Financial slaves

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Why is Kenya the most important place in the world when it comes to taxes right now? Because it’s living proof that the will of the people is stronger than that of the state.

Full details in today’s letter →

📖 ESTIMATED READ TIME: 5 minutes 50 seconds

Death and taxes.

If England was the beating heart of Europe in the middle of the 14th century, the Black Death was the malignant cancer that lurked within it. When it arrived in 1348 on the backs of rats carried by ships from the mainland, it mercilessly devastated the population of the British Isles in short order.

Men, women, and children alike were eradicated by the Bubonic Plague with the mercilessness of a murderer’s blade carving through the flesh of the innocent. In mere months, activity that once hummed throughout British villages had been reduced to an echo of what it once was, a result of the spectre of death wiping away human life with impunity.

As many as two million people—possibly half of England’s entire population at the time—had been obliterated by the Black Death.

Those who survived, however, were left in a unique bargaining position with England’s land-owning ruling class. A diminished population meant a smaller workforce, leaving the remaining peasants in a unique position to bargain for better pay. Wages rose, resulting in the peasantry enjoying a quality of life none in their station had enjoyed for hundreds of years beforehand.

England’s elite wouldn’t let this stand for long. To tip the scales of wealth back in their favour, King Edward III implemented the Statute Of Labourers in the year 1351, making it illegal for anyone to be paid higher than in pre-plague years. Those who disobeyed the new laws could expect punishment by flogging, imprisonment, or public humiliation.

This crushed the resolve of England’s people. But it was the subsequent implementation of three new poll taxes afterwards that would destroy their will for good. Poll taxes were unique as they were generally a fixed amount levied on every citizen of the nation, which disproportionately affected those in society who earned the least.

The first poll tax was levied in 1377 under Richard II on everyone over 14 years of age, requiring a payment of four pence to the crown. The second came two years later in 1379, with the third following in the following year, requiring all citizens fifteen and older to hand over a full shilling to the state to help fund England’s war against France.

One shilling wasn’t much, approximately 1.2% of the average peasant’s yearly income. Yet this measly sum was enough to plunge the entire nation into chaos and instability.

Within months, almost all of England’s southeast had erupted in revolt. Tax collectors were attacked and ejected from towns, customs houses were looted, government buildings burned, and thousands marched upon London to set the Savoy Palace ablaze.

England had spoken, and it unanimously rejected the oppressive new taxes of the powerful.

It’s all hidden.

It hasn’t been covered much in the news, but Kenya is currently experiencing serious financial chaos.

It began when the government attempted to implement its new Finance Act, which included across-the-board tax hikes for all citizens.

These included raising VAT from 8% to 16% on all goods, including essential items like bread and other food. There were also levy hikes on fuel, plastic, cosmetic items, mobile phone and internet services, as well as the purchase of some vehicles like motorcycles.

Probably most insane of all, it would also tax Kenyans 15% on “mobile money” transfers, for example, when using instant transfer apps (similar to Paypal, Zelle and Venmo) to send money to other people.

Kenyans, as you might imagine, were less than pleased.

Mass protests broke out in Nairobi, Mombasa, and other major cities. Police used live ammunition to fire on protestors; so far, at least 23 people have been killed, with another 30+ being treated for bullet wounds.

In the end, the will of the masses was heard. Kenya’s president William Ruto bowed to the people, stating just days ago that the proposed Finance Act will not be signed into law.

Most of us won’t be affected by what’s currently happening in Kenya. But that doesn’t mean we can’t learn from it.

Kenyans were protesting mostly against what have come to be known as “hidden taxes” in society.

These are things like:

• VAT or sales tax

• Fuel duties on gasoline or diesel

• Car registration or road tax

• Property tax

• Stamp duties

• Import or customs duties

These are levies you must pay in daily life after you’ve already paid tax on your income. Most Western nations are estimated to have around 150-200 of these hidden taxes, many of which you probably don’t even know about.

But hidden taxes are what skyrocket the total amount of tax we pay each year.

Take me as an example. My personal income tax in Iceland is 46.25%, but when hidden taxes are taken into account (like 24% VAT, road taxes, import duties, etc.), I pay a real tax rate of around 70% to the Icelandic government each year.

In other words, I work 70% of the year (from January to the middle of September) to pay the state. It’s only what I earn from the third week of September to the end of the year which goes into my pocket.

Obviously, this is insane.

Even more so when you consider what some cultures in history have rioted over.

→ MEDIEVAL PEASANTS: “1.2% tax? We’re going to burn down a city.”
→ PEOPLE OF TODAY: “70% tax? Yeah, that’s fine.”

Here’s the bad news: Unfortunately, most hidden taxes are unavoidable.

There are few—if any—ways you can avoid sales tax, or road tax, or most of the other hidden taxes in your home country. As always, the best way to mitigate these taxes is to move to a more tax-friendly jurisdiction.

But we can also learn from the people of Kenya, that despite the wishes of our tax-loving overlords, we don’t always have to accept it.

Of course, I’m not suggesting attacking state officials. Nor am I advocating getting yourself into a situation where you could be shot by over-zealous police protecting government buildings.

But what’s happening in Kenya is a reminder that civil action can work.

Protests, demonstrations, petitions, and even emailing/calling your local senator or government representative to complain about potential new taxes can make a difference, as it has in the past.

But it only works if enough of us care.

And if enough of us get involved.

The alternative is that we do nothing. In which case, we’re doomed to live forever as financial batteries to power our corrupt and bloated states.

Economic slavery through taxation only works if we’re willing.

Written by Leon Hill.
Founder, Anticitizen.

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