I am still plugging along on my new book. The long history of taxation has been both a treat and disappointment to me. On one side, it has been a treat to learn all the various methods that society has sought to check the exploitive State. On the other side, though, it has also been disappointing to realize how many times the State has won this contest against society. LIFE Leadership is a company on a quest to learn truth so it can be shared with others. The only agenda is truth, wherever that may lead in life. Understanding taxation is an important aspect of State/Society truth. More pointedly, understanding the Income Tax, that goose that has laid so many golden eggs for the State at society’s expense is essential. There are few areas in the history of mankind that have been subjected to more Five Laws of Decline outcomes than the taxation policies. Hence, let’s turn to the Income Tax in today’s blog.

Sincerely,

Orrin Woodward

USA Income Tax Amendment

Income tax has proven to be the goose that lays the golden eggs for government. Although all governments, even those performing its limited and delegated role, need constant funding, the creation of income tax has led to the unlimited State. Indeed, expecting a limited-government to restrain itself when it has been handed the power to tax the people’s income indiscriminately is like expecting the local drunkard to restrain his drinking when he has a free pass for unlimited drinks from the local brewery. It cannot be emphasized enough that power is an insatiable drug and money is its means of purchase. Hence, any government given a practical unlimited ability to tax (restrained only by society’s rebellion or destruction) will use this power over the purse to build State Power by taxing Social Power. The State’s view of society is akin to a the shepherd over his sheep, namely, seeking to shear them as close as possible without slaughtering them. Montesquieu recognized the State and Social Power and Social symbiotic relationship when he wrote:

The revenues of the state are a portion of that each subject gives of his property in order to secure or to have agreeable enjoyment of the remainder. To fix these revenues in a proper manner, regard should be had both to the necessities of the state and those of the subject. The real wants of the people ought never to give way to the imaginary wants of the state. Imaginary wants are those which flow from the passions, and from the weakness of the governors, from the charms of an extraordinary project, from the distempered desire of vain glory and from a certain impotency of mind incapable of withstanding the attacks of fancy. Often has it happened that minsters of a restless disposition, have imagined that the wants of the state were those of their own little ignoble souls.

The State and society, however, have had an ongoing dispute over the definition appropriate, equitable, and just levels of taxation. Indeed, when John Marshall wrote, “the power to tax is the power to destroy”, he articulated why limiting government’s ability to tax is just as important as limiting as its sphere of operation. In fact, the only proven method for limiting the State has been by limiting its funds. For anytime the funds are available to do so, government’s “force hammer,” has routinely usurped its delegated boundary to becomes the exploiters agent of injustice. Accordingly, if society intends to enjoy its inalienable rights, it must minimize the level of taxation to a limited and equitable amount that permits the government to perform its delegated role. Anything above this minimum amount is dangerous to the inalienable rights of society’s members since government will seek to use these funds to interfere with the SDS. Unhappily, few societies have successfully walked this tightrope and thus why the FLD has historically thrived under government taxation schemes. Taxation has typically been used by the rulers to optimize their profits and power by providing special deals for the few funded by increased taxation upon the many. Tax historian Charles Adams wrote:

A government that taxes excessively is like a spouse that engages in adultery. Its destructiveness is usually not apparent until it is too late. . . A society can best be evaluated by examining who is taxed, what is taxed, and how taxes are assessed, collected, and spent. Those in control of the political process invariably bear lighter tax burdens than those on the outside. . . Taxes are forced exactions. The loss of money through taxation often enrages people and drives them to revolt. Governments, therefore, must face their tax management with the utmost prudence and wisdom. . . A government that shackles its people with grossly inequitable tax laws and despotic enforcement practices loses all moral persuasion with respect to compliance, and can hardly complain if its taxpayers resort to all kinds of schemes to protect themselves . . . The ethics then, of society’s tax policy should develop from two moral maxims: First, it is the duty  – the first duty – of every government to develop just and sound revenue systems. . . Second, it is the duty of every person to pay his (or her) fair share of the costs of maintaining the government that serves and protects them. 

Regrettably, the history of taxation reveals the inability of those in power to lightly shear society’s sheep. As the tax rates increase, the shearing transforms into slaughter as the the people are plundered mercilessly. Moreover, the increased taxes rob the people of the capital needed to grow the SDS. As a result, societal growth slows before it begins its inevitable decline. Although people can endure injustices for extended periods of time, they will not tolerate an unjust tax system indefinitely. If the FLD continues to expand within the tax system, then evasion, exile, and rebellion become the potential paths of action. But when the rebellion against the State’s oppression reaches a certain point, the SDS collapses as either chaos or coercion overthrows societal concord.

Here are a couple of paragraphs from the Six Duties of Society (SDS) chapter. The SDS are the six duties that every healthy society must have in order to prosper while the Five Laws of Decline (FLD) are the systematic method of exploitation used by the State in society. By understanding these two systemic processes, one can build laws to support the SDS and check the FLD. In effect, until this is done, society will never enjoy true justice for all. LIFE Leadership will be publishing my new book when its finished and I cannot wait to work with Chris Brady on videos and workbook to support it.

Sincerely,

Orrin Woodward

Making a Difference

In reality, there are three main avenues of injustice within society. The first is the strong members of society oppressing the weak. Since man seeks the satisfaction of his wants with the least amount of effort, if plunder is unchecked within society, the strong will plunder the weak and injustice will reign. The second type of societal injustice occurs when the government uses its force-hammer outside its delegated and limited sphere of defense. Although society thrives under persuasion and only needs government’s force hammer to check potential exploitation, when this hammer enters other areas of society, the government itself becomes an agent of injustice as it pounds people in areas where persuasion is just. Not surprisingly, as government intervention grows, so does State Power at Social Power’s loss. Government’s force-hammer damages society anytime it is used in areas it doesn’t understand, doesn’t belong, and doesn’t help.

Remember, government is only designed for one specific function, namely, to protect the inalienable rights of society’s members. To achieve this, it is delegated the force-hammer to ensure potential exploiters refrain from unjust actions and choose, instead, to meet their needs through production rather than plunder. Government, in other words, is designed to defend society, not conquer it. The third type of injustice occurs in society when it is invaded and defeated by a stronger nation seeking plunder. The victors promptly increase State Power to systematically plunder the defeated society. The vanquished  society, however, still has methods to resist the systematic plunder of the conquerors. For as the oppressive State plunders the life, liberty, and property of the conquered society’s members, they respond in a predictable fashion. Even though they were defeated militarily, the are not defeated metaphysically. Thus, by simply reducing their productivity to the bare minimums necessary to survive, the “rob” the victors of the expected systematic plunder. In effect, how do you plunder someone who has nothing? As a result, when injustice abounds within a society, the people’s creativity and productivity respond accordingly.

Insofar as anything above sustenance level will just be plundered by the State, why would anyone produce anymore than the bare minimum. Evidently, the State believes when it maximizes oppression that it also maximizes plunder, but it simply isn’t so. Society’s members merely reduce their productivity as the State increases its tyranny. Indeed, if the State does not relax its oppression, the death of the parasitic State and its societal host is assured. This is a common theme for all historically oppressive societies. Nevertheless, the State exploiters seem incapable of learning from history by denying themselves in the short-term to gain from longer term exploitation. The reader might wonder why the State exploiters destroy the societies they plunder. The answer, again, is rooted in human nature. Although human beings may have limited needs, they also have unlimited wants.

As a result, when plunder is possible, the exploiters cannot seem to restrain their desire for just a little more. Society, of course, resist the injustice and the vicious cycle of increased exploitation and lower production eventually causes societal collapse. The death of the State and society naturally follows the increasing injustices aimed at the members inalienable rights. Indeed, this is what occurred in the Eastern Bloc communistic countries – oppressive injustices led to woeful production levels which sealed the State’s demise.

Here is a portion of my chapter on the Five Laws of Decline (FLD) from the new book I am working on. The more I study history and society, the more I realize how true the FLD are in real life. Modern politics merely confirms what the FLD teaches – that most men will sell out their character if the price is right. Oliver DeMille and I explain how the Five Laws of Decline work within society in our book LeaderShift. If you haven’t read that book, I encourage you to do so. The goal of LIFE Leadership is to educate the world on life-changing principles that make a difference in a person’s life.

Sincerely,

Orrin Woodward

Gresham’s Law – Bad Behavior Drives Out Good Behavior

Thomas Gresham’s Law

Thomas Gresham, an English financier, developed his law through the study of monetary policy and wrote, “when government compulsorily overvalues one money and undervalues another, the undervalued money will leave the country or disappear into hoards, while the overvalued money will flood into circulation”. In short, bad money drives out good money. There are many historical case studies of this phenomena (for example, my book RESOLVED: 13 Resolutions for LIFE discusses colonial New England’s disastrous paper money experiment) where fiat paper money causes gold and silver specie to disappear from the marketplace. Why, in effect, would anyone pay for goods and services in real dollars when the State issues non-backed fiat paper as its  legal tender? Real money is quickly stored by society’s members until the fiat legal tender paper fraud runs its course. Gresham’s Law, however, can also be applied to other fields besides just money. For instance, as the  “political means” of wealth grows within society, Gresham’s law works to drive out good politicians who, after realizing they cannot restore justice, exit the political field rather than play by the new unjust rules. In effect, real leaders refuse to surrender their character to political bosses who demand “political means” of wealth creation for those they elect. Therefore, the best politicians are eliminated from the selection process and are replaced by less noble souls who sell out their ethics to be elected in the service of exploiters.

Accordingly, the growing FLD within society force the politicians to either play by the unethical rules or exit themselves from the game. Either way they fulfill Gresham’s Law as the good is driven from the field. Another way of viewing Gresham’s Law is to understand that what is rewarded increases while what is punished decreases. Few have described Gresham’s Law in action better than Bertrand De Jouvenal did when he wrote:

Through the prestige of its leaders and the popularity of its principles the group brings victory to its candidates, whom it has chosen less for their personal worth than for the pledge of their obedience to itself; moreover, they will be the more faithful to their party from the inability to make their way without it. The first result of this is a degradation of the assembly, which no longer draws its recruits from the best men. . . So far the debasement of the electors and the degradation of the assembly are only accidental. They are to become by progressive stages systematized. Syndicates of interest and ambitions will soon take shape which, regarding the assembly as a mere adjunct of Power and the people as a mere cistern for the assembly, will devote themselves to winning votes for the installation of tame deputies who will bring back to their masters the prize for which they have ventured everything, the command of society. . . Soon they secured for themselves the selection of the candidates, and, naturally, chose men in their own likeness: they did not choose Catos. From this has followed a prodigious drop in the level of parliaments and in the level of government. . . Parliament is then no longer a sovereign assembly in which an elite of independent citizens compare freely formed opinions and so arrive at reasonable decisions. It is now only a clearing-house in which the various parties measure their respective parcels of votes against each other’s.

An example from modern times that confirms Gresham’s Law is alive and well was the impeachment proceedings against President Bill Clinton. Regardless of the particular party one supports, doesn’t it seem curious that an impeachment vote on non-party moral issues could follow party-lines so closely? For how does anyone argue that party affiliation is the main indicator as to whether Clinton’s behavior was ethical or non-ethical? If the impeachment proceeding proved anything, it proved that party loyalty trumps personal ethics whenever they conflict. The impeachment trial validated De Jouvenal’s 1945 outlook while teaching that politics, if anything, is more subject to Gresham’s Law in the twenty-first century than it was in the preceding one. Gresham’s Law, to sum up, has driven independent thinkers from the political arena and substituted obedient servants who follow the party line instead of their internal conscience. The politicians are no longer leaders with independent thoughts, but rather mere subjects beholden to the party if he desires to stay in power.