So said Justice Oliver Wendall Holmes. If that’s true then it naturally follows that paying taxes is every citizen’s moral duty. Or is it?
This week’s article is an extract of an article I recently read by John Pugsley, Chairman of The Sovereign Society and author of many books on investing, politics and economics including Common Sense Economics, The Copper Play and The Alpha Strategy.
According to Pugsley the widespread acceptance that taxes constitute a moral obligation is truly puzzling. To tax is to take property without the owner’s consent. This is the very definition of theft. Thus we are in a logical dilemma. We instinctively sense that theft is wrong but we’re still morally bound to a system of theft.
Our brains are wired to resist any attack on our territory or resources. We are wired to resist being plundered, yet we are told that civilization can’t function unless we allow ourselves to be plundered through taxation.
Each tax season the authorities must reinforce our belief that paying taxes is our duty. They also simultaneously counter our natural resistance with threats if we fail to pay.
In the USA the Internal revenue Service (IRS) released a study showing that individuals and corporations “cheated” the government out of US$290 billion in tax revenues in 2001.
Taxpayer advocates argued that the loss of revenue “…is an extraordinary burden to ask our nation’s compliant taxpayers to bear every year”.
The media (in March 2007) picked up and ran the story of which the implications are:
Those who don’t pay in full are immoral and unfair.
They’re placing the tax burden on us good compliant citizens.
So are individuals who resist unfair taxes immoral individuals?
A look through history suggests otherwise.
The American Revolution was a tax rebellion. Henry David Thoreau went to jail rather than pay a US$1 poll tax. Most civil wars are actually tax rebellions by citizens tired of being plundered.
In response to such rebels, governments use all sorts of methods to inspire you to pay. They appeal to your sense of duty, use threats of incarceration, and lethal force to maintain their taxing authority.
In 306 AD Roman Emperor Constantine instituted a tax so onerous people had to sell their children into slavery to pay it. Another Emperor, Diocletian, routinely sentenced tax evaders to death. And as recently as 1988, a Kansas City judge handed down a 30- year jail sentence to a lady for evading US$1 million in taxes, a sentence worse than most bank robbers would receive.
So is taxation the price we pay for civilization?
Nonsense.
Peace and prosperity are inversely proportional to the level of taxation. Communist countries, where taxation is high have the lowest standard of living of all, and nations where taxation is low, such as Hong Kong, have a high level of wealth per capita.
Tibor Machan, scholar at the Mises Institute said it clearly:
“The institution of taxation is not a civilized but barbaric method to fund anything…. it amounts to… a gross violation of human liberty.”
The Sovereign Society is founded on the principle that individual liberty is the highest good, and that individuals have a moral right to keep what they earn.
Legally minimising the amount of tax you have to pay is a socially positive act.
The Society’s mission is to help you discover and create sophisticated strategies that minimize your taxation through fully legal domestic and international structures.
For more information go to: www.sovereignsociety.com
Source: The Sovereign Individual Newsletter, April 2007, p3
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This column was compiled by Paul Wright from excerpts originally published by Damien Parker, Publisher of the subscription only Positive Business Newsletter & Information Service. The Right Team, Sales Strategists & Business Improvement Specialists, ABN 49006 576 564 ACN 110 466 138 Tel: 1300 66 44 89, have worldwide licensing & distribution rights for the Positive Business Newsletter. Visit our new website www.rightteam.com.au
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