Peter Schiff Says The Majority Doesn't Have A Right To Steal His Money

[Reub]

Schiff is saying that the majority doesn't have the right to vote to take more of his money.

Here is his quote:

"First of all, I'm in the top two percent. Right now, I'm paying 45% of my total income in income taxes, both to the state of Connecticut and to the federal government, and if you take the 3% Medicare tax. After the tax hikes go into effect next year, more than half -- more than half of my total income is going to go to the government. You tell me, what's fair about that when medieval serfs pay 25%, I'm paying half? I don't care what the majority voted to do, they don't have a right to steal my money just because they vote for it."

Is he right?

http://realclearpolitics.com/video/2012 ... or_it.html

[Pointedstick]

I feel his pain. About 50% of my business income is taxed. There's something crazy going on when government takes more than half of the output of your productive labor.

It's even more crazy when you realize that most of the theft taxation is done by a federal government that doesn't even need the money to operate, and in fact is desperately trying to put money back into the private sector in the form of deficit spending.

[Pointedstick]

Furthermore, the argument that the federal government needs to tax this much in order to create a demand for dollars rings hollow due to the amount of people wanting to buy treasury bonds. I doubt this flood of demand would abate even if federal taxes were at 0%. Of course, not every country has the luxury of having the reserve currency and a massive military, but I would think that these advantages nullify the "need to tax to create a demand for currency" argument, and would theoretically enable a 0% total federal tax rate.

[moda0306]

There are two issues here IMO:

Total tax as a percentage of total income, and your marginal tax rate.

Theoretically, you could have very unfair marginal tax rates, while you have modest overall tax rates.  I think both should be designed to be "fair"... whatever that means.

However, I still don't really understand how some can assert so confidently where legitimate government stops and tyranny of the majority starts.  Even if we can agree what constitutes negative vs positive rights, and that the only legitimate federal government act is to protect negative rights, you still have to have that government force others who disagree with the nature of that protection into that paradigm... and then there's the question of what rights local and state governments have to do things that the federal government doesn't, and why a smaller form of government should be able to enact tyranny of the majority while the fed's can't.  I understand the "voting with your feet" aspect, but the "you can move" excuse built around local/state tyranny could theoretically even apply to any but a one-world government... and even then we could move to the moon with Newt as president .

So I guess I don't see the whole "taxation is theft" approach as being very productive.  Really, Mr. Schiff probably sees no problem with a lot of very important aspects of what our government does, but simply wants them to do the things HE sees as beneficial... the things that don't feel like tyranny to him.  Driving on a freeway to go enjoy your country estate FEEL like liberty, but if you really look at them they're a private/public partnership... just like most of our interactions with the world around us.

[systemskeptic]

He's right that the government probably shouldn't tax at rates as high as 50% of your income

He's wrong in that he views the gap between the 2% and everyone else as being even remotely acceptable.    He is also ignoring the fact that the taxes that financed the government, roads, education system, infrastructure, subsidized markets, and historical military power, etc. that has enabled him to get into the top 2%... were paid mostly by those in the 98%

Better system would be a flat tax on all income sources [~10%] and a property tax on net assets above $1M [~5%].  my 2c solution

[Pointedstick]

He is also ignoring the fact that the taxes that financed the government, roads, education system, infrastructure, subsidized markets, and historical military power, etc. that has enabled him to get into the top 2%... were paid mostly by those in the 98%

This is true at the state level, but at the federal level, taxes don't finance government. Rather, currency-issuing governments tax in order to create a demand for their currency, and to remove money from circulation in an attempt to tame inflation. Currency-issuing governments finance themselves. In principle, a government blessed with low inflation, a non-tax-originated demand for currency, and a smaller level of deficit spending could lower tax rates to 0% and see no problems. See http://pragcap.com/understanding-modern-monetary-system

That said, I could easily get behind your proposed tax rates. Much simpler and better than the current mess.

[RuralEngineer]

There are no human rights, there is only what individuals are willing to fight for. If he feels his taxes are too high, I suggest he do something about it. If he chooses to wait for some great arbiter of fairness to come and prevent the theft of his wealth, good luck to him.

The fact is that democracy is always a tyranny of the majority because we have a broad range of ideas concerning acceptable governmental behavior. If anyone thinks the masses are going to relinquish the ability to vote themselves direct access to their neighbors pocket, they're delusional.

With respect to suggesting that we could "vote with our feet" to another country, where exactly is someone supposed to go in search of a small government society that's not 3rd world or some deserted archipelago?

[MediumTex]

There are no human rights, there is only what individuals are willing to fight for. If he feels his taxes are too high, I suggest he do something about it. If he chooses to wait for some great arbiter of fairness to come and prevent the theft of his wealth, good luck to him.

The fact is that democracy is always a tyranny of the majority because we have a broad range of ideas concerning acceptable governmental behavior. If anyone thinks the masses are going to relinquish the ability to vote themselves direct access to their neighbors pocket, they're delusional.

With respect to suggesting that we could "vote with our feet" to another country, where exactly is someone supposed to go in search of a small government society that's not 3rd world or some deserted archipelago?

Just to provide a bit of color to Schiff's position, it's interesting to note that his father, Irwin Schiff, is currently serving a 13 year sentence in federal prison for tax fraud-related crimes.

I appreciate Schiff's outrage (I guess), but Schiff has shown over the years that he will do or say almost anything to sell more Peter Schiff products and services, so it's hard for me to take anything he says as more than his latest self-promotion effort.

If Schiff was honest he would admit that he has made his fortune complaining about the system, even though he has never really offered any workable alternatives.  In other words, if the system wasn't so screwed up he wouldn't be so rich in the first place.  In other words, YES, the government is taking more of his money than it would in a fair world, but if the world was fair a gadfly like him wouldn't be rich to begin with because in a perfect world there isn't a market for noisy complainers like Schiff.

[WildAboutHarry]

However, I still don't really understand how some can assert so confidently where legitimate government stops and tyranny of the majority starts. 

Everyone lives under the same set of rules (i.e. federal and state constitutions, etc.).  So long as those rules are applied properly to all, then the tyranny of the majority (which is ever present) is tolerable, or at least less perceptible.

When that tyranny begins to stretch those rules, then legitimate government morphs into intolerable tyranny of the majority.  I think many are perceiving that tyranny lately.

There is also nothing wrong with arranging your financial and personal affairs to minimize that tyranny.  Invest in municipal bonds.  Generate less taxable income.  Avoid states with income taxes or other onerous policies.  And so forth.  The 1% or 2% (or 10%) have the financial means to arrange their affairs to minimize taxes and government intrusion to a far greater extent than the 90% can.

One version of the old Robin Hood story was not about robbing the rich and giving to the poor but was about fighting government tyranny. 

In the 1939 movie Robin Hood (with Errol Flynn) the Lady Marian says to Robin Hood "Why, you speak treason!"

Robin's reply: "Fluently!"

So are today's rich the Normans or the Saxons?

[ngcpa]

Louisiana Senator Russell B. Long  observed that “tax reform”? often means taxing someone else. The taxes often don’t collect the expected revenue because people arrange their affairs to try to avoid paying taxes.

Long made the following famous in November 1975:

"Don’t tax you,
Don’t tax me,
Tax the fellow
Behind that tree. "

Norm

[melveyr]

ngcpa,

I totally agree. There is no objectively "fair" tax code. It's just people fighting for their own interests. Always.

That's why I don't like when people say that a politician is "engaging in class warfare." That's like accusing a plumber of plumbing.

[Reub]

But if they are so disliked then how did one just get reelected?

[Pointedstick]

But if they are so disliked then how did one just get reelected?

https://en.wikipedia.org/wiki/Rational_ ... y#Politics

Politics is a situation where rational irrationality is expected to be common, according to Caplan's theory. In typical large democracies, each individual voter has a very low probability of influencing the outcome of an election or determining whether a particular policy will be implemented. Thus, the expected cost of supporting an erroneous policy (obtained by multiplying the cost of the policy by the probability that the individual voter will have a decisive role in influencing the policy) is very low. The psychic benefits of supporting policies that feel good but are in fact harmful may be greater than these small expected costs. This creates a situation where voters may be rationally irrational for practical morale reasons.

When a large number of individuals hold systematically biased beliefs, the total cost to the democracy of all these irrational beliefs could be significant. Thus, even though every individual voter may be behaving rationally, the voters as a whole are not acting in their collective self-interest. This is analogous to the tragedy of the commons. Another way of thinking about it is that each voter, by being rationally irrational, creates a small negative externality for other voters.

Caplan believes that the rational irrationality of voters is one of the reasons why democracies choose suboptimal economic policies, particularly in the area of free trade versus protectionism. Philosopher Michael Huemer, in a TEDx talk on rational irrationality in politics, cited the war on terror and protectionism as two examples of rational irrationality in politics.

[WildAboutHarry]

Uhh, don't you live in California?

Ha!  Thought you caught me, huh?

I do, indeed, live in California.  But I own a house in Washington State, and I will vote with my feet when I retire in the next few years.  And I will take all of my state-tax deferred IRA/401(k) contributions and earnings with me.

If only I could move my CA house as well...

[Kshartle]

Just to provide a bit of color to Schiff's position, it's interesting to note that his father, Irwin Schiff, is currently serving a 13 year sentence in federal prison for tax fraud-related crimes.

Irwin has been fighting for Americans to be free of the income tax for years. What's interesting is that he wasn't allowed to present evidence in his defense and the IRS couldn't provide any statute that he was in violation of. He's a political prisoner who challenged the ruling powers on behalf of the common man and is being shuffled from prison to prison away from his family until he dies. Tragic.

I appreciate Schiff's outrage (I guess)

Well that's good (I guess)

Schiff has shown over the years that he will do or say almost anything to sell more Peter Schiff products and services

What exactly do you mean? Do you have some evidence he's deliberately misled people or broken laws? If you simply mean that he markets his various companies vigorously, well, that's absolutely correct.

If Schiff was honest he would admit that he has made his fortune complaining about the system, even though he has never really offered any workable alternatives.

Again, what proof do you have that he's been dishonest? No workable alternatives? I would suggest you read his latest book "The real crash". Its chalk full of "workable" alternatives. That's the entire premise.

In other words, if the system wasn't so screwed up he wouldn't be so rich in the first place.  In other words, YES, the government is taking more of his money than it would in a fair world, but if the world was fair a gadfly like him wouldn't be rich to begin with because in a perfect world there isn't a market for noisy complainers like Schiff.

The logic fail here is so astounding that I'm embarrassed to comment. If the government took less of his honestly earned money he wouldn't be able to earn as much. I hope the rest of you can see how nonsensical this is. It's a testament to him that he's created several successful businesses in a terribly regulated and competitive industry while suffering crushingly high taxes/theft.

If you don't like the guy just call him a doo-doo head and move on. Don't jump onto a thread about a valid topic (excessive taxation) as an excuse to make a personal attack on someone while ignoring the entire topic.

[MediumTex]

Just to provide a bit of color to Schiff's position, it's interesting to note that his father, Irwin Schiff, is currently serving a 13 year sentence in federal prison for tax fraud-related crimes.

Irwin has been fighting for Americans to be free of the income tax for years. What's interesting is that he wasn't allowed to present evidence in his defense and the IRS couldn't provide any statute that he was in violation of. He's a political prisoner who challenged the ruling powers on behalf of the common man and is being shuffled from prison to prison away from his family until he dies. Tragic.

I don't think that arguing before a U.S. court (that is funded through the federal income tax) that the Internal Revenue Code doesn't require individuals to pay taxes is a good use of a person's time. 

I'm a tax attorney and I make a living trying to keep my clients from paying more tax than they have to, so I am entirely sympathetic to the motives of tax protesters, but there is just something sort of naive about their arguments IMHO.  It would be like arguing to a herd of predators that they should become vegetarians.

Schiff has shown over the years that he will do or say almost anything to sell more Peter Schiff products and services

What exactly do you mean? Do you have some evidence he's deliberately misled people or broken laws? If you simply mean that he markets his various companies vigorously, well, that's absolutely correct.

I just mean that he is an arrogant loudmouth who is always selling Peter Schiff in the guise of innumerable complaints about how stupid the rest of the world is, while never coming back to any of his own advice that didn't turn out very well. 

For example, where is this inflation Schiff has been promising his followers for years?

If Schiff was honest he would admit that he has made his fortune complaining about the system, even though he has never really offered any workable alternatives.

Again, what proof do you have that he's been dishonest? No workable alternatives? I would suggest you read his latest book "The real crash". Its chalk full of "workable" alternatives. That's the entire premise.

I don't mean that Schiff is dishonest in any other way than most media personalities are dishonest.  He wants people to be upset so that he can help rescue them from the thing that he convinced them they should be upset about.  Lots of people do this--I don't mean to single him out.

In other words, if the system wasn't so screwed up he wouldn't be so rich in the first place.  In other words, YES, the government is taking more of his money than it would in a fair world, but if the world was fair a gadfly like him wouldn't be rich to begin with because in a perfect world there isn't a market for noisy complainers like Schiff.

The logic fail here is so astounding that I'm embarrassed to comment. If the government took less of his honestly earned money he wouldn't be able to earn as much. I hope the rest of you can see how nonsensical this is. It's a testament to him that he's created several successful businesses in a terribly regulated and competitive industry while suffering crushingly high taxes/theft.

If you don't like the guy just call him a doo-doo head and move on. Don't jump onto a thread about a valid topic (excessive taxation) as an excuse to make a personal attack on someone while ignoring the entire topic.

It's not a personal attack to point out that someone who is making very inflammatory remarks about the U.S. tax system has a parent who is in prison for tax fraud.

That's relevant information.

If you like Peter Schiff, you're not alone.  I used to like him, too.  A lot of people like him.  I recognize that.  It's cool.

Schiff's arrogance, endless self-promotion, and seeming inability to have a discussion with anyone without attempting to talk over them just annoys me.  It's like he wants everyone to listen to him, but he doesn't want to return the courtesy by listening to other people when it is their turn to talk.

His beatdown of Art Laffer on Kudlow's show a few years ago WAS very entertaining, in part because however much of a dolt Schiff might be, he looks like a genius in comparison to Laffer.

[MachineGhost]

I'm a tax attorney and I make a living trying to keep my clients from paying more tax than they have to, so I am entirely sympathetic to the motives of tax protesters, but there is just something sort of naive about their arguments IMHO.  It would be like arguing to a herd of predators that they should become vegetarians.

Isn't being a tax attorney and a libertarian an oxymoron?  Which came first, the attorney or the libertarian?

[Pointedstick]

I'm a tax attorney and I make a living trying to keep my clients from paying more tax than they have to, so I am entirely sympathetic to the motives of tax protesters, but there is just something sort of naive about their arguments IMHO.  It would be like arguing to a herd of predators that they should become vegetarians.

Isn't being a tax attorney and a libertarian an oxymoron?  Which came first, the attorney or the libertarian?

I don't see how it would be. MT helps people keep more of their own money that the government would like to take. Would it be an oxymoron to be a libertarian running for public office?

Sometimes ya gotta engage with the system if you want to effectively change it or avoid its consequences.

[MachineGhost]

I don't see how it would be. MT helps people keep more of their own money that the government would like to take. Would it be an oxymoron to be a libertarian running for public office?

Sometimes ya gotta engage with the system if you want to effectively change it or avoid its consequences.

It just seems like a conflict of interest.  Being a tax attorney or a CPA presupposes a government to have the legislative power and executive ability to tax.  If that power went away as libertarians want, so would those jobs.

Nor would you expect a tax attorney or CPA to take any "illegal tax protestor" argument seriously, even if they're constitutional or factual-based.  They will always defer to the Tax Court or Federal government's opinion on the matter.  Hardly impartial.  Need I remind anyone that the Constitution expressly forbid taxing judges salaries?  Yet, the IRS does it anyway to keep them all in line.  Hardly impartial either.

Also, I have a hard time seeing that libertarian public policy would be so complicated, that make-work attorneys would be needed in such droves as today.

So I think MT must be a very rare breed.  Compared to moda who's a CPA, MT's a lot more libertarian than he should be.

[Pointedstick]

I imagine that MT would have little difficulty finding new employment if all or nearly all taxes disappeared, as libertarians want. Making a living out of helping people reduce the harm that the government causes to them hardly seems like a conflict of interest at all.

[MachineGhost]

I imagine that MT would have little difficulty finding new employment if all or nearly all taxes disappeared, as libertarians want. Making a living out of helping people reduce the harm that the government causes to them hardly seems like a conflict of interest at all.

Where do you keep getting this idea that what he does as an attorney is helping people reduce the harm of tax laws, rather than enforcing the status quo to maintain his job?  Seems like a rationalization to me.  I'm sure MT can come to his own defense. 

[moda0306]

Machine Ghost,

Do you go slower than you otherwise would want to on the freeway because of speed limits?

Do you pay taxes you deem to be unconstitutional, and personally do you use qualified retirement account strategies to avoid taxes?

We all try to do what we can to live within the system but game it what little bit we can.  Sometimes, there's enough wiggle room, that lawyers, accountants, or financial advisors can actually be hired, and worth it, to help us through the process.  Individually, none of them can affect the tax code or legal system, all they can do is help people play the game.  All any of us can do is play the game.  We can pontificate and debate about how things should all be run, but individually we are left with very little influence on the system.

[MediumTex]

I imagine that MT would have little difficulty finding new employment if all or nearly all taxes disappeared, as libertarians want. Making a living out of helping people reduce the harm that the government causes to them hardly seems like a conflict of interest at all.

Where do you keep getting this idea that what he does as an attorney is helping people reduce the harm of tax laws, rather than enforcing the status quo to maintain his job?  Seems like a rationalization to me.  I'm sure MT can come to his own defense. 

Minimizing the taxes my clients are required to pay the government is one of the things that I enjoy about my job.

I am realistic about what tax management strategies actually work in practice because no one wants to pay a tax attorney who is going to make theoretically sound arguments that are universally rejected by the people who are running the system.

You have to be realistic about what actually works, but with that said there are an awful lot of tax strategies that work just fine.

BTW, for anyone curious about my references to doing retirement plan work and being a tax attorney, virtually all employee benefits arrangements are primarily tax-driven, and thus any retirement plan/executive compensation/health and welfare practitioner is basically a tax attorney in the sense that they spend all of their time with Internal Revenue Code provisions and deal with the IRS when issues arise.  (Note that most of ERISA is mirrored in the Internal Revenue Code, so even a so-called "ERISA attorney" is still basically a tax attorney.)

I don't feel any tension at all with being skeptical of the government's ability to solve society's problems through the confiscation of private property through taxation, and spending my professional career trying to minimize the government's confiscation of private property through taxation.

Ultimately, all legal systems consist of arbitrary rules designed to validate the system and take care of the VIPs in society.  Some people imagine that when challenging the government in court if you have a good legal argument you will always win, when that's rarely the case.  In order to win, you do need to have a good legal argument, but you also have to be realistic about what you are asking the state to do.  Asking the state to cede power will always be a rough case to win, regardless of the strength of your legal arguments.

In the case of Irwin Schiff and tax protesters of his ilk, I always wonder what they thought would happen.  Did they not realize that their schemes could result in them going to prison? 

I understand their righteous indignation, but I think that when dealing with an amoral entity like the state, such indignation is akin to being outraged that a bear mauled you after you walked up to it covered in honey shouting anti-bear epithets.

[MachineGhost]

We all try to do what we can to live within the system but game it what little bit we can.  Sometimes, there's enough wiggle room, that lawyers, accountants, or financial advisors can actually be hired, and worth it, to help us through the process.  Individually, none of them can affect the tax code or legal system, all they can do is help people play the game.  All any of us can do is play the game.  We can pontificate and debate about how things should all be run, but individually we are left with very little influence on the system.

Ouch.  Pee on my parade, why don't you?  The implication you seem to be implying is that we're all helpless in one giant orgy and we should just go ahead and incestously snack and feed on each other, no matter what the collective end result, because we have no individual power.  And that does seem to be the direction America has been going for a while.  I have a problem with that line of thinking.  I'm not a standoffish libertarian anymore.

I do hate pontificating over and over about what could or should be, but at the same time if we didn't have these nit-picky discussions, how would we push the envelope for society to reform and improve in the future?  I'm just as invested in the system as everyone else, but I'm not content to sit on my damn ass and accept things as they are.  Oh jeeze, now I sound like I'm pulling a doodle...

[Pointedstick]

We all try to do what we can to live within the system but game it what little bit we can.  Sometimes, there's enough wiggle room, that lawyers, accountants, or financial advisors can actually be hired, and worth it, to help us through the process.  Individually, none of them can affect the tax code or legal system, all they can do is help people play the game.  All any of us can do is play the game.  We can pontificate and debate about how things should all be run, but individually we are left with very little influence on the system.

Ouch.  Pee on my parade, why don't you?  The implication you're implying is that we're all in one giant orgy and we should just go ahead and incestously feed on each other, no matter what the collective end result.  And that does seem to be the direction America has been going.  I have a problem with that line of thinking.

I do hate pontificating over and over about what could or should be, but at the same time if we didn't have these nit-picky discussions, how would we push the envelope for society to reform and improve in the future?  I'm just as invested in the system as everyone else, but I'm not content to sit on my damn ass and accept things as they are.  Oh jeeze, now I sound like I'm pulling a doodle...

The problem with government is that it's one giant collective action problem. Like it or not, we're all slaves to the prevailing opinion. You can't get too frustrated with it because you'll just feel miserable all the time. We can try to affect other people's attitudes in our own small ways, but generally speaking, the effort/reward ratio is very low unless it's something you enjoy doing anyway.

I really like to advise that people that they be the change they want to see in others. I argued myself blue in the face about guns for years, but it wasn't until I stopped debating and started quietly enjoying my firearms that people started to come to me about what their first gun should be. The only people who are going to follow the angry bombastic rager are cultists.