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Low Income/Simple Living as War Tax Resistance
Now that I’m moved in, I hope to soon be able to put some time into producing a new edition of the NWTRCC “Practical War Tax Resistance Series” pamphlet #5: Low Income/Simple Living as War Tax Resistance.
The previous edition was written by Clare Hanrahan and Susan Van Haitsma and published in .
Much of it remains helpful and informative today, but changes in the tax laws have made some of the other information out-of-date or incomplete.
The pamphlet covers the advantages and challenges of voluntary simplicity, and the difficulties and opportunities for low-income tax resisters in their interactions with the tax code.
I hope to expand it to include sections on Health Savings Accounts, tax-advantaged retirement accounts, and some of the deductions and credits available to low-income folk, as well as sections on avoiding excise and social insurance taxes, and on how a surprisingly large number of people avoid the income tax today.
If you have suggestions for what sort of information would be useful in a pamphlet like this, or of questions you would like to see such a pamphlet answer — or if you would like to help write or edit the pamphlet, please drop me a line.
I wrote up some of my impressions of of ’s NWTRCC meeting in Las Vegas.
I took notes on-and-off through and I’ll write up those things I remember that might be of interest.
The New Pamphlet I’ve Been Working On
I was at the meeting in part to present a first draft of a new edition of NWTRCC’s “Practical War Tax Resistance” pamphlet #5 on low-income / simple-living as a war tax resistance technique.
On night we distributed a few copies of this draft and over the course of I had a chance to sit down with a number of people and listen to their suggestions for improvement.
(If you would like to review the document, send me email and I’ll send you a copy of the draft.)
I’m aiming to have a final draft ready in , and with any luck we’ll have our new edition back from the press .
Not Much Evidence of a Tax Resistance Groundswell
Despite the growing anti-war sentiment in the country, there has been no evidence of a corresponding groundswell of interest in war tax resistance.
For the most part, people reported that their local groups were treading water in terms of membership and outreach.
There was more resignation than frustration expressed on this point, as most of us have become used to being, as we’d characterize it anyway, well ahead of the curve on this.
Many people also expressed that they often hear about lone-wolf tax resisters who for whatever reason never feel the need to align themselves with tax resistance organizations, so that the actual number of tax resisters is hard to gauge.
Survey in Progress
, NWTRCC started conducting a survey, informally, often at rallies, protests, and other activist events, to get a feel for what makes people choose or avoid tax resistance, and to do some concept testing of a possible large-scale one-year tax resistance campaign.
Of the few hundred people who have responded to the survey thus far, 47% are not doing any tax resistance now, and of that group, 61% would “consider participating in a one-year commitment to refuse a portion of your federal income taxes and redirect your taxes to a humanitarian cause if thousands joined you publicly” on a particular date.
All this sounds pretty good, and we plan to continue the survey , but even if we find a potential for this sort of tax resistance avalanche, NWTRCC alone doesn’t really have the resources to organize and launch it.
My hope is that we can package these persuasive survey results along with offers of our own specialized expertise and sell the idea of such a campaign to one of the larger national anti-war groups who could launch a campaign like this in a heartbeat if they cared to.
My own feeling is that this sort of thing is exactly the sort of sustained nationwide civil disobedience campaign the peace movement has been looking for; they just don’t know it yet.
Phone Tax Resistance Going Out of Style
Phone tax resistance has been a useful way of getting potential resisters to take the first step.
It’s pretty easy to do, and the risks are very low, and so many tax resisters have gotten their feet wet in this way.
However the proliferation of phone companies and phone plans, and the recent abolition of the phone tax on long-distance, have muddied the waters a bit.
There’s a pretty good chance that the excise tax on local service is on the way to the trash heap as well, so NWTRCC has begun to deemphasize phone tax resistance and the Hang Up On War campaign.
We’re still looking for the next “gateway” resistance tactic — any ideas?
Dan Jenkins Tries to Get the Courts to Recognize COMT
Some folks are trying to improve NWTRCC’s multimedia educational and persuasive offerings.
This is a good thing (our local tax resistance group still uses a slide show made during the Reagan administration, complete with a tape recording that goes “beep” when you’re supposed to flip to the next slide).
Alas, I was in a different workshop when this was being discussed, so I didn’t learn as much about this as I could have, but the project also includes a video contest — anyone can enter by producing a short video on the topic of war tax resistance — with cash prizes for the winning entries.
I’ll post more details on The Picket Line when the contest officially launches .
A New Flyer on W-4 Resistance
NWTRCC’s produced a new flyer on W-4 resistance (adjusting the withholding allowances on your W-4 form so that your employer sends less of your paycheck to the IRS) that may be helpful to folks who would like to resist their income tax but who find themselves with nothing but a refund to resist when April 15th comes around.
Tax Resisters and Student Financial Aid
A preliminary fact sheet was distributed that covers the implications for war tax resisters who are participating in student financial aid programs, or whose children are.
It’s not ready for publication just yet, but looks like it will be a useful resource when the time comes.
A Report from the International Conference on War Tax Resistance and Peace Tax Campaigns
We also got to read Larry Rosenwald’s report back from the International Conference on War Tax Resistance and Peace Tax Campaigns which was held in Woltersdorf, Germany .
He was struck by the differences between the tax resistance movement in the United States and its counterparts in the rest of the world (Europe in particular).
In Europe, the movement is focused more on using the law and the courts (national and international) to legalize some form of conscientious objection to military taxation, and less focused on civil disobedience and forms of extralegal conscientious objection.
They find it confusing that in the United States there’s both a Peace Tax Fund campaignand an organized war tax resistance movement.
I’ll feature a section from the upcoming edition of NWTRCC’s “Practical War Tax Resistance” series pamphlet #5 on low-income / simple-living as tax resistance.
I suspect that most of this section will end up being cut, for space reasons and because its subject matter is only tangentially related to the core topic of the pamphlet.
But it’s too good not to share:
How Does the Federal Government Get Your Money?
If one of your goals in resisting taxes is to stop funding the government’s war budget, it is worth investigating in what other ways the government gets its funds besides the federal income tax, and whether you can reduce your contribution to these funding sources in the course of adopting a low income lifestyle.
According to U.S. Budget documents, in 2005 the federal government brought in its revenue in the following ways:
43.0%
Income tax on individuals & families
36.9%
Social insurance taxes (FICA, self-employment tax, the “payroll tax”, Social Security/Medicare)
12.9%
Income tax on corporations
3.4%
Excise taxes
3.8%
Other (estate/gift taxes, customs duties / tariffs, Federal Reserve deposits, etc.)
Social Insurance Taxes
Although social insurance taxes are ostensibly collected to pay for programs like Social Security and Medicare, any surplus that the government collects but does not use to pay for these programs, it “borrows” to pay for other items in its budget, including the military.
For this reason, some tax resisters who do not disapprove of programs like Social Security and Medicare still try to resist these taxes.
In recent decades, the percentage of government revenue that comes from social insurance taxes has risen.
Today, most families pay more to the federal government in social insurance taxes than in income tax.
Corporate Income Tax
As an individual you can reduce your contribution to corporate income taxes by reducing your contribution to the profits of corporations, and the best way to do that is by reducing your consumption of corporate-provided goods and services.
The Indian independence movement boycotted goods that the British colonial occupation monopolized and taxed, such as alcohol.
Gandhi’s independence campaign encouraged Indians to produce their own salt and cloth, both to withdraw financial support from the British monopolies and to encourage the development of domestic industry.
Rebellious British colonists used a similar tactic during the American Revolution — making homespun cloth in patriotic “spinning bees” and boycotting British monopoly tea.
What would be a good equivalent of the patriotic spinning bee for today’s anti-imperialists?
What commercial transactions does the government tax that it would have a harder time taxing if they were the fruits of household industry rather than the marketplace?
One good candidate is home-brewed beer.
The federal excise tax on beer comes to about a nickle per bottle.
By home-brewing, you can resist this tax, learn a craft, and drink good beer — all legally!
It is a winning proposition any way you look at it.
Imagine “brewing bees” or “drinking bees” at which tax resisters belt out songs of liberty with gusto!
Wrote one home-brewer: “I like the symbolism of home brewing tax-free beer.
Gandhi’s campaign had a value that went beyond its bottom-line pounds-and-pence figure.
Spending time spinning cloth was a way of consciously participating on a daily basis in the resistance, and wearing the homespun cloth was a way of broadcasting your commitment to those around you.
Besides, brewing beer is fun and when you’re done you’ve got beer!”
Excise Taxes
The federal government taxes the sale of certain specific things like alcoholic beverages, gasoline, airline tickets, ammunition, vaccines, local telephone service, tobacco, cars & car parts, fishing equipment, and coal.
The receipts from some excise taxes fund particular programs, while others just go into the general fund.
For instance, the federal excise tax on gasoline funds highways and mass transit projects, while the federal excise tax on local telephone service may be spent on anything in the budget.
You can avoid excise taxes in a variety of ways.
For instance, you can avoid the excise tax on alcohol either by not using alcoholic beverages or by producing your own (it is legal to produce your own beer or wine).
You can avoid the excise tax on local phone service by using an internet-based voice-over-IP phone instead of a regular phone line — assuming you do not get your internet over your phone line — or, as many tax resisters do, you can simply refuse to pay it and subtract it from your phone bill.
Tariffs
Tariffs are taxes on goods imported into the country that are applied when the goods arrive.
The Washington Post reported in that “the average tariff on non-agricultural goods imported into the United States is less than 3 percent” but that “tariffs on a number of everyday consumer products — including clothing, luggage, dinnerware and handbags — range well into double digits.
The same goes for some food, such as butter and cheese.”
You can avoid contributing to these tariffs by purchasing fewer foreign-made products.
However, when you purchase from domestic producers, you contribute to their profits and therefore to the income taxes they owe and pay.
This is an example of where lowering consumption in general is the best policy.
Other Taxes
If you have less income, you will also reduce your state and local tax liability.
Many resisters are opposed to state taxes because of concerns such as unnecessary highway-building (which creates community displacement and habitat destruction), prison construction, and the death penalty.
Other Revenue Sources
The official revenue numbers do not tell the whole story.
Much of the money the government spends is money that it borrows.
In some years, this can rival the amount it gets from any particular tax.
For instance, in the federal government brought in $1,880 billion through various taxes, but borrowed an additional $568 billion.
One way the federal government borrows money is by selling U.S. Treasury Bonds; the original purchasers of such bonds are loaning money to the federal government.
The government can also manipulate the money supply for its own benefit.
By doing so, it can use inflation to quietly tax people and to reduce the value of its debt.
John Maynard Keynes wrote: “A government can live for a long time… by printing paper money.
That is to say, it can by this means secure the command over real resources, resources just as real as those obtained by taxation.
The method is condemned, but its efficacy, up to a point, must be admitted.
A government can live by this means when it can live by no other.
It is the form of taxation which the public find hardest to evade and even the weakest government can enforce, when it can enforce nothing else.”
The resistance and conscientious objection of Amish people to social insurance tax forced the government to change its tax laws.
Some Amish people felt that government-sponsored social insurance programs were both mistrustful of God and destructive to the mutual support that forms an important part of Amish community life.
When the Social Security program and its social insurance tax became mandatory, many refused to pay the tax and refused to apply for benefits.
14,000 signed a petition to Congress asking for permission to opt out of the program.
The IRS began to try to enforce the law by seizing money directly from resisters’ bank accounts.
Amish resisters responded by closing their accounts entirely.
The IRS then began to seize money from the cooperatives that purchased the resisters’ products, and then finally to seize the resisters’ property.
The local IRS Chief of Collections said: “People have no right to use their religion as an excuse not to pay taxes.”
After a number of sympathetic resisters had been subjected to IRS seizures — in one case they seized a man’s horses as he was using them to plow his field — public outrage and Amish petitions finally convinced Congress to give the Amish the legal right to opt out of Social Security and cancel the outstanding tax bills of 15,000 resisters.
The Amish and Other Exceptions to Social Insurance Tax
In general, social insurance tax (also known as “FICA”, the “payroll tax”, or the “social security/medicare tax”) is hard to avoid if you earn your income in the above-ground economy.
Your employer is required to withhold money from your paycheck starting with the very first dollar you earn, and you cannot qualify for a refund no matter how little you make.
If you are self-employed, be aware that social insurance tax is assessed on incomes much lower than the minimum threshold for the income tax.
For most people, the threshold is $400 per year.
For an employee of a church or church-controlled organization, the threshold is $108.28 per year.
In addition, if you are self-employed, you are required to pay the tax by certain deadlines, four times a year.
The federal penalties, both civil and criminal, for refusing to pay social insurance tax are the same as those for refusing to pay income taxes.
The IRS does not distinguish between these two kinds of taxes in terms of applying penalties.
There are a few exceptions from the general rule that everyone must pay social insurance tax.
An exemption applies to the Amish and a handful of other religious groups that have been around at least since and that have religious scruples against participating in social insurance plans (see the sidebar).
If you do not earn any income — that is, if all of your income comes from interest, capital gains, pre-existing savings and the like — you do not have to pay social insurance tax on that money.
In addition, there are a few job categories that can provide income exempt from social insurance tax:
State and local government workers who participate in alternative employer retirement systems
Election workers (people who are employed by the government to staff polling places during elections) who earn $1,200 or less a year
College students who work at their academic institutions
Household workers (housekeepers, maids, baby-sitters, gardeners, etc.) who earn less than $1,500 from an employer
Self-employed workers with annual net earnings below $400
Paid ministers, members of religious orders, and Christian Science practitioners who elect to be exempt
