The Truth About Taxation: Where Are the John Hancocks of Today?

April 15th is approaching--a day when Americans will fuss and fume about Uncle Sam's income tax round-up, but dutifully sign their names on the dotted line anyway.

I'll be posting articles all this week to show the history of taxation in America, the illegality of the income tax, and alternatives that can free us and our children from its expanding tyranny.

This information helped open my eyes and stir me to action. If you acknowledge your individual sovereignty before God, but are now convinced more than ever that the State has brazenly, systematically made you its slave...then you, too, will be galvanized by what you read.

When one views a copy of the Declaration of Independence, John Hancock's signature stands out from all the rest. The story goes that he signed the Declaration in large script so that King George wouldn't miss his signature!

Hancock was also one of the wealthiest businessmen prior to the Revolution; yet, he was willing to take  a profound risk with his fortune and ultimately (as indicated by his  over-sized signature), his life.

Hancock had not paid H.M.S. Customs taxes for decades. Today, we would call him a tax dodger and a criminal; but Hancock’s bold signature is a clear reminder that America was founded by tax rebels.

Hancock presided over the Second Continental Congress and was the sole signer of the Dunlap-Broadside version of the Declaration. He was the first elected governor of Massachusetts, and was reelected eight times. He was reelected President of the Second Continental Congress after the ratification of the Articles of Confederation.

 John Hancock

What do you think Hancock, his mentor Samuel Adams, and other patriots would say about the current income tax? After all, they were only standing up to abusive tariffs and excise taxes in their day.

More importantly, what do you think they would say to us, the American people?

Today, Christians apply to the State to start a church in exchange for a not-for-profit status and tax benefits.

Christian ministries covet monetary grants from the government to continue the good works of Jesus, yet stay bound by the rules and regulations of a godless state.

Christians even seek permission from the State to marry.

Americans' activities and pursuits are monitored, cataloged, defined,and restricted. To resist the State incurs harassment, fines, and/or imprisonment.

This is NOT the America for which Hancock so boldly signed!  Is it yours?

The History of Taxes in America:

With the advent of income taxation in America, the relationship between citizen and government was inverted. Prior to the income tax, the citizen was sovereign by virtue of the fact that he was free to earn unlimited amounts of money and there was nothing the government could do about it. Like it or not, it was his money, to do with as he pleased.

With the adoption of income taxation, all that changed. In effect, the income tax nationalized income. While many people would undoubtedly prefer not to think about it in this way, under the federal income tax everyone’s income belongs to the government or, if you prefer, to “society.” The power to set the tax rate is essentially the power to decide how much of their income people are going to be permitted to keep.

Thus, the income tax has converted the relationship between government and citizen into one akin to parent and child. The portion of their income that the citizenry are permitted to retain has effectively become an allowance. Sometimes the government is good to the citizenry and lets them keep more of their income. Sometimes the government is not so nice and lets the citizenry keep less of their income. But what’s important here, in terms of freedom, is not the percentage that is being levied but rather the fact that it is the government making the determination. That’s obviously a far cry from a society in which there is no income taxation at all. (Jacob Hornberger, The Ultimate Tax Cut

The British government had serious tax problems at the time of American colonization.

The prolonged war with France had been costly, as all wars are, and to increase taxes at home, in 1764, taxes were introduced on hard cider, the beverage of the common man. Riots erupted in London, excise houses were burned, and the tax was repealed. The Crown then turned to the untaxed colonies. In the House of Commons the question was asked, "Do you think the Americans will resent paying their mite for the protection of the colonies?" No one objected. The Crown then passed the Sugar Act with no dissents.

Revenue was not anywhere near what was expected, so the Crown tried again with stamp taxes that would apply to all kinds of documents, newspapers, etc. No opposition was expected as there had been nothing of much significance to the protest over the Sugar Act. But this was a different kind of tax – it hit everyone, not just the smugglers in New England. Stamp taxes were in use in the colonies as a local revenue measure. They were popular most everywhere in Europe, having been invented at the beginning of the 18th century. It was this tax that prompted Adam Smith’s comment, "There is no act which one nation sooner learns from another than how to drain money from the pockets of the people."

To the surprise and shock of British tax authorities, and even local governors, the colonists reacted with a fury. Even Ben Franklin, at first, applied for the job of stamp tax collector, not anticipating a major rebellion. The colonists called for a meeting of protest, which met in New York, and called itself "the Stamp Act Congress," which was the real birthplace of the United States. Most of the colonies showed up. This congress brought together the squabbling colonies for the first time with a common goal – defeat British efforts to tax the colonies internally.

The British prime minister...proposed a new tax putting a duty on a number of goods coming into the colonies... The Americans immediately started to boycott the goods that carried the new taxes. The Crown had no choice but to repeal these duties, except for tea. This gave rise to the trigger for the Revolution, the Boston Tea Party. A Brief Tax History of America by Charles Adams

The Continental Congress of the colonies drafted the Articles of Confederation, which many libertarians today still consider superior to the Constitution. The government had NO power to directly tax the people--what it needed had to come voluntarily from the sovereign states.

To be monetarily at the mercy of the states was unacceptable to many men who wanted a top-down government. Behind closed doors, a new Constitution granting more power to a centralized government was quickly drafted and pushed through with questionable ratification.

Power-hungry men got their way, and stronger, centralized government began to steadily flex its ever-growing muscles as the task master over a new plantation of slaves.

Is taxation equivalent to slavery? Yes!

Slavery...is non-ownership of Person and Labor. In that case, sovereignty is ownership of Person and Labor. The basic contrast, then, is between slavery and sovereignty, and the issue is ownership. And there are two basic things one can own: one’s Person (one’s life), and one’s Labor (the fruits of one’s labors, including personal wealth resulting from productive labors).

The pivotal point is whether or not ownership is ceded through voluntary contract. Have you any recollection of any deals you signed with the IRS promising them payment of part of your income? If not, then if 30% of your income is paid in income taxes, then you have only 70% ownership of Labor. You are a slave from January through April – a very conservative estimate at best, today!

If one wants to stand on the U.S. Constitution as one’s foundation, then the 13^th Amendment to the U.S. Constitution can be used as an ironclad argument against a forcible direct tax on the labor of a human being.

The 13^th Amendment says: 'Neither slavery nor involuntary servitude, except as a punishment for a crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction. Congress shall have the power to enforce this article by appropriate legislation.'

The 13^th Amendment makes it very clear that we cannot legally or Constitutionally be forced into involuntary servitude. As such, we maintain that a human being has an inalienable right to own 100 % of Person and 100% of Labor, including control over how the fruits of his actions are dispensed. A human being has an inalienable right to control the compensation for his labor while in the act of any service in the marketplace – e.g., digging ditches, flipping burgers, word-processing documents for a company, programming computers, preparing court cases, performing surgery, preaching sermons, or writing novels.

A forcible direct tax on the labor of a human being is in violation of this right as stated in the 13^th Amendment. If we work 40 hours a week, and another entity forcibly conscripts 25 % of our compensation, then we argue that we have been forced into involuntary servitude – slavery – for 10 of those 40 hours, and we were free for the other 30." Is the Income Tax A Form of Slavery?  by Steven Yates and Ray E Bornett II

Interestingly, although the new constitution gave the government the power to tax...

...it was generally believed this should be limited to duties on imports. The right to tax without limitation was repudiated by even the most ardent nationalists, like Noah Webster and Hamilton. Hamilton argued successfully against limiting taxes to a single form. If great revenues were needed, as they may be at times, then a single form of tax would be excessive, fostering evasion and hurting commerce. Let Congress have the power to select many different forms of taxation and spread the burdens more equitably. So as you might expect, the first power granted to Congress was to tax.

When the matter of constitutional ratification came up in the many state legislatures, concern about direct taxing powers was expressed by the representatives. Without exception, it was almost axiomatic that direct taxation would only occur during an extraordinary emergency.

A delegate to the Maryland state convention, noted that the federal government must hold the power of direct taxation in reserve, "nothing but some unforeseen disaster will ever drive them [federal government] to such ineligible expedients." At the Convention, Luther Martin seemed to express the universal view that direct taxation "should not be used but in cases of absolute necessity." James Wilson, whom many believe was the primary architect of the Constitution, even eclipsing Madison, said that direct taxes were for emergencies only. (Adams)

But enter the Whiskey Rebellion:

Hamilton as the Secretary of the Treasury, persuaded the first Congress to adopt a tax on whiskey to help pay for the huge war debt as well as to run the country along with import duties. At that time, there was no tax more hated than excises by both the Americans and the British. It was an extremely unpopular form of taxation, as the ruling Federalist Party was to learn the hard way.

A revolt immediately erupted in Western Pennsylvania where whiskey was used as money, more than as drink. Any farmer who paid the tax, had his still shot full of holes by "Tommy Tinker," the name used by the rebels against the tax.

Tax collectors were tarred and feathered and ridden out of town on a rail, as some of the fascinating etchings from this period show. Eventually the rebels capitulated and signed an amnesty agreement, promising to pay the tax. President Washington pardoned the few who led the uprising. Historians now know the military force called out to put down the rebellion was unnecessary as the rebels had capitulated beforehand. It was Hamilton’s idea of showing force to strengthen the support for the new national government. In the end, however, when Jefferson came to power, the tax was repealed and the Federalist Party disappeared from history.

When President Adams replaced Washington, he too as a strong Federalist, introduced the first direct tax, and like the Whiskey tax, it set off another tax revolt, this time in Eastern Pennsylvania. When tax assessors showed up in the various counties, an armed uprising followed. Some of the rebels were put in jail, and an auctioneer named John Fries showed up with a mob and got the men released. Adams called out the militia, Fries was arrested and tried for treason. His conviction and subsequent sentence to be hanged, was overturned by a pardon given by President Adams, against the unanimous advise of his cabinet. Adams felt it was not treason, but just a riot. That unpopular tax, along with the whiskey tax, added to the popular contempt for the Federalist Party.

Hamilton was behind this tax as well as the whiskey tax. Historians have often called him the right man, at the right time, in the right place, in American history. His firm policy to make the country fiscally strong, with sound credit and a sound currency, no doubt justify that observation. But to the Federalist Party, his taxes brought about the total destruction of our first political party. (Ibid.)

The Real Cause of America's Civil War:

The tariff became the primary tool to raise revenue for the federal government, and finally, in 1834, the national debt was paid off. It was long struggle, but with a frugal government, and only one short war, the finances of the federal government were slowly being put in good order.

The tariff had been used for some protectionist purposes in the beginning, but in 1828, northern industrialists pushed through a high tariff, greatly resented by the South. They called it the "tariff of abomination," a biblical term meaning the highest evil. In 1832, when this high tariff continued, South Carolina nullified the tariff as unconstitutional. There was a brief threat of war by President Jackson, but cool heads prevailed, the tariff was to be reduced, and the nullification ordinance passed away.

The hatred for the tariff was universal throughout the South. It made Southerners vassals of the North, being just a sophisticated form of tribute. The argument went like this: The tariff prevented competition from Europe, which meant that Northern industrialists could charge excessive prices for their goods sold in the South, thus shifting a large part of Southern wealth to Northern interests. If the South should chose to buy foreign goods with the high tax, this put Southern moneys into the federal coffers to be spent on Northern projects, in effect another form of tribute from the South to the North. Either way it was an injustice upon the Southern people and their economy."(Ibid.)

The nefarious beginnings of a "tax agency":

Few historians take note of Whiskey Rebellion #2 which began as the Civil War ended and raged for almost 40 years, in Appalachia – from West Virginia south to Georgia and Alabama. The heart of the rebellion was probably in North Carolina. To support the war, the North adopted a tax on whiskey, eventually up to $2 a gallon.

When the war ended, the tax naturally spread throughout the South and federal tax men, call revenuers, scoured this mountain region to collect the tax. Open war erupted and hundreds were killed, on both sides, as the IRB (Internal Revenue Bureau) came into existence and enforced this hated tax on what was a poverty area of the nation. As one moonshiner said, being led off to jail for tax evasion, "What did my granddaddy fit in the Revolution if it wasn’t to make a little corn licker." Others argued it was an assault on their liberties; they had just as much right to grind corn into mash as they did to grind it into flour to make bread.

The spirit of the assault on these mountain people, and the numerous death that resulted from trying to serve arrest warrants, indicates a kind of savage enforcement of a tax law that has survived to this day. The violence we see from time to time in enforcing federal laws, even misdemeanors, may well be traced to the spirit of enforcement of the whiskey tax in the South among the moonshiners. The Internal Revenue Bureau grew from this small paramilitary operation to enforce the income tax that came some 30 years later, eventually becoming the I.R.S. in our day.

The spirit of tax enforcement that characterized that early IRB seems to have infected not only the IRS, but other federal agencies with similar endowments of powers of enforcement. Resistance to the service of any federal warrant justifies deadly force today, as it did during the days of the moonshiners. Waco, Texas, is proof enough of this policy of violence to the disobedient, and Waco is not a rare exception to official policy." (Ibid.)

Think about the spirit and courage of leaders like John Hancock and common patriots who stood against unjust tariffs and taxations. Again I ask, what would they think of us today as a people who dutifully submit year after year to such an oppressive system of direct taxation?

No doubt they would be shocked and outraged; they would call for a massive revolt, assured that millions of people who stand united can prevail against government tyranny.

However, John Hancock's have been ringing the Liberty Bell on this issue for years, only to have the plea fall mostly on dear ears. These rebels appear strange to wards of the State today, although prior to the American Revolution, the opposite was the norm--people who defended the Crown and quietly complied to the increasingly oppressive taxes were on the "loony fringe"!

Would you have been a rousing freedom fighter back then?  What are you today, patriot, and why is it any different?

John Hancock wants to know.

In our next installment, we'll continue with America's tax history and look closer into the Internal Revenue Service--an incredible, unrestrained agency with power to enslave an entire nation.