Tax Protester Irwin Schiff Dies in Jail
This was sent by Dr. David Gordon of the Mises Institute.
Irwin Schiff, imprisoned for his resistance to the federal income tax, died yesterday. Efforts by his son, the noted financial commentator Peter Schiff, to secure his release from prison so that he could die with his family were unsuccessful. Schiff's sad passing illustrates an essential truth about the state: if you resist its orders, you will be dealt with by force.
His son says that cancer killed him.
I have written about Irwin Schiff. My first post was one week shy of a decade ago. He was a tax protester. He was one of the most famous of the tax protesters. So, the federal government dealt with him accordingly. They wanted to have a poster child for tax protesting, and Schiff was the target.
I have said for over 30 years that it is foolish to get involved in the tax resistance movement. If you do, you will live on the fringes of society, dealing only in cash. You will not get to take advantage of the division of labor. Your wife will be worried for years about her future and your future. Your productivity will go down. Your income will go down. In other words, by taking this stand, you will be much worse off economically, and you will accomplish essentially nothing. The federal government will continue to collect its taxes.
The federal government doesn't really care much about the average taxpayer. The reason should be clear. About half of all income earners don't pay income taxes. They pay Social Security taxes. But they don't pay income taxes.
The amount of money generated by the income tax imposed on middle-class people and below is relatively low. We are dealing with the Pareto principle. The big money has to come from rich people. Rich people earn more money. They earn lots more money. So, this is where the feds concentrate their interest.
They want to get money out of large corporations. That is also a huge bonanza for them. Huge corporations have skilled lawyers, but ultimately they cannot escape from the IRS. The IRS pays a lot of attention to them.
So, some tax protesters do get away with it, because it simply is not worth the time and trouble for the IRS to come after them. But their protest has no effect on revenues collected by the federal government.
Their friends will not join the movement, because their friends perceive that it is a suicidal decision. They place themselves at an enormous risk with respect to the penalties, although the odds of being sent to jail are minimal. But the odds don't matter if you are sent to jail.
The more you talk about your strategy, the more likely it is that you will be prosecuted. In other words, if you act as an evangelist, you will wind up like John the Baptist or Irwin Schiff.
I think it is a good idea to stay out of prison. I think it is a good idea not to have the IRS come in and assess penalties. It is a good idea to avoid the worries associated with joining the tax revolt.
There are some people who do get away with it. They have a high toleration with respect to concern about getting hassled by the IRS. Most people are not like these people.
I regard paying income taxes as protection money. It lets me preserve my liberty in those areas that the IRS really doesn't care about. I think I can inflict more pain on the government by staying out of jail and online. So, I pay my taxes, and I maintain my liberty outside of jail. It's not worth it to me to risk winding up like Irwin Schiff.
The government should have let him go home to die. But the government is trying to get across the basic point, namely, that if you cross the government, you are going to be sent to prison, and they will throw away the key. By not letting him come home to die, they were sending a message to tax protesters generally. It is a powerful message.
Most of the people who get involved with the tax protest movement are low-productivity people. They are not strong competitors in the division of labor. The government will go after a few of these people. It went after Wesley Snipes. He went to jail. His status as a movie star meant nothing when he tried to get out on appeal. The case went to the U.S. Supreme Court. The Court refused to hear the case. He had been given three years in prison for a misdemeanor. The jury would not convict for a felony. If anything, his public status was an advantage to the government. It showed that the government is not to be messed with.
The government released him eight months early. Clemency? Hardly. It released him in the first week of April 2013. Tax filing day is April 15. The government knew the release would get a huge amount of publicity, which it did. It sent a message: "Do not mess with us. File."
Taxes in the United States are lower than in most Western nations. There is a lot of liberty in this country. Part of the liberty is the fact that people who do not get on any government agency's hit list are generally left alone. The government cannot police everything. So, it polices easy victims. It also polices symbolic victims. Irwin Schiff was a symbolic victim. The government got good use out of this status.