Born to American parents living in Canada, Kerry Knoll’s two teenaged daughters had no clue they became dual citizens at birth. (An American parent confers such status on Canadian-born children.) Now the IRS wants to grab at money they earned in Canada from summer jobs; the girls had hoped to use their RESPs (registered education savings plans) for college.

The IRS is making a worldwide push to squeeze money from Americans living abroad and from anyone who holds dual citizenship, whether they know it or not. It doesn’t matter if the “duals” want U.S. status, have never set foot on U.S. soil or never conducted business with an American. It doesn’t matter if those targeted owe a single cent to the IRS. Unlike almost every other nation in the world, the United States requires citizens living abroad to file tax forms on the money they do not owe as well as to report foreign bank accounts or holdings such as stocks or RSSPs. The possible penalty for not reporting is $10,000 per “disclosed asset” per year.

Thus, Americans and dual citizens living in Canada (or elsewhere) who do not disclose their local checking account — now labeled by the IRS as “an illegal offshore account” — are liable for fines that stretch back 10 years and might amount to $100,000. A family, like the Knolls, in which there are two American parents and two dual-citizen children, might be collectively liable for $400,000.

Approximately 7 million Americans live abroad. According to the IRS, they received upward of 400,000 tax returns from expatriates last year — a compliance rate of approximately 6%. Presumably, the compliance of dual-citizen children is far lower. Customs and Immigration is now sharing information with the IRS and, should any of 94% expats or their accidentally American offspring set foot on U.S. soil, they are vulnerable to arrest.

Why Now?

As of 8:30 a.m. EST, Sept. 20, the US National debt was $14,744,278,404,668. That is over $47,000 per American citizen, over $131,000 per taxpayer. America is bankrupt and desperate to grab at any loose dollar within its reach. Having reaped the easy pickings within its own borders, America is extending its reach.

So far, the IRS push into foreign territory has been a rousing success by their own standards. In 2009, the IRS offered “amnesty” — that is, lessened but still hefty penalties — to whoever stepped forward to disclose foreign bank accounts. According to Fox Business News, the 2009 program netted

“the government $2.2 billion in tax revenues…and $500 million in interest from the 2011 program, for a total of $2.7 billion…Moreover, the IRS says it has yet to reap penalties from these evaders, which could rake in hundreds of millions more.”

IRS Commissioner Doug Shulman stated:

“we are in the middle of an unprecedented period for our global international tax enforcement efforts. We have pierced international bank secrecy laws, and we are making a serious dent in offshore tax evasion.”

Going after the college money earned by children born and raised in Canada (or elsewhere) is just one part of the international enforcement effort. The entire package is called the Foreign Account Tax Compliance Act, or FATCA; it was a revenue-raising provision that was slipped into one of Obama’s disastrous stimulus bills. Starting in 2013 — or 2014 if an exemption is granted — every bank in the world will be required to report to the IRS all accounts held by current and former U.S. citizens. If account holders refuse to provide verification of their non-U.S. citizenship, the banks will be required to impose a 30% tax of all payments or transfers to the account on behalf of the IRS. Banks that do not comply will “face withholding on U.S.-source interest and dividends, gross proceeds from the disposition of U.S. securities and pass-through payments.”

Australia and Japan have already declared their refusal to comply. Canada’s Finance Minister Jim Flaherty has publicly stated that the proposed American legislation “has far-reaching extraterritorial implications. It would turn Canadian banks into extensions of the IRS and would raise significant privacy concerns for Canadians.”

According to the Financial Post:

“Toronto-Dominion Bank is putting up a fight against a new U.S. regulation that would compel foreign banks to sort through billions of dollars of deposits to find U.S. citizens who might be hiding money.… TD has complained that the proposed IRS rule is unreasonable because it would require the bank to make US $100-million investment in new software and staff. Other lenders resisting the effort include Allianz SE of Germany, Aegon NV of the Netherlands and Commonwealth Bank of Australia.… Now the Canadian Bankers association has joined the fray. In an emailed statement the CBA called the requirement ‘highly complex’ and ‘very difficult and costly for Canadian banks to comply with.’”

The Financial Times reports,

“One of Asia’s largest financial groups is quietly mulling a potentially explosive question: Could it organize some of its subsidiaries so that they could stop handling all U.S. Treasury bonds? Their motive has nothing to do with the outlook for the dollar.… Instead, what is worrying this particular Asian financial group is tax. In January 2013, the U.S. will implement a new law called the Foreign Account Tax Compliance Act…The new rules leave some financial officials fuming in places such as Australia, Canada, Germany, Hong Kong and Singapore…Implementing these measures is likely to be costly; in jurisdictions such as Singapore or Hong Kong, the IRS rules appear to contravene local privacy laws…Hence the fact that some non-U.S. asset managers and banking groups are debating whether they could simply ignore FATCA by creating subsidiaries that never touch U.S. assets at all. ‘This is complete madness for the U.S. — America needs global investors to buy its bonds,’ fumes one bank manager. ‘But not holding U.S. assets might turn out to be the easiest thing for us to do.’”

Meanwhile, banking will become more difficult within the United States. FATCA will hold banks liable for any “improper” transfer of money to outside the United States. The Wealth Report, a financial analysis site, states,

“U.S. banks will be desperately trying to cover their liability by checking the exact purpose of the payment, to make sure it doesn’t come within the scope of the legislation. The burden of proof will naturally pass to the account holder who is trying to transfer money, to demonstrate that the transaction is not subject to the new withholding tax. If the sending bank in the USA has any doubt at all about the purpose of the transaction, they will be forced to deduct 30% tax. Net result? It is going to be darned difficult for anyone to transfer money out of the USA. If that isn’t a form of currency control, then I don’t know what is! (emphasis original)”

Returning to the Little Guy and Gal

Expat Americans and children — aka dual citizens — will be caught in the indiscriminate steel net that the IRS wants to throw around the globe. Their innocence or ignorance will not matter. The IRS wants money. If expats and duals do not owe money from their earnings, then the IRS will pursue obscure reporting requirements and apply them to people who did not even know they were American. It will try to yank their college funds and drain their parents’ retirement savings.

They can renounce their American citizenship, but that is an imperfect solution. For one thing, it does not immunize them from the past 10 years of nonreporting. For another, following the United States’ “exit” sign takes many people directly through the Treasury Department, where they may be required to pay a brutal one-time exit tax. Basically, for those with more than $2 million dollars in assets, the tax comes to $600,000.

Moreover, renunciation is a difficult process. The Globe and Mail is one of many Canadian newspapers now explaining to readers how they can renounce American citizenship. G&M states,

“Renouncing your U.S. citizenship starts with a hefty fee — $450 (U.S.), just for the chance to appear in front of a consular official. Need it done in a hurry? Forget about it. It can take about two years to get an appointment.”

The true hope lies in a worldwide refusal to comply. The only power strong enough to rein in the United States is the world itself. There is hope that this will happen.Reuters declared,

“A U.S. law meant to snuff out billions of dollars in offshore tax evasion has drawn the criticism of the world’s banks and business people, who dismiss it as imperialist and ‘the neutron bomb of the global financial system’…A senior American finance executive at the Hong Kong branch of a major investment house [declared] that FATCA was ‘America’s most imperialist act since it invaded the Philippine Islands in 1899.’ The regulation…was ‘engendering a profound and growing anti-American sentiment abroad.’”

How long can America maintain that people “hate us for our freedom”? People fear and hate America for its totalitarianism. And among those people filled with fear are American citizens.

Regards,

Wendy McElroy

The Attack on Accidental Americans was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

In 2008, Alvin Rabushka’s book of almost 1,000 pages appeared: Taxation in Colonial America (Princeton University Press). In a review published in the Business History Review, the reviewer summarizes the book’s findings.

Rabushka’s most original and impressive contribution is his measurement of tax rates and tax burdens. However, his estimate of comparative trans-Atlantic tax burdens may be a bit of moving target. At one point, he concludes that, in the period from 1764 to 1775, “the nearly two million white colonists in America paid on the order of about 1 percent of the annual taxes levied on the roughly 8.5 million residents of Britain, or one twenty-fifth, in per capita terms, not taking into account the higher average income and consumption in the colonies” (p. 729). Later, he writes that, on the eve of the Revolution, “British tax burdens were ten or more times heavier than those in the colonies” (p. 867). Other scholars may want to refine his estimates, based on other archival sources, different treatment of technical issues such as the adjustment of intercolonial and trans-Atlantic comparisons for exchange rates, or new estimates of comparative income and wealth. Nonetheless, no one is likely to challenge his most important finding: the huge tax gap between the American periphery and the core of the British Empire.

The colonists had a sweet deal in 1775. Great Britain was the second freest nation on earth. Switzerland was probably the most free nation, but I would be hard-pressed to identify any other nation in 1775 that was ahead of Great Britain. And in Great Britain’s Empire, the colonists were by far the freest.

I will say it, loud and clear: the freest society on earth in 1775 was British North America, with the exception of the slave system. Anyone who was not a slave had incomparable freedom.

Jefferson wrote these words in the Declaration of Independence:

The history of the present King of Great Britain is a history of repeated injuries and usurpations, all having in direct object the establishment of an absolute Tyranny over these States.

I can think of no more misleading political assessment uttered by any leader in the history of the United States. No words having such great impact historically in this nation were less true. No political bogeymen invoked by any political sect as “the liar of the century” ever said anything as verifiably false as these words.

The Continental Congress declared independence on July 2, 1776. Some members signed the Declaration on July 4. The public in general believed the leaders at the Continental Congress. They did not understand what they were about to give up. They could not see what price in blood and treasure and debt they would soon pay. And they did not foresee the tax burden in the new nation after 1783.

In an article on taxation in that era, Rabushka gets to the point.

Historians have written that taxes in the new American nation rose and remained considerably higher, perhaps three times higher, than they were under British rule. More money was required for national defense than previously needed to defend the frontier from Indians and the French, and the new nation faced other expenses.

So, as a result of the American Revolution, the tax burden tripled.

The debt burden soared as soon as the Revolution began. Monetary inflation wiped out the currency system. Price controls in 1777 produced the debacle of Valley Forge. Percy Greaves, a disciple of Ludwig von Mises and for 17 years an attendee at his seminar, wrote this in 1972.

Our Continental Congress first authorized the printing of Continental notes in 1775. The Congress was warned against printing more and more of them. In a 1776 pamphlet, Pelatiah Webster, America’s first economist, told his fellow men that Continental currency might soon become worthless unless something was done to curb the further printing and issuance of this paper money.

The people and the Congress refused to listen to his wise advice. With more and more paper money in circulation, consumers kept bidding up prices. Pork rose from 4¢ to 8¢ a pound. Beef soared from about 4¢ to 100 a pound. As one historian tells us, “By November, 1777, commodity prices were 480% above the prewar average.”

The situation became so bad in Pennsylvania that the people and legislature of this state decided to try “a period of price control, limited to domestic commodities essential for the use of the army.” It was thought that this would reduce the cost of feeding and supplying our Continental Army. It was expected to reduce the burden of war.

The prices of uncontrolled, imported goods then went sky high, and it was almost impossible to buy any of the domestic commodities needed for the Army. The controls were quite arbitrary. Many farmers refused to sell their goods at the prescribed prices. Few would take the paper Continentals. Some, with large families to feed and clothe, sold their farm products stealthily to the British in return for gold. For it was only with gold that they could buy the necessities of life which they could not produce for themselves.

On December 5, 1777, the Army’s Quartermaster-General, refusing to pay more than the government-set prices, issued a statement from his Reading, Pennsylvania headquarters saying, “If the farmers do not like the prices allowed them for this produce let them choose men of more learning and understanding the next election.”

This was the winter of Valley Forge, the very nadir of American history. On December 23, 1777, George Washington wrote to the President of the Congress, “that, notwithstanding it is a standing order, and often repeated, that the troops shall always have two days’ provisions by them, that they might be ready at any sudden call; yet an opportunity has scarcely ever offered, of taking an advantage of the enemy, that has not been either totally obstructed, or greatly impeded, on this account…. we have no less than two thousand eight hundred and ninety-eight men now in camp unfit for duty, because they are barefoot and otherwise naked… I am now convinced beyond a doubt, that, unless some great and capital change suddenly takes place, this army must inevitably be reduced to one or other of these three things: starve, dissolve, or disperse in order to obtain subsistence in the best manner they can.”

Only after the price control law was repealed in 1778 could the army buy goods again. But the hyperinflation of the continentals and state-issued currencies replaced the pre-Revolution system of silver currency: Spanish pieces of eight.

The proponents of independence invoked British tyranny in North America. There was no British tyranny, and surely not in North America.

In 1872, Frederick Engels wrote an article, “On Authority.” He criticized anarchists, whom he called anti-authoritarians. His description of the authoritarian character of all armed revolutions should remind us of the costs of revolution.

A revolution is certainly the most authoritarian thing there is; it is the act whereby one part of the population imposes its will upon the other part by means of rifles, bayonets and cannon – authoritarian means, if such there be at all; and if the victorious party does not want to have fought in vain, it must maintain this rule by means of the terror which its arms inspire in the reactionists.

After the American Revolution, 46,000 American loyalists fled to Canada. They were not willing to swear allegiance to the new colonial governments. The retained their loyalty to the nation that had delivered to them the greatest liberty on earth. They had not committed treason.

The revolutionaries are not remembered as treasonous. John Harrington told us why sometime around 1600. “Treason doth never prosper: what’s the reason? Why, if it prosper, none dare call it treason.”

The victors write the history books.

What would libertarians – even conservatives – give today in order to return to an era in which the central government extracted 1% of the nation’s wealth? Where there was no income tax?

Would they describe such a society as tyrannical?

That the largest signature on the Declaration of Independence was signed by the richest smuggler in North America was no coincidence. He was hopping mad. Parliament in 1773 had cut the tax on tea imported by the British East India Company, so the cost of British tea went lower than the smugglers’ cost on non-British tea. This had cost Hancock a pretty penny. The Tea Party had stopped the unloading of the tea by throwing privately owned tea off a privately owned ship – a ship in competition with Hancock’s ships. The Boston Tea Party was in fact a well-organized protest against lower prices stemming from lower taxes.

So, once again, I shall not celebrate the fourth of July.

Regards,

Gary North

Tricked on the Fourth of July was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

For the sake of clarity, I do not advocate the abolition of all laws. However, we must define legitimate laws as those that prohibit an act that is in itself bad. An example of this type of law is one that prohibits the infliction of bodily injury on another. Those laws that make an otherwise innocent activity unlawful are simply political in nature. They are what the philosopher Thrasymachus, best known as a character in Plato’s Republic, labeled “the advantage of the stronger.”

In order to enforce the “advantage of the stronger,” an increasingly larger bureaucracy is needed. And in order to fund this bureaucratic watchdog, money is needed. Without money, there would be no bureaucracy and there would be no army of legislative staff members writing truckloads of laws aimed at limiting your “inalienable rights.”

The money to feed this bureaucratic Goliath comes from your taxes! Since the inception of the income tax, government intrusion into our lives has grown by leaps and bounds. According to the Tax Policy Center, 57 percent of federal tax revenue comes from individual and corporate income taxes. An additional 36 percent is appropriated through the payroll tax. Since 1950, the individual income tax has been the largest growth area of federal-government tax revenue.

According to the US Census Bureau, there are 2.8 million civilian employees working for the federal government and paid for with your taxes. The state governments employ an additional 5.3 million civilians. These employees are dispersed throughout countless agencies, bureaus, and divisions.

I was once briefly associated with a local politician who constantly reminded his constituents that he had authored over 120 pieces of legislation. He thought that this was a big accomplishment on his part and a reason he should be elected to higher office. However, I was confused as to whether he was running for an elective office in New York or for a seat on the Soviet Politburo!

In any event, without the confiscatory tax system, all of these laws and regulations that limit your freedom would not be possible. We would see a return to the days when the American government was small, the free-enterprise system was strong, and the visions of the Founding Fathers were still present in the body politic.

The Power to Tax Destroys Prosperity

Quite simply, if one is taxed, he has less money either to invest or to spend. The higher the tax rate, the more money is taken from those individuals who can invest and create economic opportunity for themselves and for others.

An accumulation of capital is essential to increase the productive capacity of a nation. Therefore, it is important to understand the true meaning of savings. When money is deposited in a bank, it is usually lent out to someone else. The money is then used either to invest in business expansion or to purchase the products produced by business — cars, televisions, boats, etc. An accumulation of wealth is essential for a prosperous economy.

Cuba does not allow an accumulation of wealth. It was recently reported in the press that the Cuban leadership will now allow limited monetary payment to employees. However, the Communist administration will still not allow anyone (except themselves, of course) to accumulate wealth. Is there any doubt as to why there is no capital formation and viable industry on that island?

In the United States, a supposedly capitalist nation, wealth is taxed at all levels. For example, if you sell a piece of real estate for more money than you bought it for, the gain from the transaction is taxed. This is so even though the gain was due to your foresight and entrepreneurship. The taxman is a silent partner with a participation in your profits, even though those profits were the result of your business sense. The same scenario exists if your gains were the result of profits made in stocks, bonds, or commodities.

If you are a wealthy person, beware. The estate tax will destroy what you have created through your hard work and diligence. Unless you have spent a small fortune on financial planners, accountants, and tax attorneys, the fruits of your labor may be enjoyed by the government instead of by your heirs. Even when family members are active participants in making a business successful, there is no guarantee that they will not be supplanted by the government through a confiscatory system of taxation.

One of the main reasons that many small business establishments have difficulties is because of the regulations and tax burdens imposed upon them. A small business is subject not only to income taxes but also to a host of others taxes and requirements. These include the payroll tax, workmen’s compensation insurance, and a list of fines aimed at fattening the government coffers. If small business fails, the economy will stumble because small business is a major engine of employment growth.

Parenthetically, we should not fall prey to the class warfare that is so often employed by the taxman. Discussing politics, an electrician who once worked for me stated, “I have no problems with rich people. I need to make a living. I never benefited by being hired by a guy who didn’t have the money to pay me.” This is an important point that should be kept in mind by all those looking for a job.

The Power to Tax Destroys Market Efficiency

Beginning with Joseph Stalin, Soviet leaders engaged in centralized, nationwide efforts toward rapid economic growth. At first, these so called five-year plans emphasized heavy industry. By 1970, the focus had shifted to the production of consumer goods.

In fact, Paul Samuelson was so impressed with Soviet industrial production that he believed it would surpass that of the United States, even in light of undeniable facts to the contrary published in his own textbooks. He referred to unregulated capitalism as “a fragile flower bound to commit self-suicide.” Though I must admit that I am perplexed as to how a flower commits suicide, I am even more perplexed as to how deregulation causes “capitalist suicide.”

Nevertheless, the Soviet Union collapsed under the weight of its centralized economy. The reason for this is that planned economies are inefficient. Central planners cannot properly gauge the sentiments of consumers.

The tax system in the United States produces the same inefficiencies as did the planned economy of the former Soviet Union. When a tax is imposed, money is taken away from individuals and spent by government. And, as the Soviet example has proven, government is an inefficient producer of goods. The reason for this is simple: central planners do not have the mechanism to determine what consumers want.

When government planners produce, they do so based upon political directives. Obamacare is a perfect example of this. Although highly unpopular with the American public, healthcare reform has been pushed through Congress simply to achieve the administration’s political goal. Unless repealed, it will result in the misallocation of resources and higher healthcare costs for all.

Central planning does not work because the central force behind economic decision-making is the individual. Rothbard explains, “Only individuals have ends and can act to attain them. There are no such things as ends of or actions by ‘groups,’ ‘collectives’ or ‘states,’ which do not take place as actions by various specific individuals.”

Therefore only an individual can determine what products should be produced. The actions of producers must focus on the needs and desires of the individual expressing his utility in the marketplace. The producer needs to get it right because his capital is at risk.

Money given to a bureaucrat to spend is inefficient because there is no at-risk capital. If a mistake is made, the project is simply terminated or more money is thrown at it until it achieves a politically favorable outcome. However, as in the Soviet case, no economy can sustain this structure for very long.

Free-market capitalism has given the consumer more goods and services than any other economic system ever employed. It is the only system in which the consumer is king. If an entrepreneur does not gauge the desires of consumers correctly, he will not be in business for long. This is not the case with the central planner. From this stems the inefficiency of taxation.

Conclusion

There are many other ways in which the power to tax destroys. Nevertheless, the point has been made. Taxes are an unproductive waste of resources.

The current administration is wrestling with a trillion-dollar-plus budget deficit. This deficit was created by a massive government intervention into the economy — one supposedly aimed at creating jobs.

But what has this intervention accomplished? Not much. Unemployment is still high, commodity prices are skyrocketing, and credit is still tight. Obviously, the Keynesian-induced tinkering with fiscal and monetary policy has once again fallen short of success.

Does the administration acknowledge this undisputable fact? Obviously not, since it is attempting to push through Congress another massive tax hike! Ironically, the president is trying to justify his tax increase by stating that the deficit is a “major job killer.” He seems to have gotten the connection between budget deficits and slow job growth. Is it possible that he picked up a copy of Economics in One Lesson and actually read it?

Regards,
Fred Buzzeo
Whiskey & Gunpowder

April 29, 2011

Fred Buzzeo is a real-estate developer and a consultant to small property owners in the New York City area. He resides with his wife and two sons in the Town of Oyster Bay, (Long Island), NY. During the 1990s, he held executive positions in city municipal government. It is during this employment that he saw firsthand the pitfalls of government intervention and regulation.

To Tax Is to Destroy was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

If you have ever been to a kindergarten or a playground where very young children play, you might have realized that, although the kids are too young to understand many things, they already have a surprising sense of justice.

Take a toy away from a toddler who cannot yet speak a word, and you will often be met with a very clear protest. As far as the toddler is concerned, you have stolen her toy, you have initiated violence, and therefore it’s time to cry. The toddler’s reasoning probably isn’t this sophisticated, but the understanding is there.

Slightly older children are even more amazing. They understand that there is illegitimate violence (when a toy gets stolen), but they also understand that there is such a thing as legitimate violence as well, which is when the victimized child goes to the thieving child and takes her toy back. The astonishing thing is that the usual focus is on getting the toy back rather than punishing the aggressor. Punishment is a concept that they learn later, probably from us.

The initiation of violence is the act of an aggressor against you or against your property. This can be done through actual violence or through intimidation, because the mere threat of violence is an act of violence in itself. A good example would be a thief that points a gun at you to get your wallet without actually pulling the trigger. Another less obvious example is the way the government takes our money. To say that taxes are a form of theft may seem a bit over the top, but refuse to pay your taxes and you will be thrown in jail. Refuse to pay your property taxes and you will see who really owns your house.

Governments have done a wonderful PR job: They call us taxpayers, not victims, and the taxes are somehow “collected,” not stolen. Taxes are also called contributions, as if it had been a matter of choice. And because it is the government that decides whether this form of theft is legal or not, there is nothing we can do legally to get restitution. No playground justice for us.

Many actually see the crime but take it as a necessary evil, and when you ask for the complete abolition of taxation, they ask in minute detail how we would pay for roads or law enforcement.

I admit, it is hard to imagine how our society would work in a completely new order, but I would like to offer some ideas and historical facts that may ease these worries.

One important thing to remember is that all of the services now funded by taxation and provided by the government were at one point in the not-so-distant past funded and provided privately. Indeed, many are being provided privately today, from affordable private education in Ghana to the luxurious streets being built every day in our North American cities for new residential developments (which are later handed off to local governments).

Another reassuring example for those who want answers right now regarding a future without taxation is that not so long ago slavery was normal, and in many parts of the world nobody could have conceived of life without it. When some pointed out the ethical and economic problems behind the practice, the vast majority of people claimed that, not only was it impossible to abolish slavery, but even the slaves themselves were actually better off in captivity than in liberty. Today these claims seem ludicrous to us.

Some were genuinely concerned about the slaves. Because they had no property, some said they would all be homeless and scattered around. Such well-meaning conservatives even feared that without their masters the slaves would be unemployed. And above all, the worriers claimed that the entire economy would collapse, putting everyone — former slaves included — in a state of abject poverty.

The idea of a world without taxes is hard for us to imagine, and there are many unanswerable questions that we would like answered. But we need to stand for liberty regardless of our reservations, just like we still stand against slavery.

While I agree that lots of neat things can be done with stolen money, we need to remember that we would never go to our neighbors with a gun and tell them to pay for our education or retirement, regardless of how rich they were. We wouldn’t do it because it’s wrong. Even a toddler knows that.

Regards,
Rod Rojas
Whiskey & Gunpowder

April 27, 2011

Rod Rojas is a holder of the Canadian Securities Course designation and performs as a financial adviser in personal, corporate, and public-policy matters. He is a proud member of the Ontario Libertarian Party.

The True Nature of Taxation was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

Whether they realize it or not Americans live in a constant state of fear every day. I’m not referring to the fears of everyday life like losing a job or having an accident of some kind, but rather a more sinister and devious fear; a fear that Americans only dare talk about around the water cooler or at cocktail parties so as not to be taken seriously; a fear they try to mask with a with a whimsical tone of sarcasm or indifference. Whether Americans want to admit it or not, it’s the single greatest fear in their lives: fear of the government.

Right about now there are those reading this thinking: Don Cooper is a drunk. To which I reply: what’s that got to do with it? Maybe more people should drink if that’s what it takes to sober up and confront what they are really afraid of.

In their defense, I’ll admit that reality is scary. No argument that living in delusion is warmer, safer, cozier, and easier. Pretending is always more fun than reality, that’s why we go to the movies. But fear of the government is a fear that invades a person’s soul and – since the government intervenes in every aspect of our lives – it affects every move we make every day.

Fear of the government is hard to recognize and acknowledge. It’s a fear that we are taught early on in life and to which we become accustomed. We inevitably end up tucking it away in the far reaches of our minds in order to function “normally” every day and live our lives. But just as a car backfiring will trigger a sense of fear from a shell-shocked veteran, so too can the State trigger that sense of fear they’ve instilled in us.

One need only ask: when you see a cop in your rearview mirror with his lights on, do you feel a sense of safety and comfort or do you get a shot of adrenaline from your body’s “fight or flight” reflex? Do you immediately start asking yourself what he could possibly pull you over for, other than the fact that he was abused as a child, bullied at school and his mother didn’t love him, and now he’s going to whittle away at that chip on his shoulder by abusing you.

As you search for your proof of government permission to drive (i.e., your license), and your government permission to own the car ( i.e., your registration ), and your proof of government mandated insurance, do you do so calmly and with a smile on your face and with gleeful anticipation of speaking with someone who gives of himself to serve and protect you, or do you do so nervously, fumbling through your papers hoping everything’s up to date and acceptable to him for fear of being detained for whatever reason and having it affect your job, your family, and every aspect of your life?

And when it’s all over, do you feel glad that it happened or are you just glad it’s over? Later that evening do you recount the story to others with a sense of pride, or do you do so with a sharp tongue and kick yourself for all the things you wish you would have had the presence of mind to say at the time but didn’t? Do you feel happy that you have to pay $150 to the government because you were driving down the street faster than the government allows you to, or are you angry?

And in the end, do you send the money to the government even though you don’t agree with it? Even though you feel it’s unfair to have to pay so much money yet you’ve harmed no one? Of course you do. And why? Because you’re afraid of what the government will do to you if you don’t. In the end, you’ll retreat back into your cubby-hole of delusion in order to justify paying the fine by convincing yourself that what you did was wrong, the government was right, and you deserve the punishment.

My favorite delusional argument from those still attached to the matrix is that they pay their taxes voluntarily. To these people I ask: when you do your tax returns, do you take as many deductions as the government will allow you? Of course, the answer is always yes. Then I ask them that if they could take enough deductions such that their tax liability was zero would they do so? Again, not surprisingly, the answer is yes. I then ask them that if their preference is to pay zero taxes then why don’t they simply refuse to pay taxes. Inevitably, that’s where their train of thought always runs out of track. Of course everyone knows the answer: because they’re afraid of what the government will do.

I challenge everyone to ask themselves: when was the last time you even thought about the possibility you might be robbed, your house broken into or shot at? Can you even remember? Now ask yourself when was the last time you were afraid of doing something that could be deemed “illegal” by the government and for which you could be fined, detained or arrested? Something like not wearing a seatbelt, speeding, making a U-turn, going through a yellow light, not crossing the street at the cross-walk, riding a bike on a sidewalk, forgetting your license at home, taking too many deductions on your taxes, talking on your phone while driving, not allowing strangers to touch you or your children at the airport, cutting down a tree on your own property, owning and transporting a gun, collecting rain water and the list goes on. I would wager the answer is: daily! The first word out of everybody’s mouth when asked a normal, completely benign question these days is: “Well legally …” It’s first and foremost on our minds, and why wouldn’t it be, there are 76,000 pages to just the federal register alone. Some argue that everyone commits at least three felonies every day!

Ignorance is a dangerous thing, and it must be stopped in our lifetime, fo’ it kill somebody.

At the end of the day, all government mandates are enforced at the end of the barrel of a gun, and that scares the hell out of everyone, as it should. But if we truly believe we are free then we have to start acting like it. It’s time we cared about something bigger than ourselves. It’s time we stopped living our lives in fear.

Having said all that, I’m not holding my breath. It’s proven to be difficult to convince people that freedom is more important than the real housewives of New Jersey.

And that’s why I drink!

Regards,

Don Cooper

What Is The Quiet Fear That Troubles Us All? was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

He promoted the idea of educational vouchers issued by local governments and based on taxes extracted from the public. He did not consider the obvious fact that the courts would make this the wedge by which the state would take over private education. He and I debated this in 1993.

Most of all, he promoted the idea that storing gold in government vaults to back the currency is wasteful. It wastes gold. It wastes storage space. It wastes armed guards. So, to make monetary policy more efficient, the Federal Reserve should increase money — he never said which M — by 2% to 5% per annum. He wanted central-bank-controlled fiat money.

The only critics from the fringes of academia were the Austrian School economists. We knew that an efficient government is a dangerous government. We also knew that a central bank that does not face an outflow of gold in response to its policies of monetary inflation will inflate far more than would be allowed in any gold-related economy.

I responded to this argument, which had been picked up by The Wall Street Journal, back in 1969.

Hans Sennholz responded on many occasions. So did Murray Rothbard. But we were not taken seriously. We were not part of the mainstream. Academic economists had long since abandoned any support of a gold coin standard. They did not all support Friedman’s idea of a restrained Federal Reserve. In fact, very few of them supported it. They wanted flexibility. They still do.

Once Nixon closed the gold window, there was no turning back. The monetary base grew, all of the various Ms grew, prices rose, bubbles grew and blew, and the Federal debt rose to today’s gigantic, unsustainable level — unsustainable apart from mass inflation followed by hyperinflation.

The abolition of a currency convertible on demand into gold was only one part of Dr. Friedman’s contraption. The other part was his suggestion of floating exchange rates. This deserves special consideration.

Milton Friedman’s Contraption

Friedman easily took apart the idea of fixed exchange rates. Fixed exchange rates are a form of price control. Friedman was a good enough economist to know that price controls produce shortages. The artificially undervalued currency goes out of circulation. The overvalued currency produces gluts. There will be runs on central banks.

Domestic purchasers of foreign goods say to the central bank: “Sell us the artificially undervalued foreign currency at the official price.” The central bank runs out of foreign currencies. Trade collapses. There is then a devaluation. The official prices of the foreign currencies are raised to new fixed exchange rates.

It was easy for Friedman to expose this as ridiculous. “Just float the currencies,” he said. “Let the free market set their prices.” This was good advice. Price controls do not work as promoted. They always produce gluts or shortages.

But then Friedman recommended his old favorite: pure fiat currencies. He said that these can be managed rationally by means of a fixed rule governing a predictable expansion of money. “Turn it over to the Federal Reserve. All will be well if the Federal Reserve does not tamper with the rate of growth.” As John Wayne said in The Searchers: “That’ll be the day.”

Nixon adopted Friedman’s contraption. First, there would be no more convertibility of gold for foreign official government agencies.

For a little less than two years, there were universal price controls on American goods. These controls led to shortages and a disruption of international trade. The dollar was not officially floated until December 1973.

When the price controls came off, prices rose. In 1975, Gerald Ford launched the WIN plan: Whip Inflation Now. The recession of 1975 did exactly that. Then came the worst monetary inflation in American peacetime history: 1976-80. Gold and silver soared.

Friedman’s contraption clearly was not working. Floating exchange rates were not the problem. The abolition of the gold exchange standard was the problem.

Friedman’s contraption has engulfed the whole world in monetary inflation, bubbles, and busts.

Stockman on the Contraption

In a lecture to the Mises Institute on March 12, David Stockman blames floating exchange rates and the abolition of the gold standard.

That the demise of the gold standard should have been as destructive of fiscal discipline as it was of monetary probity can hardly be gainsaid. Under the ancient regime of fixed exchange rates and currency convertibility, fiscal deficits without tears were simply not sustainable — no matter what errant economic doctrines lawmakers got into their heads.

Back then, the machinery of honest money could be relied upon to trump bad policy. Thus, if budget deficits were monetized by the central bank, this weakened the currency and caused a damaging external drain on monetary reserves; and if deficits were financed out of savings, interest rates were pushed up — thereby crowding out private domestic investment.

This is an accurate assessment of what happened. But the anchor to this was not the fixed exchange rate system, because the IMF had no real authority to enforce them. The anchor was the promise of the United States to sell gold at $35 an ounce. When the chain was cut, and the U.S. kept its gold, the international currency system was cut adrift. The anchor resides in the vault of the New York Federal Reserve Bank.

In the good old days, there was pain, Stockman observed. “Politicians did not have to be deeply schooled in Bastiat’s parable of the seen and the unseen. The bitter fruits of chronic deficit finance were all too visible and immediate.” This ended in 1971.

During the four decades since the gold window was closed, the rules of the fiscal game have been profoundly altered. Specifically, under Professor Friedman’s contraption of floating paper money, foreigners may accumulate dollar claims or exchange them for other paper monies.

But there can never be a drain on U.S. monetary reserves because dollar claims are not convertible. This infernal engine of fiat dollars, therefore, has had numerous lamentable consequences but among the worst is that it has facilitated open-ended monetization of the U.S. government debt.

The government is running a $1.6 trillion deficit. Nothing can be done politically to stop this. We are on a runaway train. The main brakes were removed in 1971. The only brake now is that of the bond vigilantes, but the Federal Reserve is the buyer of bonds today, along with Asian central banks. Stockman observed that “the Fed’s QE2 bond purchases have been so massive that it is literally buying Treasury paper in the secondary market almost as fast as new bonds are being issued.”

Is all this Friedman’s fault? Stockman lets him off the hook, to some extent.

By contrast, under the contraption that Professor Friedman inspired, trade account imbalances are never settled. They just grow and grow and grow — until one day they become the object of fruitless jabbering at a photo-op society called G-20.

In all fairness, Professor Friedman did not envision a world of rampant dirty floating. Indeed, it would have taken a powerful imagination to foresee four decades ago that China would accumulate $3 trillion of foreign currency claims or more than 50% of GDP, and then insist over a period of years and decades that it did not manipulate its exchange rate!

My response: it was all Friedman’s fault, intellectually speaking. When an economist recommends a policy, he also recommends its effects. Friedman failed to see what Austrian School economists had predicted: the unleashing of fiat money, and manipulated rates — dirty floating. Dirty floating is all there is in a world run by government-licensed central banks without gold coin convertibility. But for our saying this, decade after decade, the economics profession has marginalized us.

Conclusion

Milton Friedman was always too clever by half. He advised governments to get more efficient, and they did so. They used his advice to expand their power and expand their reach into our wallets.

We told him so. He did not listen. His followers did not listen. Today, they all sit mute at the side of the road, mumbling about potentially excessive deficits and potentially excessive price inflation, but generally approving of the Federal Reserve.

The problem is the original contraption: (1) government’s monopolistic control over money and (2) central banking as such. Here, Friedman was supportive of government.

The problem was not floating exchange rates or the breakdown of Bretton Woods in 1971. Those were the inevitable results of Bretton Woods, as Henry Hazlitt warned in the late 1940s, and was fired by the New York Times for saying so.

The problem was not even the Genoa Conference of 1922, the contraption designed to solve the inflation that came as a result of the suspension of redemption in the second half of 1914, when World War I broke out.

The problem was the mass confiscation of the people’s gold in 1914: first by commercial banks, then by the central banks.

Milton Friedman’s contraption was just one more ill-fated attempt to deal with the results of the original confiscation. It was one more case of his outlook: “The government was right to confiscate the gold and end the gold standard. That was an efficient way to fight a war, just as withholding taxes are efficient, and vouchers are efficient.”

Milton Friedman spent his career defending the efficiency of the free market. But, on the really big issues, he sold his peers on the efficiency and good will of government politicians and bureaucrats. “Trust them to be efficient.”

The Austrians said the same thing, but added, following Forrest Gump’s mother, “Efficiency is as efficiency does.” The state gets more efficient only in order to tyrannize people on a cost-effective basis.

Milton Friedman’s contraption was the unchecked welfare-warfare state: unchecked by annual taxation without withholding and unchecked by the gold standard.

If that’s efficiency, include me out.

Regards,
Gary North
Whiskey & Gunpowder

March 21, 2011

Milton Friedman’s Money Machine was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

It also does not mean that he is giving up hope for liberty; he may have great hope for liberty, in a different way and in a different place.

In any case, the rise of emigration, expatriation, and citizenship renunciation is a trend that is not going away. It is rising and will get more significant. In some ways, it is completely expected. When regimes over-control, over-tax, over-regulate, they gnaw at the innate sense of the right to be free. When this gets worse and worse, people tend to look around for better environments.

We’ve all known people who talk about it openly. It is becoming cocktail conversation, the once-unthinkable now standard fare. It’s not just an impression. State Department records show that 502 people gave up citizenship in just the last quarter of 2009. That is more than twice the total for 2008. That might not seem like a lot but what stands out here is the trend line, which is soaring. I also hear reports of year-long bureaucratic delays in approval, and, of course, plenty of people leave without permission.

The driving factors here are not cultural or social; they are economic. The US government is making it ever more difficult for Americans living abroad, taxing them wherever the bureaucrats can find them. The government makes it very difficult even to hold a bank account in the US unless the account holder can point to a US residency (thanks to the Patriot Act). And when the government finds a reporting error on income earned overseas, it can charge a 50% penalty.Even when a person gives up US citizenship, and establishes citizenship with a freer country, the US government can still haunt him with continuing tax obligations and demands for military service. There is, at the least, a vast exit penalty. Any regime that would do things like this inspires people to want to stay at arm’s length.

Far more frightening is the sense that financial calamity is around the corner. A look at the data seems to suggest that. Vast reserves are sitting in the banking system, waiting to be unleashed to create what could be total destruction of the dollar. The deficit is rising so fast that it is hard to chart.

The jobs situation is terrible, especially for young people (and adults often make decisions based on what is best for their kids’ future). Personal income is falling and falling. Investment is not recovering after its cliff dive in 2009. The social welfare state is broke. Private debt is rising even though lending has not restarted.

The policies of the fiscal and monetary authorities are absolutely terrifying. The Fed is keeping rates at zero. The government is spending and spending beyond belief. Tax receipts are falling as never before, unleashing the greedy hand of the predator state to extract every last dime.

And look at what the US congress and president are doing about this terrible mess: they are working to socialize health care, start a war with Iran, impose tariffs on China, and otherwise tax, regulate, inflate, and control more more more. An economy that is heavily capitalized and driven by the entrepreneurial spirit can stand a surprising amount of abuse. But that reserve capital is being drained away into new bubbles, and the entrepreneurial spirit is being crushed at every turn.

Based on all these facts, the sense of impending doom is hard to avoid. And consider that most people are thinking only about today, this month, and this year. But among the rich and entrepreneurial we find a class of people who specialize in thinking outside the box, and for the very long term. It is among the ranks of these people that we are seeing the renunciation trend take hold. The smart money is giving up on the US political system.

What precisely is a person actually giving up when he walks into a US consulate and signs the renunciation oath? The right to vote? Yes, but just how much value are we supposed to place on the right to choose between dumb and dumber, and to have your vote cancelled out by the guy behind you in the line? No living person has ever swung a significant election. It is hardly a surprise that people put so little value on going through the motions of democracy.

There is much to give up in a cultural and social sense. It is not a decision to be made with a light heart. It is final and scary for that reason. What compels many people to do it now rather than wait is the sense that at some point, it might not be possible to renounce citizenship. As the controls grow ever tighter, so will the regulations on those who try to escape.

Every socialist and fascist regime in history has put up walls to prevent flight by people and capital. This is why people and capital are flying now, while they still can. In so doing, they are inspired by the writings of the American revolutionaries. The difference is that they have decided that living in the land of the free and the home of the brave means not being a slave of the US government.

The way to stop the brain and capital drain is readily at hand. Relinquish controls. Stop taxing people abroad. Adopt laissez-faire. Reinstitute freedom. Reject militarism and nationalism. Only that path will inspire optimism in the future of this country. Until that happens, we can expect this trend to continue, and to advise the young and successful families who ask us, to get out while the getting is good.

Regards,
Lew Rockwell
LewRockwell.com
Whiskey & Gunpowder

April 28, 2010

Renouncing American Citizenship was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

So when you hear anyone say that the level of taxation in a country should be based on the “ability to pay”, be very afraid. These people are not only coming for your money. They’re coming for your economic liberty too. Ultimately, that means they’re after your political liberty as well.

Progressive taxation is the idea the larger your disposable income, the larger percentage of that income you ‘should’ pay in taxes. Proponents of it—and these days nearly everyone one is—claim it is more ‘fair.” But let’s be honest and call things by their right names and say what progressive taxation is really about.

Even John Stuart Mill, who favoured it, called progressive taxation “a mild form of robbery.” That’s because progressive taxation is about using the tax code to redistribute wealth. It’s base on the class-warfare idea that the rich get rich illicitly and conspire to keep the riches of society for themselves. It uses the law (coercion) to correct what some people see as the social and economic injustice meted out by the marketplace.

But how people treat private property (and wealth IS private property) determines the character of society. A society that promotes the idea of wealth accumulation and that everyone can get rich is one in which standards of living will rise over time. It doesn’t mean getting wealthy is the only or even the most important ambition in life. That’s a matter of personal choice and values. But it just means that if you want to raise standards of living over time, you should guard economic liberty and not use taxation to punish personal incentives.

The only fair argument for progressive taxation is that indirect taxes (consumption taxes) hit the poor harder than they hit the rich. This is certainly true for taxes on consumption goods. But it is not true for income taxes, most of which the poor do not pay anyway. A tax on Gucci handbags is less onerous than a tax on a slab of beer. But that doesn’t justify the argument that just because you can pay more taxes, you should.

When is it ever right for a man to come in to your home and take what’s yours simply because he’d decided that someone else needs it more? And how is the government arbitrarily deciding to raise income tax rates on only certain citizens, based on their ability to pay, any different? Yet that’s the argument for progressive taxation in the modern world. And most people seem to think it’s fair and just.

Mind you, that doesn’t mean that free people can’t use legislatures to levy taxes in order to pay for projects they believe should be provided by the State, like roads, bridges and other infrastructure. But there is a difference between that kind of public spending and public spending financed by wealth redistribution to achieve particular social and economic outcomes.

How did we get to the point in civil society where a democratic majority that does not pay taxes can, through its elected representatives, legally confiscate the wealth of a minority? Friederich Hayek gives the history in, The Constitution of Liberty.

“As is true of many similar measures, progressive taxation has assumed its present importance as a result of having been smuggled in under false pretences. When at the time of the French Revolution and again during the socialist agitation preceding the revolutions of 1848 it was frankly advocated as a means of redistributing incomes, it was decisively rejected. “One ought to execute the author and not the project,” was the liberal Turgot’s indignant response to some early proposals of this sort.

“When in the 1830′s they came to be more widely advocated, J.R. McCulloch expressed the chief objection in the often quoted statement: ‘The moment you abandon the cardinal principle of exacting from all individuals the same proportion of their income or of their property, you are at sea without a rudder or compass, and there is no amount of injustice and folly you may not commit.’”

“In 1848,” Hayek continues, “Karl Marx and Freidrich Engels frankly proposed ‘a heavy progressive or graduated income tax’ as one of the measures by which, after the first stage of the revolution, ‘the proletariat will use its political supremacy to wrest, by degrees, all capital from the bourgeois, to centralise all instruments of production in the hands of the state.’

And these measures they described as ‘means of despotic inroads on the right of property, and on the condition of bourgeois production…measures…which appear economically insufficient and untenable but which, in the course of the movement out strip themselves, necessitate further inroads upon the old social order and are unavoidable as a means of entirely revolutionising the mode of production.’”

If Marx and Engels are to be taken at their word, progressive taxation was never about fairness. It was about putting production “in the hands of the State” and “revolutitionising the mode of production.” In the world of State-run capitalism, this is what we seem like we’re headed towards.

Now, we can take a step back and ask whether a State-run, union owned Chrysler makes a better car than the shareholder owned management-run Chrysler. It’s a fair enough question. We’d argue that government-built and designed cars are going to be about as appealing as a leather boot for breakfast. But that is not really the point.

The point is that the politicians are lying to you about the goal of progressive taxation. The goal is not to produce more “fairness” or “social justice.” It’s to place the State at the centre of economic production, so it can regulate and tax with impunity.

There is both a psychological and crassly economic motive to this movement to displace the free market with the State as the organiser of economic life. The smarty pants elitists in both political parties, with their ties to union and corporate money, really believe the world would be better off it was run be benevolent bureaucratic despots. Or maybe using coercive taxation to steal from the rich is simply envy-based class politics, a kind of populist theft conducted with the consent of a hi-jacked system for passing laws.

Once you go down this road of socking it to the rich instead of reducing spending, you get higher and higher rates of taxation that eventually shrink the economy. Britain adopted the income tax in 1910 and the U.S in 1913. At the time, the top tax rates on income were 8.25% and 7% respectively. Yet within 30 years, thanks to the Great Depression and the World Wars, those rates had risen to 97.5% and 91% respectively.

“Thus in the space of a single generation,” Hayek writes, “what nearly all the supporters of progressive taxation had for half a century asserted could not happen came to pass…All attempts to justify these rates on the basis of capacity to pay was, in consequence, soon abandoned and supporters reverted to the original, but long avoided, justification of the progression as means of brining about a more just distribution of income.”

How much a man should reasonably a pay to the State was no longer an economic question about his ‘ability to pay.’ It was revealed as the purely political decision it always was. Or as Hayek says, it’s “an attempt to impose on society a pattern of distribution determined by majority decision.”

That’s what we meant by the character of society. Do you want to live in a country where over 50% of a man’s income can be taken from him simply because the majority votes for it? In that kind of country you want to live in, where you have no real property rights and you don’t have equality before the law.

Upward income mobility is undermined in this kind of society. People don’t try to get rich because there’s no point in it if your gains are going to be confiscated. The net result of decades of progressive taxation is lower capital formulation, more consumption, less production, and ultimately a lower standard of living for everyone.

In that society, your only means of social and economic advancement is based on your personal connections and political patronage. Not surprisingly, in that society, politicians exercise enormous power. And decisions are not made by businesses that aim to offer consumers better products and services at lower prices; they are made by politicians who aim to cement their electoral position by favouring certain constituencies.

Progressive taxation has nothing to do with fairness, justice, or equality. It is unfair, unjust, an unequal. But hey, if that’s the kind of country you want to live in, or if you’re someone who’s getting the check instead of writing it, that might not seem like such a bad deal.

We’d just advise you to prepare for a lifetime of dependency on busybody politicians who become increasingly grasping, moralistic, and intrusive. If you’re a free man, you’d better pack your bags and look for some other luckier country.

This is not to glorify getting rich as the most important thing in this world (or any other world.) It isn’t. And there are much more important things in life. Whether you choose to pursue material gain is up to you.

And just as a government should not use the tax code to punish the rich, it ought to quit tinkering with it and providing so many deductions and rebates that allow anyone with a good accountant to avoid paying large income taxes. A much simpler taxation system based on consumption would be fairer for everyone and it would force the government to finally live within its means.

Of course that probably won’t happen. Ever. But it would be nice to think so. In the meantime, a society that discourages wealth creation and capital formation through so-called progressive taxation is eventually going to make itself a lot poorer and a lot less free.

Regards,
Dan Denning
Australian Daily Reckoning

May 15, 2009

Progressive Taxation, an Assault on Liberty was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

Is it just a simple matter of “voting all the bums out” — as a few signs advocated?

I don’t believe in man qua corporation as having a soul — and that’s a sticky snaggle for libertarian conversions in my book. We’ve got these corporations on our hands. Lots of them. And we’re saving them right now. Of course, we don’t wanna, because in the world according to Darwin, they don’t deserve it. And that’s what a couple of signs said.

Yet other than taxes, what pitchfork have we with which to attack this capital gains-loving Marie Antoinette of Manhattan? If one were to write Revelations today, one could send the Whore of Babylon with Roman corruption and kings at her breast into early retirement. The Whore of Manhattan, we’d make, with Blankfein and Vikram, sucking away.

Examine this pseudo-biblical snatch from Network and its corporate demon, Arthur Jensen:

“Am I getting through to you, Mr. Beale? You get up on your little 21-inch screen and howl about America and democracy. There is no America. There is no democracy. There is only IBM, and ITT, and AT&T, and DuPont, Dow, Union Carbide, and Exxon. Those are the nations of the world today. What do you think the Russians talk about in their councils of state, Karl Marx?…We no longer live in a world of nations and ideologies, Mr. Beale. The world is a college of corporations, inexorably determined by the immutable bylaws of business. The world is a business, Mr. Beale. It has been since man crawled out of the slime. And our children will live, Mr. Beale, to see that…perfect world…in which there’s no war or famine, oppression, or brutality. One vast and ecumenical holding company, for whom all men will work to serve a common profit, in which all men will hold a share of stock. All necessities provided, all anxieties tranquilized, all boredom amused.”

You see, tea baggers, We the People are not the Geneva-loving Rousseau’s Corsica or Poland, starting with a new constitution afresh. We have no democracy. We have only the media, chattel of the corporations that are hoping to eek one last ounce of profit from the old dead horses called newspaper and broadcast TV. Why do you think we see so much of Obama on our late night and Geithner on our sacred Sunday mornings?

How do I know that Mr. Jensen’s speech is not what pure libertarianism would look like if thrust atop this ugly, brutish state? Would I be happy there? Would I be tranquilized?

I’m thinking the best you and I can do, dear reader, is defect…make nice paper-dollar profits on the IBMs and Dows and their tiny brethren…and depart after turning it into gold. Go somewhere with cheap land…and buy cattle, sheep, goats.

After all, who among us really has the nads, the arms, or sufficient belief in mankind to rewrite the social contract of these United States?

(Hush, Texans like Rick Perry, we hear your clamor…but do we believe it?)

How the Rest of the World Sees Tea Baggers

Always ask: What do our fellow nation-states make of all this? After all, what is diplomacy but a massive PR campaign? And how will we know which country will harbor us gold-bearing exiles the best?

Here’s a headline courtesy of Agence France-Presse: “Anti-Barack Obama ‘Tea Party’ Protests Mark U.S. Tax Day.” The article juxtaposed the words “modest crowds” with “several thousands.” It admitted the protest had a “catchy theme,” but questioned the strength of the “mostly Republican forces” whose party has “been in disarray since Sen. John McCain lost the White House” — a party whose senior figures “appear lukewarm” to the tea parties.

Maybe that’s just because they have issues with verbal jokes that mix them up with “tea bagging” — the sex act — which we all laughed about the morning after. Strategically, there’s no reason for the Republicans to ignore the voice of the Ron Paul fringe, which is getting louder…they’re still doing worse than Obama in Gallup polls, and they’re up for re-election first.

We all know it’s good to ride the faux-populist express…Just look at who ran it straight up to the door of the White House last year.

I know die-hard Dems who voted Reagan into office his first year…for fiscal conservatism, and fiscal conservatism alone. Look how well that turned out! Running from one platform and party to the other is as dizzying as a dog chasing its own tail.

Americans need to stop being twits first and foremost. Posthaste, Patriot…keep your brain for yourself!

Regards,
Samantha Buker

April 21, 2009

Why Tea Won’t Work This Time was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

You go into a feed store (wonderful smells, fascinating merchandise, nice folks, and sticker shock wherever you look.  Are you up to $2500 saddles?  An average price, nothing special… how about fencing at five thousand a mile?  And up.  Mostly up!), and you can have a good, rousing, patriotic conversation on every aisle if you want to make an opening remark…the price of antibiotics (animals’ make ours look cheap), or the astounding increase in wire and T-post prices (non-precious metals) during the last year…or the probable effect on future feed costs from a crashing economy.

THEY AIN’T NO LIB’RULS IN SMALL TOWN BARBER SHOPS.  In small towns purt’ near ever’body knows ever’body else and either employs, works for, or trades with ‘em.  We are tied to the land and our small social groups, and charity really begins at home.  We have no patience with the shiftless but pour out our bounty at times of birth, death, and catastrophe.  I traveled extensively in six western counties of Texas in ’08 and saw precisely three Obama signs:  one each in front of the shabbiest house in two small towns, and one in the little storefront that housed the Obama campaign in a small county seat.  Democrats control local politics firmly (backlash against Reconstruction), but they are quite conservative at that level.  Mebbe it takes critical mass before Demmies go really goofy…or perhaps hometown boys and girls get led astray by slick city mice.  Probably both.  We’re too busy trying to keep our land and businesses in the family to want to tell other people how to wash apples at th’ county level.

THEY AIN’T NO LIB’RULS IN GROCERY STORES.  Hoo, boy, are there not.  This is something that will grow as supplies decrease and prices increase.  Now you still see the occasional liberal tee-shirt, but more and more people are focusing on their own problems in survival and are not really sympathetic with those who toil not, neither do they spin.  It is frustrating to have to be careful about what we put in our carts because we know how much money is in our purses, and annoying to watch people buying luxuries with food stamps.  Did you ever notice that those paying with our money are usually pretty nicely dressed and wearing good jewelry?  Well, if somebody paid our grocery bills we could buy Boar’s head ham and cheeses, too.  We’re the ones who know we have to choose, have to know the difference between what we can afford and what we can pay for, and have to make decisions on what is most important to us.  If we buy that very expensive ham, something else has to be foregone.  The welfare crowd doesn’t have that problem, nor do the illegals, for the same reason.

THEY AIN’T NO LIB’RULS IN HONKY TONKS ‘CEPTIN’ TH’ DIXIE CHICKS!  One uh th’ gang commented that he hadn’t had any good political discussions in upscale bars recently.  That’s ’cause th’ chardonay and sushi crowd doesn’t know much about traditional values, how money is made, how the monetary system is supposed to work, or anything except influencing public opinion and insider deals.

You git in tuh a great honky tonk lahk Willie’s Broken Spoke, in Austin, and yew don’t run into th’ welfare crowd, th’ illegals, or th’ politics of envy–although Congress is certainly doing its best to recruit us over the AIG mess which was all their doing.  Ain’t nobuddy thar but good ol’ boys an’ their ladies havin’ fun, an’ we don’t hold with tearin’ down the Constitution, amnesty fur illegals, or anythin’ else much goin’ on in DC.  Don’t you go burnin’ our flags or spittin’ on our Bibles, ’cause it ain’t safe.  Ladies will thank you fur openin’ doors an’ look startled if you address a letter to “Ms.  Farmerswife.”   “Mizz” is how we pronounce “Miss,” and “Mizz-rus” means the gal’s married.  We ain’t got no other honorifics, ‘cept courtesy “Aunt”  an’ we like th’ ones whut we got.  We don’t usually know sexual deviants unless we meet ‘em when visitin’ in th’ big city, an’ nobody has a problem with “Merry Christmas!”

You look at one uh them thar fancy charts whut shows how th’ country’s divided up, all purty in red with disfiguring blobs like De-Troit, MY-ami, an’ Washin’ton, an’ coastal strips in blue, an’ you’ll see maht’ quick that th’ disagreement between th’ Nawth an’ th’ South has expanded to that between th’ city fellers an’ th’ country boys.  We’re still fighting (sorry, “fahtin’”) ovuh th’ same thangs:  tariffs, taxes, big government vs. small, laissez faire, standin’ on our own two feet instead of on our neighbors’ wallets, States Rights, killin’ our own snakes, the Good Book, an’ sech lahk.  (DJ’all git that?  “Like,” if’n you don’ savvy mah lingo.)  We don’ want no gummint subsidies an’ we don’ think y’all should pay our mortgages.  We don’ want tuh support anybuddy though they ain’t no kinder hearts in th’ universe.

We’s ’bout divided equally in population and on policy ‘twixt the Red an’ th Blue, but th’ Damnyankees (Yes, that’s all one word.) are still stackin’ th’ ballot boxes an’ stid o’ writin’ to y’all Ah should be out ‘splainin’ tuh people why th’ Democratic party they’s addicted to ain’t been around for a mahty long spell.  Habits er good when we’s talkin’ ’bout sloppin’ th’ hawgs, but they ain’t no reason tuh vote for uh bunch uh scallawags an’ carpet baggers what er pushin’ th’ Lib’rul agenda.  We jes’ ain’t got ovuh bein’ mad at Lincoln, Sherman, an’ Beast Butluh, thass all.

Hay-ul, no, Ah ain’t makin’ fun uh mah frens an’ neighbors, mo’ lahk mah seff.  We tawk funny ’cause we like it, an’ tuh remind ah-sevs that we ain’t th’ problem heah an’ we’uh dag-nabbed tarred uh havin’ socialism thrust upon us an’ bein’ beggared fer a bunch uh useless slime an’ payin’ fur votes tuh keep Pelosi, Reid, Maxine Waters, Ted Kennedy, an’ Ron Dellums in office.  Don’t believe in welfare, but if them folks gonna git somethin’ fur nothin’ leastways they could do is clean our houses an’ gummint buildin’s, or be th’ ones holdin’ them traffic signs ‘stead uh payin’ ovuh twenty bucks an hour fur sich services.

Ah done give up appologizin’ fur bein’ South’n.  Ain’t gonna make no more jokes ’bout how Ah flies th’ Stahs an Bahs ’cause it amuses th’ hands.  It does, but Ah likes it too.  Ah’m fed up with income- an’ soul-destroyin’ regulation thass drahvin’ us outta business, an’ what’n tarnation made th’ Feds thank that outlawin’ are raht t’ feed ourselves an’ others should be a crime in th’ name of “food safety?”  Hey, anybody you know evah git sick from eatin’ at home?  Didn’t think so.  Evah have any problems with home-canned vegetables?  ‘Course not.  Th’ problems come out uh heavily regulated an’ inspected restaurants an’ factories.  Had a fren, oncet, back in mah college days, heir to uh big corporation.  (Hey, got me three uh them pay-puhs whut says DEE-gree on ‘em, but common sense counts thuh most, that an’ th’ bonnie blue flag.)  Aftuh a summah spent learnin’ th’ bidness in the Phillipines warn’t nuthin’ would git Lon tuh eat Daddy’s best-known confection.  Seems he took a real dislike tuh th’ gi-gantic bugs an’ rats what infested th’ factories.

Restrictin’ food perduction ain’t ’bout nuthin’ but pertectin’ agribusiness an’ controllin’ crowds should it come tuh “insurrection,” as th’ Feds’ull call it.   ‘Bout tahm ya’ll got serious about wass goin’ on an’ reflectin’ on a gummint that dun’t want yuh t’ have no more’n two weeks’ food in yore house.  ‘Bout tahm t’ question how cum them varmints got they eyes on our guns agin’ an’ whah they ain’t much ammo available an’ that costs three tahms whut it did last year.  Thank Gawd we’uh “one shot–one squirrel” types, not prone t’ sprayin’ bullets ’round like th’ SWAT guys do, or we’d be ovuh-run with squirrels, ‘possums, ‘coons, bob cats, an’ othuh pests.  Dang if it don’ cost a dolluh evah tahm Asia shoots a wild hawg.  Plus tax, uh cos.’

THEY AIN’T NO LIB’RULS in small town banks.  They ain’t no Lib’ruls cat fishin.’  Don’t think they’s many Lib’ruls in small town lie-berries, jes’ ladies wantin’ tuh keep th’ computers from bein’ used for porn-ography.  Probly ain’t no Lib’ruls in th’ Boy Scouts, lease-wise not at Eagle Scout level.

Ya’ll thank this ovuh whahl Ah stots ovuh an’ whips out twenny or thutty thousan’ wuds on whah th’ South was rot.   We wuz, y’know.  Had a perfect raht tuh git shet uh dictatorial gummint an go are sep-rut ways.  All we wanted was uh simple little no-fault dee-vorce an’ Lincoln an’ his bunch dun turnt it intuh a shootin’ mattah.

Save yo’ Corn-federate dollars.  No, not because th’ South’s gonna rise agin, fer shoe-uh, but ’cause they got IN-trinsic value, unlike Bernanke Ben’s counterfeit.

Regards,
Linda Brady Traynham

March 31, 2009

There Ain’t No Liberals in Feed Stores was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.