On September 25, 1794, US President George Washington issued a proclamation authorizing the use of military force against a group of defiant citizens.
It had all started a few years before when a handful of politicians had succeeded in passing an excise tax on liquor, something that became known as the Whiskey Tax.
The Whiskey Tax was the brainchild of Treasury Secretary Alexander Hamilton, who was under pressure to pay off the government’s debts from the Revolutionary War.
The thing is, much of the debt had been originally owed to soldiers who fought in the war. They had been paid in IOUs, many of which had been scooped up by bankers in New York for pennies on the dollar.
Hamilton had family connections to prominent New York banks– the first example of Wall Street infiltrating the Treasury Department. It wouldn’t be the last.
(Over 200 years later, the American taxpayer would again be on the hook to bail out banks.)
Back then the Whiskey Tax was a big deal. America was a ‘whiskey nation’.
Whiskey was such a prevalent part of American culture in the 1790s, in fact, that it was even commonly used as a medium of exchange in parts of the country.
So you can imagine that the government’s intent to tax whiskey distillation was met with pockets of staunch opposition, especially once people found out that the entire reason for the tax was to pay back the New York bankers.
In some cases the opposition was militant. Parts of Pennsylvania, Maryland, and Virginia swelled with local resistance to the point that people began physically assaulting federal tax collectors and forming rebel militias.
Washington eventually had to dispatch federal troops (which he personally commanded) to put down the insurrection.
The rebels lost. But this conflict between government and the taxpayer continued to run deep.
It still exists to this day. It’s ingrained in the DNA of the nation, and in every free individual around the world.
At its core, taxation is an elaborate form of theft based on deeply flawed premises that we all have a claim on each others’ earnings, and that the government knows how to spend your own money better than you do.
There are certainly some places where people do receive value for the taxes that they pay.
Norwegians are commonly cited as tolerating their incredibly high levels of taxation because they receive relatively good quality medical care, education, etc. in return.
But for most people in the West, taxes fund wars, debt, dropping bombs on brown people by remote control, and yes, bailing out banks.
It’s perfectly natural to be enraged at such immoral waste, and people deal with it in different ways.
Some take the approach that if we’re going to be screwed then we should all be screwed together, equally.
They throw childish temper tantrums when anyone uses perfectly legal means to reduce their taxes, labeling them ‘tax dodgers’.
Usually this is an emotion grounded in petty jealousy and ignorance, wanting everyone to be equally miserable, and failing to realize that tax mitigation solutions are open to everyone.
Right now there’s actually an entire town in Wales called Crickhowell that is ‘protesting’ how big businesses use the tax code to slash what they owe.
They’re angered that Facebook, Google, Amazon, etc. pay very little tax.
And to voice their frustration, the butcher, the baker, and candlestick maker decided to employ the exact same tax strategies used by big companies to reduce their own tax burdens.
As the proprietor of the local smokery put it, the plan is “jolly clever.”
Clever indeed. Because they’ll soon realize the tremendous power and freedom of using completely legal solutions to keep more of what you’ve earned.
Doing this is not immoral or unpatriotic.
In fact, if you believe that your government makes your country worse off and less free, then reducing the financial resources available to them is a highly effective expression of patriotism.
Rather than people whining about everyone else paying less tax, it would be a much better use of time to learn about ways to reduce their own taxes.
This is a far more powerful way of voicing your opposition to a government than standing in a voting booth. And you’ll be better off financially as well.
To be fair, most of these concepts aren’t far fetched or complicated.
How many of us have gone shopping at a duty-free store in order to save a few bucks from not paying taxes?
Plenty of people already incorporate businesses in no-tax states like Delaware. Or they’ll work in a place like Boston (high tax) but live nearby in New Hampshire (zero tax).
There are plenty of other solutions. US taxpayers who live on investment income can move down to the beach in Puerto Rico and pay 0% tax.
Or you can move abroad and earn over $100,000 per year (per spouse) tax free.
There are also more complicated solutions such as setting up captive insurance companies to reduce business profits tax, trust structures to eliminate estate tax, and much more.
These aren’t ‘loopholes’ where you need teams of lawyers to misuse or take advantage of some cryptic language in the tax code.
It’s all right there in black and white, part of the law.
Criticizing a very sensible, legal strategy to keep more of what you earn is like criticizing someone for driving the speed limit, claiming that it’s some sort of traffic ‘loophole’.
There are completely legal options out there for everyone. Taking advantage of them just makes sense.