Death by Taxes – Direct and Indirect

Mish reviews “Daylight Robbery”:

For better or for worse, recall it was intervening in the American Revolution that tipped the French monarchy into the Revolution, the Terror and Napolean.

It was the American Civil War that introduced central banking and elastic currencies into the US.

It was the income tax and the Federal Reserve that fueled the rise of the national government, gutted the currency, and dispatched conscripted armies into overseas adventures.

It was the Great War that drove Czarist Russia into 70 years of Soviet oppression, Germany into the arms of National Socialism, and set the stage for the horrors of Second World War and everything that followed.

It was the Vietnam War and LBJ’s “Guns and Butter” that led to Nixon closing the gold window, and the debauching dollar.

War and national states are unhealthy to peace and prosperity.

Here’s Mish:

Daylight Robbery

In Daylight Robbery, Dominic Frisby takes you on a whirlwind journey through the history of taxation, from ancient Mesopotamia to the present day. 

From the French Revolution to the great wars of the Twentieth Century, and somewhere underneath you will find a tax story. Wars are made possible by taxes.

In a world on the brink of revolution and revolt, Frisby argues governments need to radically change who they tax and how if they are to survive.

Book Excerpts

Tax is power. Whether king, emperor or government, if they lose their tax revenue, they lose their power. This rule has always applied, from the first king of ancient Sumer to the social democracies of today.

Every war, from ancient Mesopotamia to modern Iraq, was paid for by some kind of tax. Taxes make wars possible. If you want to end war, end taxes.

The aim of every conqueror, from Alexander the Great to Napoleon and beyond, was to take control of the tax base : the land, the labour, the produce and the profits. Conquerors plunder and then they tax. ‘ Taxes are the chief business of a conqueror of the world,’ said George Bernard Shaw ’s Caesar.

‘No taxation without representation ’ was the cry of the American revolutionaries. Ruinous taxes levied by the tsar against peasant farmers led to the Russian Revolution. Perhaps most explicitly of all, the Philippine Revolution began with the Cry of Pugad Lawin, exhorting rebels to tear up their tax certificates. From Spartacus to Boudicca to Robin Hood to Mahatma Gandhi, the greatest rebels in history were usually tax rebels. History looks different when viewed through this lens of taxation.

Rulers have a long history of justifying taxes on moral grounds. Former Chancellor George Osborne ’s sugar taxes were introduced not for the good of government coffers, but for the good of your health. French president Emmanuel Macron imposed fuel taxes for the good of the climate. The spin is apparent even in the language of tax – a tax is your ‘ duty ’, your ‘ tribute ’, your ‘ due ’

In 1187 when the great Kurdish leader Saladin annihilated the armies of the Crusaders and took Jerusalem, the Christian cause was shaken to its core. There must be a new crusade, said the kings of England and France, and to pay for it Henry II levied a special tithe, the Saladin tithe. It was a 10% tax on revenues and movable properties, with special exemptions for the ‘ arms, horses and garments of knights ’ and the ‘ horses, books, garments and vestments, and all appurtenances of whatever sort used by clerks in divine service ’. Everyone else paid – though if you joined the crusade you were exempted, which proved an extremely effective recruiting tool.

War Costs Money

The greater the war, the greater the tax burden. The second World War gave the world even higher taxes. President Franklin D. Roosevelt said, ‘ War costs money.’

The real cost of war is perpetual debt.

Seeking to indoctrinate people about how to pay their taxes and to reduce public resentment following World War II, Secretary of the Treasury Henry Morgenthau Jr commissioned Walt Disney to make a film. It was called The New Spirit and Donald Duck was cast as the star. 

The US turned to other entertainers in its mission to promote the payment of tax not just as a patriotic duty but also as a joy. Irving Berlin wrote a song, which Gene Autry sang: ‘I Paid My Income Tax Today’.

Inflation is Taxation by Another Means

Like debt, inflation may not be an official tax, but that does not mean it does not exist. Indeed, it is often deliberately propagated, and its effect is the same : it confiscates wealth from one group and transfers it to another – from the salaried or the saver to the state, from creditor to debtor, from employee to employer. It is ‘ a particularly vicious form of taxation ’, said economist Henry Hazlitt.

Milton Friedman was equally damning: ‘ It is a hidden tax that at first appears painless or even pleasant . . . It is a tax that can be imposed without specific legislation. It is truly taxation without representation.

Frisby claims war is mass murder funded by theft and that conscription is the moral equivalent of kidnapping.

Care to disagree? Then read the book. 

Tax reform is one of the few ways by which politicians really can change the world

How the Book Started

In addition to being an economic writer, Frisby is a stand-up comedian. His book started life in 2016 as a comedy show at the Edinburgh Festival called Let ’s Talk About Tax. 

Comedy gave way to a serious endeavor that took years to write.

Overlooked History

There is a tax story , often an overlooked one, somewhere near the heart of almost all of humanity ’s defining events. 

British inventor Michael Faraday explained electricity and the discoveries he had made about it to the Chancellor of the Exchequer, William Gladstone.‘

But, after all, what use is it ? ’ Gladstone asked petulantly. Faraday ’s response was immediate: ‘Why, sir, there is every probability that you will soon be able to tax it.

Jesus was only born in Bethlehem because Mary and Joseph were there to pay tax. And in 2017, Microsoft founder Bill Gates declared the robot that takes your job should pay taxes.

Get the book. It’s educational and fun. You will enjoy it.


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