WEBVTT

NOTE The Making of a Tax Historian

1
00:00:00.000 --> 00:00:10.760
There's actually one more book. I brought them all here for you folks to look at them.

2
00:00:10.760 --> 00:00:21.240
Maybe somebody swiped one already. There's a new edition of For Good and Evil, came out a couple of years ago.

3
00:00:21.240 --> 00:00:25.880
and it's not very often that you get a chance to rewrite a book.

4
00:00:25.880 --> 00:00:28.680
Oh, there it is, right there.

5
00:00:28.680 --> 00:00:31.680
Well, at least it didn't go far.

6
00:00:31.680 --> 00:00:38.920
But it's certainly worth having a second edition, except in the first edition they had some illustrations that

7
00:00:38.920 --> 00:00:43.640
for some reason didn't make it to the second edition. The particular one I liked

8
00:00:43.640 --> 00:00:48.880
was the one on the Egyptian taxation, which shows the scribes of Egypt

9
00:00:48.880 --> 00:00:55.120
making their inspections and then making their writing up their stuff and then dragging in

10
00:00:55.120 --> 00:01:00.320
the taxpayer for not paying his taxes and it's in the first edition and it's kind of

11
00:01:00.320 --> 00:01:10.040
a nice illustration I had a photocopier made but anyway there is 30 years of my life if

12
00:01:10.040 --> 00:01:11.360
you want to see it.

13
00:01:11.360 --> 00:01:15.160
Now actually the love of my life is this one.

14
00:01:15.160 --> 00:01:20.720
This is the first book, Fight, Flight and Fraud, The Story of Taxation, it's a collector's

15
00:01:20.720 --> 00:01:21.720
edition.

16
00:01:21.720 --> 00:01:29.080
It's a long story, but a lot of times I get people who want to know, you know, how do

17
00:01:29.080 --> 00:01:35.380
you become an author successfully, you know, how do you get published, and my answer is

18
00:01:35.380 --> 00:01:37.640
it's tough.

19
00:01:37.640 --> 00:01:44.280
I think somebody said 92% of all the manuscripts, only one is selected for publication in America.

20
00:01:44.280 --> 00:01:48.560
I don't know who compiled that, but I think there's a lot of truth in it.

21
00:01:48.560 --> 00:01:53.040
And I think what you have to do is you have to just be persistent, you have to believe

22
00:01:53.040 --> 00:01:56.720
in your subject.

23
00:01:56.720 --> 00:02:02.680
I wrote that manuscript and I had a publishing contract with a British firm called Richard

24
00:02:02.680 --> 00:02:06.240
Babu that publishes in the UK and the Commonwealth.

25
00:02:06.240 --> 00:02:12.400
And after we worked on it they came back and they said, well, just don't think it'll sell.

26
00:02:12.400 --> 00:02:14.000
Could we cancel a contract?

27
00:02:14.000 --> 00:02:19.040
This is after you spent two or three years on it and another three years getting permissions

28
00:02:19.040 --> 00:02:20.040
with the illustrations.

29
00:02:20.040 --> 00:02:27.600
It was a bit disappointing, but I kept hanging in there and eventually I was able to sort

30
00:02:27.600 --> 00:02:29.560
of self-publish it.

31
00:02:29.560 --> 00:02:34.760
I had written a lot of magazine articles and I went to the magazine editor and asked him

32
00:02:34.760 --> 00:02:38.440
if he'd like to put this thing together and I'd see if I could raise up enough money that

33
00:02:38.440 --> 00:02:41.240
we could print it, so we did.

34
00:02:41.240 --> 00:02:49.920
And it was a problem, because when you self-publish, for every dollar you spend advertising, you

35
00:02:49.920 --> 00:02:58.840
sell the dollars worth a box, or $100, so the result is it's not a very profitable enterprise

36
00:02:58.840 --> 00:03:02.280
and very discouraging.

37
00:03:02.280 --> 00:03:07.320
And I can't tell you how discouraged I was, I'd spent so many years on, maybe 10 years

38
00:03:07.320 --> 00:03:10.320
or so.

39
00:03:10.320 --> 00:03:17.960
Then some fellow in the White House, who was on Ronald Reagan's legal staff there, said

40
00:03:17.960 --> 00:03:21.600
he bought the book for a buck in the garage sale.

41
00:03:21.600 --> 00:03:25.160
So that's where my book ended up.

42
00:03:25.160 --> 00:03:28.720
And he said, I couldn't put the book down.

43
00:03:28.720 --> 00:03:31.280
I stayed up until four o'clock in the morning.

44
00:03:31.280 --> 00:03:34.600
He's not the most interesting book I ever read in my life.

45
00:03:34.600 --> 00:03:39.840
He said, I'm very much interested in taxes and economics and Reagan economics.

46
00:03:39.840 --> 00:03:46.040
And he says, is there any chance you could redo that book into a book form?

47
00:03:46.040 --> 00:03:52.280
And so I said, yeah, sure, I said, but it hadn't been very good.

48
00:03:52.280 --> 00:03:57.200
So I redid it in a book form, which is for good and evil.

49
00:03:57.200 --> 00:04:02.160
And again, we went through the publishers and couldn't get a publisher.

50
00:04:02.160 --> 00:04:06.320
And it was just a float that it got published.

51
00:04:06.320 --> 00:04:18.320
It had been rejected by the University Press of America and one day one of the directors walked in the office of the publisher and picks up the manuscript after they said they didn't want it.

52
00:04:18.320 --> 00:04:26.320
He thumbed through it and he turned to the publisher and he said, you know, I think you ought to publish this book. It's quite interesting.

53
00:04:26.320 --> 00:04:38.320
So they did, and they published 1,700 copies. Not a lot. The Wall-T Journal picked it up, and then it just took off.

54
00:04:38.320 --> 00:04:47.320
They were producing 5,000 at a crack, and they couldn't keep up with the demand. They sold 60,000 copies. They went through 11 printings.

55
00:04:47.320 --> 00:04:52.320
And it's one of the great stories. I talked to one of the senior editors. He said,

56
00:04:52.320 --> 00:04:57.320
He said, I ought to tell that story about how that book took off, because we didn't think it would sell.

57
00:04:57.320 --> 00:05:05.320
And of course, then I was on Booknotes with Brian Lamb, and the guy that wrote the article in the Wall Street Journal,

58
00:05:05.320 --> 00:05:13.320
I contacted with him, I got in touch with him, and he said, I get calls from everybody, nobody can find the damn book.

59
00:05:13.320 --> 00:05:17.320
Well, he only made 700 copies, it didn't last very long.

60
00:05:17.320 --> 00:05:25.320
But then it took off, and that was wonderful, and particularly since they couldn't keep up on it.

61
00:05:25.320 --> 00:05:30.320
Now it's been translated into four different languages. The most interesting translation is the Faroe Islands.

62
00:05:30.320 --> 00:05:37.320
You know where the Faroe Islands are? It's a group of islands between Iceland and Norway.

63
00:05:37.320 --> 00:05:42.320
They speak their own language, although they have the Vikings as part of their...

64
00:05:42.320 --> 00:05:46.320
I get a call from the finance minister years ago, and he said,

65
00:05:46.320 --> 00:05:50.320
we'd like to translate your book into the language of the Faroe Islands,

66
00:05:50.320 --> 00:05:54.320
and get permission, so we gave him permission.

67
00:05:54.320 --> 00:05:58.320
Well, it's been translated into Japanese and Polish and German,

68
00:05:58.320 --> 00:06:02.320
so that's the background of the book.

69
00:06:02.320 --> 00:06:06.320
I was on the BBC last year, in the spring,

70
00:06:06.320 --> 00:06:10.320
they were having a history of British taxation. Now that's interesting,

71
00:06:10.320 --> 00:06:15.520
Because you know the Brits don't think that us people on this side of the Atlantic are too smart.

72
00:06:15.520 --> 00:06:18.120
You know, they have a snobbishness about them.

73
00:06:18.120 --> 00:06:22.920
So for them to contact me on the history of taxation was quite interesting.

74
00:06:22.920 --> 00:06:28.120
And they introduced me as the world's leading authority on taxes.

75
00:06:28.120 --> 00:06:36.220
Now that sounds pretty good, but I don't think there's anybody else other than in Europe.

76
00:06:36.220 --> 00:06:38.720
They take it serious over there.

77
00:06:38.720 --> 00:07:08.720
But here we don't teach it in universities, you know, of course in history taxation, but in Europe they do. They have endowed chairs at the University of Amsterdam, an endowed chair at the University of Leiden, and I know the professors and they've kept in touch with me, and so I think maybe that's one of our problems with the tax system. Who was it? Sir Francis Bacon said, history makes men wise. Lack of history makes men stupid. I think that's a good thing.

78
00:07:08.720 --> 00:07:16.000
But anyway, that's been the labor of my life, and I've enjoyed it.

79
00:07:16.000 --> 00:07:20.400
I have a letter from Bill Archer inviting me to speak at the Health, Ways and Means Committee

80
00:07:20.400 --> 00:07:24.200
on getting rid of the income tax, and I did speak there.

81
00:07:24.200 --> 00:07:26.440
Had a wonderful time with Charlie Rangel.

82
00:07:26.440 --> 00:07:29.440
You know who he is?

83
00:07:29.440 --> 00:07:37.000
And in his Harlem black brogue, he proceeds to tell me, he says, now Mr. Adams, he says,

84
00:07:37.000 --> 00:07:39.160
Isn't America tax haven?

85
00:07:39.160 --> 00:07:42.600
And I was so tempted to say, we're in your district, yes.

86
00:07:42.600 --> 00:07:46.400
But I backed up a little bit.

87
00:07:46.400 --> 00:07:49.120
But Bill Archer said, hey, I've got to read that guy's book.

88
00:07:49.120 --> 00:07:51.120
And then one of the members of the committee

89
00:07:51.120 --> 00:07:52.840
invited me up to his office and said,

90
00:07:52.840 --> 00:07:54.800
you've got to run for Congress, and so forth.

91
00:07:54.800 --> 00:08:00.240
But there was a strong movement to reform our tax system

92
00:08:00.240 --> 00:08:00.880
at that time.

93
00:08:00.880 --> 00:08:02.520
That was 1994.

94
00:08:02.520 --> 00:08:05.200
And then Bill Clinton sent one of his swankies

95
00:08:05.200 --> 00:08:10.200
The Professor in San Francisco said that he liked the tax system just the way it is, which

96
00:08:10.200 --> 00:08:14.640
was to put everybody on notice that he would be telling anything.

97
00:08:14.640 --> 00:08:16.240
And I think it died.

98
00:08:16.240 --> 00:08:18.020
But there was a lot of movement.

99
00:08:18.020 --> 00:08:21.840
There were the Cats people, Citizens for an Alternate Tax, and there were a number of

100
00:08:21.840 --> 00:08:22.840
them.

101
00:08:22.840 --> 00:08:31.040
And I was on so many talk shows and I testified at a few places.

102
00:08:31.040 --> 00:08:38.040
By my experience, I'm a little discouraged about major tax reform.

103
00:08:38.040 --> 00:08:45.040
I think that we've got a war on, we've got so many other interests that I don't know that's going to happen, at least now.

104
00:08:45.040 --> 00:08:48.040
But it may happen sometime in the future.

105
00:08:48.040 --> 00:08:52.040
So, how do they get to be a tax historian?

106
00:08:52.040 --> 00:08:55.040
Well, that's another interesting story.

107
00:08:55.040 --> 00:09:03.040
You students, a lot of you are wondering, how do you make a decision in life, about your career?

108
00:09:03.040 --> 00:09:11.040
And it's a tough thing. I have a grandson who's a junior in high school and he's talking about, what am I going to do?

109
00:09:11.040 --> 00:09:22.040
But the only advice I can give you is just hang in there, get a good liberal arts education, and just take opportunities to come your way.

110
00:09:22.040 --> 00:09:27.040
and you probably end up doing something you never thought of doing.

111
00:09:27.040 --> 00:09:31.040
Now the last thing I wanted to do was to be a tax lawyer.

112
00:09:31.040 --> 00:09:38.040
When I went to law school, went to UCLA, I wrote an article on tax in the law review.

113
00:09:38.040 --> 00:09:40.040
I don't know how I ever did it.

114
00:09:40.040 --> 00:09:44.040
But that would be my last choice to be a tax lawyer.

115
00:09:44.040 --> 00:09:51.040
Well, I get out of law school, I look for a job, I get hired by a firm up in Ventura, California.

116
00:09:51.040 --> 00:10:21.040
The University of California was a Stanford firm and they wanted a Stanford guy, but they ended up with UCLA, man, and so they take you through the office the first day and you meet the other attorneys and you meet the secretaries and finally they take you to your office and I got this big office with a senior partner that had been put on the bench and nobody wanted to move, so I got the best office and of course there I am sitting, now what?

117
00:10:21.040 --> 00:10:26.040
It's a tax problem. Give me a memo on it and how we can beat it.

118
00:10:26.040 --> 00:10:30.040
I wasn't going to say I don't know a damn thing about taxes.

119
00:10:30.040 --> 00:10:34.040
I did have to take a couple of courses for the bar exam, but you know, that was part of the bar.

120
00:10:34.040 --> 00:10:39.040
But I thought taxes were for CPAs and the guys that, you know, really ennest themselves.

121
00:10:39.040 --> 00:10:43.040
So I wrote the memo. It was really interesting.

122
00:10:43.040 --> 00:10:48.040
And after three days, I gave him the memo.

123
00:10:48.040 --> 00:11:16.040
and he comes back and says, I didn't know we hired a tax expert, he says, fellas, we got a tax expert, everybody's got a tax expert, we all hate tax problems, give it to Adams, I didn't know, I've been there three days, I was fired, so that's how I became a tax expert, give it to Adams, but I did find it was fascinating,

124
00:11:16.040 --> 00:11:25.040
I found that it was like a chess game. I'm not talking about the accounting side of it. I'm talking about the way you manage things in the tax world.

125
00:11:25.040 --> 00:11:35.040
And the result was that I became very fascinated. See, I have an institute of advanced studies and I studied international tax and even that was more interesting.

126
00:11:35.040 --> 00:11:45.040
And I found that using international tax you could avoid tax, not just reduce it, you could eliminate it by the way you rearrange your pieces.

127
00:12:15.040 --> 00:12:45.040
I learned what I could do internationally, offshore, and I did, and there was a small branch of an American college there, I think it was Pacific University set it up, and they were looking for teachers, so they came to me, I was about the only American on the island at the time, and he said, well, what could you teach, and I said, well, what do you got, and he said, well, we're looking for a history teacher, and I said, boy, that's my first love.

128
00:12:45.040 --> 00:12:53.600
and I always wanted to be a history teacher, and my dad taught me out of it, so I taught

129
00:12:53.600 --> 00:13:00.080
U.S. history and world history, and in the course of teaching those subjects, maybe because

130
00:13:00.080 --> 00:13:07.080
of my sensitivity to taxation, I began to see the tax issue bubbling up all the time.

131
00:13:07.080 --> 00:13:11.480
In all the great events of history, it wasn't just the American Revolution, it wasn't just

132
00:13:11.480 --> 00:13:15.800
The French Revolution, the British Civil War, it was everywhere.

133
00:13:15.800 --> 00:13:21.180
And I became very fascinated with the role that taxes were playing in the course of events.

134
00:13:21.180 --> 00:13:26.140
And there was a magazine article in the West Indies, and I said,

135
00:13:26.140 --> 00:13:31.100
they asked me if I'd publish some articles on the offshore world, and I did.

136
00:13:31.100 --> 00:13:34.200
And then after about three articles, I ran out of things to say.

137
00:13:34.200 --> 00:13:41.320
So I said, you know, how would you like an article on tax history?

138
00:13:41.320 --> 00:13:43.400
And he said, well, yeah, we'll try anything.

139
00:13:43.400 --> 00:13:48.520
Well, so the first article I wrote was called The Greeks Had the Word on Taxation.

140
00:13:48.520 --> 00:13:53.680
And I talked about the Greek system, then I wrote the Romans, and then pretty soon he came to me and he said,

141
00:13:53.680 --> 00:13:58.200
boy, our subscriptions are going up. Everybody just loves the stuff you're writing.

142
00:13:58.200 --> 00:14:02.760
Write more. So I wrote 39 articles for him over the course of three years.

143
00:14:02.760 --> 00:14:08.200
And in the course of that, I really got bit by the bug to write a book on it.

144
00:14:08.200 --> 00:14:11.660
and then I was fortunate enough to have married a Canadian.

145
00:14:11.660 --> 00:14:17.320
My wife hated it in the Cayman Islands and it was terrible for a woman in those days.

146
00:14:17.320 --> 00:14:21.040
You had no idea what a horrible place it was to live, except for the guys.

147
00:14:21.040 --> 00:14:26.020
We went stupid diving and spear fishing and lobster fishing. We had a wonderful time there.

148
00:14:26.020 --> 00:14:31.600
But for a woman it was horrible. I mean the food was a disaster.

149
00:14:31.600 --> 00:14:34.580
They would bring a cow in

150
00:14:34.580 --> 00:14:37.500
once a week in the city square and it was all dirt

151
00:14:37.500 --> 00:14:42.300
And they butcher the cow and then you go in with a basket and get a chunk of meat.

152
00:14:42.300 --> 00:14:49.400
And man, I tell you, talk about brain-fed beef. That was not brain-fed beef.

153
00:14:49.400 --> 00:14:54.200
Had a ghastly flavor, probably from the salt grass that the cows ate.

154
00:14:54.200 --> 00:14:58.300
But she was very enterprising.

155
00:14:58.300 --> 00:15:05.200
And so she was down in San Jose, Costa Rica, because they used to bring a freighter in once a week.

156
00:15:05.200 --> 00:15:11.920
DC6 would come flying over and bring in foodstuffs and she went to one of the guys and she said,

157
00:15:11.920 --> 00:15:19.320
would you make up a box of food for me and then we can probably survive because I talked

158
00:15:19.320 --> 00:15:22.800
to a doctor there and he said, you know, health is terrible there because the nutrition's

159
00:15:22.800 --> 00:15:28.720
so rotten and so every Friday, every Thursday afternoon she'd wait for the plane to come

160
00:15:28.720 --> 00:15:33.280
flying over the house and then she dashed out to the airport and get her box of groceries

161
00:15:33.280 --> 00:15:43.780
And that's how we survived. But how I got out of there was the mosquitoes. I mean, you got to believe it. I mean, you guys don't know what mosquitoes are.

162
00:15:43.780 --> 00:15:52.280
They have the world's record for mosquito catching there in the Cayman Islands when I lived there. They had these traps that they put out and so forth.

163
00:15:52.280 --> 00:16:03.280
But, so I said in the summer, I said, why don't we go up to Canada, which is your home, and get away from this god-awful place in the summer, love in the winter, you know, great.

164
00:16:03.280 --> 00:16:14.280
So, I said, well, it's just an idea. Now, I said that at noon. When I came home in the evening, there were bags packed.

165
00:16:14.280 --> 00:16:18.280
And I said, what are the bags for? She says, we're going to Canada.

166
00:16:18.280 --> 00:16:26.920
And I said, well, I was just, just with an idea, you know, I said, well, no idea with me. I'm ready now.

167
00:16:26.920 --> 00:16:33.840
So off we went to Canada. But the beauty of that little twist was that you may not know this,

168
00:16:33.840 --> 00:16:41.080
but the second largest academic library in North America is the University of Toronto.

169
00:16:41.080 --> 00:16:45.840
The only bigger one is Harvard, and their British sources are the best.

170
00:16:45.840 --> 00:16:55.840
And students come from all over the world to go to that library, and the main library is 14 stories high, and then there are libraries scattered around the campus.

171
00:16:55.840 --> 00:17:04.840
That gave me the sources to write these books. Without the University of Toronto Library, I could not have written this material.

172
00:17:04.840 --> 00:17:13.840
There was so much there, and so you play it by ear that that's what made it possible for these books to come about.

173
00:17:13.840 --> 00:17:33.840
When I talk about your life, you younger kids, not younger men, and women, anyway, just go with the flow. Things will develop. I never thought I'd be a text lawyer, I never thought I'd be a historian, I never thought I'd write those books, I never even thought I'd be here, I guess.

174
00:17:33.840 --> 00:17:41.680
But Lew invited me here about 10 years ago and it was my first visit to the South.

175
00:17:41.680 --> 00:17:48.040
I never knew anything about the South, but I had spoken at Tallahassee at Florida State

176
00:17:48.040 --> 00:17:53.480
and then I came up here and spoke and I'd been coming from time to time and I really enjoyed it.

177
00:17:53.480 --> 00:18:00.560
In fact, we were in this building down here, this thing wasn't here, I'm sure you remember.

178
00:18:00.560 --> 00:18:08.320
But, anyway, that's the little background of who I am and how I got there.

179
00:18:08.320 --> 00:18:15.280
And I just think it's good advice for young folks, get a good liberal arts education and go with the flow.

180
00:18:15.280 --> 00:18:18.680
The opportunities will develop, you'll never imagine.

181
00:18:18.680 --> 00:18:23.520
And here I am, the last thing I ever wanted to do was become in a resident tax.

182
00:18:23.520 --> 00:18:30.160
I ended up being what I am and then academically I happened to stumble into the opportunity

183
00:18:30.160 --> 00:18:36.840
to teach history and then I happened to see the role that taxes play. It was kind of interesting

184
00:18:36.840 --> 00:18:42.280
as I was analyzing the role. It was sort of like a, you remember Euclid's geometry and

185
00:18:42.280 --> 00:18:45.940
you remember the shortest distance between two points is a straight line and you might

186
00:18:45.940 --> 00:18:54.680
remember that the square of the hypotenuse of the triangle is the sum of the other sides.

187
00:18:54.680 --> 00:19:01.760
I came to the conclusion that behind every event in history, there's a tax story, and

188
00:19:01.760 --> 00:19:08.160
it usually gets lost sight of, and it shows up in so many ways.

189
00:19:08.160 --> 00:19:14.560
Of course, the American Revolution is one, but like the Civil War, you know, I always

190
00:19:14.560 --> 00:19:19.000
thought the Civil War was old slavery, and that's what they taught me, and all I had

191
00:19:19.000 --> 00:19:24.600
to do was pick up Lincoln's inaugural address, and the first thing he says in there is that

192
00:19:24.600 --> 00:19:35.600
You've heard me a thousand times. I'm not going to interfere with slavery. I have no right to, I have no inclination to, but I'm going to collect the taxes.

193
00:19:35.600 --> 00:19:43.600
This is his inaugural address in March 1861, and he med business on that. That was a big item.

194
00:19:43.600 --> 00:19:50.600
And in some of the early efforts to stop the war, a fellow came up to me, Baldwin. He was from Virginia.

195
00:19:50.600 --> 00:20:20.600
And after, and Virginia hadn't succeeded yet, they were still organ-subject. And Lincoln said, where am I going to get my revenue? And this was the big issue, because the vast majority of the revenue, in fact all of it came from customs, and customs came from the south, southern ports, and it was a major item for the government and for the economy, and so he was not going to let the

196
00:20:50.600 --> 00:21:07.600
The Real Issue is the Tax Issue

197
00:21:20.600 --> 00:21:28.800
and the South wants economic freedom and independence from the North and that's

198
00:21:28.800 --> 00:21:35.480
why they seceded and makes good sense. The problem you have and I've spoken on

199
00:21:35.480 --> 00:21:39.860
the Civil War a bit and it's a tough it's a tough sale because everybody

200
00:21:39.860 --> 00:21:44.180
wants to believe it was slavery it's a fact it's a nice thing to come to a

201
00:21:44.180 --> 00:21:56.180
I spoke at a civil war round table in New York City, and you know, if they'd have had a rope, they'd have lynched me.

202
00:21:56.180 --> 00:22:04.180
I had some lady with tears coming down her eyes, Lincoln was her idol, how can I say things like that?

203
00:22:04.180 --> 00:22:12.180
I just said that he was, and then some guy in the front row is gasping for breath, his face turning red,

204
00:22:12.180 --> 00:22:22.180
I thought he was going to have a heart attack right there on the spot. But I did get out of it alive. So it's nice to have a friendly audience.

205
00:22:22.180 --> 00:22:36.180
But these are interesting subjects that we'll cover as we talk. I guess I told you that's the making of me and being a tax historian.

206
00:22:36.180 --> 00:22:47.180
and it is a wonderful subject. It's a fascinating subject. I think the guy from the Canadian publication, The Globe and Mail, said,

207
00:22:47.180 --> 00:22:58.180
I've done the impossible. I've made tax history interesting. And I think a lot of you will find that.

208
00:22:58.180 --> 00:23:08.180
Well, where did taxes begin? Well, taxes began in the first civilization that we know anything about.

209
00:23:08.180 --> 00:23:16.180
And I have said, and one of the things I propose is that taxes are the fuel that makes civilization run.

210
00:23:16.180 --> 00:23:26.180
There's no civilization that did not tax. And the earliest civilization we know anything about was in Iraq, of all nice places.

211
00:23:26.180 --> 00:23:55.180
It was a civilization of Sumer and a city of Laggish, and they wrote on clay cones, these were cones, and they wrote in a cuneiform language, which we can translate, we understand it, and they wrote about taxes, and they said that they'd had a war, and this is an interesting point in history, and after the war, the tax collectors would not give up their wartime powers.

212
00:23:55.180 --> 00:24:15.180
Now, that's happened so many times. Canada is a good example. They introduced an income tax during World War I. It was a war tax. Soon the war is over. Tax will end. You'd better believe it didn't end. It's continued to this day because it produces a lot of revenue.

213
00:24:15.180 --> 00:24:25.180
So anyway, in this early civilization, they said that the tax collectors would not give up their wartime powers, that everything was taxed.

214
00:24:25.180 --> 00:24:31.180
You couldn't even bury somebody without paying a tax. And we learned this on these clay cones.

215
00:24:31.180 --> 00:24:38.180
And then they had a saying, and I noticed the sayings everywhere. In fact, I was looking at something that was pinned up from the Orange County Register in there.

216
00:24:38.180 --> 00:24:48.180
I discovered this stuff, but it spread over the world, and they said you can have a lord, you can have a king, but the man to fear is the tax collector.

217
00:24:48.180 --> 00:25:02.180
And that has not changed. And one of the illustrations that I like in my book is called Terrace, and it shows a picture of an Arab terrorist with a bomb,

218
00:25:02.180 --> 00:25:09.180
There was a picture of an Irish terrorist, a knife or something, and then it has a picture of an American terrorist.

219
00:25:09.180 --> 00:25:13.180
There's a guy in a suit with a silly grin on and a bag that says, IRS.

220
00:25:13.180 --> 00:25:18.180
And believe me, there's a lot of truth in that.

221
00:25:18.180 --> 00:25:22.180
And I was reading in the ladies' magazine, this was a dirty trip to you gals,

222
00:25:22.180 --> 00:25:29.180
and it says, you really want to get back at your husband someday, just before he's going to sleep.

223
00:25:29.180 --> 00:25:36.180
Say, oh honey, forgot to tell you, the IRS called. They said they'll call back.

224
00:25:36.180 --> 00:25:40.180
Talk about ruining his sleep.

225
00:25:40.180 --> 00:25:46.180
So anyway, the man of the fear is the tax elector, and I think it's been true throughout history.

226
00:25:46.180 --> 00:25:54.180
And that's why I guess the first sign of a major tax reform is when the people start towing and feathering tax men.

227
00:25:54.180 --> 00:26:01.980
Tax Men. That's what the Americans did. We did that to the British in 1865. They tried

228
00:26:01.980 --> 00:26:08.540
to introduce a stamp tax and then later on they tried to introduce a custom tax in which

229
00:26:08.540 --> 00:26:15.540
the Tea Party is famous. And they were tarring and feathering British tax agents. Did you

230
00:26:15.540 --> 00:26:20.060
know 20 years later they were tarring and feathering American tax agencies? You know

231
00:26:20.060 --> 00:26:33.060
The Whistly Rebellion in 1794, and he gets so many pictures and shows these poor tax collectors all covered with tar and feathers, you know, and on a rail and being rolled out of town.

232
00:26:33.060 --> 00:26:41.060
So that's really one of the great origins of American Revolution, where these violent protests.

233
00:26:41.060 --> 00:26:56.960
But on these clay cones, the story doesn't have a great ending because it tells us that a good king came and the good king got rid of all the tax collectors and there were no more tax collectors.

234
00:26:56.960 --> 00:27:06.760
Then we found out that the city was destroyed by foreign invaders, though maybe they should have kept a few taxes to build up their military forces.

235
00:27:06.760 --> 00:27:24.480
But that's where taxes began, and what are taxes? How would you define them? They're forced exactions, and it means to force out, and it comes to the word exactio.

236
00:27:24.480 --> 00:27:33.680
Now, extortion is a simpler word, which means to twist out. I like the subtle Latin distinction.

237
00:27:33.680 --> 00:27:41.380
The taxes are forced executions. They're not debts. And I've maintained a lot of times, I say, well, a tax debt. I say, oh, no, it's not a debt.

238
00:27:41.380 --> 00:27:48.080
This is where my legal background comes in. A debt is based on value received.

239
00:27:48.080 --> 00:27:55.780
Taxes are owed because the government orders them to be paid, and there is no argument about value received.

240
00:27:55.780 --> 00:28:02.280
So it simply is an order to pay, and the government uses the police bar to collect it.

241
00:28:02.280 --> 00:28:06.280
and that's why it is a force of the exaction.

242
00:28:07.280 --> 00:28:16.280
If we move on from our early history there with Sumer, we then, I think, come to the Egyptians.

243
00:28:16.280 --> 00:28:22.280
And they've got some great things in the book on Egyptians, but I'll leave these books here.

244
00:28:22.280 --> 00:28:31.280
Particularly in this book, there are some marvelous, I think, illustrations.

245
00:28:31.280 --> 00:28:51.280
The one I... Showing the... See, this is the one they left that way. You can't see it.

246
00:28:51.280 --> 00:29:02.280
The Egyptian tax system was not a system of money. They didn't have a money economy in those days.

247
00:29:02.280 --> 00:29:07.280
It was a system based on the collection in kind. You paid so much.

248
00:29:07.280 --> 00:29:14.280
And one of the jokes that's in the last addiction here, you'll see a picture.

249
00:29:14.280 --> 00:29:26.280
An artist drew it up for the Foreign Affairs magazine, and it shows an Egyptian tax man collecting the pigeon eggs.

250
00:29:26.280 --> 00:29:32.280
Because it was a 20% tax, so he would climb up and collect 20% of the eggs in the pigeons.

251
00:29:32.280 --> 00:29:39.280
That's how thorough the scribes were. And the scribes of Egypt, and I would like to call it Shadows of the Day,

252
00:29:39.280 --> 00:29:49.040
The IRS of that world, they snooped on everybody, and they recorded on everybody.

253
00:29:49.040 --> 00:29:53.440
And they hauled people in if they didn't pay their taxes, and there's one of the interesting

254
00:29:53.440 --> 00:29:58.780
stories there, and this goes back to the question of what should I do, there's a teacher who's

255
00:29:58.780 --> 00:30:06.800
talking to his students in ancient Egypt, and he said, you want to be farmers?

256
00:30:06.800 --> 00:30:16.800
He says, consider the harvest tax. Consider the fact that the birds may come and eat up the crop, and these may come and eat up the crop.

257
00:30:16.800 --> 00:30:25.800
And then the tax collectors arrive and they say, where is the grain? And you say, you have none.

258
00:30:25.800 --> 00:30:34.800
And you are then doused in the water head down, along with your wife, and your kid's clothing is taken from them.

259
00:30:34.800 --> 00:30:45.800
And he said, I don't think you want to be farmers, but be a scribe. He who is skilled in writing is not taxed.

260
00:30:45.800 --> 00:30:50.800
So the Egyptian scribe was not taxed. And he was the most powerful person in Egypt.

261
00:30:50.800 --> 00:31:00.800
And he ran the place. And there was a 20% tax. Now, the Bible mentions that Joseph was sold by his brothers in Egypt,

262
00:31:00.800 --> 00:31:14.800
in Egypt and that he had interpreted the Pharaoh's dreams and he proposed a 20% tax during the days of seven years of plenty and then they would set it aside in the graineries and so forth for the seven years of famine.

263
00:31:14.800 --> 00:31:23.800
The thing that's wrong with that story is that the Egyptians had been collecting a 20% tax for a thousand years before Joseph showed up.

264
00:31:23.800 --> 00:31:26.800
But the Bible gives Joseph credit for it.

265
00:31:26.800 --> 00:31:49.800
I like to think about some of the other aspects of the Egyptian system. Euclid, for example, we all studied his geometry. He learned geometry in Egypt, and he went to there, and the reason he learned it there is because they used geometry for the tax system.

266
00:31:49.800 --> 00:32:02.800
That was based on how much land you had, and since all the land was not nice and square and so forth and they had to figure the angles and things like that and that's where geometry came in to collect the tax.

267
00:32:02.800 --> 00:32:09.800
And so Euclid got his geometry, which we all learned in the 10th grade or there about, he got it from the Egyptians.

268
00:32:09.800 --> 00:32:22.800
The other thing that the system had was called Asylia. Asylia was the immunity of the taxpayer once he got inside the temples.

269
00:32:22.800 --> 00:32:30.800
So if you were having trouble with the IRS of the day, you'd race to the temple.

270
00:32:30.800 --> 00:32:39.800
and the Temple had great gates, and if you got inside, the tax man was left on the outside.

271
00:32:39.800 --> 00:32:49.800
And Temple has lived on, in a sense, we have it today, in the embassies of the world.

272
00:32:49.800 --> 00:32:55.800
There was a Hungarian Cardinal that fled to the American Embassy in Budapest.

273
00:32:55.800 --> 00:33:14.360
In the Bible you will read that certain cities were set aside as cities of refuge, meaning

274
00:33:14.360 --> 00:33:20.100
that you were in trouble with anybody or anything you could race and get inside the city of refuge

275
00:33:20.100 --> 00:33:30.100
The Federal Reserve, fiat money, fractional reserve banking, Human Action, Man Economy and State, The Theory of Money and Credit

276
00:33:50.100 --> 00:34:14.100
and the word philanthropy comes from that period and the word was philanthropa and it simply was the immunity from tax that we would find the Egyptian pharaoh would give and he said if a man is poor and he's down on his luck so to speak, forget his taxes, those are his advices to the scribes.

277
00:34:14.100 --> 00:34:42.300
And so there was this human element involved, but in time it failed because Egypt was taken over by Ptolemy, a general of Alexander, and when he took over the system, he brought in the Greeks, and the Greeks were really vicious tax collectors.

278
00:34:42.300 --> 00:34:49.900
They had developed what originally was called tax farming, which was kind of a nice prospect of getting out of a...

279
00:34:49.900 --> 00:34:59.900
See, the Greeks didn't like bureaucracy, and their idea was to set up a government without bureaucrats.

280
00:34:59.900 --> 00:35:04.500
That's a hell of a great idea. I don't know about you guys, if you have to deal with these people.

281
00:35:04.500 --> 00:35:11.500
And so they had a number of ways in which they didn't have bureaucrats. One was they set up tax farmers.

282
00:35:11.500 --> 00:35:16.620
So rather than have a tax bureaucracy which goes out and collects for the government,

283
00:35:16.620 --> 00:35:21.380
the government auctions off the right that collects a harbor tax in Athens, or where

284
00:35:21.380 --> 00:35:25.780
it might be, and then you'd know from past receipts about what you could collect.

285
00:35:25.780 --> 00:35:30.100
And of course with the tax farmer, he would pay to the government, and this happened in

286
00:35:30.100 --> 00:35:40.740
Egypt, he'd pay what he thought he could collect, or the minimum bid of course, but then the

287
00:35:40.740 --> 00:35:46.100
The problem was he had to keep everything over and above what his bed was, like a good

288
00:35:46.100 --> 00:35:47.100
contractor.

289
00:35:47.100 --> 00:35:52.300
So you can imagine when they applied the muzzle to the taxpayers, what the tax farmer turned

290
00:35:52.300 --> 00:35:53.300
into.

291
00:35:53.300 --> 00:35:57.500
The tax farmers make the IRS look nice, I guess, compared to the gasoline.

292
00:35:57.500 --> 00:36:00.180
They get to keep everything.

293
00:36:00.180 --> 00:36:06.780
And the IRS didn't keep everything, they had to turn it over to the government.

294
00:36:06.780 --> 00:36:17.780
One of the problems we found in Egypt is that the head scribes were sharing corruption with the scribes out in the field.

295
00:36:17.780 --> 00:36:24.780
It would be like the IRS guys in Washington sharing what they were ripping off taxpayers for that taxpayers didn't know.

296
00:36:24.780 --> 00:36:26.780
So it's kind of a corrupt system.

297
00:36:26.780 --> 00:36:33.780
One of the pharaohs that came along following Tutankhamun, he found out about this.

298
00:36:33.780 --> 00:36:42.780
And so, any taxman, a scribe, that was collecting more than he was supposed to had his nose cut off.

299
00:36:42.780 --> 00:36:51.780
And we have the record of a place out in Arabia where there was a society with people with deformed noses.

300
00:36:51.780 --> 00:36:57.780
So, actually, he did the job. Not a bad idea when you think about it.

301
00:36:57.780 --> 00:37:05.780
Anyway, so if we go back to Ptolemy in Egypt, then if he brought in these tax bombers, then they were a really brutal bunch.

302
00:37:05.780 --> 00:37:20.780
The army had come back from a military campaign, and of course the Egyptian society was in the clutches of these vicious Greek tax collectors, and society was in disaster of shape.

303
00:37:20.780 --> 00:37:30.860
Fugitives had left, taxpayers were locked up in jail, lands had been confiscated, the

304
00:37:30.860 --> 00:37:37.780
dikes were in disrepair, and it was in this, it was in this setting that the Rosetta Stone

305
00:37:37.780 --> 00:37:43.820
came about. And the Rosetta Stone, there were probably more than one of them because the

306
00:37:43.820 --> 00:37:51.500
The records indicate that they would inscribe this stone, they'd inscribe it in the two

307
00:37:51.500 --> 00:37:55.380
Egyptian languages, and then in Greek.

308
00:37:55.380 --> 00:38:00.420
And then, that was the most marvelous find in archaeological history, because all of

309
00:38:00.420 --> 00:38:06.660
a sudden, we could understand hieroglyphics, because we could simply compare it, and it's

310
00:38:06.660 --> 00:38:10.820
a beautiful thing, I don't know, I saw it over in the British Museum.

311
00:38:10.820 --> 00:38:14.860
It came from the town of Rosetta and it was dug up by Napoleon.

312
00:38:14.860 --> 00:38:22.340
His troops did and they took it back to France, but then when the British beat Napoleon they

313
00:38:22.340 --> 00:38:27.400
swiped it and they took it to the British Museum where it now sits.

314
00:38:27.400 --> 00:38:31.060
And so that became the key to understanding Egyptian languages.

315
00:38:31.060 --> 00:38:36.660
But the Rosetta stone was a proclamation of peace and it was a tax document.

316
00:38:36.660 --> 00:38:39.300
It was an amazing tax document.

317
00:38:39.300 --> 00:38:45.300
It was trying to bring peace to the civil war and the total collapse of the Egyptian society.

318
00:38:45.300 --> 00:38:49.700
So there was a cancellation of tax debts.

319
00:38:49.700 --> 00:38:54.580
Fugitives that had fled could come back and we give them their land back.

320
00:38:54.580 --> 00:39:02.180
We release the taxpayers that were in jail because we needed the workers.

321
00:39:02.180 --> 00:39:07.180
And so it was an attempt to bring peace to a society that had simply collapsed.

322
00:39:07.180 --> 00:39:19.180
The Temple Rite of Asylea had been lost for 500 years. It was gone. So that came back.

323
00:39:19.180 --> 00:39:31.180
And the result was that there may have been other proclamations of peace. The one I like was so interesting is that the king and queen sent out a proclamation.

324
00:39:31.180 --> 00:39:44.180
And they said that the tax men are not to be, I'll just use the term thugs, they're to be fair, they're to be decent fellows.

325
00:39:44.180 --> 00:39:52.180
And it was I'm the king and the queen. Now that's interesting because the queen now had equal status which was unusual, you know, in history.

326
00:39:52.180 --> 00:39:59.180
The thing that's true about it is that we have the same thing today. I like to digress a little bit. Today we have the same thing.

327
00:39:59.180 --> 00:40:15.180
I remember years ago there was a revenue procedure written by the IRS and it said that IRS agents are not to protect the revenue, they're simply to administer the law fairly.

328
00:40:15.180 --> 00:40:43.180
I was in an audit once, and I had this IRS agent there, and he was pushing pretty hard, and I brought up the revenue procedure, I said, he mentioned to me, well, I'm here to protect the revenue, and I said, wait a minute, here's what your bosses in Washington said, you're not to protect the revenue, you're simply to justly administer the tax law.

329
00:40:43.180 --> 00:40:48.180
He turned to me and he said, well, that isn't what my supervisor tells me.

330
00:40:48.180 --> 00:40:57.180
So I think you get some of these baloney that comes out of the tax department and, you know, try and cover some of the misdeeds that they do.

331
00:40:57.180 --> 00:41:05.180
They certainly had done a collection of disservice to the American people, but it's traditional.

332
00:41:05.180 --> 00:41:12.180
It's not anything that is especially unusual, the British done it, the French have done it.

333
00:41:12.180 --> 00:41:26.180
Benjamin Franklin, at the time of the American Revolution, he says you send out from London the most indiscreet, the most rude, the most vicious tax people to administer the system.

334
00:41:26.180 --> 00:41:37.180
So no wonder we're rebelling. And I guess it goes with the job. I think you put a badge on some people and you give them awesome authorities and they always misuse it.

335
00:41:37.180 --> 00:41:49.180
I certainly have seen it. In fact, a lot of people talk about the IRS. The worst tax people I ever met was the Franchise Tax Board in California.

336
00:41:49.180 --> 00:41:55.180
They make the IRS look like Boy Scouts. They're a mean bunch. I mean, I've talked to other lawyers in California. I said,

337
00:41:55.180 --> 00:42:11.180
I said, you ever deal with those guys? They said, yeah, boy, aren't they awful. So it isn't just the IRS that's bad, and I think sometimes the IRS, we have to keep pressure on them, because if we don't, they're going to be a problem to us.

338
00:42:11.180 --> 00:42:21.180
They've got these awesome powers and they've given people to commit suicide. They're just a bad bunch.

339
00:42:21.180 --> 00:42:26.180
But I think it goes along with the system and that's why the Greeks, and we want to go back to them,

340
00:42:26.180 --> 00:42:31.180
they wanted to have a tax system where there was no bureaucracy.

341
00:42:31.180 --> 00:42:36.180
And before they had the tax farmers, they had an interesting system.

342
00:42:36.180 --> 00:43:01.180
They would put together the ten taxpayers, and then of those ten, they'd get another ten, making a hundred, they would take the richest taxpayers, and they would have them pay the tax for everybody, and then they would have to collect it to replace the money they'd paid off.

343
00:43:01.180 --> 00:43:09.680
And I guess it wasn't a bad system in some ways, but it was the Greek alternative to the tax system.

344
00:43:09.680 --> 00:43:19.680
Another thing that the Greeks had, which I thought was very good, was the way in which...

345
00:43:19.680 --> 00:43:23.180
How did they work that?

346
00:43:23.180 --> 00:43:28.460
They would go to the rich man in the town and they'd say,

347
00:43:28.460 --> 00:43:33.340
we need a new road, we need a new place, I'm gonna go buy the costumes,

348
00:43:33.340 --> 00:43:39.100
we need some rowers for the Navy, we want you to do it.

349
00:43:39.100 --> 00:43:46.220
And they would put social pressure on them and they would do it.

350
00:43:46.220 --> 00:43:50.460
And you'll read some of the things in my book as to what they said.

351
00:43:50.460 --> 00:44:03.460
But coming back to our biblical days, and I think we've got some more time, and if you want to ask me some questions, that's fine too.

352
00:44:03.460 --> 00:44:14.460
The Feral enslaved the children of Israel, and we know that Moses led the children of Israel out of Egypt. How did he enslave them?

353
00:44:14.460 --> 00:44:30.960
It had to be the tax system. The Great Pharaoh was a man who would rule by the laws of God and he couldn't just make up laws.

354
00:44:30.960 --> 00:44:40.220
So the Bible tells us that he said the children of Israel had become so numerous, let us deal wisely with them,

355
00:44:40.220 --> 00:44:45.120
lest they join up with some of our enemies and destroy us.

356
00:44:45.120 --> 00:44:56.400
Well, they were a foreign colony in Egypt, and as a foreign colony he had a right to make tribute taxes, they had to pay tribute.

357
00:44:56.400 --> 00:45:08.960
And if he made the taxes so high, as the Bible says, put a yoke upon them, and that's a common word for taxes in the Old Testament, they could rebel, and if they rebelled, they could be enslaved.

358
00:45:08.960 --> 00:45:23.440
And I think that's what the Pharaoh did. I think he enslaved them by heavy tax. It was so logical, so easy, and the children of Israel, of course, rebelled, Moses came along, they got out of Israel.

359
00:45:23.440 --> 00:45:38.640
When they went to the promised land and they took that over, the Bible tells us that there were no kings in Israel, that every man did that which was right in his own eyes.

360
00:45:38.640 --> 00:45:46.640
So here you have a real libertarian society, a wonderful libertarian society.

361
00:45:46.640 --> 00:45:53.780
And it was going pretty good until the children of Israel, in their follies and foolishness, wanted a king.

362
00:45:53.780 --> 00:45:56.780
Everybody else had one, you know, we need a king.

363
00:45:56.780 --> 00:45:58.580
So what did they do?

364
00:45:58.580 --> 00:46:06.660
Well, they went to the prophet Samuel, and prophet Samuel says, God does not want you to have a king.

365
00:46:06.660 --> 00:46:09.100
And I don't want you to have a king.

366
00:46:09.100 --> 00:46:14.340
Because if you have a king, you're going to be taxed.

367
00:46:14.340 --> 00:46:22.340
You're going to be taxed in your fields, in your vineyards, in your cattle, in your flocks.

368
00:46:22.340 --> 00:46:29.340
He says that your sons will have to go work for them, your daughters will have to work for the king. You don't want a king.

369
00:46:29.340 --> 00:46:34.340
Well, they insisted on having a king, and of course they had one.

370
00:46:34.340 --> 00:46:48.340
We know that it was not a good time, but the thing that then happened, of course, is that they got caught between Egypt and, I'll call it, Assyria.

371
00:46:48.340 --> 00:47:02.340
And they were kind of in the squeeze position, so the Assyrians and the Egyptians fought for their loyalty, and in the process they also taxed them pretty brutally.

372
00:47:02.340 --> 00:47:11.620
They taxed them in so many talents of silver, and I think it was 125 ounces, or pounds, I guess, of silver.

373
00:47:11.620 --> 00:47:16.680
But anyway, the tax was enormous. And the Jews rebelled.

374
00:47:16.680 --> 00:47:23.260
And the king of Assyria came down with his huge power of allegiance, and he conquered them.

375
00:47:23.260 --> 00:47:29.180
And what he conquered was the kingdom of Israel. Because what had happened up in this time is that

376
00:47:29.180 --> 00:47:37.620
Solomon had two sons that were contending for the throne, for the kingship, and there

377
00:47:37.620 --> 00:47:41.620
was a big argument, as sons will do.

378
00:47:41.620 --> 00:47:46.540
And so the kingdom split, and we had the main kingdom of Israel on the north and the smaller

379
00:47:46.540 --> 00:47:50.760
kingdom of Judah, where Jerusalem was, on the south.

380
00:47:50.760 --> 00:47:58.100
And so the Assyrians, they came down from the north and they just destroyed the power

381
00:47:58.100 --> 00:48:05.620
of the Kingdom of Israel, and they hauled them off into captivity. There's some wonderful

382
00:48:05.620 --> 00:48:11.180
reliefs on the walls of Nineveh, and they became lost and became the lost tribes of

383
00:48:11.180 --> 00:48:16.980
Israel. Those of you with biblical background or interest, what became of the lost tribes

384
00:48:16.980 --> 00:48:23.760
of Israel? Just to get a little side, a couple hundred years ago it was thought that the

385
00:48:23.760 --> 00:48:28.720
The American Indians were the lost tribes in Israel, because they tried to explain everything

386
00:48:28.720 --> 00:48:34.440
in terms of the biblical story, and so nobody knew where they went, and a lot of myths developed

387
00:48:34.440 --> 00:48:37.920
about them, but they disappeared from history.

388
00:48:37.920 --> 00:48:46.520
Then the king of Assyria turned on Judah, the king who was Jewish, smaller, and demanded

389
00:48:46.520 --> 00:48:49.920
that they pay a lot of tax, and they did for a while, and finally they said, oh to hell

390
00:49:19.920 --> 00:49:35.560
In the historical sense the Babylonians take over and they defeat the Assyrians and they

391
00:49:35.560 --> 00:49:41.840
turn on Israel and Israel made a deal with the Egyptians, they thought they'd help them

392
00:49:41.840 --> 00:49:48.280
out but they didn't and so they battled the Babylonians and then Nebuchadnezzar, maybe

393
00:49:48.280 --> 00:50:18.280
The King of Babylon sent the Jews back to Jerusalem and sent them back there so they could become tax-paying

394
00:50:18.280 --> 00:50:21.680
and the Basils of His Kingdom.

395
00:50:21.680 --> 00:50:29.880
So now we've got the Jews in Babylon, and now we've got the Jews back in Jerusalem,

396
00:50:29.880 --> 00:50:34.720
and that's where we kind of, I want to stop for a minute, anybody have any questions, then

397
00:50:34.720 --> 00:50:35.720
I'll pick up a little later.

398
00:50:35.720 --> 00:50:36.720
Are you all satisfied?

399
00:50:36.720 --> 00:50:37.720
Yeah.

400
00:50:37.720 --> 00:50:40.720
Are you all satisfied? Yeah.

401
00:50:40.720 --> 00:50:46.720
I've got a question. You talked about how Iraq was destroyed after they, they got rid of the tax collectors.

402
00:50:46.720 --> 00:50:48.720
Yeah.

403
00:50:48.720 --> 00:50:57.720
Greece, when the Greeks were just beginning democracy and they were attacked by the Persians,

404
00:50:57.720 --> 00:51:00.720
can you talk a little bit about what the tax system was then?

405
00:51:00.720 --> 00:51:11.720
That's interesting because the most important military event in the history of the world was the Battle of Marathon.

406
00:51:11.720 --> 00:51:16.720
That was, as far as we're concerned, that was it.

407
00:51:16.720 --> 00:51:28.720
The Battle of Marathon was the Babylonians wanted to take over Greece and everybody else had fallen to them.

408
00:51:28.720 --> 00:51:33.720
and there's no reason why the Greeks shouldn't be paying tribute just like everybody else was.

409
00:51:33.720 --> 00:51:37.720
So Sparta and Athens got together, they had common commanders,

410
00:51:37.720 --> 00:51:42.720
and they resisted the onslaught of the Babylonians, the Persians that they were at that time,

411
00:51:42.720 --> 00:51:45.720
and they defeated them at the Battle of Marathon.

412
00:51:45.720 --> 00:51:48.720
We're going to have a race in not too long.

413
00:51:48.720 --> 00:51:58.720
The Ballot Marathon is significant because Greek civilization seized control of history by that.

414
00:51:58.720 --> 00:52:10.720
The Greeks became the leaders of Western civilization. They didn't handle it too well, but at least in that sense, the world became Greek.

415
00:52:10.720 --> 00:52:22.720
The Greeks invented just about everything. We celebrated the birth of Copernicus. He was 1,500 years late.

416
00:52:22.720 --> 00:52:30.720
The Greeks knew the world was round. They knew it revolved around the sun. They even measured the circumference, the 25,000 miles.

417
00:52:30.720 --> 00:52:35.720
Columbus was 10,000 miles off. He thought he landed in Japan when he got to the Bahamas.

418
00:52:35.720 --> 00:52:43.720
So, the brilliant Greeks, you know, the father of medicine, the father of taxes was Aristides the Just.

419
00:52:43.720 --> 00:52:54.720
And in that sense, what the Persians wanted, of course, is tribute from the Greek city-states, and they didn't get it.

420
00:52:54.720 --> 00:53:00.720
And Greek civilization survived. Now, let's go back to your question.

421
00:53:00.720 --> 00:53:22.720
I know that at that time the Phoenix actually voted, so they voted on each, not for a politician, but on each issue, and they voted to go to war. So I'm wondering, did they have that much autonomy as far as paying taxes to support the war as well?

422
00:53:22.720 --> 00:53:35.720
Well, I told you what the taxes was. They would make the ten groups of ten, and then the riches would collect the taxes and then give it to the government.

423
00:53:35.720 --> 00:53:45.720
Taxes were, to a large extent, based on land in those days, and the rule was pretty much 10% over the summa.

424
00:53:45.720 --> 00:53:56.220
That was the 10% land tax, and the land tax was based on the Egyptian idea, it's what the land should have produced.

425
00:53:56.220 --> 00:54:04.220
Nobody was out there to measure the production, because since the production all came in the same time,

426
00:54:04.220 --> 00:54:07.220
you couldn't have enough tax people out there to count the production.

427
00:54:07.220 --> 00:54:12.720
So what you did is you measured the land, and you said this land should produce so much,

428
00:54:12.720 --> 00:54:17.040
and your 10% will be that and we'll be there to pick it up.

429
00:54:17.040 --> 00:54:20.720
And that's the way the land tax. Now, of course, they also had one of the major

430
00:54:20.720 --> 00:54:28.800
taxes was the port tax. That is the tax on Athens because they needed to have a

431
00:54:28.800 --> 00:54:35.360
powerful navy to protect commerce from pirates. And there were a number of lanes

432
00:54:35.360 --> 00:54:41.360
in there that were pretty infested with pirates and the taxes were based on the

433
00:54:41.360 --> 00:54:52.920
the particular risk involved and how much naval force was necessary to keep the sea lanes open, but that was the key to the prosperity was the commerce.

434
00:54:52.920 --> 00:55:10.520
Another thing that was the key to their prosperity was the drachma. The drachma was like a shilling or a silver dollar, and they really guarded that with propurity because sound money was so important to commerce.

435
00:55:10.520 --> 00:55:20.520
And the drachma had very serious penalties for anybody that screwed around with it, and of course the Romans took it over, and they thought it was great.

436
00:55:20.520 --> 00:55:26.520
And then they decided that if you put a little copper, you could get more drachmas, and if you put a little copper, you could get more drachmas.

437
00:55:26.520 --> 00:55:35.520
The result was that they created terrible inflation, and a bushel of wheat, which cost about a drachma a few hundred years later,

438
00:55:35.520 --> 00:55:44.320
later cost 100,000 reckons because of all the copper that had been dumped into the cornage.

439
00:55:44.320 --> 00:55:48.480
We used to believe that too, you know. I remember when I was a kid, we had silver coins, it

440
00:55:48.480 --> 00:55:53.960
was really great. Now we've got pot metal, you know. We're doing just what the Romans

441
00:55:53.960 --> 00:55:57.440
did. I wonder how it's going to end. But it took about two or three hundred years for the

442
00:55:57.440 --> 00:56:06.320
are almost a really collapse by ruining the currency and so anyway maybe I should

443
00:56:06.320 --> 00:56:10.580
tell the story of Hanukkah that that's a good story I like it because some of my

444
00:56:10.580 --> 00:56:14.900
Jewish friends love it and one of my Jewish friends he was a very devout and

445
00:56:14.900 --> 00:56:17.960
family I'll get together on Hanukkah and so forth and he said hey tell them it's

446
00:56:17.960 --> 00:56:24.560
all a tax story they get so upset what had happened is during this period when

447
00:56:24.560 --> 00:56:52.560
When we had this battle between the East and the West, or between what we'll call it, between Egypt, and in this particular time, was Greece because Alexander died and his general Ptolemy had taken over Egypt, and he had another general in Seleucid who took over Greece, and in that process the Greeks, and there was this constant jostling between the two.

448
00:56:52.560 --> 00:57:21.560
One of the interesting stories was that, how did that go? In order to make peace, they used to like to have intermarriages, and so they had a marriage between Ptolemy's daughter and his eldest son, and so that was a nice deal, and so as a wedding present, Ptolemy gave Judea, or the Kingdom of Israel,

449
00:57:21.560 --> 00:57:32.560
King of Judah, he gave it as a wedding present and that got him out of the tax system. Now they could set up a new tax system, a re-hammer on the Jews.

450
00:57:32.560 --> 00:57:43.560
It was a tough time and not only did they have these taxes they had to pay to the Greeks, they also introduced Greek culture.

451
00:57:43.560 --> 00:57:53.560
And they had these Greek gymnasiums and so forth in which the Jewish kids in these gymnasiums would run around with no clothes on.

452
00:57:53.560 --> 00:57:58.560
And to the pious Jews, that wasn't too good. They were too impressed with that.

453
00:57:58.560 --> 00:58:09.560
So they had this rebellion in the Maccabees family, and the result was that to throw off the taxes that the solicitors had put upon them was one of their objects.

454
00:58:39.560 --> 00:58:54.560
The theory of money miraculously installed in the lamps in the temple, but of course the real issue was the fact that they beat the Greeks out of their taxes, and so that was a great story.

455
00:58:54.560 --> 00:59:01.100
The people who were involved in that was a guy named Joseph. It's an interesting Jewish name.

456
00:59:01.100 --> 00:59:11.820
And at the time, now we're back with the Ptolemies, collecting taxes from the Jews, which the Jews didn't particularly like.

457
00:59:11.820 --> 00:59:19.680
And they decided not to pay the taxes. Well they notified the Ptolemies in Egypt they weren't paying the taxes.

458
00:59:19.680 --> 00:59:49.600
The Egyptians lost their minds, and so the Jews at that time were ruled by an old priest named Ohai Priest, Onias was his name as I recall, and his son, I guess it was his son, went to Ptolemy and he said, a lot like the phrase, he says, forget about him, forgive our uncle, that was it, forget my uncle, because he's old.

459
00:59:49.680 --> 01:00:18.680
And don't you know that old men are like, just like children. And he said, well, let me see what we can do. And in that particular time, they had these big auctions in Egypt for collecting taxes. And so he went there, and he offered a huge sum to Ptolemy to collect the taxes.

460
01:00:18.680 --> 01:00:31.180
Well, he didn't have that. He didn't have the sureties. He didn't have the fork to collect it, but he explained that these taxonomies he got are all corrupt, and this went with all the money. I can produce twice as much.

461
01:00:31.180 --> 01:00:44.680
And sure enough, so the king said, okay, you got the job, and he did produce twice as much. And that made Israel very wealthy during that period. It was a wonderful way in which the king of Israel, you know, became wealthy.

462
01:00:44.680 --> 01:01:14.680
I like this story because it ties in with Hanukkah and it's how the Jews became rich and wealthy and that was one of the things that set off a rebellion against the Romans because the Roman ruler was interested in getting the gold in the Hebrew temple at the time, in the early Christian times and it set off a revolt because he went in and wanted to swipe the Jewish

463
01:01:14.680 --> 01:01:37.680
Well, the end for Israel was that they rebelled around, I guess around 60 A.D. and they rebelled against the Romans. They were badly beaten.

464
01:01:37.680 --> 01:02:07.680
The remnants of them fled to Masada. Have you heard of Masada? That's a hill, a big, massive hill that you can see, and they were on the top of it, and they were making guerrilla raids against the Romans, and the Romans in the meantime had kicked the Jews out of Judea in those days, and the Romans got their most famous general, and he spent two years building a ramp up to the top of Masada,

465
01:02:07.680 --> 01:02:16.440
and when they got there they'd all committed suicide and the I think the

466
01:02:16.440 --> 01:02:23.560
Israelis today that were to the military they say they have a saying that Masada

467
01:02:23.560 --> 01:02:31.480
shall not happen again that's a common expression in the Israeli army so they

468
01:02:31.480 --> 01:02:36.320
that was the end of them and of course that the Romans then introduced a task

469
01:02:36.320 --> 01:03:05.320
This is a tax called the Thyskos Dudaikos, and this tax was payable by all Jews, twice as much had been the Temple dues, and it went to support the Temple of Jupiter in Rome, and it was a pretty bitter thing for the Jews, but we'd simply have the Jews here become a scattered people, and they spread over the earth, spread up into Europe,

470
01:03:05.320 --> 01:03:30.320
and it sets the stage for the first attempted extermination of them during the Middle Ages when they ran it on disfavor with the kings and kings up in Europe, I think the one that didn't, there was a king in Germany who literally said about exterminating the Jews.

471
01:03:30.320 --> 01:03:36.320
Just like Hitler didn't have to look too far to find policy for getting rid of the Jews.

472
01:03:36.320 --> 01:03:44.320
They were also thrown out of Spain. They said you could buy a Jewish farm for a piece of cloth.

473
01:03:44.320 --> 01:03:49.320
They were also thrown out of Britain, England at the time.

474
01:03:49.320 --> 01:03:53.320
They were told to pack your bags and leave, and literally they were.

475
01:03:53.320 --> 01:03:58.320
So they got rid of it. The only place that seemed to have taken them was the Netherlands.

476
01:03:58.320 --> 01:04:02.320
And the Netherlands seemed to have been one of the last refuges for the Jewish people. Yes?

477
01:04:02.320 --> 01:04:06.320
Actually, the main homeland of the Jews in the Middle Ages was Poland.

478
01:04:06.320 --> 01:04:08.320
They were growing out of...

479
01:04:08.320 --> 01:04:12.320
They were growing out of Portugal. The first one was England in the 1990s.

480
01:04:12.320 --> 01:04:13.320
Yes, right.

481
01:04:13.320 --> 01:04:19.320
And during the next century, most other countries, the last one was Portugal and Spain in the 1990s.

482
01:04:19.320 --> 01:04:22.320
But at that time, Poland became a big homeland of Jews.

483
01:04:22.320 --> 01:04:27.320
I see. Well, a lot of Jews in Poland found that out, didn't they?

484
01:04:27.320 --> 01:04:33.320
In the 18th century, about 80% of the Jewish world population was living in Poland.

485
01:04:33.320 --> 01:04:34.320
I see.

486
01:04:34.320 --> 01:04:35.320
That's nice to know.

487
01:04:35.320 --> 01:04:40.840
I knew they were in the Netherlands and the interesting thing about the Netherlands was

488
01:04:40.840 --> 01:04:47.680
because when Netherlands became a kind of a superpower following the collapse of Spain,

489
01:04:47.680 --> 01:04:54.740
the argument came up in Britain, well, why are the Dutch so popular, so prosperous?

490
01:04:54.740 --> 01:04:57.820
Is it because they have Jews there?

491
01:04:57.820 --> 01:05:03.740
And so the argument was made, well, maybe we should let the Jews come back to England.

492
01:05:03.740 --> 01:05:06.300
Maybe we should never throw them out in the first place.

493
01:05:06.300 --> 01:05:07.300
And they shouldn't have.

494
01:05:07.300 --> 01:05:09.180
It was a pretty disastrous thing.

495
01:05:09.180 --> 01:05:13.900
They had what they call a Parliament of the Jews that they set up during this period when

496
01:05:13.900 --> 01:05:14.900
the Jews were there.

497
01:05:14.900 --> 01:05:17.260
And that was only just to get money out of them.

498
01:05:17.260 --> 01:05:27.740
I remember the story about one rich Jewish guy who lost his traverse from him, and he wouldn't pay the tax, so each day they pulled out a tooth.

499
01:05:27.740 --> 01:05:35.580
You remember that story? Anyway, every day they pulled out a tooth, and finally he said, okay, okay, I'll pay the tax.

500
01:05:35.580 --> 01:05:40.100
You know, so the IRS is not too bad. They don't result in that.

501
01:05:40.100 --> 01:05:44.820
But when they did run them out, you know, everything they had they lost and so forth,

502
01:05:44.820 --> 01:05:50.500
and they took a pretty rough time in Europe.

503
01:05:50.500 --> 01:05:56.900
Yeah, I guess it was that Judenschlachter was the name of the guy that murdered all the Jews in Germany.

504
01:05:56.900 --> 01:06:00.500
There's an interesting, they ran him out of Frankfurt and so forth.

505
01:06:00.500 --> 01:06:06.980
It was a, you see the Jews, the Jews were looked upon as valuable property.

506
01:06:06.980 --> 01:06:18.660
That was the important thing. And one of the kings, as I remember, they talked, an English king, they talked about forcing them to be converted to Christianity.

507
01:06:18.660 --> 01:06:28.620
And the king says, oh no, no, no, no. They're mine, they're valuable property. Once I'm a Christian, I've lost them. So he didn't want them to be a Christian.

508
01:06:28.620 --> 01:06:33.300
And I guess that's probably a good place to think.

509
01:06:33.300 --> 01:06:54.800
One of their problems is that they could loan money and collect interest, and therefore they were considered evil, because interest was evil, and they did a lot of the things that the Christians could not do, they were valuable property in that sense.

510
01:06:54.800 --> 01:07:02.000
But that gave them the excuse to steal from them. I mean, the kings to confiscate them, because they had the pie.

511
01:07:02.000 --> 01:07:09.500
The word was, they acquired their money through sinful means. I think that was the term that they used to use.

512
01:07:09.500 --> 01:07:16.000
Anything else? Any other thoughts?

513
01:07:16.000 --> 01:07:21.600
I was going to kind of stop there. We'll pick up the Greeks this afternoon and the Romans.

514
01:07:21.600 --> 01:07:27.240
That's a great story, but I'll, yes?

515
01:07:27.240 --> 01:07:32.480
I have a comment during that time that you talked about the Maccabees, the Coiningers,

516
01:07:32.480 --> 01:07:41.920
their family crests were the palms, and that was on the coins, and of course, when Jesus came in,

517
01:07:41.920 --> 01:07:50.240
the palm sundae was really in your face, because that was showing this coinage of the Roman,

518
01:07:50.240 --> 01:07:59.240
That's interesting. So much of history that is just filled with tag stories, there just seems to be no end to them.

519
01:07:59.240 --> 01:08:05.240
And there's so many of the things that we do today all of a sudden have tags of origin, like I pick up the newspaper this morning.

520
01:08:05.240 --> 01:08:11.240
You know, it's a newspaper. Why is the newspaper like this and why isn't it like Time magazine?

521
01:08:11.240 --> 01:08:19.240
Well, the reason it isn't is because the British introduced a tax on newspapers so much a page.

522
01:08:19.240 --> 01:08:26.640
so to avoid the tax they made big pages and that is the origin of our modern

523
01:08:26.640 --> 01:08:30.560
newspaper we like it but originally there were not big pages the big page was

524
01:08:30.560 --> 01:08:34.920
it so much tax a page so you make a big in fact one of the illustrations in my

525
01:08:34.920 --> 01:08:40.240
book shows a just shows a newspaper page that's ten feet high and then you can

526
01:08:40.240 --> 01:08:46.040
you know if they won tax yes back retracing back to Israel I'm curious what

527
01:08:46.040 --> 01:09:01.040
With the way they collected taxes under the judges and the kings, I don't remember talking about establishing a bar, saying he'll tell them he's going to tax you and it's going to be a whopping 90%.

528
01:09:01.040 --> 01:09:15.040
How is that tax collected in an Israelite kingdom? Was it property? Was it income? Was it...

529
01:09:15.040 --> 01:09:21.120
Well, all I can think of is that everything was in kind, and so you paid so much tech into

530
01:09:21.120 --> 01:09:28.000
the granaries that the government had, and they stored the grain, and also they collected

531
01:09:28.000 --> 01:09:32.640
from the fruits of the field, in the sense of the vineyards and the orchards.

532
01:09:32.640 --> 01:09:38.680
I guess they just had gigantic granaries and houses to store the stuff.

533
01:09:38.680 --> 01:09:45.920
And we run into an interesting story on that in China, which is in my new book. There was

534
01:09:45.920 --> 01:09:55.320
a Chinese king, and he was a remarkable guy. He had the title of governing by doing nothing.

535
01:09:55.320 --> 01:10:00.860
That was his name, governing by doing nothing. And previous to that time, the Chinese had

536
01:10:00.860 --> 01:10:06.960
a 10% tax, and Confucius was behind it, and Mencius was behind it, and it was considered

537
01:10:06.960 --> 01:10:12.200
a pretty clever tax system. They would divide up the land in the nine squares and the middle

538
01:10:12.200 --> 01:10:17.520
square, 3333, and the middle square was balling with the government for taxes and all the

539
01:10:17.520 --> 01:10:24.120
farmers around had to help farm it and that was called the field system. But this guy

540
01:10:24.120 --> 01:10:32.920
whose name was governing by doing nothing, I love his title, he reduced the tax to 3%

541
01:10:32.920 --> 01:10:39.320
And he collected so much that the granaries were rotting on a 3% tax.

542
01:10:39.320 --> 01:10:45.920
So the real founders of ergonomics were the Chinese.

543
01:10:45.920 --> 01:10:54.640
One of the stories that I like is that the king called in, he said, an enlightened one,

544
01:10:54.640 --> 01:10:56.680
meaning a sage.

545
01:10:56.680 --> 01:11:04.440
And he says, I'm charging 20% tax, and I don't have enough tax to run my kingdom.

546
01:11:04.440 --> 01:11:06.960
What should I do?

547
01:11:06.960 --> 01:11:11.360
And the sage said, reduce the tax 10%.

548
01:11:11.360 --> 01:11:13.720
The time honored 10%.

549
01:11:13.720 --> 01:11:18.120
And the king said, well, if I can't collect enough on 20%, how in the world can I collect

550
01:11:18.120 --> 01:11:19.120
enough on 10%?

551
01:11:19.120 --> 01:11:25.600
And he says, but if you only charge 10%, people will work harder, people will come into your

552
01:11:25.600 --> 01:11:42.600
in your kingdom, trade will increase, you will collect more money on the 10% tax than on the 20% tax, and that's an ancient Chinese story, and so Regan was not the father of Reganomics, that was just common sense.

553
01:11:42.600 --> 01:11:49.600
I think one of the best things about Regan, and I like the story, is that somebody noticed what a wonderful golf swing he had.

554
01:11:49.600 --> 01:11:58.600
And they ask him, jeez, you play beautiful golf, how do you do that? Why can't you so good?

555
01:11:58.600 --> 01:12:05.600
And he says, well, he says, I work in, he was on the General Electric Hour and made some movies,

556
01:12:05.600 --> 01:12:13.600
I work until August. And in August, I've made all the money I can possibly want to make under the tax system.

557
01:12:13.600 --> 01:12:43.400
Do you hear Michael Reagan tell the story of his father?

558
01:12:43.400 --> 01:12:54.400
He asked for a raise in his allowance. And he said, I can't give you a raise now because they're taking all my money in taxes.

559
01:12:54.400 --> 01:13:03.400
He said, when we get a president that will lower our taxes, I'll give you a raise.

560
01:13:03.400 --> 01:13:13.400
He said, well, years later, he said, sure enough, I'm candy-loaded to taxes. He gave me a raise on my one.

561
01:13:13.400 --> 01:13:27.400
Well, it's a true story. In fact, when I was on the BBC last year, they asked me about the underground economy in America.

562
01:13:27.400 --> 01:13:31.200
And I said, well, I said, yeah, that's the underground economy.

563
01:13:31.200 --> 01:13:39.640
I said, what had happened when the Reagan administration dropped the tax rate down 28%?

564
01:13:39.640 --> 01:13:44.560
A lot of the CPAs that I know said that people came in and wanted to pay tax now.

565
01:13:44.560 --> 01:13:50.320
They wanted to get back in the system because they would live with the 28% tax tops.

566
01:13:50.320 --> 01:13:52.840
And so they started paying taxes again.

567
01:13:52.840 --> 01:13:54.040
That was the thing.

568
01:13:54.040 --> 01:13:59.040
And the reason, I suppose, for the underground economy, I said there are three reasons for it.

569
01:13:59.040 --> 01:14:09.040
One is the tax rates are unfair, the system is too complex, and the government spends its money for things that people disapprove of.

570
01:14:09.040 --> 01:14:13.040
And I think those three things are the motivation for the underground economy.

571
01:14:13.040 --> 01:14:15.040
I think it's still a thrill for some people.

572
01:14:15.040 --> 01:14:23.040
But now, of course, the rates have gone up, so maybe there's more guys cheating than they used to.

573
01:14:23.040 --> 01:14:29.040
You done? I'm done? Okay.