Tax Resistance

In February of 2010, Bernard Madhoff told the New York Magazine that the United States federal government operates a giant Ponzi scheme. Madhoff represents the worst of the parasites that leech money from unsuspecting “investors.” It is Madhoff, however, who provides insight into the tawdry world of American finance. Madhoff’s revelations provide validation to the growing legion of Americans who resist paying the federal income tax.

The American tax resistance movement took root in 1774, when a cadre of colonists defied paying taxes by dumping English tea into the Boston Harbor. Northerners took to the streets at the height of the Civil War to protest taxes levied on them by the federal government. The tax levies funded the bloodiest war in American history; the insurrection in northern cities cost thousands of American lives. Whenever the banking cartel pushed for the establishment of a central bank, some type of tax, and vehement protests, immediately followed the bank cartel’s proposals. American citizens opposed the 16th amendment to the Constitution with such virulence that subsequent presidential administrations resorted to issuing Executive Orders in order to expand and enforce tax policies. The abolishment of the 16th amendment encompasses the central theme that drives the contemporary incarnation of the Tea Party movement.

A tax resister refuses to pay a portion or entire amount of a tax because of opposition to the collecting institution. Historically, tax resisters have primarily based their resistance on opposition to funding wars or other brutal government policies. The Vietnam War spawned the strongest tax resistance movement ion American history. On the other hand, members of religious groups, such as Quakers, resist paying taxes due to conscientious objections. In India, Mahatma Gandhi uses tax resistance as a strategy in the campaign for independence. Tax resisters are unlike tax protestors, who deny the legal obligation to pay federal income taxes. Tax resisters recognize the legal obligation to pay taxes, yet they refuse to pay the tax.

Tax resisters implement varied tax resistance methods. Some resisters file proper tax forms, but they withhold an amount from the total tax due. The most popular method for tax resisters involves staying out of the system by not filing a return. The growing underground economy offers another method for resisting taxes. Tax resisters earn income that they do not report. In many cases, their underground income is substantially more than their documented income. They ear less than what the government considers taxable income. Finally, resistance to the federal telephone excise tax has become a low-risk method for protesting government policies.

Tax filing proponents promote their side of the discourse with three compelling arguments. First, they believe society needs taxation in order to solve social problems. Their resistance, and the tax money withheld, comes from war appropriations. Second, conscientious tax resistance requires resisters to openly disobey laws and face the legal consequences. Lastly, filing a return gives tax resisters a platform to voice their political disagreements, and thus differentiates resisters from people who evade taxes for financial gain. 

Many people inside the tax resistance movement doubt that filing tax returns has nay political impact. They believe the Internal Revenue Service (IRS) has become more of an organized crime outfit that a legitimate revenue-collecting agency. Non-filers believe they have no obligation to cooperate with the IRS, nor do they have an obligation to accept their fines and penalties. The true political protest, according to non-filers, occurs when they discuss tax resistance with friends, family members, and c o-workers. Non-filers communicate tax resistance with the public by sending letters to the editor, speaking at political rallies, and handing out tax resistance leaflets. Moreover, non-filers believe that denying the federal government resources brings about the type of social and political change that they seek.

The number of Americans who resist paying federal income taxes has grown at a rapid rate over the past ten years. The IRS estimates the number to exceed ten million Americans. While the Treasury Department cannot establish a firm figure, prominent economists state the underground economy produces over $500 billion of unreported revenue per year. Half a trillion dollars represents uncollected taxes that politicians in Washington and financial oligarchs on Wall Street try to procure for their Ponzi scheme. Tax resistance takes many forms, but whatever form it takes, the existence costs the criminals running the Federal Reserve System billions of dollars per year.

Tax resistance principles have evolved since 1774. Yet, as Robin Einhorn, author of the essay, “American Taxation, American Slavery,” writes, “Most Americans would probably agree that our hatred for taxes has something to do with a more profound aversion to government control…A nation founded in a tax revolt is true to itself only when it is ‘starving the beast’.” Henry David Thoreau predicated his tax resistance on two moral principles: his opposition to taxpayer funding of the Mexican War, but more importantly, his strong objection to slavery. The noted philosopher, Wesley Snipes, succinctly put the contemporary tax resistance movement into perspective: “I think tax resistance was an issue for the early colonists, so what’s new?”

As we enter the second decade of the twenty-first century, a new, unfailing principle guides the tax resistance movement. Politicians use the war on terror as a pretext to pry more income taxes from the American people. We must demand that politicians declare a new war on Wall Street and the Federal Reserve System, and stop the charade of extorting money from hard working Americans. Presidents such as Thomas Jefferson and Andrew Jackson fought against the establishment of a central banking system. However, most presidents have cowered under the shadowy figures that hide behind a cloak of secrecy.

Every nation with a private central bank lives under financial tyranny. In America, a growing number of citizens understand the tyranny, and they have decided to do something that stems the evil tide of the Ponzi scheme. Tax resistance, in whatever form, is the best way to undermine the criminals who loot our diligently earned money.