the outstanding social security tax bills of 15,000 Amish resisters.
A number of pacifist groups, frequently including war tax resisters, have been trying to get their governments to recognize or legally formalize a right to conscientious objection to military spending that would permit conscientious objectors to pay their taxes in a way that would not pay for the military portion of the government’s budget: a “Peace Tax” as it were.
So far, none of these long-standing efforts — which have included legal challenges using a variety of arguments, lobbying, and appeals to international legal bodies — have borne much fruit.
Governments seem universally hostile to the idea, and those international legal bodies with any clout have been unwilling to push the point.
Besides this, it is difficult to separate a government’s military budget from the rest of its budget in a way that would make a separate “Peace Tax” plausible.
The American version of the “Peace Tax” legislation, for instance, would ironically result in more taxpayer money going to military projects.
Italy has an otto per mille tax, which people can designate either for their church or for “humanitarian and cultural projects” of the government’s choosing — this resembles the sort of plan the “Peace Tax” promoters have in mind, but Italy’s government cunningly declared its participation in the Iraq War a “humanitarian and cultural” project and siphoned the funds off that way.
A tax resister who was opposed to the death penalty came to an agreement with the state of Delaware in which the state permitted him to pay his state taxes into a fund designated for paying state tax refunds of other taxpayers, rather than into the general fund that funded the prison system and executions.
American Quaker war tax resister Joshua Evans was so persistent that eventually the tax collector gave up.
“I was told it was concluded that as I gave myself up very much to the service of Truth, it was not proper I should be troubled on account of military demands; and I understood my name was erased, or taken from their list.”
Occasionally something similar happens today, when because a war tax resister has so few assets, or those assets would take too much trouble to discover, the IRS formally lists the resister’s file as “uncollectible” and gives up the attempt to force payment.
After ten years, a delinquent income tax payment hits a statute of limitations and the U.S. government is generally forbidden to pursue the matter further.
American suffragist activist Sarah E. Wall resisted her taxes for 25 years, when finally, according to Susan B. Anthony, “I do not know exactly how it is now, but the assessor has left her name off the tax-list, and passed her by rather than have a lawsuit with her.”
Something similar happened to English suffragist tax resister Charlotte Despard and some others: “[T]he Government rather than go to the trouble of selling up the recalcitrant ‘debtor,’ and attracting attention to the principle involved, had quietly dropped the matter in several instances.
Mrs. Despard had had no application for taxes since she had been sold up last year.”
Ellen C. Sargent patiently pursued legal challenges in California to try to promote women’s suffrage with a “no taxation without representation” argument.
She began by petitioning the San Francisco Board of Supervisors for a refund of her property taxes, and then filed a lawsuit when this petition was denied (the lawsuit also failed).
When farmers in drought-ravaged regions of Argentina threatened a tax strike in , the government responded with a clever bit of ju-jitsu — it declared an agricultural emergency in the area which exempted those farmers from paying taxes.
Utah governor J. Bracken Lee stopped paying his federal income taxes in the hopes of prompting a Supreme Court test case that would invalidate what he considered to be extraconstitutional federal spending.
(The court declined to take his case.)
A group referred to as “the Texas housewives” resisted paying the social security tax on the salaries of their household help, and pursued a two-year parallel legal challenge to have the tax invalidated, before finally being turned down by the U.S. Supreme Court.
Property tax resisters in Depression-era Chicago won a court case that found property assessments in the city to have been performed incorrectly — with $15 billion in property held by wealthy, well-connected Chicagoans somehow left off the rolls — thus effectively legalizing the resistance.
“As the matter stands,” a newspaper account put it, “citizens howled about their taxes, refused to pay them and a court upheld them.
They are in revolt with legal sanction.”
During the Land League’s rent strike in Ireland, Charles Stewart Parnell reported that “a large majority of landlords” reduced the rents on their properties, “[which] shows that they did finally recognize the situation, and that they determined to make the best of it.”
When the Prussian quasi-autocracy tried to ignore the legislature and govern on its own, the legislature formally declared tax resistance to be legal, and said that the autocrats had no authority to raise or spend money.
Something similar happened in Russia half a century later, when the Czar dissolved the legislature, which then reconvened in Vyborg and called on the citizens to refuse to pay any more taxes to the Czar.
According to a book on war tax resistance: “In Russia became the first country to establish legislation exempting pacifists from paying war taxes.
Thirty British citizens were invited by Czar Alexander Ⅰ to establish a cotton mill.
Because some of the employees were Quakers, a petition was submitted to the Czar from the employees asking for freedom of conscience and an exemption from military service, church taxes for war, etc. The Czar issued a certificate which read ‘His Imperial Majesty has given his gracious assent to this petition … all … shall be exempted from all civil and military taxes … the sect of Quakers may now and in future be freed from war taxes for the support of the Military…’ Two English Quakers visiting Russia in found these provisions still in effect.”
The Great Confederated Anti-Dray and Land Tax League of South Australia began as a tax resistance and mutual insurance group, but was soon successful in convincing the government to rescind the offensive tax.
But history is also full of lessons about the foolishness of trusting the government when it responds to your tax resistance campaign by insisting that it’s on your side and wants to help.
For example:
When tax resistance leader Wat Tyler was assassinated while negotiating with the King in , the king boldly went out to the enraged crowd and told it that he would be their leader and would press for their demands.
Instead, he waited for the fuss to die down, then executed some of the other leaders of the rebellion.
When the Whigs were whisked into power in the wake of the Reform Act agitation around , the tax resistance movement celebrated its victory… only to find that the Whigs could be just as tyrannical about prosecuting those who promoted tax resistance as their Tory cousins.
The recent American TEA Party was quickly coöpted by the Republican Party, which learned how to lead it by the nose with witless rhetoric, but conceded nothing on the tax-and-spend big government front.
During the Annuity Tax strike in Edinburgh, the government passed something called the “Edinburgh Annuity Tax Abolition Act.”
Despite its name, that act did not abolish the annuity tax, but merely concealed it with an aim to making it more difficult to resist.
Here are some dispatches from the Chicago property tax strikes of the Great
Depression. First, from the
New York Sun:
Hold Notes for $284,000,000 on a $276,000,000 Assessment.
by Owen L. Scott
Special Dispatch to The Sun
Chicago, . — School teachers, policemen, firemen, and others among the
18,000 employees of the city and county, continue to work without pay in
Chicago, while the politicians whistle at an admittedly approaching
bankruptcy.
The bankers of the city declared today that it will take $600,000,000 to
place the local governments on a cash basis as a result of the grand financial
spree of recent years. The taxpayers, so surly over the situation that they
paid only $140,000,000 on a $276,000,000 assessment, are on strike.
If the property owners refuse to pay the taxes, what reason have the banks
for increasing loans which already total $284,000,000, the local financiers
ask. They point out that New York city tax paper sells readily at 1.4 per
cent. interest, while Chicago’s is unsalable
at 6 per cent.
“Our financial situation is so bad,” said Mayor Anton J. Cermak, “that I wish
the newspapers would stop talking about the subject until we find a way out.”
The Day of Reckoning
It just happens that the day of reckoning for faulty taxation and
over-ambitious spending, is at hand, said Melvin A. Traylor, president of the
First National Bank of Chicago, and a careful student of public finance. This
city is only putting on the first show, which later may be witnessed in other
parts of the country when the time comes for paying bills.
“Most of the taxing machinery of the country was created at a time when the
present volume of public debt was not thought possible,” Mr. Traylor said in
analyzing the present condition of Government finance here and elsewhere. “It
is, therefore, inadequately and inequitably adjusted to meet the emergencies
of the present burden. The consequence is that in almost every major
political subdivision of the country certain classes of wealth escape
taxation or pay little, while other types of property are charged with an
unbearable obligation.
“The duty of leadership, therefore, in this field, is two-fold: First, and
most important, a greater degree of caution must be exercised in the creation
of Government obligations; and second, an immediate reform in taxing
machinery must be undertaken. Unless there is a return to sanity in the
matter of public expenditures, default and reduction of public obligations
cannot much longer be avoided.”
The banker said that “more disgraceful to Chicago than its reputation for
gangsters will be its financial plight if we go on as we are going.”
Political Jobs at Stake.
“Naturally, those responsible for government desire to give their constituency
the finest educational facilities, the best obtainable roads, streets, public
parks, playgrounds and other facilities,” he continued, “but after all, there
is no denying the fact that expenditures for such purposes bear a very close
relationship to the individual because they mortgage his future earnings for
consumable and rapidly deteriorating goods. Every bond issue for the public
welfare is an installment debt on the earning capacity of every individual and
enterprise in the community affected.”
In Chicago’s case the bankers have pointed the way out of a financial
wilderness. All they ask in return for aid to tide over the city is the reform
of the tax-assessing machinery and a reduction of city expenses. But
approximately forty-five good jobs for politicians are involved and rather
than give them up, the political leaders have so far preferred to gamble on
the possibility of bankruptcy.
The taxpayers, in revolt against the situation, have refused in large numbers
to pay their bills. They know that tax sales last year resulted in the sale of
only $5,000,000 in titles out of $55,000,000 offered, and are willing to take
a chance.
Chicago, . — United Press. — A
grand jury investigation was added today to the weapons by which city
officials hope to break the tax strike which has been instrumental, they
assert, in bringing municipal finances to the brink of disaster and spread
suffering among unpaid civil employes and pensioners.
A special Cook county grand jury was impaneled today charged to investigate
tax strikers who are credited with withholding payment of about 60 per
cent. of the $200,000,000 taxes in arrears to
the city.
The jury was ordered to study the situation for evidence of possible
racketeering in connection with the strike of taxpayers, many of whom have
banded together in associations.
Mayor Leads On Other Front
Mayor Anton J. Cermak led a fight on another front to collect the overdue
levies. He named three city officials to an emergency commission which has
been empowered to withdraw civil privileges from large taxpayers who refuse to
pay their levies despite financial ability to do so.
Commissioner of Public Works A.A. Sprague, one of those named to the emergency
commission, decried the failure to pay taxes.
“It is time to end the city’s passive resistance to these tax strikers,” said
Sprague. “Apparently there is no conscience in some of these people. Fifty
per cent. of the taxpayers, including nearly
all the [illegible], are paying for the services which the city has been
giving good citizens and tax strikers alike.”
Ask Heavy Judgments
City attorneys asked tax judgments against two more large loop structures
owing more than $300,000 in taxes. Receivers were asked for eight structures,
six of them loop buildings and the others large apartment buildings on which
big tax bills are long overdue.
The consequences of the strike of taxpayers have been felt thruout the city
and county governments. Suffering has been frequent.
Another result disclosed today was inability of the county to pay the pensions
it is obligated to provide for needy widows and their children.
Records of the county welfare bureau showed 1,900 mothers on the pension roll
and 5,680 applications for pensions. The mothers are allowed pensions only
upon proof of dire need. But due to lack of tax payments the county has been
without funds.
Mothers Pensions Unpaid
Mothers on the county roll have received nothing
. The payments provided
by law total about $100,000 monthly. More than half a million dollars is now
owed the pensioners with little hope of relief unless the tax strike is
broken.
Investigation of the supposedly pensioned mothers and applicants showed most of them in desperate circumstances.
Relief for about 200 has been obtained, county officials said, thru loans from the Illinois emergency relief commission.
The average pension the county is supposed to pay is $55 monthly, with a $25 monthly allowence for the first child and $15 for each additional.
This paper attempts to improve on the analysis of David Beito, in his book on the tax strike: Taxpayers in Revolt ().
Thornton & Weise think that Beito underestimated the success of the tax strike.
While Beito attributes the petering out of tax resistance nationally after to a lack of ideological coherence in the movement and the lack of a national organization to coordinate the various local resistance groups (Chicago was prominent but not alone in this sort of resistance), Thornton & Weise think that it is instead the result of the movement having largely achieved its goals:
In this paper, we argue that the anti-tax movement was a genuine success, and
that this success is the reason the revolt ended. This success took two major
forms. The first and most obvious was the tax limitation movement, which
provided the political pressure to cut taxes and establish limitations on
property tax rates. The second, which was both more important and far less
obvious, was the passage of the Twenty-first Amendment, which repealed
alcohol prohibition (hereafter, Repeal). Under intense political pressure
from the tax revolt, politicians supported Repeal in order to provide
federal, state, and local government with increased revenues to offset cuts
in property taxes while simultaneously providing a drastic decrease in the
price of alcohol, and, in effect, granting the American public a gigantic tax
cut.
Here’s a note about the Chicago property tax strike during the Great
Depression, from The Jacksonville [Illinois] Daily
Journal:
Delinquent Property Is Being Sold
300,000 Parcels Will Be Auctioned Off In Cook County
By R.S. Kleckner
Chicago, . — For sale: 300,000 parcels of Cook county real estate
because of delinquent taxes.
The gavel dropped today as sheriff’s officers started auctioneering to carry
out blanket court judgments against the properties.
Ten tracts near Barrington were forfeited to the county today when no other
bids were made on the first of the series of tax sales. Only one parcel is to
be sold daily during the next month, County Treasurer Joseph B. McDonough
said, to comply with the court orders. But after the month sales will go on
full schedule.
The county possesses about 1,300,000 parcels of property — 600,000 on the
delinquent list. On 260,00 parcels, objections and injunctions have been filed
against the assessments.
Delinquencies in Cook county can not be traced alone to pinched finances,
county authorities said. For example, there has been a taxpayers strike in
progress.
The association of real estate taxpayers, contending large tax-bills should
be split of the personal property tax were enforced, put on a drive to resist
tax payment.
The association at first attempted to force authorities to levy against trust
funds, corporation holdings, and similar large investments. Later it made a
drive for members among small property holders and its officers now claim
28,000 persons joined in the tax protest.
Charging that the association was interfering with normal processes of law,
and hence involved in a conspiracy, the state’s attorney’s office launched an
investigation at the request of unpaid school teachers whose wages were
chalked overdue because of slow tax payments.
The investigation closed last week and authorities said apparently the
association would be cleared of accountability for local financial
prostration.
Included in the delinquent lists were 1,000 school teachers and other city
employes who have been unpaid. They filed tax exemptions on the ground they
were unable to collect their salaries. County Judge Edmund K. Jarecki, who
issued the sale orders, said their homes would not be sold if they promised
to meet their taxes as soon as they received wage payments.
Thousands of other property owners have taken advantage of a quarterly tax
payment plan.
About $148,935,000, slightly more than half the real estate taxes due, have
been collected to date on the levy.
The deadline for first payments on the quarterly plan was extended
until
. County Treasurer Joseph
McDonough said 34,842 tax-payers, most of them small home owners, had taken
advantage of the plan paying $2,519,712 on the first payment up to
.
During the Great Depression, property taxes went up even as people became increasingly unable to pay. A result was organized taxpayer leagues and property tax strikes. Stephen Mihm, at Bloomberg Opinion, wonders whether such tax revolts might return as businesses shutter and rent strikes bloom, reducing the ability to pay of property owners.
Attacks on traffic ticket robots continue in Europe, with recent attacks in France and Italy and yet more in France. The number of tickets and the revenue from them were both down about 25% last year in France.
