You don’t have to be an American to file for a fraudulent tax refund with the IRS. You don’t even have to be in America.
I’m imagining huge overseas sweatshops filled with children with stubby pencils and poor lighting conditions filling out 1040 forms all day long as their bosses make millions mining the U.S. Treasury.
Tax and customs officials in Greece have gone on strike to protest the usual taxpayer bailouts of international lenders at the expense of social services.
“The strike underlines the risks to a tax collection drive demanded by the EU and IMF inspectors as workers who will themselves suffer from the austerity measures resist implementing the new laws.
Disgruntled electricity workers have already threatened to boycott a planned property tax, designed to be collected through electricity bills as a means of bypassing the notoriously inefficient tax authority.”
Another of Tolstoy’s didactic dialogues, this one written in but hidden by censorship until after his death, called “The Traveler and the Peasant,” hopes to show us that the problems of the Russian peasantry (the “99%” of their day) are of their own making and the solutions to those problems are in their hands.
If only they would stop doing the bidding of (and paying taxes to) those who oppress them and steal from them, and instead devote their energies to true Christian brotherhood, Tolstoy (disguised as the Traveler) suggests, there would be no need for griping or for revolution.
Mr. Money Mustache has an interesting post on the true cost of commuting that tries to do the math on just how much you are giving up when you take a job that requires you to commute (especially by car).
People choosing a job or a home would do well to read this over and do some back-of-the-envelope calculations.
The Early Retirement Extreme blog now has its own wiki at which the proprietor and his merry collaborators plan to document how “you could retire much sooner than most think… and never need to work for money in your life again.”
A recent outrage-of-the-week was the Obama administration’s attempt to require employers to provide coverage of contraception-related treatment in employer-provided health insurance plans.
Some employers, you see, think contraception is immoral, and don’t think the government ought to be able to force them to violate their consciences by providing a benefit to an employee that an employee might use to do something they think is wrong.
To which many folks said: “Seriously? Of all the things the government forces us to bloody our hands with, you’re getting bent about this?”
For example:
“Pacifists’ ‘Conscience Objections’ to War Taxes Never Get Same Notoriety as Opposition to Funding Birth Control” by David Dayen, FireDogLake, who includes this depressing remark about the collapse of war tax resistance in the Society of Friends: “I went to a Quaker secondary school for a year, and I’m quite sure that many of the believers in the weekly meeting for worship sessions had strong religious objections to their money being used to kill other people, even in self-defense.
And yet I don’t remember a single controversy in my lifetime about ‘conscience protections’ for taxpayer funds and their use in war.
I don’t even remember any accounting accommodations made for that.”
“A modest proposal regarding religious liberty” by Mark Gordon, Vox Nova: “The principle being upheld is that as a matter of religious liberty no one ought to be forced to pay for something that violates their conscience.
If that is true of government-mandated private insurance policies, and I believe it is, then it is equally true of government-mandated taxes.”
“Obama’s Big Government Mandates: Why no one should be forced to act against his conscience” by Sheldon Richman, reason.com, who says “Americans have been forced, without their consultation — much less permission — to finance mass murder.
It’s called war, invasion, occupation, and special operations.
U.S. military missions in Iraq, Afghanistan, Yemen, Somalia, and elsewhere have directly or indirectly killed over a million people who never threatened Americans at home.
Those missions have ruined the lives of hundreds of thousands more through injury and the destruction of their homes and societies.
The president of the United States refuses to take war with Iran off ‘the table’ … War against Iran would constitute mass murder.
The U.S. government should be stopped from engaging in such brutality.
But short of that, those with a conscientious objection should be free to opt out of financing these crimes.”
This is similar to the argument by the “won’t pay” movement in Greece, whose government is nickle-and-diming the citizens by raising rates on utility bills, road tolls, transit fees, and so forth, to try to raise money to pay off international lenders who are openly threatening to abolish representative government in Greece entirely and instead run the country as though it were a bankrupt corporation in receivership.
When the government electric power monopoly cut off power to a family of seven with a disabled child because they were unable to pay the hike, members of the “won’t pay” movement reconnected the power themselves in defiance.
The IRS is being swamped by identity theft cases in which fraudsters use someone else’s social security number to file a tax return that qualifies for a big refund, then cash the check before the victim knows about it.
The IRS then pursues the victim for having perpetrated tax fraud and tries to force them to pay back a refund they never saw.
The agency’s focus on trying to get more people to file their tax returns electronically has made it easier and faster for the identity thieves to process fake returns wholesale.
In Tampa, Florida, where the practice had become so widespread that local tax fraud entrepreneurs even taught classes in how to use the technique, the local news reported a few days back on “hundreds of frustrated people [who] were lined [up] at an IRS building…” waiting in long lines for hours only to find that the IRS personnel they talked to were unable to help them.
The Treasury Inspector General for Tax Administration, J. Russell George,
presented a report to the House Oversight and Government Reform Subcommittee
on Government Organization, Efficiency, and Financial Management
.
How significantly greater?
To the tune of $14 billion, says George.
To put that into perspective, that makes issuing fraudulent tax refunds a bigger federal budget item than, for instance:
The entirety of the Department of the Interior ($12.057 billion) — that includes the National Park Service, Bureau of Indian Affairs, Fish and Wildlife Service, Bureau of Land Management, and others
The total budget of the Internal Revenue Service ($13.285 billion)
Vickie Aldrich gives us an update on her “frivolous filing” struggle with the IRS.
Aldrich accompanied her income tax returns with a letter indicating that for reasons of conscience she would not be paying the complete amount due.
The IRS interpreted this as her taking a frivolous legal position and fined her ($5,000 I think) for doing so.
She got the help of some law school volunteers, but seemed unable to convince anyone that she wasn’t making a legal argument at all, but merely a statement of her moral priorities.
The two sides seem to have come to an agreement, in which the main sticking point for the IRS seems to have been that they wanted Aldrich to stop sending them any such letters, whether she pays her tax or not.
The IRS issues Individual Taxpayer Identification Numbers (ITINs) to people who are required to file tax returns but who do not qualify for social security numbers.
Apparently they give these out promiscuously and without much review, further encouraging the fraudulent tax refund farming industry.
As I’ve mentioned before, fraudsters have been filing tax returns that claim bogus refunds by stealing the identities of other people. This has turned into a thriving industry in some areas, particularly parts of Florida, with millions of such returns being filed. This story shows some of the fall-out for the people whose identities were stolen, and for the IRS. “Frustrated identity theft victims are swamping the Plantation office of the Internal Revenue Service, forming long lines to wait hours to speak to a representative — with one woman complaining of being told to come back at 4:30 a.m. to begin a new wait.…”
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.
Some bits and pieces from here and there:
NWTRCC is collecting a list of protest actions that will be going on around the U.S. this year.
The “pos me salto” movement of Mexico seems to be spreading to other countries where governments have hiked transit fares as a “stealth tax.”
I’ve seen examples popping up in recent weeks from Rio de Janiero to Barcelona.
protesters in Brazil disable fare gates
River Att, of Hulme, England, has legally changed his name to River Axe The Tax.
Mr. Axe The Tax is fighting increased fees the government is charging to people who live in subsidised housing if the government deems them to have more rooms than strictly necessary: something foes of the policy call the “bedroom tax.”
France’s tax agency misses out on about €10 billion each year thanks to “zappers” — computer programs that businesses can use to override the software on their cash registers to as to hide transactions and avoid reporting receipts.
I had the opportunity to meet with folks who have been war tax resisters
since WW2 and
with folks just turning the idea over in their minds. It was a powerful
experience for me. I have never understood the depth of calling that
moves folks to civil disobedience. In Ithaca, I am surrounded by folks
that have protested for years, many have been arrested for their beliefs
and some have served time for civil disobedience. This weekend I saw
with an open heart and with new eyes.
All told, in just , 1.6 million taxpayers were affected by identity theft,
compared with 271,000 for ,
according to a recent audit by the Treasury Department’s inspector
general. While the
IRS
said it discovered many of the incidents, the cumulative thefts have
resulted in billions of dollars in potentially fraudulent refunds,
according to an array of government reports.
“I’ve had a police chief tell me ‘street crime is down because everybody
is now filing false
IRS
returns,’ ”
IRS
Commissioner John Koskinen, who took office last month, said in an
interview.
While Koskinen stressed that the
IRS
uses a series of “filters” that are increasingly successful in catching
identity thefts before refunds are paid, he acknowledged that “this
problem has exploded” and that the agency is in a constant race to keep
its detection techniques a step ahead of the thieves. “It is,” he
said, “a little like ‘Whac-a-Mole,’ knock them down here and they come
up over there.”
“We have seen drug dealers go into this because it is easy access to
money. Gangs go into this because it is easy access to money. Or at
least they perceive it that way,”
[U.S.
Assistant Attorney General for the tax division Kathryn] Keneally said,
while adding: “Please, if you quote me on saying ‘It is easy access to
money,’ include: ‘We are changing that equation and we are adding risk
to that.’ ”
To your typical amateur, the tax law can often seem like it was designed to
entrap the unwary. You take some common sense step, or think you’re
following the law, only to find that some obscure provision somewhere
unexpected ensnares you in some subordinate clause’s cross-reference to an
unfamiliar acronym. So it’s hard not to react with a hearty har-har when
you hear that when the
IRS
itself was audited, by the Treasury Inspector General for Tax
Administration, the auditor found that for 39% of the money the agency paid out to its employees as relocation reimbursement it failed to record that money as taxable income as the law requires. The
IRS
executives who qualified for the reimbursements thought of them,
naturally, as a tax-free perk — but that’s not how the law treats
them.
And now these criminal entrepreneurs have struck on the idea of working the game from the other side — they’re impersonating the IRS itself, calling up American citizens, and threatening them with government retribution — such as imminent arrest, deportation, license revocations, or property seizure — if they don’t pay some invented tax liability immediately (but, pay to the scammers, not to the real IRS).
The government calls it the “largest ever” scam of this sort — involving tens of thousands of victims, and millions of dollars in extorted payments.
Hilariously, in warning people about the scam, the Treasury Inspector General for Taxpayer Administration claims:
“If someone unexpectedly calls claiming to be from the IRS and uses threatening language if you don’t pay immediately, that is a sign that it really isn’t the IRS calling,” he [Inspector General J. Russell George] said.
Sounds like Mr. George has never gotten a call from the IRS before!
The upshot of this is that the real IRS is going to have a harder time than usual distinguishing itself from smaller-scale thieves, and is going to have to devote even more energy into trying to assert its legitimacy.
And that’s energy the agency doesn’t have to spare — it has fewer employees now than at any time in the last decade, and much more to do: including implementing much of Obamacare, chasing down the rampant identity thieves, and responding to sweeping Congressional subpoenas regarding the TEA Party-targeting kerfluffle.
A man who read philosophy and politics, Herman despised all war and refused to contribute to its financing.
Finally a local “third degree committee” came to his farm west of town.
His wife watched while holding their infant in her arms as the men strung a rope over the limb of an apple tree.
When Herman continued to refuse to buy Liberty Bonds, the committee ran him into town and grilled him until early morning in the hall of a local fraternal organization.
A local lawyer sat on the arm of his chair and threatened to punch him in the face unless he agreed to buy bonds.
What Herman said in defense of his actions was used to prosecute him for sedition, The Billings Gazette editorialized that “he should be prosecuted to the extreme limit of the law.”
He was convicted in a 1½-day jury trial and served 28 months.
He was released .
Ruth Benn, coordinator of the National War Tax Resistance Coordinating Committee, discusses how because war tax resisters are a largely individualist, idiosyncratic breed, they have difficulty congealing into a unified movement, in Individual Choices and Movement Building: Shall the Twain Meet?
The folks at Crimethinc have put together a well-designed and inviting anarchist appeal: “To Change Everything”
According to a Government Accountability Office report, people filing phony tax refund claims by using appropriated identities stole $5.2 billion from the IRS during the .
(An additional $24.2 billion in such refund claims were detected before the IRS sent any money.)
To put that into perspective, $5 billion is roughly the amount of money that was in the entire IRS enforcement budget (before recent cuts, anyway).
Which is to say that nowadays the government pays more to organized tax cheats than it pays to combat tax cheats.
The identity theft industry is a significant (and growing) part of the federal budget.
When the Syriza coalition looked like it was on track for a shocking victory in the Greek elections, people across Greece stopped paying their taxes.
After all, Syriza had campaigned in part on the abolition of some new taxes, and had hitched its wagon to the “won’t pay” tax resistance movement.
Well, now that they’re in power, they’re more apt to be caught talking about tax-paying as a “patriotic duty,” but the Greeks don’t seem to agree: tax collection is down by 23% from expectations.
An Italian priest, Don Marino Ruggero, has been making waves by promoting tax resistance to his flock.
In his parish bulletin he wrote: “Catholic doctrine notes that there are fair taxes that are to be paid under pain of mortal sin and of the penal law, unfair taxes that you may evade without sin and without offense, and even perverse taxes that are contrary to the divine law and that should not be paid even if you have to risk your life.”
He says he feels that the tax burden has become so grotesque in Italy that the taxes are no longer fair enough to be obligatory to Christians: “I wonder if it is better to pay utility bills and taxes and then have to go begging for charity.
When a family sinks into despair because they have nothing to eat, one has to decide.
I call for a tax strike.
Yes, a peaceful revolution, in which it would be enough that everyone fearlessly stop paying any tax, with a single purpose: to undermine an out-of-control ‘meat grinder’ tax system.
Gandhi said: ‘Withholding payment of taxes is one of the quickest methods of overthrowing a government.’
He and his people, they got it.”
Disobedience.eu is born, a consultancy designed to resist the Troika
An old guy on my block used to say: “If you’re going to steal, steal big.
Because if you stay small, you’re just a thief, but if you steal big you’ll be a millionaire.
All it takes to be rich is to skim a little from everybody.”
“You make a lot of sense!”
I thought.
But the old guy never stole, at least not on a grand scale, and to me, frankly, the proof is in the pudding.
The world is an unfair place, sir, and what are you going to do?
He who has the most pays the least, and this, at least when it comes to taxes, goes without saying: all of the companies in the IBEX 35 — those that are publicly traded and have the most liquidity in Spain — are located in tax havens and pay minuscule amounts to the Treasury in comparison to their earnings.
Citizens, small- and medium-sized businesses, aren’t so fortunate with the tax collector.
It’s unfair, but legal.
They bask in the sun on a private beach, and to the rest of us they leave only a miserable puddle to splash around in.
Is there really nothing that can be done?
Beyond complaining, there’s a new plan — a yet untried option: drag our towels and camping chairs onto the private beach to say, “Hello, buenos días, good morning, guten morgen, we are also in the club.”
, Disobedience.eu, the first tax rebellion consultancy meant for the common people, was launched.
It all began when the artist Núria Güell contacted Enric Duran, the activist known as the “Robin Hood of the banks” for swindling — or expropriating, you might say — some half a million euros from various financial institutions in , with the motive of finding a way to buck the Troika.
From there a small tax advisor emerged, the Troika Fiscal Disobedience Consultancy.
A score of European activists, and Duran from the underground, launched what may come to be the largest hack of the financial system in Europe, at least on the part of the citizenry.
“It starts by resisting the Troika through financial strategies, by playing with the law in the same ways as the neoliberal corporations,” says Güell.
The idea is to imitate Apple, Google, and Banco Santander — not for personal gain, but “to stop paying an illegitimate debt and to start financing the common good.”
“The Troika is dedicated to commandeering and privatizing the commons, it has a colonizing nature: all the countries that are subjected to it, like Spain, Ireland, or Greece, lose their sovereignty.
We must create a parallel financial system.”
Fiji, the Cayman Islands, Liechtenstein, your home
If we were to do a math problem, it might go as follows: Say that John has a balance last trimester that comes to 2,000 euros VAT.
John sends an email to Disobedience.eu with the amount he wants to resist (2,000 euros) and they will supply him with an invoice for that amount.
John will pay 8% for the service: management fees (1%) and a contribution to a common fund (7%).
“The rest (92%), although recorded as paid, will not actually be charged.
As far as I know, to forgive a debt is not a crime,” says Güell.
So John has an invoice that states that he has made a tax payment in Spain, although in reality no such thing happened.
“In the EU there is free trade, but in practice there is no common fiscal policy, and the justice system is not coordinated.
The countries as a result have trouble obtaining information from one another.
The big companies benefit from this, and now the little guy can do so as well.
It would be very difficult for the administration of the country where he is consulting to know who has not claimed the income.”
John has evaded taxes, mimicking the techniques of the big multinationals, but for another purpose.
“92% of the money is yours.
The idea is that you can dedicate it to projects for the common good, which are increasingly privatized or abandoned by the state.”
For example, a support network for refugees or school libraries.
Desobedience.eu was inspired by the Coperativa Integran Catalana and the Right of Rebellion Collective, and will be linked to the international Fair Coöp collective.
For this reason, Güell expects there will be a rapid increase of clients, projects, and affinity groups: “The assignment of the funds is up to each client.
Nobody will be monitoring or checking on where it is going.”
Isn’t this a do-gooder form of tax evasion?
How can you prevent “dishonest” evaders from using this tool?
Activists will sift the clients: “If a capitalist business wants to use this service to evade taxes, it will be turned down.
On the other hand, a group of lawyers with a social focus have already been accepted.”
Gandhi versus Starbucks
The tax disobedience initiative has sparked interest, but also an understandable fear of possible legal problems. Güell asserts that the activists involved have everything sorted out: “The only people who run a real risk are those who put in their names to form the company, but they are insolvent and that protects them.”
Throughout history there are numerous examples of economic disobedience.
“From the Boston Tea Party in to the Salt March of Mahatma Gandhi in .”
Though there are also much more recent examples:
In the residents of Crickhowell, a town in Wales, grew tired of paying much more in taxes than Starbucks and decided to declare themselves a tax-free town and to create a company in the Cayman Islands: “They initiated a collective action of tax resistance, and since then the State has not done anything.”
With the activists of Disobedience.eu there is more resolution to attack the core of the system than fear of the possible repercussions.
Furthermore, for Güell, economic disobedience is better politics than voting in democratic elections.
“If we do not have autonomy with respect to the Troika and the markets, there is no way to advance the many initiatives that we put forward.
They are the obstacle, because they are above democracy.
The dictator is only a dictator if he has subjects; disobedience is the only way remaining to us.
Furthermore, disobedience is intrinsic to democracy.”
The real hurdle is to go beyond the environmental activists and the more politicized minorities and to extend the initiative across the whole population.
“Workplace exploitation; inability to make ends meet; a rainbow assortment of pills for depression; daily suicides from eviction, foreclosure, or meaninglessness; and murderous barbed-wire over some fictitious dividing lines.
Why dedicate your life to feed this machinery that only benefits a minority?” asks Güell.
“You just need to open your eyes to notice that Europe is at a dead-end, caught between the technocrats of the Troika and the anti-immigration nationalists.
The European Union is no more than a financial plan for plundering social wealth and impoverishing the workers, a set of legalized financial crimes that act to transfer the income of citizens to the banks and large corporations.”
And as such, the response should be collective and in the financial sphere.
As Aristotle told us, politics does not manage the public sphere, rather our everyday actions are what create policy.
The actual mechanism by which the tax evasion happens is left a little obscure by this article, but as best I can gather it’s something like this:
In Europe there is a value-added tax, which is something like a sales tax.
It is added to the price of the good as it increases in value during its manufacturing stages, but intermediate goods that are sold to other sellers (for instance, goods purchased by merchants for resale) do not have more tax added to them.
If you’re buying something for resale, rather than paying the tax at the time you buy it, you indicate to the seller that you’ll be adding the tax to the price of the goods at the time you resell it, and then whoever sells the goods to you sells you the goods tax-free.
An exchange of invoices allows the tax agencies, in theory, to follow the supply chain to whoever is responsible for collecting and remitting the tax.
But this process is frequently gamed.
For instance, if the final seller is a sort of Potemkin business that vanishes before taxes are due, then the taxes never have to get paid.
Or, apparently, if that seller is officially domiciled outside the European Union — say, in the Cayman Islands or something.
So what the Consultancy seems to be doing is to be providing invoices saying that they’re responsible for paying any value-added tax that ordinarily would be paid by a resisting small business.
They charge the business for the cost of the goods, but they don’t bother to collect most of the money.
So the business is off the hook for the tax, the Consultancy doesn’t generate any income that might make it liable, and everyone walks away a little happier.
Something like that, anyway.
They also seem to be doing some of their transactions (the percent of the invoice they do intend to collect, for instance) in “FairCoin” — a bitcoin-like currency.
I’m not sure what advantages if any this gives to the Consultancy or the businesses that use it, but it seems like something that could boost the value of FairCoin as a currency, and maybe that’s the point.
Links have been piling up in my bookmarks as I spent
poring through
back issues of The Mennonite.
International Tax Resistance News
A new law in Samoa requires previously untaxed church
ministers to pay income tax. Many, including those from the country’s
largest church,
are refusing to pay.
The United States government has begun
denying passports to people with large tax debts.
If you’re one of the 362,000 or so Americans who owe more than $51,000 and
you haven’t entered into an installment payment plan (I’m one of those),
you will likely soon find that you cannot successfully apply for or renew
your passport. While the government also has the legal authority to revoke
existing passports from such people, it is not yet exercising that
power.
Guerrilla electricians in Greece continue to
reestablish electric power
to households who have had their power cut off for inability or
unwillingness to pay the state utility monopoly’s bills which have been
inflated to support the state’s austerity budget policies.
Veterans of the successful campaign to abolish the
“écotaxe” in Brittany held
a celebratory picnic
on the anniversary of the destruction of one of the highway portals that
would have enforced the hated tax. In part the picnic was meant to show
solidarity with those who had been convicted of criminal charges for the
parts they played in destroying such portals, and in part it was meant as a
show of strength to let the government know they would not tolerate any
attempts to reestablish the tax.
The increasing use of traffic-ticket-issuing cameras worldwide as a
government revenue booster has led to a rash of direct action by the victim
population. This usually takes the form of destroying, disabling, or
blocking the cameras. Here are several recent examples:
Launched on as another variety of civic struggle against the dictatorship, the proposal to carry the thesis of civil disobedience to the extreme of applying a “tax strike” is still in force, but has not yet switched on, except in the Mercado Oriental.
On that date, the Academy of Sciences, and the Academy of Legal and Political Sciences, called for “civil disobedience as a national imperative to be put into operation immediately,” inviting employers, workers, students, and taxpayers to immediately suspend the payment of taxes to DGI, DGA, and city hall, in particular “withholding of Income Tax from salaries.”
Although the call for tax resistance enters the popular imagination as a civil form — and for that reason a legitimate one — of resisting the regime of Daniel Ortega, neither businesses nor individuals have responded with determination to the proposal, from fear or from caution.
Caution as demonstrated by the sources consulted for this article, who requested anonymity as they explained that people, business-owners and managers in particular, are afraid that the tax administration will fine them or, worse yet, temporarily take over operation of their companies or shutter their business.
Not all of the sanctions are catastrophic.
There are cases in which the fine applied is equivalent to 2.5% of the amount not paid in the case of the monthly advance payment of the business income tax, or 5% in the case of the value-added tax or of income tax withheld from the salaries of employees.
“Technically, it’s an invalid appropriation of withholdings, and can be criminally sanctioned,” in addition to being shut down, fined, or temporarily put under government management, explained a source with extensive experience in tax matters.
That said, this source sees a variety of reasons to doubt that they would decide to take such extreme measures, beginning with “as far as I know, they have never applied them to anyone.”
Another is that to close a business means sending its workers into unemployment, which implies that they will not receive taxes from the business or from those consumers.
But beyond believing in the mercy that any of these reasons implicitly assumes, the source points out fact that is easier to accept:
“If the resolution is massive, the tax administration simply does not have the capacity to audit and penalize everyone at once.”
Larger Companies Have More Fear
If it is decided to penalize only some in order to set a precedent that strikes fear into the others, surely one of the larger ones will be chosen, which not only has more ability to defend itself in the courts, but also to negotiate, precisely because of its size.
Another source asserts that “although it may seem obvious, the businesses that take the least risk are the most powerful ones, for the simple reason that they are not big taxpayers but big tax collectors.
“The DGI, does not want to be bothered with them, because if they weaken them, this affects tax revenues, principally value-added tax withholding.”
When the big companies that could take such measures don’t apply them, despite their intrinsic power, they are demonstrating “the cowardly face of big capital.
If they would decide, the blow to DGI would be immense,” s/he says.
Róger Arteaga, former director general of Revenue, agrees, saying that “big capital has not wanted to go all-in.
It is true that it gave its approval to the strike, but did so with fear and only temporarily.”
There is at least one group that risks more in a tax strike: import and export companies, which require clearances that can only be obtained once they have paid the corresponding taxes.
“If one of these business doesn’t make its monthly statement, or makes it but doesn’t pay, it falls into insolvency, and can neither import nor export.
The only importers who could afford that ‘luxury’ would be those that have sufficient product already on hand, especially at times like these, when there is little movement of inventory,” explained one of our sources.
Small- and medium-sized businesses — both fixed-quota and general regime — can stop paying taxes as long as the situation does not normalize, and while this makes them vulnerable to penalties, it is not likely that this will occur, especially, again, if a critical mass applies this measure of fiscal chastisement.
How long can the government last without taxes?
Our sources note that before making tax payments, the employer must guarantee the salary of its employees, and that the decision not to pay taxes is “protected by the higher legal concept, legally enshrined in the national legislation, as the Act of God and the Force Majeure.
Nobody is obligated to do the impossible, and the reason for this impossibility lies outside the control of the employer or employee.”
Citizens, on their part, could put pressure on big and medium-sized business, offering to act together if the Treasury moves against them.
“In this context, big capital must play a consistent role, acting firmly in the face of a Treasury that has granted them such special privileges.
It would be their most authentic repentance for the eleven years of tax advantages they have taken in the shadow of power.
That stain should be washed out right away,” they say.
As an expert, Arteaga proposes “that the businesses do not charge value-added tax, and the citizens not pay it.
Income tax also.
There are penalties, but the penalties and decisions of this government must be ignored, as they have no legitimacy.
How long can the government last without taxes?” he asked.
“Tax resistance aims to respond to Ortega’s claim that he will stay on through : we must find a solution, and one of these is for the private sector finally to decide on civil disobedience of a monetary and tax nature,” he explained.
Pedro Muñoz Fonseca, president of the executive committee of Costa Rica’s Social Christian Unity Party, urged Nicaraguans to use tax resistance against their government:
Social Media Tax Protest in Uganda
The government of Uganda has imposed a 5¢-per-day tax on using social media and
other services. This was designed as both a revenue measure and a way of
reducing what Ugandan president Yoweri Museveni calls lugambo
(“fake news”). Amnesty International has been among those to see through the
government’s rhetoric and cast the tax as
“a
clear attempt to undermine the right to freedom of expression.”
Robert Kyagulanyi, a Member of Parliament better known by his musician
stage name Bobi Wine, whose election is in part credited to his success on
social media, has been at the forefront of protests against the tax.
He was arrested, along with
three reporters when a march protesting the tax was attacked by police
with tear gas and rubber projectiles, but they managed to escape.
Ugandan protest marchers wearing shirts featuring a smart phone screen that
reads “This Tax Must Go”
War Tax Resistance Around the World
ABC reports on war tax resisters in Valencia — “the new refuseniks”.
War tax resisters there typically refuse to pay some percentage of their taxes, often basing this on the percentage of the federal budget that is spent on the military and similar items, and redirect this money to more worthy charities.
They declare this deduction on their tax forms in such a way that the tax agency typically does not treat it as illegal tax evasion but as an error or mistake.
The Global Day of Action on Military Spending Final Report has been released.
It gives a summary of the various events that took place around the world, including several by war tax resisters and groups promoting war tax resistance.
There’s a new NWTRCC newsletter out, with content including:
Ideas & Actions concerning weapons-free investing, responding to arguments against war tax resistance, a fast for nuclear disarmament, and more
You can now listen to audio excerpts from the upcoming documentary The Pacifist, about war tax resister Larry Bassett, on Spotify.
Erica Leigh pores through back issues of Conscience, the newsletter of the Conscience and Military Tax Campaign, an American war tax redirection group that slightly predates the founding of the National War Tax Resistance Coordinating Committee.
Raymond Hunthausen has died.
As Catholic archbishop of Seattle, he took a remarkably strong stand on nuclear weapons — famously calling the Trident nuclear submarine program being developed nearby “the Auschwitz of Puget Sound” — and began practicing war tax resistance in response.
This earned him enemies in Washington and in the Catholic hierarchy. Here are some of the obits and remembrances:
A biography of Hunthausen, A Disarming Spirit, will be released soon.
David McReynolds has died.
He was a long-time War Resisters League and Socialist Party activist and was also on the staff of the Committee for Nonviolent Action which helped to spearhead war tax resistance as a tactic during the campaigns opposing the American war in Vietnam.
He was among the signers of the “Writers and Editors War Tax Protest” in and of a similar public pledge .
David Paul Irish has died.
He was active with the Fellowship of Reconciliation, Women’s International League for Peace and Freedom, Peace Brigades International, and Witness for Peace.
He was an advocate for war tax resistance in the Society of Friends, drafting a minute in favor of of war tax resistance that the Twin Cities and Minneapolis Meetings approved in .
