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Tax resistance

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A tax resister resists or refuses payment of a tax because of opposition to the institution collecting the tax, or to some of that institution’s policies. Often tax resistance comes from pacifists, conscientious objectors or members of religious groups, such as the Quakers, who choose not to fund violent government activities. It has also been a technique used by nonviolent resistance movements, such as India’s campaign for independence led by Mahatma Gandhi.

Unlike tax protesters (who deny that the legal obligation to pay taxes exists or applies), tax resisters typically recognize that the law obliges them to pay taxes but still choose to resist taxation.

History of tax resistance

Main article: History of tax resistance

Motives

Tax resisters are typically motivated by disagreement with the policies of the government or institution that is collecting the tax. For some, this may include opposing that government or institution entirely, and not just specific policies (for instance, Gandhi’s opposition to British Imperial rule).

Anarchists who resist taxes oppose anybody or any institution that demands tribute. Christian anarchists in the pacifist tradition resist taxes from any government that funds a violent civil defence force or military. Some radical democrats suggest that a right to deny tax payments is in the spirit of democracy, giving people a veto right and forcing government spending to be done with the consent of the governed.

What a tax resister hopes to accomplish may be personal or political or some combination of the two:

  • Some tax resisters want to “wash their hands” of complicity in immoral government policies by not contributing to funding them.
  • Some resist taxes as a form of protest that communicates the strength of their opposition through an act of civil disobedience.
  • Some see tax resistance as a form of nonviolent political force – cutting off funds from the government as part of a campaign to force concessions from that government or to cause it to relinquish control.

Methods

There are many methods of tax resistance. In war-tax resistance circles in the United States it is sometimes remarked that there are as many ways to practice tax resistance as there are resisters.

Redirection

Some tax resisters refuse to pay all or a portion of the taxes due, but make an equivalent donation to charity. In this way, they demonstrate that the intent of their resistance is not selfish and that they want to use a portion of their earnings to contribute to the common good.

For instance, Julia Butterfly Hill resisted about $150,000 in federal taxes, and donated that money to after school programs, arts and cultural programs, community gardens, programs for Native Americans, alternatives to incarceration, and environmental protection programs. She said:

I actually take the money that the IRS says goes to them and I give it to the places where our taxes should be going. And in my letter to the IRS I said: “I’m not refusing to pay my taxes. I’m actually paying them but I’m paying them where they belong because you refuse to do so.”[1]

Refusing specific taxes

Some resisters resist only certain taxes, either because those taxes are especially noxious to them, or because they present a useful symbolic target, or because they are more easily resisted.

For instance, in the United States, many war tax resisters resist the Telephone Federal Excise Tax. The tax was initiated to pay for the Spanish-American War and has frequently been raised or extended by the government during times of war. This made it an attractive symbolic target as a “war tax”. Because this tax is typically small, resistance very rarely triggers significant government retaliation. This form of resistance is popular in part because of its relative safety.

Refusing to pay

The most dramatic and characteristic method of tax resistance is to refuse to pay a tax – either by quietly ignoring the tax bill or by openly declaring the refusal to pay.

Some tax resisters resist only a portion of the taxes due. For instance, some war tax resisters refuse to pay a percentage of their taxes equivalent to the military percentage of the government’s budget.

Other resisters withhold a symbolic amount – for instance, in the United States, some might hold back $17.76/17.76% (symbolic of the revolutionary year 1776) or $10.40/10.4% (in tribute to Form 1040, which is used in federal income tax returns). In other countries, similar amounts symbolic of a certain year in their country's history (eg. 1788 or 1901 in the case of Australia) or a tribute to the form used for income tax returns in the country are held back in a similar fashion.

Paying under protest

Some taxpayers pay their taxes, but include protest letters along with their tax forms. Others pay in a protesting form – for instance, by writing their check on a toilet seat or a mock-up of a missile. Others pay in a way that creates inconvenience for the collector – for instance, by paying the entire amount in low-denomination coins like nickels or pennies.

Tax avoidance

A resister may lower the tax due by using legal tax avoidance techniques. For instance, one way to lower the tax due is by changing one’s tax status through incorporation, or establishing an offshore company, trust, or foundation in a tax haven.

Tax evasion

A resister may lower the tax due through illegal tax evasion. For instance, one way to avoid the income tax is to participate in the underground economy – earning money that is never declared to the government.

Reducing expenditure and income

Other tax resisters change their lives and lifestyles so that they owe less tax. For instance; to avoid an excise tax on alcohol, a resister might home-brew beer; to avoid excise taxes on gasoline, a resister might take up bicycling; to avoid income tax, a resister might decide to take in less income and take up a simple living or freegan lifestyle; and so forth.

These methods differ from tax evasion in that they stay within the tax laws, and they differ from tax avoidance in that the goal is to pay as little tax as possible rather than to keep as much post-tax income as possible.

Arguments for tax resistance

There are a variety of arguments made for tax resistance.

Some of the arguments are as follows:

  • The government has no legitimate claim to the fruits of one's labor and so taxation is tantamount to stealing (see self-ownership).
  • The government engages in immoral, unethical and destructive activities, such as war, and paying taxes inevitably funds these activities (see Christian anarchism).
  • The government is non-legitimate i.e. the rulers did not come to power in a legitimate manner (see Salt Satyagraha).
  • The government regime in power is corrupt, serving mainly their own needs.
  • The government is controlled by individuals with business interests which unjustly benefit from tax revenue (see conflict of interest).
  • The size and scope of government have reached levels far beyond that required of the state (see starve-the-beast).
  • The wealthy, or those in power, do not pay their "fair share."
  • The government is inefficient and wasteful, providing inadequate return on the tax collected.
  • The destitute should be helped through voluntary giving and charities, not funds obtained from compulsory taxation (see altruism).
  • The best person at distributing an individual's income and money is the individual, not the government (see individualist anarchism and libertarianism).
  • Individuals who chose to take nothing out of the government system (no state pension, healthcare or police protection, for example) need not pay into the system (see anarcho-capitalism).

Arguments against tax resistance

Many arguments can be made against the tactic of tax resistance. Most basic, of course, is from those who support the entity collecting the tax and feel that other people should as well. But even those who are sympathetic with the tax resister’s complaints may question the methods. Some common arguments against tax resistance are:

  • In a democracy, if everyone funded only those decisions with which they agree, the democratic process would be undermined (see anarchism).
  • If taxes are left unpaid, the government will just have to take the money from someone else, which is unfair to them.
  • Individuals who evade taxes are free riders, benefiting from government services like road infrastructure without paying their share of the bill.
  • Tax resistance is too passive and ineffective a way to gain political change. Currently, a third of those who file tax returns and 41% of Americans in all pay no federal income tax.[2] If the government can thrive with so many people avoiding the income tax, it would require an unlikely number of tax resisters to have any effect, either as a protest or as an actual curb on government policy.
  • The government would respond to tax resisters by assessing fines, interest, and/or penalties against them, which would just mean they end up with more money in the end.

Quotations

  • “Withholding payment of taxes is one of the quickest methods of overthrowing a government.” — Mahatma Gandhi
  • “He or she who supports a State organized in the military way – whether directly or indirectly – participates in the sin. Each man old or young takes part in the sin by contributing to the maintenance of the State by paying taxes.” — Mahatma Gandhi
  • “I have heard some of my townsmen say, ‘I should like to have them order me out to help put down an insurrection of the slaves, or to march to Mexico, – see if I would go;’ and yet these very men have each, directly by their allegiance, and so indirectly, at least, by their money, furnished a substitute. The soldier is applauded who refuses to serve in an unjust war by those who do not refuse to sustain the unjust government which makes the war…” — Henry David Thoreau
  • “If only each King, Emperor, and President understood that his work of directing armies is not an honourable and important duty, as his flatterers persuade him it is, but a bad and shameful act of preparation for murder – and if each private individual understood that the payment of taxes wherewith to hire and equip soldiers, and, above all, army-service itself, are not matters of indifference, but are bad and shameful actions by which he not only permits but participates in murder – then this power of Emperors, Kings, and Presidents, which now arouses our indignation… would disappear of itself.” — Leo Tolstoy

See also

Notes

  1. ^ Smith, Gar "An Interview with Julia Butterfly Hill: Part 1" The Edge 26 May 2005[1]
  2. ^ Hodge, S. “Number of Americans Paying Zero Federal Income Tax Grows to 43.4 Million” The Tax Foundation 30 March 2006[2]
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