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Saturday, December 8, 2007

Reader Mail #18 - Paying Taxes is Still Stupid

I liked this post from The Picket Line. It lists most of the false counter-arguments that people give when paying taxes.

The arguments were broken down into several categories:

Would tax resistance be effective?

From a personal viewpoint, if I avoid income taxes it's like getting paid twice as much for the same labor. Is that "effective" in the sense that I improved my own circumstances? Definitely! If I'm the only person doing it, does it damage the bad guys? Not at all. However, I have doubled my personal wealth! That's certainly an accomplishment.

If I would avoid income taxes, I would have twice as much income. Currently, I earn enough income to support myself. If I don't pay income taxes, I would have enough income to support myself AND hire someone else to work for me! Then, that person can avoid paying income taxes. When you also include the cost of compliance with government regulations, the productivity improvement isn't 50%; it's more like 75%-95%. At some point, exponential growth starts to take hold and the underground economy explodes.

I liked this point:

The IRS can garnish wages and raid existing bank accounts for money owed to them.

People need to start storing their wealth outside the "official" financial system. Some sort of distributed underground banking system is desperately needed.

Would tax resistance be too dangerous?

This depends on the approach you take.

If you have a regular corporate W-2 job, your options for tax resistance are zero. Your income is automatically reported to the IRS and taxes are automatically withheld. If you had a corporate W-2 job and tried to file an "exempt" W-4 form, the HR department would never allow it.

If you're registered as being self-employed, that is difficult. As a small business owner, you do have the opportunity to do off-the-books work or underreport your income. However, the IRS tends to be very heavy-handed when auditing small businesses.

If you trade agorist-style and work completely off the books, then you have better options at hiding your income from the IRS. If there was an advanced grey market banking system, you could safely store your wealth there. Instead of "laundering" your money, you would merely purchase gold and silver in the grey market economy. Even better, there may someday be an underground agorist capital market, where people can lend each other money and invest in their businesses.

Currently, there's no safe place to store gold or silver. I would be willing to loan out gold or silver at a 0% interest rate, if the counter-party were trustworthy, because that's safer than storing my gold or silver in my residence.

I liked this point:

The IRS can force you to waste tens of thousands of dollars defending yourself against frivolous charges. Don't mess with them.

I think that, when being harassed by the IRS, you might be better off representing yourself than hiring an attorney. An attorney is "sworn to uphold the law". That makes it hard to get a competent defense when your argument is "the law is illegitimate".

Plus, if you're careful, you won't generate a paper trail of auditable income.

Some people say that an IRS agent gives up when harassing knowledgeable people and prefers to go after the low-hanging fruit. If the IRS agent sees you're going to put up a tough fight, they may leave you alone. If an agorist finds himself investigated by the IRS, he may be able to settle for paying a fine. If you agree to pay a fine, the IRS agent can look good on his records, and you still may have profited if the IRS didn't catch all your economic activity.

The main problem is that there's no SERIOUS analysis of the risks of tax avoidance, because you can't go around and ask all the tax avoiders and collect statistics. This problem is best left to agorist protection associations, when they decide how much to charge for IRS protection insurance.

Would tax resistance be ethical?

Anyone who understands the Compound Interest Paradox would be so annoyed at the current economic system that they would see income taxes as immoral.

Suppose you explain to someone:

- The corrupt nature of the Federal Reserve.
- The Federal Reserve provides a massive government subsidy to banks, hedge funds, and large corporations.
- Income taxes prevent people from boycotting the Federal Reserve and using sound money instead.
- Income taxes convert everyone into government slaves. Income taxes mean you need permission from the government and Federal Reserve to work.
- The voting system is completely corrupt.
- The USA is actually a communist country. The Federal Reserve and income tax are two key planks of the Communist Manifesto.
- The economic system discriminates against individuals and small business owners.

Once someone understands some of these things, it becomes very easy to ethically justify refusing to pay taxes. If you have trusted trading partners, agorism provides a way to avoid paying taxes by developing an underground economy.

A lot of people find my blog when they Google search for "Who's the Richest Man in the World?" or variants thereof. I actually give the correct answer, unavailable elsewhere, and yet almost all of those visits are bounces.

My post "Beware of Libertarian Red Market Agents" has proven to be incredibly popular. I thought that was a relatively boring post. I don't know where the traffic is coming from. Usually, a spike is due to a post being mentioned elsewhere.

Sometimes, when I say "This post is going to be a hit!", nobody winds up reading it. Sometimes, when I say "This post is boring and obvious.", I wind up with a bunch of readers. I am totally confused. For example, I thought The Voting Scam was something everyone already knew about, and it's my 2nd most popular post.

I recently discovered Google Reader. It's a useful tool if you track a bunch of blogs. I'm sure there are other RSS readers out there, but I like Google Reader. Google isn't even paying me to say this! I use several Google products regularly: search, gmail, Blogger, Analytics, and now Reader.

I do have one pet peeve. A lot of people have an RSS feed for their blog, but they DON'T GIVE THE FULL FEED. They only give the first few sentences, and you have to follow the link to get to the full post. THIS IS VERY ANNOYING. It seems that WordPress, by default, gives only partial feeds. By subscribing to my own RSS feed, I have verified that I am actually giving out the full feed. I feel the need to make a rant for a moment.

(unless your blog's content is super-awesome)

I like this joke from "Crash Landing".

I was reading a book on Jefferson and Burr tonight and read, "Justus Bollman sent a message from his cell to the President's house."

'What?!' I thought. 'He was texting Jefferson?!'

Then I realized he had been in jail at the time.

I liked this post on Kung-Fu Monkey's blog. It links to a series of interesting articles on another blog, "Orcinus".

In this post, I liked this excerpt:

[Psychopaths] are drawn to power, and will seek it ruthlessly and relentlessly, regardless of the consequences to others. Many cultures (including ours, up until a few decades ago) have found these people so dangerous that they've evolved counterweights and backstops that conspire to either keep them away from the levers of power, or mitigate the damage they can do (and I'll discuss some of those in the last installment). However, modern America seems to have lost all vestiges of this awareness. Now, we celebrate our most powerful social dominants, pay them obscene salaries, turn them into media stars, and hand over the keys to the empire to them almost gratefully. They have free rein to pursue their ambitions unchecked, with no cultural brakes on their rapacity. They will do whatever they can get away with; and we'll not only let them, but often cheer them on.

This paragraph is interesting. The economic and political system in the USA *USED TO* have checks and balances that made sure psychopaths didn't rise to positions of power and influence. All those checks have been repealed. Now, the psychopath is held up as the model for everyone else to follow. Only the most egregious conduct winds up being caught and punished, and the threshold for "egregious conduct" seems to be higher and higher all the time.

The only solution is to abandon the idea of having a government altogether. The very existence of a government means that the most evil people will exploit it for their own benefit, while loudly proclaiming that they are merely doing it for the benefit of everyone else.

In a truly free market, someone who acted as a psychopath would find themselves at a disadvantage. Non-psychopaths would be able to found competing businesses, and their superior performance would wipe out any psychopath-run businesses.

In this post on Kung-Fu Monkey's blog, I liked this excerpt:

Well, let's say the candidate's job is to walk into a room of complete strangers and get them to like him. Connect with him. Wow, the few rare politicians who can do that, they're worth their weight in gold.

I did that for twelve years. So did hundreds of other people you've never heard of. We're stand-ups, and that's the ENTRY-LEVEL for the job.

A good stand-up can walk into a room, a bar with no stage and a shit mic, in the deep goddam South or Montana or Portland or Austin or Boston, and not only tell jokes with differing political opinions than the crowd, can get them to laugh. With all due respect to our brother performers in theater, etc., we can walk into a room of any size from 20 to 2000 complete strangers with no shared background and not just evoke emotion ... we can evoke a specific strong emotion every 15 seconds. For an HOUR. A good stand-up can make fun of your relationship with your wife, make fun of your job, make fun of your politics, all in front of a thousand strangers, and afterward that same person will go up and invite the stand-up to a barbecue.

In short -- every club audience is a swing state.

Politicians lack the basic speaking skills that every stand-up comedian knows. Whenever a politician speaks in public, it's a scripted PR session. Whenever a politician appears on a talk show, the host is reading from a prepared script of questions. Even the Daily Show and the Colbert Report do this, because otherwise they wouldn't be able to land "hot" guests. The *LAST* thing a politician wants is to be put in a situation where he's forced to think on his feet.

The problem is that the media is biased. There aren't ANY shows that deviate from the script. A show that deviated from the script would no longer be able to get politicians on as guests. The host probably would be fired for deviating from the script. There are no "unscripted live performances" for politicians. The *LAST* thing the Supreme Leader of Humanity wants is a politician who's able to think for himself.

In this post on Kung-Fu Monkey's blog, I liked this excerpt:

[Many readers on Kung-Fu Monkey's blog say: "BUSH IS A LIAR! ISN'T IT OBVIOUS!"]

He's not lying. [He actually thinks he's telling the truth, so technically he's not lying. His cluelessness makes him a more effective liar. If he *KNEW* he was lying, he wouldn't be as convincing.]

In the parlance of my business, he's the hack comic who kills every show, and has no idea he's a hack.

The problem is that the media, who are supposed to be making sure that unqualified hacks don't get elected President, AREN'T DOING THEIR JOB. The average person says "Really, would a totally clueless fool be presented by the mainstream media as a qualified President?" The average person is unaware that mainstream media is completely and totally corrupt.

Topics such as "Who deserves to play in the BCS Championship Game?" are debated much more honestly and thoroughly than actual serious news stories. A play-by-play announcer for a sports game actually has the improvisational speaking skills that most political candidates lack.

Francois Tremblay pointed out that elections on American Idol are conducted more fairly that US government elections. Unlike with government elections, American Idol gives a SERIOUS analysis of the candidates' qualifications before the vote. American Idol uses a variation of "Instant Runoff Voting", which is far superior to the winner-take-all method used in political elections. In contrast with political elections, American Idol really gives each candidate equal time, although the producers of American Idol only present candidates that meet their standards. I estimate that the average person will spend more time discussing American Idol than the 2008 Presidential election.

I liked this post about tomato pickers in Florida. The writer seemed to sort of understand how the Federal Reserve makes the bargaining relationship between workers and employers uneven. The tomato pickers were NOT officially organized as a union. This meant they could actually use effective tactics, since they were not subject to government regulation of unions.

Instead of pressuring the farm owners, the tomato pickers started pressuring the large fast food chains that bought the tomatoes. They even managed to get some concessions from some large corporations that use tomatoes, offering to pay the workers extra. One corporation decided it didn't want to give concessions. It successfully lobbied the Federal government to declare those negotiated agreements illegal.

In other words, the workers did manage to negotiate better wages, in spite of a huge handicap. Then, the red market reversed their progress by declaring the agreement illegal.

IMHO, the tomato pickers should be recognized as the rightful owners of those farms, and not the corporation who owns the farm, who purchased/stole the farms with money borrowed/stolen from the Federal Reserve at an artificially cheap interest rate.

On Zhwazi's Blog, he says (paraphrasing):

I don't like the Labor Theory of Value.

You don't understand the Labor Theory of Value.

The Labor Theory of Value says that a worker's salary is proportional to the actual value of his work.

In that post, he gives an example of someone who is paid to dig a ditch and fill it back in. The person who hired you to dig a ditch and fill it back up again is a stupid businessman. In a free market, he will soon go out of business.

The Labor Theory of Value fails to hold in the current economic system because the current system is not a free market. For example, lawyers do nothing useful, but they are paid a lot. The problem is that government violence creates an artificial demand for lawyers' services. Government violence gives lawyers a monopoly, due to licensing requirements.

In a free market, there is a natural arbitrage process that raises the salary of underpaid workers and lowers the salary of overpaid workers. Don't confuse the current market with a free market.

My attitude on such theories is: "If mainstream economists uniformly and loudly discredit a theory, then it must be true." IMHO, that works every time. For example, try asking an economics professor about The Compound Interest Paradox. He will say that there is no such thing. Try asking an economics professor about a gold standard; he will say that history has soundly discredited the gold standard. Not only will the economics professor disagree, but he will be loud and insistent.

I have a future draft planned for the Labor Theory of Value. If you want, I'll publish it sooner.

I'm starting to get bored with the Ron Paul Forum. It might be time to declare that forum property of trolls and move on.

On the Ron Paul Forum, someone said:

Should Americans worry that foreigners hold lots of dollar assets? Check out this article. It was written by an economics professor at a respected university, and therefore it is of a high quality.

[Summary of article: Employers can't discriminate against workers, because they would just find an equal or better job elsewhere.]

And then a troll responded:

I am a troll.

Just because someone's the chairman of the economics department at a university, doesn't mean they're NOT a troll.

That's like saying "Ben Bernanke is the absolute authority on sound monetary policy." Ben Bernanke is as much a troll as some people on the Ron Paul Forum. Ben Bernanke is far more dangerous, because he can impose his will on others by force. An obnoxious person on a discussion forum is easily ignored.

There's a major fallacy in the article cited above. That assumes that you're dealing with a free market. In a *TRUE* free market, a businessman who tries to discriminate against an employee suffers negative economic consequences. The businessman loses a worker, and the employee can find a job just as good elsewhere.

The USA is *NOT* a free market. It's a communist dictatorship. In many industries, there are only 3-5 employers, frequently located in different cities. An employee who is unfairly fired may be forced to move. The other employers may "check references" and the discriminating businessman may give a false bad reference. A worker can't easily get a job of equal value, because the labor market isn't really a free market. A worker can't start his own competing business, because there are too many obstacles placed there by the government.

If professors didn't pass off lies and nonsense as "economic research", we wouldn't be in the current mess.

On Don't Think Too Hard, an anonymous reader says:

Thats pretty funny. I get told not to think too much by people around me all the time. Sure it is good to know your position in the human world and why you are there. How some people are controlling your behaviour and under-development through the use of their laws and policies and to combat them.

But beyond rationality there is a knowledge that is very fine and comes from the Spirit, from within...and this gives peace....and a method of combating the enemy without.

It really is traumatic being able to think clearly when nobody around you seems to be able to do it. After being trained to not think, it's very traumatic to be suddenly able to start thinking for yourself.

Most people refuse to think because they're trained to not think, and actually thinking can be very stressful.

Sometimes, I feel like the Will Smith character in the "I am Legend" movie. Everyone else is a mindless zombie and I'm trying to help them.

On The National Debt - Who is the Creditor?, an anonymous reader says:

I think it would be cool to print an umpteen trillion dollar Federal Reserve Note and present it to the banksters as payment in full for the debt. It would be legal tender but if they tried to spend it any cashier would say, "sorry, I don't have change for a bill that big; got anything smaller?"

I already mentioned this. "In theory, the government could mint a $100 trillion coin and deposit it in its account at the Federal Reserve."

If the Treasury department printed a $100 trillion Federal Reserve Note, the government would only be reimbursed FOR THE PRINTING COST.

If the Treasury department minted a $100 trillion coin, the government would be reimbursed FOR THE FACE AMOUNT.

The government insists that, when it mints coins, the government is reimbursed for the face amount, not the minting cost.

There is a strange legal loophole. Look at a Federal Reserve Note. It says "This note is legal tender." Look at a quarter. There is *NO INSCRIPTION* that says "This coin is legal tender." Treasury-minted coins are ACTUALLY money. Federal Reserve Notes have a lower status.

Fortunately, the Congress and President will never try this. The fact that Congress *COULD* do this if it wanted to, points out how silly the concept of a "national debt" is in the first place.

The US government cannot be bankrupted as long as all its debts are in dollars, a currency it controls. The Federal government is not subject to the same accounting rules as everyone else.

Third world governments can be bankrupted, because their debts are in dollars and their income is in their local currency.

Suppose I made up my own currency, the F$K. Suppose I managed to convince other people to start accepting F$Ks as money. If the F$K was an irredeemable fiat currency, then I could NEVER go broke! I could always just print more F$Ks. People might notice inflation if I did this. If I abused it too much, people might start refusing to use F$Ks as money.

On Beware of Libertarian Red Market Agents, TGGP says:

Interesting to hear this from an agorist, the last person I came across speculating about secret forcing behind banking who are wealthier than anyone but unknown was a right-wing extremist rather chummy with neo-nazis. It doesn't make you wrong though. I tend to be more willing to belief in impersonal forces and I try to avoid promiscuous teleology.

This is another comment that falls under the "I almost rejected it as a troll" category.

Are you aware of how many times you used the Strawman Fallacy in your comment? You know someone else who was a white supremacist (bad idea) who also believed that the banking elite secretly rule the world (true). Therefore, everyone who believes that the banking elite secretly rule the world is evil?

It's time for a new blog rule. People who post comments that use the Strawman Fallacy have their comments rejected or ridiculed.

That link defines "promiscuous teleology" as assigning causes to events WITHOUT EVIDENCE. I don't have ABSOLUTE PROOF that someone is secretly ruling the world. There is a lot of circumstantial evidence that a group of people are secretly ruling the world. What do you expect the Supreme Leader of Humanity to do? Do you expect him to personally walk up to my front door, say "Oh, you got me!", and give me the full details of how he enslaved the entire world? Even with the full proof, fully documented, I doubt I could convince many people anyway.

There is a *LOT* of circumstantial evidence that someone is secretly ruling the world.

- The Compound Interest Paradox is too cleverly designed and hidden to be an accident.
- Voting is pointless.
- Mainstream media sources always echo the same defective viewpoints. If there were true free market competition, some media sources would tout the alternative viewpoints, just to attract the 1% market share.
- University economics professors mostly echo the same defective theories.
- Income taxes convert everyone into government slaves. Income taxes mean you need permission from the government and Federal Reserve in order to work.
- Income taxes and anti-money-laundering laws make it impossible for someone to legally develop an alternate monetary system.
- In the 19th century and early 20th century, it was common for spies to come to the USA and lobby for certain laws. In fact, the international bankers even had some spies planted among the US founding fathers. Alexander Hamilton was rumored to be secretly working for the bankers.
- For most wars, both sides were funded by large international banks.

The best piece of evidence is: The current economic and political system is one of absolute perfect enslavement. It's too perfectly designed to be an accident.

As a practical matter, it's sort of irrelevant. If the current corrupt system has developed by accident, then we should do everything we can to develop a better system. Since the opposition is disorganized and incompetent, success should come easily.

If the current corrupt system is part of someone's sinister plan, then we should do everything we can to fight them. If there is someone secretly pulling the strings, the fact that I haven't been hunted down and killed is evidence that they approve of what I'm trying to do. If there is someone secretly pulling the strings, it seems as if they *WANT* the current economic and political system to fall apart.

Being accused of "thinking like a child" is actually a compliment. That means that I've managed to unlearn most of the bad things I've been taught.

On Reader Mail #17, Kevin Carson says:

From the stats on my site meter, I can't imagine how I could possibly have 10,000 regular readers or more--unless the 200 or so visitors I have every day are people who visit very infrequently.

I misestimated. I assumed that if your Technorati rank was that much higher than mine, you had that many more readers than me. I'm up to around 40 visitors per day, and it's been increasing at a decent rate. That means my blog is only 1/5 as popular as Kevin Carson's! That's kind of neat.

They have a "rate your blog's language level" tool somewhere on the Internet. Kevin Carson's blog rates as "genius level", which also means that it's tough to read. My blog is "high school level", which means I'm not writing with fancy language.

I noticed that Kevin Carson is writing a second book. How many copies has he sold? Is he self-publishing or going through a publisher? I was thinking of taking my best posts and making a book, but it would probably only be worth it if I could sell over 10,000 copies.

The biggest piece of advice I have for Kevin Carson is: LEARN TO WRITE BETTER. His content is very interesting otherwise. For most other authors, I wouldn't bother to trying to read in spite of the poor writing.

I noticed that my blog is of interest to a wide variety of people. I've been mentioned on white supremacist sites, agorist/anarchist sites, communist sites, amateur trader sites, car discussion forums, and many others. I think the fundamental issue "The current economic and political system isn't working" is a common theme for all those groups.


David Gross said...

You write: "If you have a regular corporate W-2 job, your options for tax resistance are zero. Your income is automatically reported to the IRS and taxes are automatically withheld. If you had a corporate W-2 job and tried to file an 'exempt' W-4 form, the HR department would never allow it."

It's actually not so bad as this. Your HR department isn't going to police your W-4 form for the government. People file new W-4s all the time for various reasons, and if you change your allowances or even declare yourself "exempt" your HR department isn't going to look at you funny (in fact, they've probably been trained not to, since it's illegal to discriminate against employees because of their family size, marital status, disabilities, and things of that ilk that often prompt new W-4 filings).

If your company withholds less from your paycheck than the IRS thinks they should, the IRS may respond to this by "overruling" your W-4 and telling your employer to accept a new one of their choosing on your behalf. At this point, your employer will begin withholding from your paycheck again. That's all. Not too frightening, is it?

Zhwazi said...

You don't have to reply to this in another reader mail thing if you don't want to, and if you do anyways you can just omit this paragraph.

I'm quoting a bit sporadically, but I said "I find [the argument from mudpies] ironic..." because it "...would seem to refute the Misesian premise...not to mention it's a strawman in the first place." I'm fully aware that those examples don't singe the LTV in the slightest and made that clear.

My actual position on the LTV until a couple days ago has been that it's obviously true as a general tendency at least, and I wouldn't posit on anything else about it because I didn't know much about it...just enough to know that the mudpie argument didn't apply (from having glanced over it's wikipedia page). The irony I pointed out was a funny thing I noticed once, thinking about it's inapplicability. My current actual position is that both labor and subjective theories appear to be true, but don't seem to contradict. Still reading on that, though.

Post it whenever you're comfortable, don't rush it for me. And I'm not mad or anything, just a little confused about how my post was construed that way. Otherwise a good post, I like these reader mail ones.

TGGP said...

You know someone else who was a white supremacist (bad idea) who also believed that the banking elite secretly rule the world (true). Therefore, everyone who believes that the banking elite secretly rule the world is evil?
I thought I explicitly denied it, but maybe I didn't make that clear enough.

Regarding promiscuos teleology, I think it is a common bias among human bequeathed to us by evolution because a false positive was less costly than a false negative. I consciously try to avoid it. One of the best websites on the net is about recognizing and correcting these imperfect heuristics:

Do you expect him to personally walk up to my front door, say "Oh, you got me!", and give me the full details of how he enslaved the entire world?
No, but I don't think anyone can have that much power and influence without people knowing.

Voting is pointless.
Certainly, but I don't think it's very strong evidence.

Mainstream media sources always echo the same defective viewpoints.
But isn't that what makes them mainstream? There's a no true Scotsman issue here. As for why the viewpoint is defective, I think if people want crap the media will give it to them.

If there were true free market competition, some media sources would tout the alternative viewpoints, just to attract the 1% market share.
I get most of my info from the internet, so it doesn't seem like there are unrepresented viewpoints to me.

University economics professors mostly echo the same defective theories.
What about non-university economics professors? I've heard they're supposed to be more right wing. I think there are heterodox econ profs in major universities though. Again though, you've got to remember that the purpose of a university is not truth but attracting students and donors.

Income taxes convert everyone into government slaves.
See re voting.

In the 19th century and early 20th century, it was common for spies to come to the USA and lobby for certain laws.
Should I care who it is lobbying? They're all scum to me and the whole thing would be rotten if there were no other countries.

Alexander Hamilton was rumored to be secretly working for the bankers.
He was certainly a despicable prick, but I don't rely on rumors for that.

For most wars, both sides were funded by large international banks.
Most wars took place before banking existed. Steve Pinker discusses how much less violent things are now here.

It's too perfectly designed to be an accident.
Creationists say the same thing about evolution.

Gary Becker and Richard Posner have been discussing not paying taxes here and here.

Anonymous said...

You erroneously accepted the burden of proof with that guy you were debating on the ethics of the income tax. It should have been incumbent on him to prove that paying taxes is ethical.

It looks to me like you and this guy each have a piece of the puzzle:

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