The Noose Continues to Tighten But No Government Lasts ForeverBy Carl Watner
Jul. 17, 2012
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Voluntaryists have a unique outlook on government. They view the State as an invasive institution. It imposes a coercive monopoly over defense services and collects its revenues via compulsory taxation. Theodore Lowi, a professor of political science at Cornell University in the early 1980s, authored a book, INCOMPLETE CONQUEST (1981), in which he observed:
Every action and every agency of contemporary government must contribute to the fulfillment of its fundamental purpose, which is to maintain conquest. Conquest manifests itself in various forms of control, but in all those forms it is the common factor tying together in one system the behavior of courts and cops, sanitation workers and senators, bureaucrats and technocrats, generals and attorney generals, pressure groups and presidents. [p. 13]Two of the most basic "forms of control" exercised by any government are that of demanding enrollment in its armed forces, and in collecting taxes based on one's income and/or accumulated wealth. Perhaps conscription is the State's most direct control over your life, but its ability to tax ultimately destroys the principle of private ownership. Everything you think you "own" is really held subject to its pleasure. It is as though you are a slave and your master allows you to retain certain perks.
In my article, "The Chickens Come Home to Roost - The Master Plan for 'Tightening the Noose'" (Issue 48, February 1991), I referred to the late Fred Rowe, who wrote an article for his House of Onyx publication entitled "The IRS Electronic Monster." Rowe set forth his predictions about the future state of economic freedoms in these United States. He described what he called an IRS "master plan" under which the United States government would push toward the creation of a cashless society. Electronic money would take the place of banknotes, and all financial transactions would be recorded via computers, which in turn would be connected to those of the IRS. The tax bureaucracy would then take this information and render every citizen and resident of the United States a tax return. Withholding on all income from your labor, and on all major financial transactions, such as the sale of real estate and investments, would enable the government to collect taxes on a mostly "pay-as-you-go" basis. Such computer transparency would also make it very difficult for tax resisters to escape the government's clutching hand.
Whether or not such a conspiratorial master plan was ever hatched by government bureaucrats, the unceasing efforts of government to take control of its citizens' property have continued unabated. Some of the steps in this never-ending battle for conquest and control have been:
...requirements that most people born in the United States have government-issued birth certificates;Now the government is working out some new regulations that affect both our property and our bodies. The Obama care health care legislation mandates that most people in the United States purchase health insurance or pay a penalty. Its constitutionality has been argued before the Supreme Court. Increasingly, doctors are no longer able to abide by the Hippocratic Oath because third-party payers (mostly the government through Medicare and Medicaid, but also insurance companies) make health decisions for their patients. It is no longer between the doctor and patient to determine what is the best treatment. The decision is up to the party paying for that treatment. Furthermore, physicians have been ordered "to adopt electronic health records or face economic sanctions from Medicare." The Federal Commission for the Coordination of Comparative Effectiveness Research will determine the "most-cost effective way of allocating a fixed amount of resources among" the U.S. population. [See "Notable & Quotable," THE WALL STREET JOURNAL, March 17-18, 2012, p. A13]
The government is also tightening the regulations surrounding the ownership of foreign bank accounts and the reporting of assets held abroad. For all practical purposes there has never been any financial or banking privacy in the United States. Currently the governments of the United States, France, Germany, Italy, Spain, and the United Kingdom have joined together in cooperation to intensify their efforts to combat international tax evasion. On March 10, 2010, the United States enacted the Foreign Account Tax Compliance Act (FATCA). This legislation introduced reporting requirements for foreign financial institutions (FFIs). Many banks headquartered abroad are required to identify U.S. account holders, report certain information to the IRS about their accounts, and assess a 30% withholding tax on certain payments of U.S. source income to recalcitrant account holders or non-participating FFIs that are unwilling to provide the necessary information. In short, great pressure is being brought to bear on banks that are not subject to U.S. jurisdiction to subjugate them to IRS regulations. Some foreign banks, particularly those in Switzerland, have decided to terminate their account relationships with U.S. citizens so as to avoid these entanglements with U.S. law.
All this is reminiscent of what Nazi Germany did to its citizens in the years before World War II. Consider these National Socialist laws:
The decisive sign that the Nazis had turned their sights on the assets of Germans abroad was the law against economic sabotage enacted in December 1936. In part this was aimed at enticing Germans to repatriate their foreign nest-eggs: those prepared to admit they had assets abroad could keep a third of them after they handed over the remaining two-thirds to the Reichsbank, ... 'Any German national who knowingly and having as a motive acts against the law in transferring assets abroad or keeps them abroad and thereby damages the German economy is punished with death'."[Nicholas Faith, SAFETY IN NUMBERS: THE MYSTERIOUS WORLD OF SWISS BANKING, New York: The Viking Press, 1982, pp. 83-84]As reported in THE WALL STREET JOURNAL on April 6, 2012 [p. A9], "hiding money in [tax] havens isn't as easy as it used to be." The U.S. Congress has "passed laws imposing draconian penalties on people hiding foreign financial assets." How do the following U.S. government regulations compare to those of Nazi Germany?
A person who holds a foreign financial account may have a reporting obligation even though the account produces no taxable income. ... The FBAR (Report of Foreign Bank and Financial Accounts) is not filed with the filer's federal income tax return. [From IRS.gov: Report of Foreign Bank and Financial Accounts (FBAR) page on the internet]The Internal Revenue Service also has other reporting requirements to be found in Part III (Foreign Accounts and Trusts) of Schedule B, Form 1040, as well as on Form 8938, Statement of Specified Foreign Financial Assets. A Bloomberg.com news report of August 3, 2011 demonstrates that the IRS means business. Robert E. Greely, who "pleaded guilty to filing a false U.S. tax return that concealed more than $ 13 million in two Swiss" bank accounts, "agreed to pay a civil penalty of $ 6.8 million for failing to file a Report of Foreign Bank and Financial Account form." ["Former UBS Client Greely Admits to Hiding More than $ 13 Million From IRS by David Voreacos; citing U.S. v. Greely, 11-cr-374, U.S. District Court, Northern District of California (San Francisco)]
Why exactly are such assets of concern to the federal government, and why is the "failure to report" foreign assets a crime if it is not illegal to own them? The answer is to be found in the invasive nature of government. Governments demand obedience to their rules and regulations, whatever they may be. Governments also have an insatiable appetite for tax revenues. And furthermore, many governments have a record of confiscating the known assets of their citizens. Although the United States government has never required surrender of assets held abroad, it did confiscate all gold coins and gold bullion in 1933, and outlawed the ownership of gold by American citizens regardless of where it was located. But why would a citizen break the laws of the United States? An American might have several reasons. A person might be a conscientious objector against taxation. A citizen might think that foreign assets would be safe from seizure by the American government because they are outside its domestic jurisdiction. The citizen might also think that having assets abroad would provide a nest egg in case of the need to live abroad. Having foreign assets might provide a means to escape from government agents. During the Nazi era, how many German dissidents or German Jews would have been grateful to have had money outside of Germany, and how much easier would it have then been to leave Germany and escape the Gestapo?
There have been numerous books and articles comparing Nazi Germany and the United States of America. Leonard Peikoff''s 1982 book, THE OMINOUS PARALLELS, was subtitled "the end of freedom in America." Naomi Wolf's more recent publication, THE END OF AMERICA (2007) highlighted "the ten key steps that would-be despots take" when they assume control of a country. These include many that have already occurred in the Untied States:
...invoking the threat of internal and/or external dangers;No one can foretell how far these trends will affect the future, but they seem to reflect Carroll Quigley's 1966 prediction: Man's "freedom and choice will be controlled within very narrow alternatives by the fact that he will be numbered from birth and followed, as a number, through his educational training, his required military or other public service, his tax contributions, his health and medical requirements, and his final retirement and death benefits." [p. 866] That is the tragic part of the prediction in his book's title, TRAGEDY AND HOPE.
The hopeful part is reflected in what we can observe from history. No government lasts forever. The Nazi 1000 Year Reich was gone in less than two decades. The Union of Soviet Socialist Republics lasted less than 100 years. In western Europe, after the Roman empire disappeared, Quigley observes that by 900 A.D. there was clearly a period "when there was no empire, no state, and no public authority ... . The state disappeared, yet society continued. ... It was discovered that man can live without a state; ... . It was discovered that economic life, religious life, law, and private property can all exist and function effectively without a state." [p. 83] Every generation faces natural and political challenges. Despite the tightening of the political noose, our own times are not unique. Some problems are more daunting than others, but life goes on. As Robert LeFevre used to say, the free man will find a way to be free.
Carl Watner is an American author and historian of libertarian studies. He has written articles for Reason magazine, The Libertarian Forum, and The Journal of Libertarian Studies. Visit his website, Voluntaryist.com.