The Libertarian Review July 1978 - Libertarianism.org

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Karl]. Bray, 1943-1978"Getting Rid of a Rebel" is the title of an articleonce written about Karl J. Bray. But despiterepeated attempts, the Feds were never ableto "get rid" of this man. Cancer had to dothe job for them. Karl died in a Miamihospital on May 7, 1978 after a year-long illness.Karl Bray had gone to Boston early in 1977 for AynRand's annual appearance at Ford Hall when he becameacutely ill. Earlier tests performed in Utah had shownnegative results, but Karl was informed on April 16, 1977that new tests confirmed a diagnosis of lymphoma.Karl Bray is best remembered as a leading tax protesterof the 1970s, but he was an outspoken activist on a numberof other issues as well. In fact history may place Karl's majorinfluence in an area other than tax protest, once hispapers have been studied and his thoughts more thoroughlypublicized. My own personal favorite among Karl's actsof defiance took place the day after President Nixon'sorder establishing wage and price controls. Karl respondedwith a full page ad in the Salt Lake Tribune, raising theprice of products sold at his company, the Rocky MountainMint and Depository Co., by ten percent, and invitingthe Economic Stabilization Board to take action to curbsuch voluntary exchange between individuals.Many wonder which of Karl's acts precipitated the gethim-at-any-costmentality which became so evident in thegovernment's acts against him. In all likelihood it was thedramatic acceptance of his book, Taxation and Tyranny,which advocated civil disobedience to federal income taxlaws. Five thousand copies had been sold when the IRSswooped down on his bank account, seizing those recordswhich listed the names of those persons purchasing thebook by check. Many of these persons were thensystematically contacted and scheduled for audit.After two trials Karl was finally convicted of "willfulfailure to file," a misdemeanor. Actually he had filed a1972 return, but he had written across the face of his 1040form, "Fifth Amendment. Go to Hell. Go Directly to Hell..Do Not Pass Go. Do not collect $200." The first trial wasin the court of Judge Willis W. Ritter, who made nationalheadlines shortly before his death in early 1978 as theobject of a determined impeachment campaign. Yet Karlreceived little official support five years ago when hepublicly denounced Ritter and collected more than 2000signatures calling for the judge's impeachment. And evenin the face of this seemingly overwhelming prejudicial activityon Karl's part, Ritter refused to disqualify himselffrom hearing the case. When you gotta get rid of a rebel,such niceties apparently don't matter.The guilty verdict in that first trial was overturned. Thesecond trial ended on March 22, 1977, and though an appealis still pending, this was the last confrontation Karlwas to have with the Feds.Karl was convicted in that second trial of violating 18USC 701, by unlawfully possessing an IRS insignia, amisdemeanor. Curiously, this law was originally enactedto prevent persons from wearing military uniforms and impersonatingmilitary officers. And under army regulations,mere possession is not a violation. Direct testimony fromthe arresting FBI agent revealed that he had acted simplybecause he had been told by an assistant U. S. attorney"to arrest Bray." When you gotta get rid of a rebel, constitutionalprotections are overlooked.In October 1975, Karl was confined in the Salt Lake Cityand County Jail for his insignia conviction. He was toserve six months and ten days in satisfaction of this sixmonths sentence. Karl was outspoken even in jail, demandingbetter treatment for all prisoners. The resultcould have been anticipated; he spent some time in solitaryconfinement.Karl was a founder of the Libertarian Party of Utah, apopular seminar leader and speaker an numerous partyfunctions and an LP candidate for Congress in 1974. Hewas so widely known, respected and loved throughout themovement that we all have our private moments with hismemory. However, there is more to Karl than a memory.His books, notes, letters and papers, his ubiquitous 3 X 5cards, his legal briefs and mementos are being preserved atthe Freedom Library, which Karl was establishing at thetime of his fatal illness. The Church of Moral Ethics iscoordinating the receipt of funds which will be used to offsethis enormous medical expenses and to continue thework at Freedom Library. Contributions made to theChurch may be designated as medical or library funds andmailed to Box 674, Hermosa Beach CA 90254.Karl was born June 12, 1943 in Provo, Utah. He was achemistry major at Brigham Young University and WeberState College. He hosted a talk show on radio stationKSXX in Salt Lake. As a youth he became an Eagle Scoutand a highly proficient boxer. He is survived by his father,Kenneth, of Provo; his mother, Lela Guiterrez, of Lancaster,California; his brother, Jerry of Provo; and a sister,Vickie Bray Rossman, of Marblehead, Mass.- Henry J. HohensteinComing next month:A special issue on a strategyfor achieving libertyContributors include: Roy Childs,Murray Rothbard, Charles Koch,Milton Mueller, David Theroux,Williamson Evers, and many others.6Libertarian Review
I The PublieTroughThe subterranean economyby Bruce BartlettWashington policy-makers have becomequite interested in recent monthsin a phenomenon known as the "subterraneaneconomy," and in its implicationsfor a variety of government taxand regulatory policies.This underground activity consists ofthat part of the economy which functionsoutside the reach of governmenttaxation and regulation. This includesnot only criminal activity, but also amassive number of economic transactionsconducted through barter or cash,in order to avoid the payment of taxesor control by government regulators. Itis, in fact, a black market,. just as onefinds,under any form of price control.It is now becoming common practiceamong many workers to demand thattheir wages, or a portion of their wages,be paid in cash- free of federal, state,and social security taxes. Since thesetaxes may take 50 percent or more ofeven a modestly paid worker's marginalincome, both employers and employeesbenefit from the arrangement. A workermay accept wages considerably lowerthan he would otherwise get because heknows that he will get all of the income,not just half. And the employer savesnot only on the lower wages paid, butalso on payroll taxes for social securityand unemployment compensation,which he would otherwise have to payon top of the employee's gross wages. Inshort, everyone benefits except the taxcollector.Such activities have of course gone onas long as we have had taxes. But recentlyestimates have been made on thesize of this subterranean economy whichhave forced legislators to seriously considerthe factors which are leading to itsgrowth.In the November/December issue ofthe Financial Analysts Journal, PeterGutmann of Baruch College in NewYork City attempted to estimate the sizeWe are likely to findthat the subterraneaneconotny is swellingrapidly unless taxesare quickly slashedacross the board.Gutmann makes it clear that this vastsubterranean economy is a creature ofbig government:"The subterranean economy, likeblack markets throughout the world,was created by government rules andrestrictions. It is a creature of the incometax, of limitations on the legalemployment of certain groups and ofprohibitions on certain activities. Itexists because it provides goods and servicesthat are either unavailable elsewhereor obtainable only at higherprices. It also provides employment forthose unemployable in the legal economy;employment for those-like theretired who draw social security, or illegalaliens without resident statuswhosefreedom to work is restricted; andincentive to do additional work for thosewho would not do it if they were taxed."This situation is now leading manypeople to consider the possibility that areduction in tax rates may be needed todraw people out of the subterraneaneconomy. Typical is the attitude ofPeter Passell, an editorial writer for theNew York Times:"Serious tax reform might restore thegood name of the income tax; it wouldat least undercut the rationalizationthat cheating only compensates for theof this subterranean economy, basedupon the increased use of cash in theeconomy since World War II. His researchesled him to believe that there unfairness of the system.may be as much as $200 billion worth ofgross national product being generated,unaccounted for by government statistics.If the usual ratio between jobs andGNP hold, this could mean that thereare as many as nine million more peopleemployed in this country than arecounted by the Bureau of Labor Statistics.Needless to say, if this estimate isaccurate it would shave several percentagepoints off the official unemploymentrate.Probably amore effective (and politically morerealistic) means of deterring taxcheating would be to pare personal incometaxes across the board. With Federaltax rates, say, one-third lower, theincentive to break the law would bemuch diminished. Revenues lost therebywould, at least in part, be made upat the expense of the subterraneaneconomy."Passell might have added that lowertax rates would also draw investors outof complicated tax shelters, like cattlefeed lots, and into investments whichwould yield greater output and taxrevenue.Of course liberals recoil from the obviousand continue to attack "loopholes."But slowly they are learning thateliminating deductions and raisingtaxes do not necessarily raise tax revenues.For example, in the Tax ReformAct of 1969 the maximum tax on capitalgains (a well-known tax loophole)was doubled from 25 percent to 50 percent.Since then, tax revenues from capitalgains havefallen roughly by half. Asa result, many liberals now agree thatthe capital gains tax must be reducednotenough, perhaps, from a libertarianperspective, but it would still be anothersmall step in the right direction.But unless taxes are quickly slashedacross the board, we are likely to findthe subterranean economy swellingrapidly as people scramble to loosethemselves from the grasp of government.For more and more Americans,there is no realistic alternative. Governmentpower has gotten totally out ofcontrol. The growth of the subterraneaneconomy, like the blossoming taxrevolt, is yet another sign that peopleare willing to fight back.July 19787
Page 3 and 4: LiberlarianARTICLESReviewJuly 1978V
Page 5: tribe of Katanga, Angola and Zambia
Page 9 and 10: Free Life also has published works
Page 11 and 12: ious plans of the Ford-Kissinger ad
Page 13 and 14: The perpetuity of self-governmentde
Page 15 and 16: I The MovementGreenberg for governo
Page 17 and 18: tuals like Walter Heller kept warni
Page 19 and 20: TheCollapseofthePublic SchoolsbyJef
Page 21 and 22: most of the taxes in America and ge
Page 23 and 24: dination." In 1785, the Reverend Je
Page 25 and 26: and inspired him to write his own L
Page 27 and 28: _--1--1Raiding the Newsroom••
Page 29 and 30: memories after receiving sufficient
Page 31 and 32: Justice White's observation appear
Page 33 and 34: I Books and the ArtsAnti-drug madne
Page 35 and 36: vate liberty against state power, t
Page 37 and 38: second example. After the Napoleoni
Page 39 and 40: which propelled prices upward and t
Page 41 and 42: put into the federal kitty will nev
Page 43 and 44: than Lindbeck, a position I feel is
Page 45 and 46: I Classi.&edCLASSIFIED ADVERTISEMEN
Page 47 and 48: FREE CALCULATORI With our catalog.W

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