Irwin Schiff, a controversial figure in the realm of taxation and personal finance, dedicated his life to challenging the legitimacy of the United States’ tax system. Despite his unorthodox views and numerous legal battles, Schiff became an influential figure for many individuals seeking to question the government’s authority to levy tax. Needless to say, Schiff’s arguments are still relevant today and can offer an interesting reflection on the current taxation system, not only US citizens but anyone who is subjected to taxation.
Who is Irwin Schiff?
Irwin Schiff was born on February 23, 1928, in New Haven, Connecticut. Schiff’s professional background was in finance and investment. He founded his own brokerage firm, Schiff & Company, in the 1960s and worked as a stockbroker and investment consultant.
Schiff’s approach to finance and economics followed the Austrian School of Economics, therefore, therefore, he held a very critical view of governmental currencies, intrusive fiscal policies, and the abandonment of the gold standard. Schiff considered gold to be real money, in contrast to fiat currencies that are not backed by a physical asset. He argued that governments could manipulate fiat currencies by printing more money, leading to inflation and a loss of purchasing power. Therefore, in his view, gold’s limited supply and historical track record made it a more stable and trustworthy form of currency.
According to Schiff, gold acts as a hedge against inflation and the devaluation of currencies but he also saw it as a means to challenge the authority and influence of central banks and governments over the monetary system. By holding and transacting in gold, individuals could potentially reduce their dependence on fiat currencies and avoid the risks associated with government control and manipulation of traditional currencies.
It was not until the 1980s however, that Schiff became a prominent figure in the tax protest movement, taking a stance against the US’ income tax system which led to a series of arrests and sentences that lasted until the end of his life in 2015.
Schiff’s Tax Theories
Irwin Schiff’s tax theories revolved around his belief that the United States income tax system, as enforced by the Internal Revenue Service (IRS), was unconstitutional and that individuals were not legally obligated to pay income taxes. His arguments were centered on his interpretation of the U.S. Constitution, particularly the 16th Amendment, which grants Congress the power to impose an income tax.
Schiff contended that the 16th Amendment was invalid and that the government had unlawfully expanded its taxing authority beyond what was intended by the Founding Fathers. He argued that the amendment was not properly ratified and that it did not grant Congress the authority to impose a direct tax on individuals’ wages or salaries. According to Schiff, this meant that the income tax system, as enforced by the IRS, was unconstitutional and individuals were not legally bound to pay income taxes.
To support his theories, Schiff examined the language of the U.S. Constitution and cited various court cases, historical documents, and legal arguments. He believed that the Founding Fathers intended for taxes to be limited and strictly defined, and that the income tax system violated these principles. Schiff further argued that the IRS operated under an elaborate deception, misleading the public into believing that they were legally obligated to pay income taxes. He claimed that the government relied on coercion and fear tactics to enforce compliance, rather than a legitimate legal authority. Schiff’s position was that individuals had the right to challenge the government’s authority to collect income taxes and that they could legally refuse to pay.
In his efforts to promote his theories, Schiff authored several books that explain in detail his position, including “How Anyone Can Stop Paying Income Taxes”, and “The Biggest Con: How the Government is Fleecing You,” in which he outlined his arguments and presented alternative interpretations of the U.S Constitution.
Whether you agree with Schiff or not, the way he was pilloried for his stance is disturbing even to those that are not opposed to taxation. Crucially Schiff helped to raise important questions on the nature of taxes and their legitimacy:
- What is the goal that taxation is pursuing and is taxation the only way of reaching that goal? How effective is government spending in delivering the goods and services that citizens need and desire?
- Are taxes a hindrance or a benefit to economic growth?
- What are the insurances that taxation will fund causes that citizens have agreed to through the social contract?
- How can taxpayers express their disagreement with fiscal politics?
- What is the acceptable interference of the government in individual autonomy and personal economic decision-making?
These are important questions that any taxpayer should be asking themselves. Although there might be no escape from taxation it is worth engaging in these discussions over what constitutes an acceptable form of taxation, taking the current system for granted and blindly accepting it is going to embolden governments to raise taxation and undermine economic freedoms to satisfy their hunger for power.
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