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Taxes in Sign LanguageAs you know, one of our favourite topics is taxes. There are many reasons for it, among them because as a matter of principle we deeply detest being robbed. However and more importantly, taxes are, to a large degree, the Achilles' heel of governments. What makes governments viable is money, and a great deal of it. Several decades back, when governments had not yet gone bat-shit crazy, taxes were all that stood between people and freedom. Nowadays due to the endless creation of fiat money by Central Banks, the situation is not as simple. In reality taxes only represent a fraction of all the money that governments spend, the other two being printing and borrowing. Yet, if we could somehow shut taxes down, that would make a huge dent to government stupidity. Yes, we know, not going to happen until people begin to evolve, yet, we are allowed to dream, aren't we?

In the past we have presented Taxes for what they truly are, theft. But we have also presented them as pollution (Tax Pollution) slavery enablers (Taxed To Death No Just Into Slavery), and destructive forces (Taxes - The Force Multipliers). As you can imagine, there are many other ways in which we can picture taxes, but this time we are going to step into the shoes of our opponents and take a closer look at what taxes really mean within this system.


To begin and in order to position ourselves in reality, we need to assume that governments are actually valid entities and this validity originates in valid Social Contracts (this is not true -see Social Contracts Are A Scam- but we will assume it is). Let's ascribe this to a willing suspension of disbelief in order to proceed.

And so we are the residents or citizens of a country living under the authority of a valid government. Said government taxes us and it does something with this money. How can we frame this action? Simple. If governments are valid therefore social contracts are valid and therefore taxes are nothing but valid parts of social contracts, which are contracts. In other words, taxes are contracts between us and our government. At least from a philosophical point of view.


But if taxes are contracts, we should find out if they are legally binding by using existing contract law. This is quite simple to do. Any first year law student can do it. Furthermore, we explained contract theory in the article Contracts Are The Key To Coexistence and we will not use those contents today, however, we will stick to "standard" contract law interpretation only. This means no deviations into Libertarianism. Let's do it.


The standard definition of a contract in common law legal systems is an agreement having a lawful object entered into voluntarily by two or more parties, each of whom intends to create one or more legal obligations between them. The elements of a contract are "offer" and "acceptance" by "competent persons" having legal capacity who exchange "consideration" to create a "mutuality of obligation”. We will take a look at each one of those elements.


Contracts can be analyzed under three different domains; Common Law, Civil Law and Criminal Law. We will assume that taxes operate in either the first or the second one. Yes, we are disregarding tax laws because such laws deal with the logistics of taxation while ignoring its very contractual nature. In other words, tax laws assume that taxes exist and do not dwell into what they are or how did they come into existence. As such they do not offer any insight as to the contractual nature of taxes and are therefore useless for our analysis.


Yes! We can say that taxes are legal contracts offering goods and services for money, because that is the only thing they can be. We, the taxpayer pay money and receive something in return. We do not pay money and receive nothing and we do not receive stuff for free and pay no money.

If we would pay money and receive nothing, this would be fraud, or robbery.

If we would receive stuff for exactly nothing, this would be a gift.

But neither case applies.

Everybody, even the people at the lowest poverty level is being taxed, even if all the money they ever receive comes from the government in the first place. Think about it. Even the poorest of the poorest pay, for example, Value Added taxes or Sales taxes.

Everybody, even the filthy rich receive something in return. For example, they use public roads.

Therefore we must absolutely conclude that taxes are thus plain and simple legal commercial contracts. Or at least this is what it would seem at first glance. Additionally, we can now say with certainty that commercial contract law applies.


This is one of the most basic contractual requirements. Contracts must be voluntary. But are taxes voluntary? In most countries in the world, this is not the case. Not even close. In most countries this is so bad as to have Tax Courts with Tax Agents served by Tax Police! And if all this would not be enough, in most countries in the world, taxes are deducted at source!

Furthermore, in all countries in the world, tax evasion is punishable by the so-called "criminal justice system" aided by regular police and prosecuted by regular criminal prosecutors!

What do you think? Are taxes voluntary contracts?

Not a chance in hell!


OK. Let's move on. Let's suspend disbelief and assume that up to this point everything is honky-dory. Now for the next question.

A contract is a "lawful object entered into voluntarily by two or more parties, each of whom intends to create one or more legal obligations between them."

Fair enough. We could say that taxes are lawful objects simply because they are declared as existing by laws. However, when we pay taxes, do we intend to create legal obligations with the state?

Excellent question.

Let's see. The state is most certainly creating a legal obligation for us, the taxpayers. This is easy to prove. All taxes are written in law which we are forced to abide by. Therefore, yes, the state is imposing a legal obligation onto us thus demonstrating that they are intent on creating a legal obligation onto us. This much is redundantly redundant and obvious.

But how about us, the taxpayers?

Are we intent on creating a legal obligation of the state to us? For the vast majority of the people the answer is no. Most people just pay taxes and look at this event as if burning wealth. Typically a person does not seek to achieve a legal obligation with fire or smoke. Sure, some people will vociferantly demand something from the state to the shout of "I am a taxpayer". A few will even go so far as to sue the government. But they are the vast minority. Most people don't even bother and that is the truth.

Most people fully realize that they pay taxes and that they may receive something in return. But most people don't actually expect to receive something. They don't look at it being a legal obligation from the state. They fully understand that whatever they may get is purely at the government's pleasure. Just like from a king (or queen).

And so we come to the conclusion that in this aspect too, the rules of lawful contracts are not complied with.


This is a statement of the terms on which the offeror is willing to be bound. In the case of taxes who is the offeror? Is it the state or is it us? This is simple to determine since we are always and automatically bound by taxes. This is the case even if we are not interested in paying taxes whatsoever. This is the case even if we are not even aware that we need to pay taxes. Thus, we must conclude that the offeror is the state because we, the taxpayer, receive goods and services for our money.

How come?

Simple. We, the people, don't want to pay taxes. Voluntary taxation is a very rare condition afflicting only a tiny percentage of world population. We are thus forced to pay taxes. Always. But if we pay, this makes us the oferee. But if we are the oferees, then the state must inevitably be the offeror. Get it? Let's now move forward.


What are the minimum conditions necessary to have a legally valid offer for the sale of goods, which is what governments are peddling most of the time. This was decided by English courts long time ago through the "objective test" which states that in order to determine if there was a valid offer we need look at the offeror's intention through the eyes of a reasonable person. Such a person would demand four key elements. They are:

  1. Delivery date
  2. Price
  3. Terms of payment (including date of payment)
  4. Detailed description of the item on offer including a fair description of the condition or type of service

Let's take a look at them.

Delivery date

When we pay taxes, do we get a delivery date? Does the government tell us when can we expect to receive whatever it is that our taxes are paying? No. Humm… This does not look good…


Simple, right? We need to know the price of the stuff we are paying. In principle this would seem like a certainty. We know what our taxes are because every year the government changes them. Whether we are discounted our taxes at source (most of the world) or we pay taxes once a year (typically in North America), we know, in advance, what percentage of our earnings we are we are going to pay in taxes.

Now, it could be argued that a percentage is not a price, but let's assume it is. So, where is the problem?

Simple. There is a myriad of hidden taxes. If we look for "classical" hidden taxes we can go no further than the double or triple taxation which happens when goods or services are produced by companies and sold to us. Producers of raw materials are taxed. Those taxes are added to the price of their materials when sold to manufacturers. Manufacturers are taxed and those taxes are added to the prices of goods and services when sold to us. And we pay taxes on those goods and services. Do we know how much taxes are we actually paying when we buy a product? Not a chance! In other words, we have no idea of the price we are paying to the government for goods and services.

We could, of course, have made the argument that, for example, inflation is hidden taxation. This is absolutely true, but it would be controversial. So, we won't make this argument.

Basically, the price condition is not present either.

Terms of payment

Does the government specify how and when do they want to be paid? Sure. Let's be magnanimous and concede this point. We know that whatever we earn we will be taxed on, one way or another at a given time. We also know that whatever we buy we are paying taxes right there.

Detailed description of the offer

Do we know with certainty what are we going to get when we pay taxes? Nope. But at least we are supposed to have some idea, right? Nope. Not even close.

Look. We know that our taxes pay for roads and schools for example. But do we know which roads? Nope. Which schools? Nope. How is this possible? Simple. Every year what we get from the government is a "budget". But budgets are nothing than creative accounting. We have no idea how much money will be actually spent, how much borrowed and how much printed. Furthermore, if you look closer to budgets you will notice that they are not very specific and they also contain "General Accounts". Sure, you may know that the item "Education" will receive XYZ amounts of money, but what exactly are you getting from "Education"? Not a clue. And what about the above mentioned General Accounts? Even worse. Those are just holding account where governments keep their money until they spend it on something. On what exactly? Who knows.

The bottom line is that we do not have a detailed description of the offer. Not even close!


Well… if three out of four legally necessary conditions for an offer to exist do not…well… you know… exist… what do you think? Do we have a valid offer?

Of course not!!!

Note: please see the Glossary if you are unfamiliar with certain words.

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