The Making of a Tax Historian

0:00There's actually one more book. I brought them all here for you folks to look at them. Maybe somebody swiped one already. There's a new edition of For Good and Evil, came out a couple of years ago. and it's not very often that you get a chance to rewrite a book. Oh, there it is, right there. Well, at least it didn't go far. But it's certainly worth having a second edition, except in the first edition they had some illustrations that for some reason didn't make it to the second edition. The particular one I liked was the one on the Egyptian taxation, which shows the scribes of Egypt making their inspections and then making their writing up their stuff and then dragging in the taxpayer for not paying his taxes and it's in the first edition and it's kind of a nice illustration I had a photocopier made but anyway there is 30 years of my life if you want to see it.

1:11Now actually the love of my life is this one. This is the first book, Fight, Flight and Fraud, The Story of Taxation, it's a collector's edition. It's a long story, but a lot of times I get people who want to know, you know, how do you become an author successfully, you know, how do you get published, and my answer is it's tough. I think somebody said 92% of all the manuscripts, only one is selected for publication in America. I don't know who compiled that, but I think there's a lot of truth in it. And I think what you have to do is you have to just be persistent, you have to believe in your subject.

1:56I wrote that manuscript and I had a publishing contract with a British firm called Richard Babu that publishes in the UK and the Commonwealth. And after we worked on it they came back and they said, well, just don't think it'll sell. Could we cancel a contract? This is after you spent two or three years on it and another three years getting permissions with the illustrations. It was a bit disappointing, but I kept hanging in there and eventually I was able to sort of self-publish it. I had written a lot of magazine articles and I went to the magazine editor and asked him if he'd like to put this thing together and I'd see if I could raise up enough money that we could print it, so we did. And it was a problem, because when you self-publish, for every dollar you spend advertising, you sell the dollars worth a box, or $100, so the result is it's not a very profitable enterprise and very discouraging.

3:02And I can't tell you how discouraged I was, I'd spent so many years on, maybe 10 years or so. Then some fellow in the White House, who was on Ronald Reagan's legal staff there, said he bought the book for a buck in the garage sale. So that's where my book ended up. And he said, I couldn't put the book down. I stayed up until four o'clock in the morning. He's not the most interesting book I ever read in my life. He said, I'm very much interested in taxes and economics and Reagan economics. And he says, is there any chance you could redo that book into a book form? And so I said, yeah, sure, I said, but it hadn't been very good.

3:52So I redid it in a book form, which is for good and evil. And again, we went through the publishers and couldn't get a publisher. And it was just a float that it got published. 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. 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. 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.

4:38They 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. And it's one of the great stories. I talked to one of the senior editors. He said, He said, I ought to tell that story about how that book took off, because we didn't think it would sell. And of course, then I was on Booknotes with Brian Lamb, and the guy that wrote the article in the Wall Street Journal, I contacted with him, I got in touch with him, and he said, I get calls from everybody, nobody can find the damn book. Well, he only made 700 copies, it didn't last very long. But then it took off, and that was wonderful, and particularly since they couldn't keep up on it.

5:25Now it's been translated into four different languages. The most interesting translation is the Faroe Islands. You know where the Faroe Islands are? It's a group of islands between Iceland and Norway. They speak their own language, although they have the Vikings as part of their... I get a call from the finance minister years ago, and he said, we'd like to translate your book into the language of the Faroe Islands, and get permission, so we gave him permission. Well, it's been translated into Japanese and Polish and German, so that's the background of the book. I was on the BBC last year, in the spring, they were having a history of British taxation. Now that's interesting, Because you know the Brits don't think that us people on this side of the Atlantic are too smart.

6:15You know, they have a snobbishness about them. So for them to contact me on the history of taxation was quite interesting. And they introduced me as the world's leading authority on taxes. Now that sounds pretty good, but I don't think there's anybody else other than in Europe. They take it serious over there. 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.

7:08But anyway, that's been the labor of my life, and I've enjoyed it. I have a letter from Bill Archer inviting me to speak at the Health, Ways and Means Committee on getting rid of the income tax, and I did speak there. Had a wonderful time with Charlie Rangel. You know who he is? And in his Harlem black brogue, he proceeds to tell me, he says, now Mr. Adams, he says, Isn't America tax haven? And I was so tempted to say, we're in your district, yes. But I backed up a little bit. But Bill Archer said, hey, I've got to read that guy's book. And then one of the members of the committee invited me up to his office and said, you've got to run for Congress, and so forth.

7:54But there was a strong movement to reform our tax system at that time. That was 1994. And then Bill Clinton sent one of his swankies The Professor in San Francisco said that he liked the tax system just the way it is, which was to put everybody on notice that he would be telling anything. And I think it died. But there was a lot of movement. There were the Cats people, Citizens for an Alternate Tax, and there were a number of them. And I was on so many talk shows and I testified at a few places. By my experience, I'm a little discouraged about major tax reform. 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.

8:45But it may happen sometime in the future. So, how do they get to be a tax historian? Well, that's another interesting story. You students, a lot of you are wondering, how do you make a decision in life, about your career? 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? 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. and you probably end up doing something you never thought of doing. Now the last thing I wanted to do was to be a tax lawyer.

9:31When I went to law school, went to UCLA, I wrote an article on tax in the law review. I don't know how I ever did it. But that would be my last choice to be a tax lawyer. Well, I get out of law school, I look for a job, I get hired by a firm up in Ventura, California. 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?

10:21It's a tax problem. Give me a memo on it and how we can beat it. I wasn't going to say I don't know a damn thing about taxes. I did have to take a couple of courses for the bar exam, but you know, that was part of the bar. But I thought taxes were for CPAs and the guys that, you know, really ennest themselves. So I wrote the memo. It was really interesting. And after three days, I gave him the memo. 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, 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.

11:25And 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. 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.

12:15I 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. and I always wanted to be a history teacher, and my dad taught me out of it, so I taught U.S. history and world history, and in the course of teaching those subjects, maybe because of my sensitivity to taxation, I began to see the tax issue bubbling up all the time.

13:07In all the great events of history, it wasn't just the American Revolution, it wasn't just The French Revolution, the British Civil War, it was everywhere. And I became very fascinated with the role that taxes were playing in the course of events. And there was a magazine article in the West Indies, and I said, they asked me if I'd publish some articles on the offshore world, and I did. And then after about three articles, I ran out of things to say. So I said, you know, how would you like an article on tax history? And he said, well, yeah, we'll try anything. Well, so the first article I wrote was called The Greeks Had the Word on Taxation. And I talked about the Greek system, then I wrote the Romans, and then pretty soon he came to me and he said, boy, our subscriptions are going up. Everybody just loves the stuff you're writing.

13:58Write more. So I wrote 39 articles for him over the course of three years. And in the course of that, I really got bit by the bug to write a book on it. and then I was fortunate enough to have married a Canadian. My wife hated it in the Cayman Islands and it was terrible for a woman in those days. You had no idea what a horrible place it was to live, except for the guys. We went stupid diving and spear fishing and lobster fishing. We had a wonderful time there. But for a woman it was horrible. I mean the food was a disaster. They would bring a cow in once a week in the city square and it was all dirt And they butcher the cow and then you go in with a basket and get a chunk of meat. And man, I tell you, talk about brain-fed beef. That was not brain-fed beef.

14:49Had a ghastly flavor, probably from the salt grass that the cows ate. But she was very enterprising. And so she was down in San Jose, Costa Rica, because they used to bring a freighter in once a week. DC6 would come flying over and bring in foodstuffs and she went to one of the guys and she said, would you make up a box of food for me and then we can probably survive because I talked to a doctor there and he said, you know, health is terrible there because the nutrition's so rotten and so every Friday, every Thursday afternoon she'd wait for the plane to come flying over the house and then she dashed out to the airport and get her box of groceries 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.

15:43They 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. 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. 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. And I said, what are the bags for? She says, we're going to Canada. And I said, well, I was just, just with an idea, you know, I said, well, no idea with me. I'm ready now. So off we went to Canada. But the beauty of that little twist was that you may not know this, but the second largest academic library in North America is the University of Toronto.

16:41The only bigger one is Harvard, and their British sources are the best. 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. That gave me the sources to write these books. Without the University of Toronto Library, I could not have written this material. 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. 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.

17:33But Lew invited me here about 10 years ago and it was my first visit to the South. I never knew anything about the South, but I had spoken at Tallahassee at Florida State and then I came up here and spoke and I'd been coming from time to time and I really enjoyed it. In fact, we were in this building down here, this thing wasn't here, I'm sure you remember. But, anyway, that's the little background of who I am and how I got there. And I just think it's good advice for young folks, get a good liberal arts education and go with the flow. The opportunities will develop, you'll never imagine. And here I am, the last thing I ever wanted to do was become in a resident tax.

18:23I ended up being what I am and then academically I happened to stumble into the opportunity to teach history and then I happened to see the role that taxes play. It was kind of interesting as I was analyzing the role. It was sort of like a, you remember Euclid's geometry and you remember the shortest distance between two points is a straight line and you might remember that the square of the hypotenuse of the triangle is the sum of the other sides. I came to the conclusion that behind every event in history, there's a tax story, and it usually gets lost sight of, and it shows up in so many ways. Of course, the American Revolution is one, but like the Civil War, you know, I always thought the Civil War was old slavery, and that's what they taught me, and all I had to do was pick up Lincoln's inaugural address, and the first thing he says in there is that 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.

19:35This is his inaugural address in March 1861, and he med business on that. That was a big item. And in some of the early efforts to stop the war, a fellow came up to me, Baldwin. He was from Virginia. 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

20:50The Real Issue is the Tax Issue

21:20and the South wants economic freedom and independence from the North and that's why they seceded and makes good sense. The problem you have and I've spoken on the Civil War a bit and it's a tough it's a tough sale because everybody wants to believe it was slavery it's a fact it's a nice thing to come to a 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. I had some lady with tears coming down her eyes, Lincoln was her idol, how can I say things like that? I just said that he was, and then some guy in the front row is gasping for breath, his face turning red, 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.

22:22But 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. and it is a wonderful subject. It's a fascinating subject. I think the guy from the Canadian publication, The Globe and Mail, said, I've done the impossible. I've made tax history interesting. And I think a lot of you will find that. Well, where did taxes begin? Well, taxes began in the first civilization that we know anything about.

23:08And I have said, and one of the things I propose is that taxes are the fuel that makes civilization run. There's no civilization that did not tax. And the earliest civilization we know anything about was in Iraq, of all nice places. 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.

23:55Now, 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. So anyway, in this early civilization, they said that the tax collectors would not give up their wartime powers, that everything was taxed. You couldn't even bury somebody without paying a tax. And we learned this on these clay cones. 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. 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.

24:48And 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, There was a picture of an Irish terrorist, a knife or something, and then it has a picture of an American terrorist. There's a guy in a suit with a silly grin on and a bag that says, IRS. And believe me, there's a lot of truth in that. And I was reading in the ladies' magazine, this was a dirty trip to you gals, and it says, you really want to get back at your husband someday, just before he's going to sleep. Say, oh honey, forgot to tell you, the IRS called. They said they'll call back.

25:36Talk about ruining his sleep. So anyway, the man of the fear is the tax elector, and I think it's been true throughout history. And that's why I guess the first sign of a major tax reform is when the people start towing and feathering tax men. Tax Men. That's what the Americans did. We did that to the British in 1865. They tried to introduce a stamp tax and then later on they tried to introduce a custom tax in which the Tea Party is famous. And they were tarring and feathering British tax agents. Did you know 20 years later they were tarring and feathering American tax agencies? You know 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.

26:33So that's really one of the great origins of American Revolution, where these violent protests. 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. 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. 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.

27:24Now, extortion is a simpler word, which means to twist out. I like the subtle Latin distinction. 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. This is where my legal background comes in. A debt is based on value received. Taxes are owed because the government orders them to be paid, and there is no argument about value received. So it simply is an order to pay, and the government uses the police bar to collect it. and that's why it is a force of the exaction. If we move on from our early history there with Sumer, we then, I think, come to the Egyptians.

28:16And they've got some great things in the book on Egyptians, but I'll leave these books here. Particularly in this book, there are some marvelous, I think, illustrations. The one I... Showing the... See, this is the one they left that way. You can't see it. The Egyptian tax system was not a system of money. They didn't have a money economy in those days.

29:02It was a system based on the collection in kind. You paid so much. And one of the jokes that's in the last addiction here, you'll see a picture. An artist drew it up for the Foreign Affairs magazine, and it shows an Egyptian tax man collecting the pigeon eggs. Because it was a 20% tax, so he would climb up and collect 20% of the eggs in the pigeons. That's how thorough the scribes were. And the scribes of Egypt, and I would like to call it Shadows of the Day, The IRS of that world, they snooped on everybody, and they recorded on everybody.

29:49And they hauled people in if they didn't pay their taxes, and there's one of the interesting stories there, and this goes back to the question of what should I do, there's a teacher who's talking to his students in ancient Egypt, and he said, you want to be farmers? 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. And then the tax collectors arrive and they say, where is the grain? And you say, you have none. And you are then doused in the water head down, along with your wife, and your kid's clothing is taken from them.

30:34And he said, I don't think you want to be farmers, but be a scribe. He who is skilled in writing is not taxed. So the Egyptian scribe was not taxed. And he was the most powerful person in Egypt. And he ran the place. And there was a 20% tax. Now, the Bible mentions that Joseph was sold by his brothers in Egypt, 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. 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.

31:23But the Bible gives Joseph credit for it. 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. 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. And so Euclid got his geometry, which we all learned in the 10th grade or there about, he got it from the Egyptians.

32:09The other thing that the system had was called Asylia. Asylia was the immunity of the taxpayer once he got inside the temples. So if you were having trouble with the IRS of the day, you'd race to the temple. and the Temple had great gates, and if you got inside, the tax man was left on the outside. And Temple has lived on, in a sense, we have it today, in the embassies of the world. There was a Hungarian Cardinal that fled to the American Embassy in Budapest.

32:55In the Bible you will read that certain cities were set aside as cities of refuge, meaning that you were in trouble with anybody or anything you could race and get inside the city of refuge The Federal Reserve, fiat money, fractional reserve banking, Human Action, Man Economy and State, The Theory of Money and Credit

33:50and 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. 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.

34:42They had developed what originally was called tax farming, which was kind of a nice prospect of getting out of a... See, the Greeks didn't like bureaucracy, and their idea was to set up a government without bureaucrats. That's a hell of a great idea. I don't know about you guys, if you have to deal with these people. And so they had a number of ways in which they didn't have bureaucrats. One was they set up tax farmers. So rather than have a tax bureaucracy which goes out and collects for the government, the government auctions off the right that collects a harbor tax in Athens, or where it might be, and then you'd know from past receipts about what you could collect. And of course with the tax farmer, he would pay to the government, and this happened in Egypt, he'd pay what he thought he could collect, or the minimum bid of course, but then the The problem was he had to keep everything over and above what his bed was, like a good

35:46contractor. So you can imagine when they applied the muzzle to the taxpayers, what the tax farmer turned into. The tax farmers make the IRS look nice, I guess, compared to the gasoline. They get to keep everything. And the IRS didn't keep everything, they had to turn it over to the government. One of the problems we found in Egypt is that the head scribes were sharing corruption with the scribes out in the field. It would be like the IRS guys in Washington sharing what they were ripping off taxpayers for that taxpayers didn't know. So it's kind of a corrupt system. One of the pharaohs that came along following Tutankhamun, he found out about this.

36:33And so, any taxman, a scribe, that was collecting more than he was supposed to had his nose cut off. And we have the record of a place out in Arabia where there was a society with people with deformed noses. So, actually, he did the job. Not a bad idea when you think about it. 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. 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.

37:20Fugitives had left, taxpayers were locked up in jail, lands had been confiscated, the dikes were in disrepair, and it was in this, it was in this setting that the Rosetta Stone came about. And the Rosetta Stone, there were probably more than one of them because the The records indicate that they would inscribe this stone, they'd inscribe it in the two Egyptian languages, and then in Greek. And then, that was the most marvelous find in archaeological history, because all of a sudden, we could understand hieroglyphics, because we could simply compare it, and it's a beautiful thing, I don't know, I saw it over in the British Museum.

38:10It came from the town of Rosetta and it was dug up by Napoleon. His troops did and they took it back to France, but then when the British beat Napoleon they swiped it and they took it to the British Museum where it now sits. And so that became the key to understanding Egyptian languages. But the Rosetta stone was a proclamation of peace and it was a tax document. It was an amazing tax document. It was trying to bring peace to the civil war and the total collapse of the Egyptian society. So there was a cancellation of tax debts. Fugitives that had fled could come back and we give them their land back. We release the taxpayers that were in jail because we needed the workers.

39:02And so it was an attempt to bring peace to a society that had simply collapsed. The Temple Rite of Asylea had been lost for 500 years. It was gone. So that came back. 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. 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. 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.

39:52The 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. 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. 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.

40:43He turned to me and he said, well, that isn't what my supervisor tells me. 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. They certainly had done a collection of disservice to the American people, but it's traditional. It's not anything that is especially unusual, the British done it, the French have done it. 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. 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.

41:37I 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. 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, 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. They've got these awesome powers and they've given people to commit suicide. They're just a bad bunch. But I think it goes along with the system and that's why the Greeks, and we want to go back to them, they wanted to have a tax system where there was no bureaucracy.

42:31And before they had the tax farmers, they had an interesting system. 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. And I guess it wasn't a bad system in some ways, but it was the Greek alternative to the tax system. Another thing that the Greeks had, which I thought was very good, was the way in which...

43:19How did they work that? They would go to the rich man in the town and they'd say, we need a new road, we need a new place, I'm gonna go buy the costumes, we need some rowers for the Navy, we want you to do it. And they would put social pressure on them and they would do it. And you'll read some of the things in my book as to what they said. 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. 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?

44:14It 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. So the Bible tells us that he said the children of Israel had become so numerous, let us deal wisely with them, lest they join up with some of our enemies and destroy us. 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. 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.

45:08And 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. 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. So here you have a real libertarian society, a wonderful libertarian society. And it was going pretty good until the children of Israel, in their follies and foolishness, wanted a king. Everybody else had one, you know, we need a king.

45:56So what did they do? Well, they went to the prophet Samuel, and prophet Samuel says, God does not want you to have a king. And I don't want you to have a king. Because if you have a king, you're going to be taxed. You're going to be taxed in your fields, in your vineyards, in your cattle, in your flocks. 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. Well, they insisted on having a king, and of course they had one. 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.

46:48And 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. They taxed them in so many talents of silver, and I think it was 125 ounces, or pounds, I guess, of silver. But anyway, the tax was enormous. And the Jews rebelled. And the king of Assyria came down with his huge power of allegiance, and he conquered them. And what he conquered was the kingdom of Israel. Because what had happened up in this time is that Solomon had two sons that were contending for the throne, for the kingship, and there was a big argument, as sons will do.

47:41And so the kingdom split, and we had the main kingdom of Israel on the north and the smaller kingdom of Judah, where Jerusalem was, on the south. And so the Assyrians, they came down from the north and they just destroyed the power of the Kingdom of Israel, and they hauled them off into captivity. There's some wonderful reliefs on the walls of Nineveh, and they became lost and became the lost tribes of Israel. Those of you with biblical background or interest, what became of the lost tribes of Israel? Just to get a little side, a couple hundred years ago it was thought that the The American Indians were the lost tribes in Israel, because they tried to explain everything in terms of the biblical story, and so nobody knew where they went, and a lot of myths developed about them, but they disappeared from history.

48:37Then the king of Assyria turned on Judah, the king who was Jewish, smaller, and demanded that they pay a lot of tax, and they did for a while, and finally they said, oh to hell

49:19In the historical sense the Babylonians take over and they defeat the Assyrians and they turn on Israel and Israel made a deal with the Egyptians, they thought they'd help them out but they didn't and so they battled the Babylonians and then Nebuchadnezzar, maybe The King of Babylon sent the Jews back to Jerusalem and sent them back there so they could become tax-paying and the Basils of His Kingdom.

50:21So now we've got the Jews in Babylon, and now we've got the Jews back in Jerusalem, and that's where we kind of, I want to stop for a minute, anybody have any questions, then I'll pick up a little later. Are you all satisfied? Yeah. Are you all satisfied? Yeah. I've got a question. You talked about how Iraq was destroyed after they, they got rid of the tax collectors. Yeah. Greece, when the Greeks were just beginning democracy and they were attacked by the Persians, can you talk a little bit about what the tax system was then? That's interesting because the most important military event in the history of the world was the Battle of Marathon.

51:11That was, as far as we're concerned, that was it. The Battle of Marathon was the Babylonians wanted to take over Greece and everybody else had fallen to them. and there's no reason why the Greeks shouldn't be paying tribute just like everybody else was. So Sparta and Athens got together, they had common commanders, and they resisted the onslaught of the Babylonians, the Persians that they were at that time, and they defeated them at the Battle of Marathon. We're going to have a race in not too long. The Ballot Marathon is significant because Greek civilization seized control of history by that.

51:58The Greeks became the leaders of Western civilization. They didn't handle it too well, but at least in that sense, the world became Greek. The Greeks invented just about everything. We celebrated the birth of Copernicus. He was 1,500 years late. The Greeks knew the world was round. They knew it revolved around the sun. They even measured the circumference, the 25,000 miles. Columbus was 10,000 miles off. He thought he landed in Japan when he got to the Bahamas. So, the brilliant Greeks, you know, the father of medicine, the father of taxes was Aristides the Just.

52:43And in that sense, what the Persians wanted, of course, is tribute from the Greek city-states, and they didn't get it. And Greek civilization survived. Now, let's go back to your question. 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? 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.

53:35Taxes were, to a large extent, based on land in those days, and the rule was pretty much 10% over the summa. That was the 10% land tax, and the land tax was based on the Egyptian idea, it's what the land should have produced. Nobody was out there to measure the production, because since the production all came in the same time, you couldn't have enough tax people out there to count the production. So what you did is you measured the land, and you said this land should produce so much, and your 10% will be that and we'll be there to pick it up. And that's the way the land tax. Now, of course, they also had one of the major taxes was the port tax. That is the tax on Athens because they needed to have a powerful navy to protect commerce from pirates. And there were a number of lanes in there that were pretty infested with pirates and the taxes were based on the

54:41the 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. 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. 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. 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.

55:26The result was that they created terrible inflation, and a bushel of wheat, which cost about a drachma a few hundred years later, later cost 100,000 reckons because of all the copper that had been dumped into the cornage. We used to believe that too, you know. I remember when I was a kid, we had silver coins, it was really great. Now we've got pot metal, you know. We're doing just what the Romans did. I wonder how it's going to end. But it took about two or three hundred years for the are almost a really collapse by ruining the currency and so anyway maybe I should tell the story of Hanukkah that that's a good story I like it because some of my Jewish friends love it and one of my Jewish friends he was a very devout and family I'll get together on Hanukkah and so forth and he said hey tell them it's all a tax story they get so upset what had happened is during this period when

56:24When 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. 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, 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.

57:32It was a tough time and not only did they have these taxes they had to pay to the Greeks, they also introduced Greek culture. And they had these Greek gymnasiums and so forth in which the Jewish kids in these gymnasiums would run around with no clothes on. And to the pious Jews, that wasn't too good. They were too impressed with that. 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.

58:39The 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. The people who were involved in that was a guy named Joseph. It's an interesting Jewish name. And at the time, now we're back with the Ptolemies, collecting taxes from the Jews, which the Jews didn't particularly like. And they decided not to pay the taxes. Well they notified the Ptolemies in Egypt they weren't paying the taxes. 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.

59:49And 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. 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. 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.

1:00:44I 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 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.

1:01:37The 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, and when they got there they'd all committed suicide and the I think the Israelis today that were to the military they say they have a saying that Masada shall not happen again that's a common expression in the Israeli army so they that was the end of them and of course that the Romans then introduced a task 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,

1:03:05and 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. Just like Hitler didn't have to look too far to find policy for getting rid of the Jews. They were also thrown out of Spain. They said you could buy a Jewish farm for a piece of cloth. They were also thrown out of Britain, England at the time. They were told to pack your bags and leave, and literally they were.

1:03:53So they got rid of it. The only place that seemed to have taken them was the Netherlands. And the Netherlands seemed to have been one of the last refuges for the Jewish people. Yes? Actually, the main homeland of the Jews in the Middle Ages was Poland. They were growing out of... They were growing out of Portugal. The first one was England in the 1990s. Yes, right. And during the next century, most other countries, the last one was Portugal and Spain in the 1990s. But at that time, Poland became a big homeland of Jews. I see. Well, a lot of Jews in Poland found that out, didn't they? In the 18th century, about 80% of the Jewish world population was living in Poland. I see. That's nice to know. I knew they were in the Netherlands and the interesting thing about the Netherlands was because when Netherlands became a kind of a superpower following the collapse of Spain, the argument came up in Britain, well, why are the Dutch so popular, so prosperous?

1:04:54Is it because they have Jews there? And so the argument was made, well, maybe we should let the Jews come back to England. Maybe we should never throw them out in the first place. And they shouldn't have. It was a pretty disastrous thing. They had what they call a Parliament of the Jews that they set up during this period when the Jews were there. And that was only just to get money out of them. 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. You remember that story? Anyway, every day they pulled out a tooth, and finally he said, okay, okay, I'll pay the tax. You know, so the IRS is not too bad. They don't result in that.

1:05:40But when they did run them out, you know, everything they had they lost and so forth, and they took a pretty rough time in Europe. Yeah, I guess it was that Judenschlachter was the name of the guy that murdered all the Jews in Germany. There's an interesting, they ran him out of Frankfurt and so forth. It was a, you see the Jews, the Jews were looked upon as valuable property. 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. 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.

1:06:28And I guess that's probably a good place to think. 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. But that gave them the excuse to steal from them. I mean, the kings to confiscate them, because they had the pie. The word was, they acquired their money through sinful means. I think that was the term that they used to use. Anything else? Any other thoughts?

1:07:16I was going to kind of stop there. We'll pick up the Greeks this afternoon and the Romans. That's a great story, but I'll, yes? I have a comment during that time that you talked about the Maccabees, the Coiningers, their family crests were the palms, and that was on the coins, and of course, when Jesus came in, the palm sundae was really in your face, because that was showing this coinage of the Roman, That's interesting. So much of history that is just filled with tag stories, there just seems to be no end to them. 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.

1:08:05You know, it's a newspaper. Why is the newspaper like this and why isn't it like Time magazine? Well, the reason it isn't is because the British introduced a tax on newspapers so much a page. so to avoid the tax they made big pages and that is the origin of our modern newspaper we like it but originally there were not big pages the big page was it so much tax a page so you make a big in fact one of the illustrations in my book shows a just shows a newspaper page that's ten feet high and then you can you know if they won tax yes back retracing back to Israel I'm curious what 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%.

1:09:01How is that tax collected in an Israelite kingdom? Was it property? Was it income? Was it... Well, all I can think of is that everything was in kind, and so you paid so much tech into the granaries that the government had, and they stored the grain, and also they collected from the fruits of the field, in the sense of the vineyards and the orchards. I guess they just had gigantic granaries and houses to store the stuff. And we run into an interesting story on that in China, which is in my new book. There was a Chinese king, and he was a remarkable guy. He had the title of governing by doing nothing.

1:09:55That was his name, governing by doing nothing. And previous to that time, the Chinese had a 10% tax, and Confucius was behind it, and Mencius was behind it, and it was considered a pretty clever tax system. They would divide up the land in the nine squares and the middle square, 3333, and the middle square was balling with the government for taxes and all the farmers around had to help farm it and that was called the field system. But this guy whose name was governing by doing nothing, I love his title, he reduced the tax to 3% And he collected so much that the granaries were rotting on a 3% tax. So the real founders of ergonomics were the Chinese.

1:10:45One of the stories that I like is that the king called in, he said, an enlightened one, meaning a sage. And he says, I'm charging 20% tax, and I don't have enough tax to run my kingdom. What should I do? And the sage said, reduce the tax 10%. The time honored 10%. And the king said, well, if I can't collect enough on 20%, how in the world can I collect enough on 10%? And he says, but if you only charge 10%, people will work harder, people will come into your 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.

1:11:42I think one of the best things about Regan, and I like the story, is that somebody noticed what a wonderful golf swing he had. And they ask him, jeez, you play beautiful golf, how do you do that? Why can't you so good? And he says, well, he says, I work in, he was on the General Electric Hour and made some movies, I work until August. And in August, I've made all the money I can possibly want to make under the tax system. Do you hear Michael Reagan tell the story of his father?

1:12:43He 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. He said, when we get a president that will lower our taxes, I'll give you a raise. He said, well, years later, he said, sure enough, I'm candy-loaded to taxes. He gave me a raise on my one. 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. And I said, well, I said, yeah, that's the underground economy.

1:13:31I said, what had happened when the Reagan administration dropped the tax rate down 28%? A lot of the CPAs that I know said that people came in and wanted to pay tax now. They wanted to get back in the system because they would live with the 28% tax tops. And so they started paying taxes again. That was the thing. And the reason, I suppose, for the underground economy, I said there are three reasons for it. One is the tax rates are unfair, the system is too complex, and the government spends its money for things that people disapprove of. And I think those three things are the motivation for the underground economy. I think it's still a thrill for some people. But now, of course, the rates have gone up, so maybe there's more guys cheating than they used to.

1:14:23You done? I'm done? Okay.