In a free economy, where willing buyers transact with sellers who cannot coerce, only services and products that have objective merit – defined by people’s willingness to purchase them – succeed. Products and services that lack merit fail – as defined by people’s lack of interest in paying good money for them.

But most people have difficulty making the intellectual (and philosophical) Great Leap Forward – applying the same reasoning, the same economic discipline, to government.

If, for example, the government really does provide valuable services – as it so often claims – then why is it necessary to force people to purchase these allegedly valuable services? If the services provided by government really do have value, wouldn’t most people eagerly purchase them without coercion?

Consider “law enforcement” vs. peace-keeping.

It is doubtful the current system of “law enforcement” could be maintained on anything other than a coercive basis – because too many “customers” regard it as a service they’d very much like to decline and would decline, if they had any choice in the matter.

What does that tell you about the value of “law enforcement”?

For instance: The guy down the road who likes to smoke pot on his porch (and maybe grows his own pot in his backyard) is in no way causing me or anyone else any harm. Thus I have no interest in paying armed thugs to dragoon him in chains off to prison.

My neighbor who keeps “unregistered” vehicles on his land, out of sight, hasn’t victimized anyone I’m aware of – and without a victim – that is, a real person actually injured in some objectively real way – can there be a crime? Not in my world. And so I resent being forced at gunpoint to help pay for the armed thugs who spend their days “enforcing” laws whose transgressors have victimized no one. I would never freely give a single copper penny to Officer 82nd Airborne.

He and his kind act not merely without my consent, but with my contempt. That I am forced to help finance their activities is a source of tremendous annoyance. Paraphrasing Jefferson: To compel a man to furnish contributions of money for the propagation of actions which he disagrees with and abhors is sinful and tyrannical.

But how about a peace-keeper?

Not a buzz-cut, black sunglasses-wearing steroid-jacked thug itching to exert his limitless authority under color of “the law.” Rather, a person hired for the sole purpose of intervening when a harm is committed. An actual harm or injury to a real person or persons – as opposed to a violation of “the law.” Nothing more – and nothing less.

No harassing people peacefully drinking alcohol (or partaking of anything else) provided they’re peaceful and not impinging on anyone else’s rights. No Gestapo-style “safety” checks. You are free to go about your business – imagine that! Most people’s only interaction with a peace officer would be to say hello – if they felt like saying hello. Most important of all, they’d be free – legally entitled – to say no.

Now that I’d willingly pay for.

Probably you would, too. It’d be nice to know there’s someone patrolling the neighborhood at night, on the lookout for break-ins and so on. And it would be even nicer to know that the peace-keepers’ livelihood depends on your continued willingness to pay their salaries. That in the event they cross the line and you find out they’ve begun pestering peaceable citizens, demanding to see their “papers” or stopping them at random to question/search them, you can cancel your subscription.

The peace-keepers know this, too – and it helps to keep them in line.

It’d never work, you say? In fact it already works. Smaller, rural counties often have an elected sheriff (and deputies) rather than a selected police chief and “professional” police force. The elected sheriff isn’t quite exactly a peace-keeper paid by the voluntary subscriptions of the members of the community – but he’s a lot closer to that ideal than the selected police chief and “professional” police force. He – the local sheriff – is closer to the community because he’s more directly accountable. If he behaves like an ass – or a tyrant – he can be fired come election time.

Good luck firing a police chief.

The point being, the principle is practical. People who make rational choices when it comes to other products and services are just as likely to make rational choices when it comes to the “services” provided by government. If something has value, if it works, then they will freely buy it. If it does not have value, if it does not work then they will not.

And if it does not have value, if it does not work, then why should anyone be forced to buy it?

This is the question we must ask – and demand an answer to.

And naturally, it is the question government most wishes to avoid answering.

Regards,

Eric Peters,

Services Rendered (But Not At Gunpoint) was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

I happily did and it’s been easily one of the best things I’ve ever done. Nothing feels so great as not having to track all your income and expenses and spending hours, days or weeks “filing” your taxes. So, each year around this time I get awakened from my own little bubble in paradise when I see a headline reminding the serfs that it is time to pay their due. This year in the US it is April 17th. In Canada it is April 30th.

SLAVE ON SLAVE ACTION

There is an old joke in Canada that comments on the socialist, slave nature of Canada versus the more entrepreneurial, capitalist nature of Americans. This joke doesn’t apply as much anymore as the US has sunk to Canadian levels… and the Canadians, almost miraculously, have possibly become more capitalistic in some ways now than Americans.

But, the joke as it used to be told was this. A man goes to a seafood shop to buy some crabs. There are two tanks full of crabs. One has a lid on it and the other doesn’t. The customer asks why there is only a lid on one of the tanks. The proprietor explains, the tank with the lid are American crabs. If you don’t put a lid on it they’ll all escape, he explains. And the other, the customer asks? Those are Canadian crabs. If one tries to escape the others will drag it back down with them.

This phenomenon, known as the “crab mentality” is now quite ubiquitous throughout the western world where public education and the government controlled media have made entrepreneurs and successful people out to be the bad guys. Just ask anyone in a drum circle at Occupy Wall Street.

I have dealt with this numerous times in my personal life growing up in Canada. When I first quit my job at a bank to start up an internet company (Stockhouse.com – still Canada’s largest financial website with more than a million users) I got surrounded by old ladies at the bank trying to talk me out of my decision.

“Are you crazy?” they’d say. “You have free dental if you work here!”

In the twenty years since I quit I estimate my total dental costs, especially because I’ve lived in Thailand and Mexico mostly since then, at about $400… mostly in cleanings at $10-25/each. Wow, was that ever a mistake!

And then, nearly ten years ago, when I bid a fond adieu to Canada, many of the local slaves questioned my sanity. “But, if you don’t pay hundreds of thousands of dollars per year in income tax you are giving up your ‘free’ medical care!”

For the record, my total medical care costs in those ten years is probably about $1,000. $100 per year.

This is the slave/crab mentality.

ESCAPE FROM THE WEST

If you can somehow arrange your affairs to make the majority of your income as a contractor or over the internet you can set yourself up to escape the tax game. These are topics we regularly speak about at TDV. Both ways to earn income in non-tax or low-tax countries and also how to get foreign residency and/or citizenship to legally emancipate yourself.

My mentor, Doug Casey, recently stated:

“What is a slave? He’s someone who is deprived by force of the fruits of his labor. Sound familiar? I disapprove of slavery, in any form – including its current form.”

Paying half of your income to government extortion is no different than slavery… unless you actually want to pay it. But, ask yourself, if you weren’t forced at the barrel of a gun to pay taxes, would you voluntarily submit a cheque every year?

Many countries, such as the Dominican Republic (DR), only tax you on income made in the country. So, if you derive no income from the Dominican Republic and you are a DR resident or citizen (something we help many achieve at TDVPassports.com) you can legally set yourself up to pay no taxes… unless you are one of the only truly globally enslaved people, a US citizen. In that case you can still not pay taxes on your first $90,000 (check with your tax slave consultant for details). But almost every other citizen on Earth will not have to pay any income tax. In Paraguay, another place we help emancipate people to, there is no income tax. They’ve been trying to implement it for a few years but the citizenry keeps fighting against it. What a country!

Many other places are also tax-free, like St. Kitts and Dominica. And others, such as Bulgaria, have a 10% flat tax. We can help you achieve status in all of these countries and we are scouring the world for other places… currently we are in Cambodia working on a fast-track residency and citizenship there through official channels.

GIVING UP US CITIZENSHIP

Many people, even some of my most libertarian and freedom minded friends still have trouble with the thought of giving up their US citizenship. This is how deep the brainwashing and belief in the past – when the US was one of the only places to really get ahead – run.

But, here is the way I see it. If we are right and the US continues to devolve into a horrific fascist police state for the foreseeable future then there won’t be the opportunities there like there were in the past. In that case, giving up your citizenship and becoming a citizen elsewhere has great benefit. And the only other thing that can occur, given the financial state of affairs in the US, is that the US Government defaults and instead of being nearly 50% of the US economy it recoils back to a very small government again. In that case, things like Homeland Security, the IRS and the hundreds of three letter agencies all disappear, meaning that the US would revert back to a similar state it was pre-Federal Reserve/Income tax. In this case, you won’t need a “green card” or to be a citizen to live and work in the geographical area known as the US. So, once again, US citizenship won’t be a limiting factor in taking advantage in the wealth of new opportunities in the region.

In either case, giving up your US citizenship is a win-win.

Of course, if you are not a US citizen you are not restricted to the same extent and there is no need to give up your passport… at least, until they devolve and become more like the US, taxing non-resident citizens on worldwide income. In that case, if you already have a second citizenship you can turn on your webcam, light your passport on fire and email the video to them and tell them good riddance.

THE BEST OF TIMES, THE WORST OF TIMES

It is for this reason that we see the current state of affairs as having a lot of opportunity as well as a lot of risk. Never before has it been so easy to internationalize your affairs and escape the oppressive, collectivist dragnets. But, if you don’t, you could find yourself with no options. And now, with places like the US stating in Bill 1813 that even owing the IRS money is reason enough for them to suspend your “privelidge” to travel, and you could be trapped. Like a crab in a tank with a lid on it.

I escaped years ago… and it is one of the best things I’ve ever done. You still have this option… but it won’t be long before western governments realize the “revenue” leakage they are losing by allowing their tax slaves to escape.

Think about this as you file your tax return this year.

Regards,

Jeff Berwick

Time To Pay Your Taxes, Slaves was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

The U.S. government is looking to plug up leaks on its tax slave ship. From CBS…

LOS ANGELES (CBS) — A bill authored by a Southland lawmaker that could potentially allow the federal government to prevent any Americans who owe back taxes from traveling outside the U.S. is one step closer to becoming law.

Senate Bill 1813 was introduced back in November by Senator Barbara Boxer (D-Los Angeles) to “reauthorize Federal-aid highway and highway safety construction programs, and for other purposes”.

After clearing the Senate on a 74 – 22 vote on March 14, SB 1813 is now headed for a vote in the House of Representatives, where it’s expected to encounter stiffer opposition among the GOP majority.

In addition to authorizing appropriations for federal transportation and infrastructure programs, the “Moving Ahead for Progress in the 21st Century Act” or “MAP-21″ includes a provision that would allow for the “revocation or denial” of a passport for anyone with “certain unpaid taxes” or “tax delinquencies”.

Section 40304 of the legislation states that any individual who owes more than $50,000 to the Internal Revenue Service may be subject to “action with respect to denial, revocation, or limitation of a passport”.

The bill does allow for exceptions in the event of emergency or humanitarian situations or limited return travel to the U.S., or in cases when any tax debt is currently being repaid in a “timely manner” or when collection efforts have been suspended.

However, there does not appear to be any specific language requiring a taxpayer to be charged with tax evasion or any other crime in order to have their passport revoked or limited — only that a notice of lien or levy has been filed by the IRS.

Source

We love the name! Before we delve into how insidious this measure is, we have to congratulate lawmakers on the moniker:

“Moving Ahead for Progress…in the 21st century!” It sounds like a cross between an empty corporate memo header, cheesy political campaign pablum and a Saturday morning science fiction cartoon. Well done, Congress!

Of course the tax net isn’t the entire point of the bill. From the Official Blog of the American Society of Civil Engineers:

The reforms included in MAP-21 allow for the nation’s surface transportation program to move forward. Consolidating the 90 programs into 30, creating a National Freight Network Program, expediting project delivery, creating reasonable performance measures, and enhancing the TIFIA program are all steps that will allow for a stronger, more results-oriented transportation program.

The legislation also reduces the core highway programs from seven to five, which include three new core programs and two existing programs. The new programs include a National Highway Performance Program, a Transportation Mobility Program, and a National Freight Network Program; while the remaining programs are the Congestion Mitigation and Air Quality Improvement Program and the Highway Safety Improvement Program. Other positive reforms include a new title, called “America Fast Forward”, which strengthens the TIFIA program by increasing funding to $1 billion per year; while Title 1 takes steps to improve the existing highway bridge inspection program and authorizes a national tunnel inspection program. The bill also establishes an outcome-driven approach that tracks performance and will hold states and metropolitan planning organizations accountable for improving the conditions and performance of their transportation needs, which ASCE has supported in the past.

Source

Hmmm…D.C. needs money to fix America’s failing infrastructure. And so lawmakers are turning the screws on its delinquent tax cows.

It is just us…or isn’t this a lot like debtors’ prison?

It’s as if all the country is one big jail. Those who owe the taxman won’t be allowed to leave. Right now, the coming legislation — and we see no reason this one won’t become law — only targets those who owe fairly large amounts. Over $50,000.

So to start, they’re restricting travel on the easy targets, the people that most honest and dutiful citizens can agree are not doing their “fair share.”

Before you know it, however, those travel restrictions will start to expand. It’s almost written in the stars. This is the sort of behavior a declining, bankrupt empire has to engage in as it fights the dying of its light.

This current legislation would also reduce the risk of tax dodgers dodging their burden forever by skipping town. And country. But don’t be too surprised if new reasons for being trapped in the U.S. start to become law.

Expect currency controls to ramp up, too. It won’t just be tax delinquents who won’t be allowed to leave U.S. borders. Funds may find themselves as forbidden to see other lands as tax debtors. Any money you haven’t already squirrelled away in a foreign account may also find itself tied inescapably to the Homeland.

Best find an escape route while you still have the chance. One of our favorite routes is spelled out in a report we send every new subscriber to Apogee Advisory. It’s called “How to Move Your Money Safely out of Harm’s Way”. This report describes “offshore gold storage programs” that are completely legal. And they’re truly accessible. No matter how much or how little wealth you have to stash away, this is definitely something you want to explore.

When we read the news about restrictions on tax debtors our own palms began to sweat.

We’d just done our taxes and found that we will owe our stern Uncle more than we can pay on the date due. Our own fault for spending the money we’d earned as an independent contractor as if it were our own. We will behave better next time.

Uncle Sam and his leg-breaking IRS men know we’re good for it and will surely give us some time to pay. We had no worry about that.

But when we saw the headline about travel restrictions for those with tax debt, we blanched. Then we read further and realized it was only for those who owed over $50,000. Then we remembered…we don’t even have a U.S. passport!

We’ve been in the U.S. almost as long as we’ve drawn breath. But we weren’t born here. So our citizenship and our passport are both from our tiny country of origin.

Often we’ve been questioned about our lack of U.S. citizenship after spending over 95% of our life within U.S. borders. And just as often we’re urged to rectify the situation.

But we can’t help but feel that we’ve been right about putting off attainment of our U.S. citizenship. We always figured that when the time came, the U.S. would just revoke the U.S. citizenship of anyone it didn’t like. Just when we thought we’d be waiting forever, along came Charles Dent (R-PA) and Joe “Where’s My New Death Star?” Lieberman (I-CT)…

…and their Enemy Expatriation Act. We stopped looking quite so paranoid.

Mind you, this bill isn’t anywhere near being a law yet. And it only targets those who take up arms against U.S. citizens in the service of other armies…but like all government actions, this act is the proverbial camel nose under the tent. It’s the seemingly necessary but restricted draconian measure that will be expanded and wielded in creative ways down the road.

Better, we always thought, to hold onto some other citizenship and some other passport. We suspected it would become all the rage among the smart money one day.

And so it has! From the New York Times Economix blog:

The number of (wealthier) Americans who are renouncing their citizenship has been climbing in recent quarters.

Take a look at the chart below, courtesy of Andrew Mitchel, an international tax attorney who has been manually tallying the lists of expatriates (defined for this purpose as people renouncing their American citizenship or terminating their long-term United States residency) published in the Federal Register. The chart is taken from his blog:

The figures appear to refer primarily to those Americans wealthy enough to warrant notifying the Internal Revenue Service of their change of status, rather than all expatriates. A total of 499 Americans fell into this expatriate category during the first quarter of this year. The number during the first quarter in each of the previous seven years averaged 115.

Now I’m sure a few readers are going to blame “ObamaCare” for this burst of expatriation. Mr. Mitchel, however, suggests that two technical tax-related changes inspired more people to give up their citizenship.

He writes in an e-mail:

First, in 2008 the expatriation rules were changed. There is no longer the 10 year U.S. tax return filing requirement. Although there is now a mark-to-market regime triggering gains upon expatriation, up to $636,000 of gain can generally be excluded for individuals expatriating in 2011 (the amount is annually adjusted for inflation). Further, non-U.S. citizen, nonresidents can now annually visit the U.S. for 120 or more days without becoming taxed as U.S. residents (under the pre-2008 rules, visits to the U.S. for more than 30 days during any of the 10 years following expatriation caused the individual to be treated as a U.S. resident for that year).

With the $636,000 exclusion from the mark-to-market gain, many individuals can expatriate without paying any U.S. tax. It is important to note, however, that some individuals, especially those with assets in foreign pension plans, may unexpectedly pay more tax than they realize. The circumstances of each individual considering expatriation must be closely analyzed to determine the amount of U.S. tax that will be due upon expatriation.

The second reason for the increase in expatriations, I believe, is the recent publicity regarding the penalties and voluntary disclosures for failing to report offshore bank and other financial accounts. The U.S. tax rules for U.S. citizens living overseas can be quite complex. The increase in awareness of the penalties has caused many individuals with dual citizenship to conclude that their U.S. citizenship is not worth the stress and hassle of the U.S. tax filing rules. The U.S. is almost the only country in the world that requires its citizens that live permanently in another country to continue to file tax returns in the country of citizenship. Combine the U.S. tax return filing complexities with the potentially bankrupting penalties for failing to report certain items, and many individuals conclude that their lives would improve by shedding their U.S. citizenship.

Source

According to Mr. Mitchel, a lot of folks are effectively throwing their hands up in the air because of the complexity — and “potentially bankrupting penalties” — of U.S. tax law and saying “Screw it…I’m outta here!”

Expatriation and renunciation of citizenship are both sorely tempting, good patron. What liberty-loving person wouldn’t want to toss their slave papers at their federal masters and tell them to go pound sand…And to keep their grubby claws off their money?

But it is not for everyone. Notice that your non-U.S. citizen editor hasn’t permanently cut ties with the U.S. so he can continue to live here indefinitely.

This is despite the fact that he already has citizenship elsewhere. And a career (of sorts) that can generate income anywhere on the globe that there is a reliable Internet connection.

Even if you are like us and want to stay in your U.S. home as long as it’s not suicidal, you should have some insurance…and maybe even a “bug out” plan or two…

We’ve got foreign citizenship and a non-U.S. passport. We’ve also got a couple safehouses in the Caribbean and Latin America where we hope to be able to hide from drone attacks.

Getting a second passport would not be a bad idea for you at all. And we know it’s a stretch — and a bit of a hassle — but you may want to start looking into other possible citizenships. We here the Bahamas and the Dominican Republic are good places to look. Or maybe you could claim a place like Ireland based on your recent Irish citizen forebears.

Consider these things what they really are. Not extreme or paranoid actions. But smart, forward-looking geopolitical insurance during volatile times. It’s like stashing a parachute in your carry-on luggage if you know the plane you’ll be flying hasn’t been serviced in a decade or two.

An equally smart but far easier step is getting your money safely out of harm’s way. Both you and your money will likely be facing increasing restrictions on your movement. Best to get things moving right now.

You don’t have to up and leave the country quite yet (Though who could blame you for wanting to?). You don’t even have to get a second passport yet. But learning more about getting your money out of harm’s way is something you could do right now. Before you even get up from your computer screen. Just click here now to get started.

Regards,

Gary Gibson

U.S. to Become Tax Debtors’ Prison was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

“Joe Lieberman is not a Democrat. He is an independent, as he resigned from the Democratic Party. Don’t you ever check things out before stating them as facts?

“Wish you the best with your paranoia,”

“– Steve K”

This comes from one of our most-faithful, unswerving, persistent critics. A man who has dutifully read our material for years so he can tell us why we’re wrong about the economy, politics, art, science and love.

Our copy editing department called us on this, too. In our rush yesterday, we copied and pasted the pre-edited version of Jeffrey’s article…instead of the one that the copy editors had edited. So our apologies for that.

But if we were to be honest with you (and we always are), we would have to admit that while it may be technically inaccurate to count Lieberman among the Democrats, it is a matter of semantics that doesn’t amount to a hill of beans.

These political labels can be distracting. Personally, we don’t care what Lieberman calls himself. We care about what he does. The man is as well intentioned as he is clueless…which makes him especially dangerous. He bends most of his energy to coming up with more powers for the state under acts with comically Orwellian names.

Note that the reader who pointed out our error also wished us well with our paranoia. We suppose he means our worry about things like Lieberman’s insistence that the state should strip Americans of citizenship based on no evidence, should the state feel it necessary.

We are amazed at how the state grows from an annoying goblin into a sulphur-spitting archdemon…how it can start biting people in half (figuratively, of course) and spear infants on its trident, while its victims shrug their shoulders and mutter, “I really don’t see that there’s any cause for alarm.”

But that’s not what we’re here to talk about today. As disagreeable as it may be, we turn our attention to yet another political figure…

Mitt Romney recently released his tax information for the past couple of years. Wouldn’t you know it, he managed to lower his effective tax rate to 13.9%…by giving away millions to things he cares about.

That’s not what the headlines blare, however. What you see is that this man who earned millions of dollars per year paid far, far less a percentage of that income to the feds than middle-class suckers.

This is supposed to rouse the rabble. That’s certainly what the impressively eyebrowed Sage of Omaha, Warren Buffett, meant to do when he compared his tax payments with those of his secretary.

During our regular morning confab, LFB executive editor Jeffrey Tucker said of this, “The only really fair tax would be a fixed-dollar head tax. Like $1,000 per year. Or whatever.”

We had to push our seat back away from the table to give ourselves the room to laugh uproariously. A fixed-dollar head tax? Ha!

Sure, it makes perfect sense. But this is modern America. We are all progressives now, comrade. From each according to his ability. To each according to his need.

A man who makes more can afford to pay more. And he must. At least until he makes enough to employ some impressive loopholes in the purposely convoluted tax code.

“Of course,” Jeffrey pointed out concerning the progressive tax payment model, “if private enterprise did this, we would all see this as unfair exploitation.”

And of course, Jeffrey is right. Could you imagine if you had to pay more for your gas, meat and bread because you earned more?

Now, individual merchants can discharge their goods as they see fit, giving discounts to whomever they wish based on whatever criteria they wish: height, age, looks, degree of familiar relation…

A butcher may give his elderly widow neighbor endless credit that he never means to make her pay (like the Fed does for the U.S. government). Or that same butcher may give the shapely, unattached 20-something with the playful smile an extra cut of meat at no charge.

But those are the minute decisions of the free market based on factors that only the individual players know and can adjust to. Government with its heavy hand — and with eyes that can’t see all the details — just across the board charges more for its “services” based on the “customers’” ability to pay. And it’s not like you can take your business elsewhere if you don’t agree…

The individual seller’s rationale for any progression in pricing will reflect his intimate knowledge of conditions surrounding the sale and the marginal benefit to him of the price variance. And it’s important to note that the market itself will bear only so much progressive pricing. Most folks won’t mind that the butcher gives the widow a free ride…or even that he gives the prettiest girls a bit more meat…

But should that butcher charge the higher earners more, he would quickly lose the business of those higher earners. That’s the market at work. Buyers and sellers determining what’s fair. This kind of market democracy we like! (It’s the political kind that leaves us cold.)

The government’s pricing rationale (taxes are the price we pay for government…which is not synonymous with civilization), however, is not quite so sound…

The government says that it should take more from the rich than the poor on grounds that the marginal dollar is actually worth less to the higher earner than it is to the lower earner. But how can we know this for sure? Value is subjective, and you can’t compare the worth of money between any two people.

Further, one could argue with more substance that there is even less reason to take money from the wealthy since that money is likely to be invested, saved or donated. Taxing the rich thereby taxes society more directly than when you tax poor people who mostly consume all they earn.

So back to Jeffrey’s fixed tax on each person…

“$1,000 per person per year would yield,” he notes, “about $300 billion all together. That was the cost of government during the Ford administration. Was government too small then?”

“Not sure,” we replied, “We’d say it was already too big by the Washington administration. And that the wooden-tooth bastard ought to have been hanged for treason after the Whiskey Rebellion…

“But I’m assuming that children would be subject to the tax, too,” we continued, “and that either parent would have to pay for them…?”

“Precisely so, but not that it matters that much. Say it’s only on everybody over 18 or some arbitrary age at which the state allows people to sell their skills in the marketplace. There were only about 75 million persons under 18 in the U.S. in 2011. So you still have very nearly $300 billion in taxes collected with just $1,000 per eligible taxee.”

“Hell, even panhandlers can come up with that,” we said. “Or would they even have to pay? They certainly don’t file income tax forms now…”

“Fine, reduce it to official households. There are over 130 million of those. So $130 billion in tax revenue. Which puts us squarely in the middle of LBJ’s crazed plan to bankrupt the country with guns and butter: 1966.

“One thing I want to make clear,” Jeffrey said. “Say you have a tax of 10%. Flat, right?

“No. 10% of $1 million is far more — 10 times more — than 10% of $100,000. High-income earners are punished far more. That’s why a head tax — as strange as it may seem to some — is the only flat tax.”

And we’re not really offering solutions. Because our suggestions amount to theorizing for now. We do, however, try to make sense of the degrees of our disgust.

We never saw a tax we actually liked. But there are taxes that make us want not quite want to revolt. If we had to pay some centralized warmongering nannies (and we do), we could live with a fixed tax like the one described above.

We hate when the government tries to incentivize anything, but a truly flat, fixed tax would indeed incentivize people to try to earn more. Earning more would reduce the impact of a fixed tax as a percentage of their incomes.

Of course, this won’t fly in modern America. The rich can pay more for the government we all get. So pay more they shall!

Local and even state taxes are another good example of taxes we can’t hate as much as the progressively looted chunk we send off to the feds every quarter. With more local taxes, we are clearly getting something of use for our money after all.

We can argue till our brown face turns blue about how much more efficiently the market would provide every single service the government does (though the shape of these things would likely be quite different)…

But concerning local government services — and the money extracted to pay for them — at least we can overwhelmingly agree with what our tax money pays for. This includes things like the sidewalks and roads we use and the police and fire protection.

Federal taxes are quite a different beast, however. The bullets used to tear into foreign brown skins…the guns used to fire them…the food and clothing of the soldiers holding the guns…the bombs dropped on insurgents and collateral wedding party attendees and teenage goatherds.

Which brings us to a letter we received today…

“Hi Jeffrey, Gary et al.,

“As always, I love your articles and critiques of how the America we love is slowly eroding away.

“I have a query, but first a little background…

“I am an Irish-American citizen living and working in Ireland since 2006…so I have seen this Irish economy collapse in sync with the economy I left in Michigan back in that hazy summer…

“To cut to the chase, my wife and I were blessed with our first child, born December 2011…

“Now she is eligible for Irish citizenship and she has her birth certificate to prove this. BUT she may also obtain her U.S. citizenship, care of me..

“My query?

“Given the near- and long-term future of the U.S….endless wars, increased poverty, insurmountable debts, increased taxes (and filing taxes even if she never lives/works in the U.S.) destruction of the middle class and the $$…etc.

“Why should my daughter become an American citizen?

“What are the reasons, given the glum future of the USA, to become one of us?

“Do the same reasons, land of the free and the brave, still hold through, or should she just stay Irish till her dying days?

“Would love to get your and your readers’ views on this..

“Cheers,

“Tim”

We would love to get views from the Whiskey patrons as well! Good patrons, please send those views here. ggibsonagora@gmail.com

And a hearty congratulations on the arrival of your daughter, Tim! We’ll buy you a shot should the chance present itself.

As for her citizenship…your Whiskey editor is torn on the subject. And far from qualified to offer any real advice. Especially in a legally binding sense. But we can share our biased, but considered opinion, for this is a matter we struggle with all the time.

We aren’t even U.S. citizens. Merely a legal resident who has lived here since he was a toddler. Many of the people we respect have been cutting their ties to the U.S., either just leaving physically…or actually giving up the legal right to live and work on these shores indefinitely.

Our own situation is different. Our own native land is small, poor and given to collectivist politics. We thus effectively possess refugee status. Our options for a long-term home should we fling our green card at a border guard and spit, “Here! Take it, for I no longer want any part of your warmongering, police-nanny state!”…well, those options are limited and poor.

We wouldn’t go back to the Caribbean. We suppose we could bounce around South America as long as someone paid us to write…and we could afford to leave various countries every few months to satisfy the visa requirements.

We are not experts (and we suggest you talk to one about this)…and we hesitate to be hypocrites. We do not even have U.S. citizenship, yet we remain in the U.S. Our first inclination is to tell you to spare your daughter of the burden (for the benefit-to-cost ratio of U.S. citizenship may continue to mount for the worse as she approaches adulthood).

But note that despite it all, we remain in the U.S. unwilling to break the inertia of our own living habits. We cast about the nation in search of a comfortable, quiet corner to call home. But we’re not quite ready to leave just yet…though each outrage brings us closer to the limits of our tolerance…

There is a good case for you to keep your daughter from ever becoming a tax cow for the U.S. Again, let’s put this to our Whiskey Shooters and see what we can come up with. We’ll probably run your responses this weekend. So get cracking: ggibsonagora@gmail.com.

In the meantime, let us consider this letter, which we received just minutes later…

“Mr. Gibson.

“It appears that you use the words citizen and national synonymously. They are not.

“The 14th Amendment (proposed by a Congress that lacked a quorum) was a solution to the 1850 Dred Scott decision, wherein the Supreme Court ruled that negros of African descent could not be citizens. The amendment granted a form of citizenship to those who were born in the United States and completely subject to its political (lawmaking) power. (It was a subsequent decision in which the court ruled that the subjection of the 14th Amendment was complete subjection in the feudal sense.)

“Before the 14th Amendment, citizens of the states established the qualifications for citizenship within their respective states, not the federal government. Citizens of the United States were so because of their immediate citizenship in the political body known as a state of the union. The sates of the union created the United States, so these sovereigns could not be completely subject to the lawmaking power of the United States in the feudal sense. Under certain circumstances, they could be subject to its civil, but not its political, jurisdiction. The United States was not their sovereign liege lord; sovereignty was vested in them, not in the government, state or national.

“As the court ruled in the Slaughter-House cases, the 14th Amendment gave nothing to state’s citizens. What it did do, and what you evidently do not see, is that the 14th Amendment created a new class of citizenship: citizen-serf, a human resource, part of the capital of the federal government, PROPERTY of the United States, aka, U.S. person.

“National is the word used by government today to describe what was formerly known as a state citizen, the person in whom the sovereignty is vested. He may or may or may not elect to be treated as though he is the property of the United States. According to the 13th Amendment, he has a choice.”

Wait a minute. Are you trying to tell us that the U.S. government, like every government everywhere else all throughout history, see itself in a feudal relationship with its citizens? That to the political class, we are not “purchasers of order and civilization,” but instead nothing more than cows to be milked for tax money?

OK, yeah, we see where you’re coming from.

Regards,

Gary Gibson

Hooray for the Rich Who Don’t Pay Taxes was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

He’s ponied up $49,000 to help pay down the national debt. He’s simultaneously matching voluntary contributions already made by Rep. Scott Rigell of Virginia.

Yes, $49,000 to Mr. Buffett is the equivalent of 49 pennies to the rest of us (Mr. Buffett is a billionaire and most Americans are thousand-aires or hundred-aires at best, so this is actually pretty accurate).

Buffett had issued a challenge in Time Magazine recently in which he promised to match voluntary contributions for reduction of national debt made by all Republican members of Congress an impressive three for one.

The image below is of the actual letter from Warren to Scott.

Buffet claims that rich folks and politicians competing to see who could donate the most to the feds is a form of competition the American people would applaud?

A competition to see who can throw the most of their money down the grand canyon of federal government deficits? That’s worse than watching reality tv and finding out which sap can make the biggest ass of himself in front of millions of viewers.

And what sort of example is this setting? What is the message? That if any of us have any extra cash lying around you ought to send it to the government? The same government which already takes around 40% of your nominal income off the top? We suppose if wrapping foreign aggression and subjugation to a police state in patriotism works, then making this sort of inanity seem patriotic will work, too.

We know there are those who defend taxes no matter what. We hear these people on the radio, see them on political talk shows and read their words in print (mostly in the New York Times). A few of them regularly read this letter and send us notes to stop whining about paying our “fair share”.

Of course our own decidedly Austrian stance feeds our love or the agora, the market place, as the best use of all funds, including those funds we can no longer use because the government took them under pain of imprisonment and death…

We maintain in our free market zeal that all needs would be met and all goods and services improved upon via the free market far, far better than they could by taxation and central planning.

(We also call upon history to lighten our burden of proof. The more centralized the economy, the poorer and less sustainable it has been. The freest economy the world had ever seen has become poorer and poorer the more centralized it’s become.)

Many would even agree. To a point. Except for things like infrastructure, national defense, public safety and security. And education. And medical services. And retirement income.

Ah, see. That list can keep growing. But let’s pretend that most of us can agree on just infrastructure and national defense (the things that even many libertarians would let the feds handle). Do we really buy that the federal government needs nearly half of most of our incomes in order to maintain infrastructure and an army?

Most of us normally don’t question how much of our money disappears down the federal maw. Because it generally does no good. We accept that what we supposedly get in return – highways and not going to jail – makes those taxes money well stolen.

But what happens when the cry comes to give even more of our earnings voluntarily? Might not a few us wonder why the enormous chunk we’ve already been forced to part with proved to be not enough? Just what is happening to all that money? Why are the central government’s debt equal to the amount of money the private sector upon which it relies generates every year…while that private sector has already been handing over nearly half its income to the selfsame central government?

We’d warn Mr. Buffett that therein lies the danger in encouraging “voluntary” contributions. People might be willing to let the government take as much as the government decrees it legally can…

They may be willing to lie to themselves about how that legally stolen money is being used…because if they don’t pay it, they will surely lose their property and freedom. So they wrap themselves in a comfortable fable in order to blunt the psychological trauma. In this respect they are like the prison punk who after each episode of forced buggery tells himself that his rapist cellmate really actually loves him.

But suggest that what the government needs is the voluntary offering of as much more as possible…and then people might start wondering what they’re getting for their money. After all, in every other area of their lives when they voluntarily hand over their money, they get something in return, something that they value more than the money they just handed over.

It could be a cup of coffee, a sandwich, the use of a space for living or to conduct business, a car, a piano, or a laptop, repair of an existing item or building of a new one, performance of a song, and so on. But there was something that the money-giver wanted more than a given amount of money he had on hand. Thus the voluntary exchange was made.

Heck, it could even be an act of charity like the one Warren is trying to encourage among rich people and Republican Congresspersons. But even then the voluntary contributor commits a charitable act, he gets something he values more highly than the money he parts with: the sense of having helped someone far less fortunate than himself. It’s the same reason he would give to a relative or other loved one in need. And – this is very important — we assumed that he’d want the money to be used responsibly, and not enable the recipient to remain eternally dependent.

Note that Mr. Buffett has sheltered the bulk of his billions in a charitable foundation, sheltered from federal tax. Even Mr. Buffett feels that this sort of charity is a better way to give the vast majority of his money away. Else he would have taken those billions out of the foundation and handed it over to the Treasury. He could have added this to any amount he’d match from Republicans who met his challenge.

But it’s not like the federal government is some hard luck case who deserves our sympathy and help. If it were a person, the federal government would be the guy in a natty suit, who comes to your store every few weeks to collect “protection” money from you. He would then use that protection money to keep his favorite prostitutes well fed and happy and to make turf war on the other guys running protection rackets.

Further, this shameless gangster would also be hopelessly indebted because of an impressive gambling habit! Never mind that the protection racket he’s running is a scam at gunpoint…He’s simply a horrible credit risk!

So here is the message:

“Help our government stop having to be in constant debt for its worldwide military presence (among other outright destructive redistributions). Give them more than they already demand from you.”

That’s right, citizen. Forget buying patriotic war bonds. In times like these, lending the government your savings isn’t enough. You ought to give the money and never ask for it back. We’ll start by asking the rich.

Granted, Mr. Buffett is only asking this sacrifice of those who actually have significant amounts of money left to spare. We suppose it’s assumed that “the rich” have tons of money that they’re not putting to good use, even after gold-plating their billion-dollar mansions. So why not throw it at the debts the government has run up?

Further he’s issued his challenge to Congressional politicians, people who draw paychecks from the government credit card.

But there are plenty of “progressive” thinking people who applaud the example Mr. Buffett is supposedly setting. Entire Web sites are devoted to garnering support for a Buffett-inspired increase in taxes on “the wealthy”.

We’d recommend all income earners who aren’t already at Mr. Buffett’s level of wealth to be very wary of this. The federal income tax itself started as a tiny burden on only the richest in the U.S. Within a century it grew to consume nearly half the income of the middle class as well. The truly wealthy, meanwhile, managed to find ways to shelter most of their money from the income tax after setting the initial example and bearing the initial burden.

Mr. Buffett even uses this point to make his own…that the situation must be re-addressed so that they wealthy are once again paying their “fair share”. We note with dismay that the first attempt to soak the rich via the IRS resulted, over time, in those of us making anything above subsistence wages having to fork over half our earnings to the feds.

Not that we think anything particularly sinister is at work here. Though we do find it less than coincidental that this $49,000 show of support comes the day after a popular uprising against wholesale federal-corporate control of the Internet.

Maybe Mr. Buffett really is a paid shill, but we suspect that he’s more likely simply an enthusiastic one. He believes. For all his financial and investing acumen, Mr. Buffett rests his economic understanding on some faulty foundations. Like we said, he believes. He honestly believes that money generated privately ought to be then funneled through the central planners to find its best use.

Those who get excited about Mr. Buffett’s suggestions and find inspiration in his example also imagine that the federal government would do a better job with the money…that the federal debt as it stands is just a matter of bad luck and not the inevitable result of economic law (As sure as gravity causes objects with mass to be attracted to each other, money stolen by elected officials at gunpoint will allocate resources worse than private interests working under pressure of profit and loss).

You can’t really argue with someone who would say these things. Well, you could, but you’d be wasting your time and theirs. It’s like the old joke. Don’t try to teach a pig to sing. It wastes your time and annoys the pig.

It’s not a matter of facts for the facts support liberty and free markets if you want to abolish poverty and raise standards of living across the world. It’s a matter of philosophy. Just as it is hard to argue about the nuances of evolutionary biology to a fundamentalist holding his holy text, it is equally hard to talk to a true believer in central planning about why the nuances of human freedom and free markets to improve everything…and why they shouldn’t so enthusiastically hand the central planners their money.

Regards,

Gary Gibson

Buffett Puts His Loose Change Where His Government-Kissing Mouth Is was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

If you are fresh off the boat and have only recently stepped foot onto the stable intellectual territory of voluntaryism, you might be anxious as hell to learn that you are a milk-cow with giant, pink teats.  I know I was.  If you aren’t anxious, then puff, puff, pass please.  I became a nervous wreck when I disembarked the badly listing Ship of Statism for the first time.  I saw that the financial storm was starting to ravage the ship back in ’08, and that rattled my worldview enough to where I set out looking for a life-raft of answers.  If you would have told me that I would eventually wind up on Anarchy Isle, I would have laughed at you, and then probably called the cops, as were my evil, statist ways at the time.  I’m sure they could have found you guilty of something, especially if you just took my advice on the puffing and passing.

When I first learned about self-ownership, individual sovereignty, the non-aggression principle, the subjective theory of value, and especially where those flimsy green pieces of paper with crusty old guys’ pictures on them come from, for the first time in my life, I saw “the farm” as Stefan Molyneaux says.  Everywhere I looked I found coercion, intimidation, and confiscation.  I soon became a worthless employee as it made me feel guilty to work for a business that only survived because the car companies and banks got bailed out.  I began thinking it was my moral duty to be unproductive and do everything I could to stall the “machine.”

I had many dreams at the time, some of which I thought could really make me a lot of money.  My dreams have always focused on some economic niche that seemed obvious, but unexploited.  Most ideas required too much capital as it were and capital was something of which I have never had much.  But when I learned that I was a piece of human livestock, meant to support people in power, the thought of making millions and handing over a large chunk of it galled me.  Loopholes aside, a corporate tax rate of thirty five percent on a million bucks is three hundred fifty thousand Fed notes.  Why in the world would I have to give those thugs that much money, for no good reason at all?

When I was a statist, I was happy to fork over my tax dollars because I thought that was the price of “society.”  I felt like I was doing my part to keep things humming along. Being a part of the most kick-ass nation on the planet meant I was morally obliged to contribute for all those awesome aircraft carriers and stealth bombers.  Man, I felt like I was somebody special.

But when I realized that all of those aircraft carriers and stealth bombers were pissing off the other six billion people, and that some of them were motivated enough to blow themselves up just to kill a few people that lived in the same pasture as me, I really saw my “contribution” in a whole new light.  I felt dirty and rotten and I didn’t want to do “my part” anymore for the most ass-kicking nation on the planet.

And that is what this post is about: guilt.

These idiots who fancy themselves to be the high potentates of the Bald Eagle Tribe depend on your continued guilt to keep things humming along.  You see, all of their schemes depend on you forking over your hard won effort.  So naturally, when I realized that these people were sociopaths, the last thing I wanted to do was hand them any more of my flesh.  They want you to feel guilty for not paying your “fair share.”

I eventually turned this into a kind of virtue where I imagined that if I stopped paying my debt, got on welfare, engineered unemployment, or even went to jail, I could help hasten the demise of this beast by starving it of what it needs.  Every time I saw a patrol car sitting sinisterly behind the bushes awaiting its next victim, I would get angry, and would spend the next twenty minutes of my drive engaged in a verbal shouting match with no one at all about how evil that cop was for preying upon people who hadn’t harmed anyone.  I can only imagine how funny it must have been to the people in the other lane.  Or maybe they thought I was completely nuts.  My guilty feelings about paying these vampires overwhelmed me and I was perpetually anxious.  It didn’t do any favors to my health. That’s for sure.

But, as is the case with life, I was wrong to feel guilty.  The truth is, I am a captive on their little game preserve and they are gonna get their meat and trophy antlers one way or the other.  I’m gonna lose no matter what I do.  Either I lose a portion of the wealth I create to the strong-box of those fiends, or I lose the opportunity to take care of myself and everyone else.  Everything has an opportunity cost, even inaction.

As Viktor Frankl, a nazi death camp surivor said, “when we are no longer able to change a situation – we are challenged to change ourselves.”

We can’t stop the state from robbing us blind, and throwing us under the tank tracks when it no longer needs us, but we can choose how we are going to live, faced with that fact.  Any work I perform will benefit me much more than some bureaucrat in an office.  For each round of ammo, medicare pill, or ear of subsidized corn my stolen dollars fund, I gain much more opportunity from the remainder to get out and tell people the truth.  I could start a company and make a film about liberty, or buy up some land for a liberty settlement, or even create some television ads.  Those outcomes are much more worthwhile than me digging around at home in the dirt trying to scratch out a life just to avoid paying a tax. If you want to convince your soft statist neighbors and friends of the righteousness of voluntaryism, do you think they are more likely to listen to you if you are wealthy, or destitute?

So don’t sacrifice yourself, not even to starve the state. Because any money the state takes from us at this point is just a speck of dust compared to the universe of debt this monster has created. The paltry amount of wealth you’ll hand over in taxes will only delay the death of the state for a fraction of a second, so don’t feel guilty about making money to live and prosper with. Guilt allows them to control how you react.  Don’t let them. It will benefit you, me, and the liberty movement much more to earn, save, and prepare for when the old dragon finally breaths its last, puny puff of smoke.

So, get out there and make some damn money for yourself!  Once you start earning you will start learning about how to keep it out of their grubby, little hands.

Regards,

Seth King

Don’t Worry About Paying Taxes was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

The well-wishing phone calls started early. I missed the first — from my younger sister, who is always the first to call on my birthday — and made a note to call her back later. I was awake enough to take the second call from my dad.

“I realized this morning that if it’s been 35 years since you were born,” he said, “then I must be a little older than 35. I’m really just calling to remind you that you’re getting old too. I need the company.”

Thirty-five is one of those milestone birthdays…the neat halfway point between the big three-oh and the bigger four-oh. In my case I got to look around and panic: I hadn’t gotten started on all those grown-up things you were supposed to start by 30 and have nearly completed by 40.

Grown-ups are usually on their second or third spawn by this age. They have cars and mortgages. I’d only recently got as far as making my own meals.

But at least I’d gotten exposed to enough good reading to understand that no one owed me anything, that I had to earn everything that I wanted. I feel more grown-up than most when it comes to lacking a sense of entitlement.

Not only am I not entitled to goods and services; I also have to earn the goodwill of those whose help I’d count on in case disaster struck and I hadn’t prepared sufficiently. I had to be a good son and a good brother…a good friend and a good neighbor.

Even if I had no loving relatives or concerned friends to rely on, however, I still wouldn’t demand the tax-born kindness of strangers. Any charity I would receive would have to be voluntarily given. And there should be enough shame involved to keep me from growing to rely on it forever.

This is not a popular sentiment these days. Every effort is made by the intelligentsia and the media to convince people of the opposite…

We are all children, they tell us. We need to be taken care of. And we are all owed something by someone else. That’s what governments are really for. They guide. They prohibit. They shuffle earned income to grasping hands. And they’re proud of it…

Paul Krugman, cheerleader of the state writes:

“One side of American politics considers the modern welfare state — a private-enterprise economy, but one in which society’s winners are taxed to pay for a social safety net — morally superior to the capitalism red in tooth and claw we had before the New Deal. It’s only right, this side believes, for the affluent to help the less fortunate.

“The other side believes that people have a right to keep what they earn, and that taxing them to support others, no matter how needy, amounts to theft. That’s what lies behind the modern right’s fondness for violent rhetoric: many activists on the right really do see taxes and regulation as tyrannical impositions on their liberty.

“There’s no middle ground between these views.”

We are dealing with absolutes. Immovable objects. And Mr. Krugman is unquestionably on the side of evil.

Theft is wrong. No matter how you try to sanctify it, theft is a sin. Done as pervasively and systematically as it is under the state, it is slavery on a sliding scale. When some of the fruits of your labor are forcibly taken away, what else do you call it?

People like Mr. Krugman like to pretend that as long as it’s not all of the fruits of your labor being stolen…as long as it’s some “reasonable” part decided upon by the those elected to office by those who covet…then it’s just fine.

Democracy is, indeed, the worst kind of government. Unlike totalitarian communism — in which the state doesn’t pretend not to own everyone and their labor — democracy allows its duped cattle to think that they’re free.

A man who thinks he’s free will work harder than a man who knows he is a slave. That’s why the democratic “capitalism” (it’s been socialist since the Social Security Act and the income tax) of North America managed to outlast the outright slavery of the Soviet Union. The duped slaves here outproduced the very aware slaves over there.

But long-term quasi-slavery doesn’t work either. Transferring stolen lucre creates distortions that ultimately bring a civilization down. It creates disincentives among the producers while breeding helplessness among the net receivers. Democracy eventually taxes the spirit that creates wealth to the point of death.

More than my advancing age, what makes me so very tired is that great minds have spent lifetimes writing, persuading, and proving that transfer schemes are a horrible idea…yet it’s the lies and ignorance that thrive.

Von Mises…Rothbard…Hayek. Almost nobody knows who they are. The majority thinks ideas about honest money, honest toil, and refrain from theft and force are all quaint, antiquated notions.

This majority may not have heard of Keynes…they may not have actually read Hobbes…but they believe what those men had to say: We are murderous brutes who would be poor, short-lived and utterly lost…unless we elect some of our most ambitious brutes and give them power over our lives.

It’s not just the immorality and destruction of violence-backed wealth transfers, however…

It’s the notions about human nature and the necessity of governments. It’s how people refuse to grow up, how they want to entrust responsibilities to strong and wise leaders, who ultimately come from the most pandering and avaricious among us.

The majority thinks that without government, we’d tear each out each other’s throats. No food would be grown and nothing would get done by the Invisible Hand. You need a very visible hand holding a weapon and directing the flow of things.

“Only government can decide what money is…”

“Only government can give us roads and schools…”

“Only government can make us deal fairly with each other…”

Like an abusive parent or husband, government and its enablers sap our self-esteem and foster our dependence.

But it needn’t be so. Almost as if by magic, liberty works better. Government transfers aren’t just wrong; they’re far less efficient at accomplishing the good they are supposed to do. Immoral…and far less efficient to boot! In fact, given enough time, they turn to harm.

Mr. Krugman promises:

“In future columns, I will no doubt spend a lot of time pointing out the hypocrisy and logical fallacies of the ‘I earned it and I have the right to keep it’ crowd.”

We’ll be here too, Paul.

And we’ll keep telling anyone who’ll listen about how dangerous your earnest misconceptions and your proposed meddling are.

Regards,
Gary Gibson
Managing Editor, Whiskey & Gunpowder

January 19, 2011

Why Theft Is Never OK, Even When the Government Does It was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

To this editor’s mind, the only way to avoid being complicit in the crimes the victorious party will inevitably commit is to wash your hands of the whole affair. Vote with your feet, in other words…by walking away from the ballot box and tending instead, as Voltaire might say, to your own garden. That way the next time the Republocrats decide to dip into your kiddies’ savings account to prop up this or that corrupt financial institution or to start a greasy war to “win hearts and minds” in some far off land, at least you’ll know they didn’t do it with your implicit backing.

As Doug Casey pointed out recently, “I think it’s like they said during the war with Viet Nam: suppose they had a war, and nobody came? I also like to say: suppose they levied a tax, and nobody paid? And at this time of year: suppose they gave an election, and nobody voted?

“The only way to truly de-legitimize unethical rulers,” the International Man went on to say, “is by not voting. When tin-plated dictators around the world have their rigged elections, and people stay home in droves, even today’s ‘we love governments of all sorts’ international community won’t recognize the results of the election.”

Those looking to affect real change in the system, therefore, might wish to start by refusing to support the existing one. Just a thought…

But by wading into politics we’ve digressed from our non-stated mandate; strayed from our usual beat.

Wait! No we haven’t!

More and more these days do the spheres of politics and economics overlap. Both can and do seriously impact your money. And that’s what these pages are about: your money and, at least of equal importance, your money as a means to achieve your personal freedom.

Welfare/warfare states aren’t cheap to run…There are bombs to make, bases to build and banks to bail out. Then think of all the people the government pays not to work…the 42 million mouths- worth of food stamps…the money to bribe people to trade in their old cars for new ones…and, of course, the cash to hand directly to the auto companies themselves!

This is by no means an exhaustive list, of course. A “good” politician is never short of something to sell. A new scheme, scam or the like. Let this racket run long enough and pretty soon plasma television ownership becomes a “basic human right” and the overreaching arm of the state takes to telling you what you can and can’t watch on the thing.

Society is full of busybody do-gooders and navel-gazing morons who are happily eating up a larger and larger share of the nation’s once- productive capital. And, as this group grows and grows, they eventually shift from a disheartened minority down on their luck to taking full control of Congress. That’s when the taxpayer checkbooks really come out. Initiatives that begin as “state services” invariably end up making us servants to the state. And, in the end, voters only have themselves to blame.

Regards.
Joel Bowman
Whiskey & Gunpowder

November 3, 2010

The Only Good Vote Is a Non-Vote was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

The commission added the current budget trend is a disaster “that will destroy the country from within” unless checked by tough action in Washington. The tough action required is spending cuts in programs, including the so-called nondiscretionary, eating most of the federal revenues.

Federal tax receipts for 2009 totaled $2.1 trillion. The largest items in the federal budget were Social Security ($710 billion), national defense ($689 billion), Medicare ($456 billion) and Medicaid ($327 billion). The primary recipients of federal spending are seniors. Many of my readers have written me to argue that it’s unfair to characterize what seniors are getting as handouts because they worked all their lives and paid into Social Security and Medicare.

Jagadeesh Gokhale, senior economic adviser, Federal Reserve Bank of Cleveland; and Laurence J. Kotlikoff, professor of Economics at Boston University document the looming Social Security and Medicare crises in “Is War Between Generations Inevitable?”. They report that “A male reaching 65 years of age today (in 2000, the year of their study) can expect to receive $71,000 more in government ‘transfer’ benefits (of all kinds at both the federal and state levels, but mainly from Social Security and Medicare) than he will pay in taxes (of all kinds at both the federal and state levels) before he dies. A 65-year-old female can expect a net gain of more than twice that amount; she can expect $163,000 more in benefits than she will pay in taxes.”

The picture is not so rosy for people who entered the labor force in 2000. They will pay far more in taxes than they will receive from transfer programs. Expansion of elderly handouts, such as prescription drugs, will make things worse. “For example: A 20-year-old female can expect to pay $92,000 more in taxes than she will receive in transfer benefits over her lifetime. The future looks more than three times as bleak for her male cohort, who can expect to pay $312,000 more in taxes than he will ever receive in benefits.”

Why is Social Security a better deal for today’s seniors? Just look at what they paid in. From 1937 to 1949, the maximum annual Social Security tax was $60. It remained under $200 until 1956. After 1956, Old Age, Survivors and Disability Insurance was added and in 1966, Medicare was added. It wasn’t until 1969 that maximum Social Security taxes exceeded $2,000. Today, the maximum annual Social Security tax is $13,000 and the maximum annual benefit is $25,000.

As with any Ponzi scheme, the people who get on board early make out. This is pointed out by Geoffrey Kollmann and Dawn Nuschler of the Congressional Research Service in their report “Social Security Reform” (October 2002) They say, “Until recent years, Social Security recipients received more, often far more, than the value of the Social Security taxes they paid. … For example, for workers who earned average wages and retired in 1980 at age 65, it took 2.8 years to recover the value of the retirement portion of the combined employee and employer shares of their Social Security taxes plus interest. For their counterparts who retired at age 65 in 2002, it will take 16.9 years. For those retiring in 2020, it will take 20.9 years.” My question is: How can anyone who draws out every penny he’s put into Social Security in a few years say that he’s not living at the expense of another?

It takes a special form of callousness and disregard for the welfare of future generations of Americans for today’s senior citizens to fight against reform. Nobody’s talking about abolition of federal senior programs. We must accept that serious mistakes were made and we must take compassionate corrective action. But what the heck! Both today’s politicians and seniors will be dead so why should they make sacrifices now to prevent an economic calamity decades off into the future?

Regards,
Walter E. Williams
LewRockwell.com
for Whiskey & Gunpowder

August 25, 2010

Avoiding the Looming Disaster of Social Security was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

On occasion, I’m tempted to apologize for these rants. Not so much for the message, but for the frequency.

Unfortunately, when surveying the landscape on which our hovels rest, the king’s castle looms large in the foreground.

I am not an envious person by nature and so wouldn’t begrudge the king his fine trappings, provided they were honestly earned.

But therein lies Ye Olde Rub.

Ever more frequently these days, the drawbridge comes down and a troop of the king’s finest sallies forth to extort from me more than half of my crops, and to read new royal proclamations whose net result is to add to the daily burden of trying to provide sustenance for family and jobs for workers.

Should I protest, say, by grabbing a pitchfork and telling the soldiers to clear off my land, or refuse to fill their wagons with the best of my crops – each leaf of which represents time and investment on my part – they would grab me by the shoulders, drag me to the king’s dungeon, and confiscate my property.

In fact, all that has changed since the days of yore is that the king’s knights tend to no longer rape, as well as pillage.

To be fair, the annals of history contain rare instances of kind and intelligent monarchs, the sort who understand that overburdening the peasants ultimately reduces crop production, leading to unnecessary and unproductive hardship and, in time, even revolt. Though, by temperament, I resist authority of any description, I suppose I could live comfortably under the rule of a fair and benign monarch.

The problem with that notion, of course, is that the corruptive nature of power leads to the near certainty that Baldash the Not So Bad will be followed by Norbit the Nasty.

And all of a sudden, instead of politely requesting I kick in some reasonable percentage of my crops to help maintain a constabulary, courts, and maybe the highways, Norbit’s men are kicking in my doors and we’re back to ox carts full of my produce being confiscated to provide a new set of gold plates and to pay the cost of invading neighboring lands.

While some among you will protest, there is, I would contend, little difference between a degraded monarch and a degraded democracy. In the monarchy, a single leader directs his minions in their ruinous acts; in a democracy, the directions come from professional politicians, as well versed in gaining and keeping power as any royalty of a bygone era. (Sir Robert Byrd held high office in this nation for 57 years.)

Far from being benign, the nation’s leadership, masters at appealing to the self-interest of an unprincipled voter class, have led us to a perilous situation where the fields are being left unplanted.

And an increasing percentage of the citizenry is now muttering angry curses as the king’s men ride by in their shiny black limo-horses.

For a clear understanding of just how poorly ruled this country has been, look no further than the latest budget projections. In his recent article, “America’s Impending Master Class Dictatorship,” Stewart Dougherty does just that, analyzing the government’s wanton spending and penning some notable, and quotable, words on the topic.

One stark and sobering way to frame the crisis is this: if the United States government were to nationalize (in other words, steal) every penny of private wealth accumulated by America’s citizens since the nation’s founding 235 years ago, the government would remain totally bankrupt.

Recently our stalwart CEO Olivier Garret sent over an insider doc from the Republicans’ Study Committee that provides talking points for candidates to use in the unending struggle for control of the castle. While I think the color of flag flapping over the battlements is at this point almost irrelevant, the document contains some interesting data points.

For instance…

• $13.5 Trillion of New Debt: The president’s budget proposes to increase the national debt from today’s level of $12.3 trillion to $25.8 trillion in FY 2020 – an increase of $13.5 trillion or 109.8%.  The amount of new debt proposed by this budget is larger than the total amount of debt accumulated by the federal government from 1789 to today (even including the $3.6 trillion of new debt over the last three years).

• $2.8 Trillion Tax Increase: The president’s budget submission increases taxes by $2.8 trillion over ten years. This includes allowing many of the 2001 and 2003 tax cuts to expire at the end of this year, such as allowing the top rate (which is often paid by small businesses) to increase from 35% to 39.6%, and allowing the top capital gains tax rate to return to 20%. These tax increases would take effect in an economy that, according to many economists, will still have an unemployment rate around 10%.

• Mandatory Spending: Increases from last year’s level of $2.1 trillion to $3.4 trillion in 2020, an increase of $1.3 trillion or 59.4%. Within that amount: Medicare spending increases from $425 billion in 2009 to $953 billion in 2020 – an increase of $528 billion or 124.2%; Social Security spending increases from $678 billion in 2009 to $1.20 trillion in 2020 – an increase of $523 billion or 77.1%; and Medicaid spending increases from $251 billion in 2009 to $487 billion in 2020 – an increase of $236 billion or 94.0%.

• Interest Payments on the Debt: Increases from $187 billion in FY 2009 to $840 billion in FY 2020 – an increase of $653 billion or 349.2%.

As mentioned yesterday, the projection on interest costs is far too conservative. While the government’s always flawed projections don’t anticipate it, both Bud Conrad and Doug Casey see strongly rising interest rates as a certainty in the foreseeable future. At that point, the debt death spiral begins in earnest, and the whole charade begins to come apart.

But it won’t take soaring interest rates to bring the economy down. That’s just going to accelerate things. And, of course, the worse things get, the worse the monarchy will act – demanding ever higher taxes and further debasing the currency, as they now certainly must.

How can you protect yourself? It really depends on where you are from.

One obvious solution would be to move to a different kingdom, one that treats you and your money better. Or that pretty much ignores you altogether. If you are from the U.S., the king’s tax collectors will follow you wherever you go – but even so, there are modest tax advantages you can gain by expatriation. Ask your tax counsel for details.

If, on the other hand, you live in a kingdom that doesn’t tax foreign-derived income (yet), becoming a citizen of the world can offer serious advantages and is well worth considering. The situation in most of the developed kingdoms, where easy money and quick mortgages greatly exacerbated the levels of debt, is only going to get more dire as the rulers cast a wider and stronger net in the quest for more revenue.

Even if you aren’t in a position to move, however, you’ll benefit from clearly understanding one key point about the king. While he may dress well and speak in dulcet and pleasing tones, he doesn’t actually produce anything. What money he has to spend must first be taken off the productive elements of the peasantry.

But there are limits to how much he and his men can squeeze out of the citizenry. We are nearing those limits.

That means that all that is left to the monarchy is for it to issue IOUs. And given the levels of their debts and ongoing spending, lots and lots of IOUs. Those IOUs are called dollars, or pounds, or pesos, or yen, or….

While there will be no straight line up or down for any asset class in the unsettled times we will live through, using periods of weakness to build your exposure to tangible assets – most notably gold, whose primary and best use is as sound money – is the only way to protect yourself from the Great Debasement that’s coming.

Regards,
David Galland
Casey Research
for Whiskey & Gunpowder

April 21, 2010

Government Is Still Just Like an Overtaxing King was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.