I have a message for every liberty lover out there who knows that the federal income tax is a moral outrage, nothing more than legalized theft, and something many of our country’s founders would have found unconscionable.
The message is, "Pay it anyway."
No, I didn’t sell out to the feds during my recently completed clerkship with the U.S. Court of Appeals. But that experience did hit me with a dose of reality that made me more certain than ever that you can’t beat the federal government at its own game, on its own turf, so you must be careful to choose your battles wisely and well.
If you try to beat the feds at their own game, you will lose.
Many people know, or know of, someone who thinks he doesn’t have to pay federal income taxes. It’s not that this person doesn’t earn any income, or has a lot of deductions, or keeps his money offshore. Instead, this person thinks he has discovered the ultimate loophole in the tax code and the income tax just doesn’t apply to him, period.
Often, people like this believe some combination of the following:
- The tax code doesn’t actually tax income, therefore I don’t owe any federal income taxes.
- The Sixteenth Amendment was never properly ratified, therefore I don’t owe any federal income taxes.
- I am a citizen of my state, and not the United States, therefore I don’t owe any federal income taxes.
- I was a U.S. citizen, but now I have become a "non-resident alien," therefore I don’t owe any federal income taxes.
- The Social Security Act established a constructive trust in my name upon my birth, and I don’t earn any income myself — my salary is actually paid to the trust, which happens to share my name — and therefore I don’t owe any federal income taxes.
Those of you who have never met these people may want to check out Brian Doherty’s excellent article going inside the movement for more details.
The tax protesters may have some interesting legal, historical, or philosophical points. Maybe, for example, the Sixteenth Amendment wasn’t properly ratified. I don’t know, and I don’t care, because I know the only thing that matters: If you don’t pay your taxes, you will be forced to pay them, and then you will go to jail. And what if you resist, physically? Then, if they deem it necessary, the feds will kill you. It’s just that simple.
No judge is going to listen to your stories about the Sixteenth Amendment, sovereignty, or constructive trusts for one minute. Why? First and foremost, because when the federal government takes anyone to court, it’s a rigged game, because agents of the federal government are both prosecutor and judge. We have "separation of powers" on paper, but the reality is that no judge is going to declare the taxes that support his paycheck unconstitutional. Consider also that every federal judge is appointed by the President of the United States. Can you think of any president during your lifetime who would appoint such a judge?
Another point to keep in mind is that the courts have heard it all before, more than once, and have summarily rejected these arguments. The IRS has helpfully cataloged some of these cases for you here. I can assure you that the legal knowledge you acquire in your self-study on this matter will not stun any of these courts such that they will suddenly change their minds. The constitution is a mere document, and not very good to begin with, so despite any false impressions your government-school civics class may have given you, the constitution is powerless to save you from the feds.
Of course, I don’t doubt that there are people out there who have gotten away with these tax schemes, and who will encourage you to do the same. And I’m sure they will come up with clever new legal theories, too. But after you read their testimonials, and hear their sophisticated-sounding arguments, look at the case law, and you will see that person after person has tried it and gone to jail. Every one of them thought the law was somehow on their side when they stopped paying taxes, and every one of them was wrong.
So let us summarize: No legal argument will magically exempt you from income taxes. Period. If it were possible, entrepreneurs would have jumped on top of it and made a killing on books explaining how to do it, and then the government would have closed the loophole.
A more useful alternative.
I don’t enjoy saying any of that. That close to 50% of a person’s labor each year is slave labor for the government is disgusting and obscene, and no one is less happy about it than I am. And just so we’re clear, I would find it obscene if it were even 1%, or %, or even one penny, because taxation is slavery, and slavery is wrong, no exceptions.
And that’s what makes the tax protester situation so sad. Here we have people who have figured out something of which most of the mindless masses remain ignorant their entire lives: that taxation is theft and slavery, and that an individual is under no moral obligation to pay it. What a tremendous breakthrough, to realize that! And what a waste when they go to jail, because they navely believed the U.S. Constitution would protect their rights.
So are we doomed to simply be ever more enslaved to our federal masters, and give them as much as they demand for the rest of our lives? Of course not.
But becoming freer isn’t easy. You may need to find another country, where the government won’t burden you with high taxes.
Most of us feel somewhat tied to the country in which we were born and raised, but as globalization progresses, more of us are going to move around more often, and as we do, governments, especially in some less developed parts of the world, will compete for us through lower taxes and less government intervention.
Websites like escapeartist.com can help you find the spot on earth that will be most pleasing and least burdensome to you. Books such as PT and PT2, by W.G. Hill, can also put you on the way to thinking about freedom far more pragmatically than the scheming tax protesters. There is a wealth of literature on this, and while it may not seem as heroic as fighting the government in court and going to jail for your beliefs, it works, unlike those other options, and is the closest realistic thing to individual secession from government available in the world today.
The most important thing you can do.
And if you don’t feel like going that far, there are, at least for now, other legal ways to lower your tax burden and strike a blow for liberty. One of them is making a tax-deductible contribution to an organization that advances the freedom philosophy, such as LewRockwell.com, or the Ludwig von Mises Institute.
Even more important than that is learning all you can about the economics and morality of liberty, and how to effectively communicate libertarian ideas. Someday, when the state collapses, the world will need a Remnant to rebuild civilization, and you cannot do your part to prepare for that day very effectively from a prison cell.
So skip the bogus tax schemes, forget about fictional constitutional rights, and focus on doing something useful for yourself and for liberty instead.