The Middle Ages

0:00What did you think of the real Lincoln book? Did you read that? Yeah, yeah, I read it. Yeah, I know the guy pretty well who wrote it. He and I are pretty good friends, and it was a very good book. He got a good publisher, and he got a lot of publicity on it, and he had a lot of interesting things, like the guy out in California that is the Lincoln guy from Claremont University. Oh my gosh, that was brutal.

0:58I always thought that you can understand why, like my ancestors were all, some of my ancestors were Mormons and a lot of my friends went to the BYU and you can understand why they have to toe the party line, so to speak, with the Mormon Church and a lot of them have gotten terrible trouble because they have criticized the brethren and so forth. And I can understand that, because they, that's just the way they are, but you'd think in an academic world that didn't have any pressure, like the Mormon pressure upon the professors at BYU, you'd think that things would be concerned with what's the truth and so forth, you know, simple, you know, what's the one, you know, and it's not true, in fact, he had an interview A month ago in the Southern Partisan, did any of you read it?

1:55The author of The Real Lincoln, and he makes a reference to me because I was told by the people that published the Simon and Schuster that published this book that they couldn't publish my Civil War book because the gatekeepers of the Civil War, the northerners, wouldn't I had a chance to send them a copy of the National Book Award I got in the fact it went through a number of printings and now they're going to come up with a softback edition in a couple of months and they forget that there's more people interested in Civil War than the gatekeepers, you know, the Southerners have their interest in it, in fact the title of this book I wanted it to be Healing the Breach

3:16And when I spoke, I said, if we're ever going to heal the breach in the Civil War, the North is going to have to fess up what the war was all about. And boy, I got a standing ovation of what wasn't expected, so that motivated this book. And I really should have stayed with healing the breach, because the idea was that that should be done. and the North is holding on to its myths as to what the war was about, and unfortunately the academics in the North are, and there was a writing in 1862 by the Confederacy somewhere, I think it was a government, about if they ever lost the war, they would have to drink The bitter dregs of having the history of our struggle written by New England historians.

4:16And you know, that's true. That was 1862, before they even lost the war, that would be written by... I always heard it termed, the victor goes the history. Yeah, yeah, that's right. You didn't even say that, did you? You don't say it. It is, yeah. Well, I don't know, what was it, Nixon said the judgment of history depends on who wrote it. Richard Nixon. I'm a Whittier boy. Yeah, and they really like old Nixon. I've been there a few times and they took me around in the car, you know, the president and all that bunch. Oh yeah, they think Nixon was really okay.

5:01Because, you know, it's interesting in Duke. It was a very mixed bag there. Some people absolutely thought he was wonderful. He went to Duke, didn't he? Yeah. Yeah. But he was a Whittier boy. He grew up there, went to Whittier High School, was president of high school, went to Whittier College, president of the college. In fact, when I was 16, and I was in the optimist speech, maybe you have an optimist club around here, they have an optimist speech contest, and the guy who was supposed to help me was a dentist, his name was Spencer, and when I went over there, and he had me licking all these flyers for this young guy who was running for Congress, Richard Nixon.

5:54Well, I love that my two of my daughters went to Quaker schools, and of course I would always arrive and say, oh yes, wasn't Nick the Quaker the half of the top of something else? I don't think much of Quakerism rubbed off on him. His mother was a Quaker and I don't think so. He was a bit of a disappointment because I felt from my experience at Whittier that it had a wonderful Quaker tradition. and I was very impressed with the school and I was actually offered a job to teach there when I was in my 11th year there, my third year there and the, see I wanted to be a teacher, that was my first love in life and I had done pretty well there and so the head of the department of philosophy went to the dean and wanted to stay on, he was retiring Hoping that I could come finish my master's and come back and teach there, and that was all set up, and I had a graduate fellowship in USC, and then my dad got involved.

7:20And he was pretty wise. He said, you know, I don't think you'd be able to be happy being a teacher. He says, I just don't think so. He says, I think that you would be better off maybe to go to law school. and so I had went down and I talked to the head of the Department of Philosophy at USC and then it's just a personal experience and then I said goodbye to him and then I went downtown to Spring Street to our family lawyer and I talked to him and he showed me what law practice was about and he said you know you'll never be able to keep the wolves away being a teacher he says why don't you make it your hobby and that did happen and then I went to law school and but history was like my first love and I wrote things in law school that were published and I got another publishing bug as you can see but it would have been interesting if that decision that I made you know when young men are this age you make these decisions that really determine your life you know and and I was driving home from seeing the law

8:33Lawyer. And I was thinking about it, and I said, you know, I guess he's right. My dad was always a wise man in many ways, he was a tough businessman, but I didn't cancel my fellowship and went on to law school. Never had any attention to going, but that was, UCLA had just started the law school and they had brought up these great professors from the older guys from the east, from Harvard and Vanderbilt and so forth, wonderful faculty, and it was a turning point in my life, no turning back. But I think the advice was, you love history, you like the right, make it your hobby. And then he added, that way you'll be totally independent.

9:22He said, you get involved in a university or a college and they have their point of view on things,

9:59Another thing is when I was there with the head of the Department of Philosophy at SC, I couldn't help notice how poorly he was dressed. No, I looked at shoes and everything else. And when I went down to the lawyer's office, just an hour later, I walked in the attorney and he looked dressed well. Maybe I shouldn't ask this, but what do you think of the legal profession today?

10:51and now when I go down to Buffalo and I see these big billboards, you know, and on television you hear it, it's just so sad that it is no longer a profession. It's a craft. It's like a plumber or something. That basically, that really, that disappoints me a lot. I think a lot of people don't know what a plumber is. starting in physicians?

11:50Doctor, oh really, I really, my wife finally converted me, I used, my mother was a hypochondriac and we went to the doctor, it seemed every other day, you know, when we were kids, and my wife, she is 75 years old and she's been to the doctor about three times since I married her 40 years ago, she really doesn't believe in doctors, well they killed her mother, her Her mother wasn't feeling well. They sent her to the hospital. They gave her some tests. They gave her a test. They killed her. Apparently, it reacted on her and choked her, and she died. She couldn't breathe. They never did know what, whatever she went there for.

12:36And my grandfather, he, about my age, and he had the usual problem that men have when they get a little older, and they said, oh well, we'll just take out your prospect grand and solve that problem. So they did, and six hours later he dies in the recovery room. And he was a fairly healthy guy, and he spent a lot of time on his farm and so forth. I'll give you a couple more. My aunt was having some cramp down there, she's 23, got two little kids, and they said, oh, take out your appendix, that's probably what it is. So they took her, she got a little overnight bag and got on the bus, went down to the hospital, and they took out her appendix, she never woke up. She dropped off her two little kids with my grandmother. And that was the end of that. That is stuff there. My best friend that they got with his wife had their third baby and they decided they wanted more kids so they would tie her tubes.

13:28So she delivers a little baby boy and they wheel her down the hall, they tie her tubes, she never wakes up. And here he is, he's got a one day old baby and he's a widower. And so, medical practice is not always the safest way to go, and a lot of the drugs are terribly harmful. I think that people just should be very cautious when they go to doctors. There's so many things you can do yourself to take care of yourself properly, but we're getting a little off the subject. Do you know the Finnish say if a sauna and vodka won't cure it, you might want it?

14:33on free drugs and free medical care, and they're not all that good for you. Look at my little family experience, all these people, they got killed by medical practice. There's actually a study in the Journal of the American Medical Association on aftergenic death. The number is huge, I forget what it is, but it's in the hundreds of thousands. Would they say 80,000 people were killed every year by doctors? That came out, yeah, so that's a number, but if that happens to be your wife or your kids, I just think we have to be careful, but it's become so politicized, you know, politics and this idea of free medical care, it's almost like having free mechanical care for your car, you know, you put in a new transmission and it'd be free or something.

15:20You mentioned the Food and Drug Administration. I was reading what their authority is under the government rules. Of course, what they do is evaluate drugs and check food for toxins, whatever, but their authority is to check foods and drugs that are imported into the country, and that's it. Yeah, of course, the people now are trying to buy drugs from Canada because it's a lot cheaper up there and so forth, but anyway, let's see, I want to get to some interesting things to keep you guys alert. It's really been fun being here. I've really enjoyed it. One of the things we kind of skipped over was Lady Godiva. Do you remember her? Lady Godiva, you know the story?

16:09Sorry? Yeah, like she sat on her horse naked to oppose her husband. Yeah, but see it was over taxes, you see the local people were complaining about the taxes and her husband was the lord of the area and actually, and they reenacted, they reenacted that every year, the ride of Lady Godiva, so she barely had long beautiful hair and so she sat naked on the horse and she rode through. Did you hear her or something? Yeah, well she did it. And so he had to reduce the taxes. And now you can buy chalk at the desert, a good diamond. And actually, I think there's a picture in one of my books on that, and that's a cute story. I was thinking the same period, years ago I read into an old prayer book from the Church of England.

17:03And one of the prayers in there was Gartus from the Norsemen. And the Norsemen are the ones that created what was called the Dane Guild. And the Dane Guild was the payment of tax that they would collect so much for each chunk of land in England to pay off these marauders from the Vikings who would pray along the coast of England. of England, and here's an old prayer book with a garbis from the Norseman, so somebody never changed it, been there for a long time. The other tax that came out, which goes back to my story about the Prime Minister of England and when she and I had our little discussion, which was interesting, and that is the poll and the the British have had poll taxes tried about five six hundred years and they've always ended up with horrible revolts and the tax men got their heads chopped off and it was just terrible time what what happened is the British just didn't like poll taxes and that's what I told the Prime Minister and she

18:24You should have read my book because you would have got the message. In one of the last attempts at poll taxing in England when they were cutting off heads and sticking them up on top of polls, the head of the exchequer, which was a checkered thing that they used to count the money on, and it was called the minister, he was the The Chancellor of the Exchequer, and anyway, he went before parliament and he said that the British people are just, English people are just not going to pay a poll tax, and so we should go back to the old tried and true tenths and fifteenths, or fifteenths and tenths.

19:09And what that was, was a tax that was a 15% of the personal property that the person owned, pretty high, and 10% of rents, and so with all the 15ths and 10ths, yeah. Wow. Well, of course, you've got to remember that in those days everybody lied about the values, you know, nobody really paid the correct tax, yeah, but so I guess Margaret couldn't go back to that, but that was the tax that prevailed throughout England, and then when the Spanish The Spanish Armada was sailing down, you know, to destroy England and Queen Elizabeth went to the Parliament for her wealth and they voted a bunch of fifties and tenths to it.

19:57Usually it took a few years to collect them and they paid these off in a matter of weeks. That's how much their loyalty was to the Queen and they knew they were in deep trouble anyway with the Spanish Armada on its way down. But that was the tax that prevailed throughout England, up until even after Elizabeth. Then they had a king by the name of Charles, a fellow who got his head chopped off, you know. Well, Charles' problem was that he didn't believe that you had to go to Parliament for money, and he would institute his own little system. Elizabeth had been so successful at what they call ship money, that is the money for ships to fight the Spanish Armada, he thought he'd do the same thing, he'd create a ship money.

20:51And every hamlet and every town and every village would have to pay so much for ship money, but there wasn't any war out there, there wasn't anybody coming. One of the taxpayers took him to court, and the British court ruled that, well, the king was the judge of that, he is the one who is the guardian of the gates of England, and if he thinks we need ship money, then go ahead. and of course the result was that there were a few that didn't quite go along with it and then Lord Koch who was a very famous judge at the time he ruled against it and of course the king was in hot water and so he fled and he fled up to Scotland and wherever he could find a place to hide and eventually Cromwell comes along and they bring him back and then they chop off his head and the real the real cause of that was his attempt to create money by a tax

21:54called shipment. England didn't struggle for the best tax they could find and there's a little there was a little poem I like I think Pope wrote it though four-line Pope and says whoever hopes a faultless tax to see hope what never was and never will be. And that's not a bad thing to remember with all the kinds of taxes that we have around here. I thought that was a good bit of wisdom. The English, well, they had their struggles, but I want to go back to Spain a little bit. Again, I skipped over that.

22:40Spain had this al-Qabbalah, and it caused them no end to trouble, and at that particular time Portugal was part of Spain, it was one of the provinces. And so I guess because they'd been in so much trouble with the 10% rate, the emperor decided, well, let's just go 5% for Portugal, you know, that would be okay. Well it wasn't okay. They threw out the Castilian tax collector, they murdered him. They took the ruler down to the border and let him go over to Spain where he belonged. Portugal became independent and has been independent ever since. So Portuguese independence was another example of a rebellion over a tax and they got maybe five percent would work but it didn't.

23:33The next great thing about Spain was the 10th penny that I mentioned to you in the Netherlands. The Dutch revolted over it. What happened is the King of Spain sent a guy named the Duke of Alba, and you see some grotesque pictures of him, and he said he was going to institute the 10th penny upon the Dutch because, you know, again we have this problem with Spain running out of money. And so he called together the Estates General of the Netherlands. Now are you familiar with the Estates General, the term? It is a meeting for special tax of all the estates in the area.

24:19And that's what set off the French Revolution, is that Louis XVI tried to get some tax reform And the courts in France kept saying, you can't do it, you don't have the authority to change the tax system unless you call the estates general. So in 1789, that's what he did, and it didn't turn out so good. But it was the three estates of France, it was the commoners and the aristocracy and of course the clergy, those were the three estates. And so when the Duke of Alba calls together the three estates up in the Netherlands, he had a little problem because the Dutch were not Catholics.

25:08And so that didn't go very well, and he tried to get them to pass the 10th Betty, and they had no choice, because he just ordered it to be done, and it was done. And then the Dutch revolted. They wouldn't pay it. and the revolt lasted about eighty years. They went to the Alba and they tried to get him to stop the tags and they got the name The Beggars and so the Dutch tact rebels were called The Beggars and they loved it and so they had this rebellion and it was a remarkable rebellion. It's got to, I have some pictures of it, some pictures showing people being murdered and hung up on lampposts and it was terrible.

26:00So again, the history of the world, it turned on taxes and the Spanish lost the Netherlands and of course that's when Elizabeth stole the Spanish galleon full of silver. Peter Heim, Admiral, his name is short, Edieger Long, he captured the silver fleet. And the little Dutch people have that little poem and that little little rhyme. So it's quite an interesting thing. The next area where we get into, maybe I should mention the title of my book, Fight, Flight and Fraud, that was really taken from the Spanish story. The fight was the rebellions throughout the Spanish Empire, the rebellions of the Dutch, the rebellions of the Portuguese, the rebellions of Catalonia, the rebellions of Segovia, and flight, of course, was the tremendous flight of Spanish taxpayers in the New World, and then he has 60,000 or 6,000 a month on the galleons because no one can live in Spain and one writer right talks about the depopulation of Spain and he says I wonder is it anybody's there at all

27:12and that was another major way to avoid tax and it still is today, people want to avoid tax the best thing to do is pack up your bags and you go voting with your shoes I mentioned the Campbell suit there. He just left the United States and there was probably hundreds of millions of dollars of state taxes that the government would have collected but couldn't because he was gone. People today still leave the United States for taxes. There are other countries for taxes. And the interesting thing from a legal standpoint, a lot of people don't know this, is that there's a rule that no sovereign will aid another sovereign to collect a tax.

28:06And that's the reason why when people leave, you don't have to worry about the IRS going into the courts in foreign countries and collecting a tax, or the reverse. And I once had a tax lawyer contact me because he had a German friend, and this German friend had owed a lot of tax, and he'd come to America, and he was afraid that the German government tax authorities would come to America and go after him. And so he had elaborate schemes to try and hide stuff, and I said, forget it. He said, no sovereign will aid any other sovereign if he liked to tax, don't worry, the Germans These won't come here any more than the IRS. You go file a lawsuit in Frankfurt. It's just a point that here was a guy that was a very good lawyer, a tax lawyer, didn't understand the simple principle that you can't collect a foreign tax. Maybe someday they'll do it, but there was some attempt to do it in Canada, but the IRS had gone to the Federal District

29:11Court and got a judgment, a money judgment for taxes and it ended up, and then they took it up into Canada and tried to enforce it, but underneath it of course was taxes so the Canadian government laughed at it and threw it out, but it wasn't an attempt to do so. Do you remember the name of that law or the code or anything? You don't need it, it's just the universal law and civilization that no sovereign will International aid and other sovereign to collect a tax, period. It's international law, it's everywhere. It doesn't need to be written, it's just well known. That's why governments try to stop you at the border.

29:57Before you can exit, you have to get a release from the government to exit the country. and the whole purpose of that is to make sure you've paid your taxes. It's a universal rule. I don't think there's any holes in it at all. Now see, under the OECD problem, which I mentioned about, they will gather information, and what they want, of course, is to get information on the nationals from those countries, and so forth, and get the tax information from the country, but then they have to go back to their own country and enforce it, because there will be no international enforcement of tax obligation. Maybe someday, but there's nothing out there now to be concerned about.

30:45It's interesting about the Cayman Islands, I keep a little contact with them, I don't have anything doing down there, but the Bahamas, they really threw in the towel. They decided that they would open up their banking to America, if America would open up tax deductions for conventions and things, and that would give employment to the hotels and things. So they kind of made a deal, and they made the deal with the U.S. starting in 2004. I have a friend of mine, his wife said he used to go to work at 6 in the morning and get back at 8 at night.

31:46There were one of the banks down there, and he says, now he goes to work at 10, comes back at 3. And Swiss bank credit has folded, many of the banks have folded. And then meet them, they built these beautiful buildings down there. They'll turn them into casinos. Pardon? They'll turn them into casinos. Yeah, well they do have some casinos there, as you know. That one beautiful one that's, what's it called? Atlantis? Yeah, Atlantis, yeah, it's a really fabulous place, and I think it employs 5,000 and so forth, so they've done that, but they've ruined and destroyed the banking business. Now, Cayman's a little interesting. Cayman being a crowned colony has the pressure comes from London, you see, where the Bahamas is the independent Commonwealth.

32:39And the Cayman Island government has not agreed to buckle under to the OECD. And the latest thing is that the head guy from London of the British government, in his rage, has said, it's either our way or the highway. You know, play of words, isn't it? Meaning we're going to dump you. I guess that's what they mean by it, because it's our way or the highway. And our way would be, of course, for them to buckle under and do what the OECD wants and what the British wants. We're really going to see some interesting developments there. I'm kind of fascinated with what might become. I think the latest I heard on the Swiss is that they were going to withhold the tax.

33:26Let's suppose you're a Belgian and you have a private bank account in Switzerland, and it pays interest, let's say. They're going to withhold the tax and send it to Belgium, but not tell whose it is. That way they're not breaching the bank secrecy. But that's what I've heard the Swiss are playing games with. That's kind of clever. It would probably be very easy to avoid it by using shell companies and things like that. The tax havens, they want to know about their clients, they don't want somebody walking in with a number of Al Capone's grandsons or something, they're very concerned with money laundering and things like that, that's become very unpopular.

34:20There's also a kind of a change in attitude in Europe on avoiding taxes. There's a kind of a feeling that it's going to become dominant, that it's not the sign of a good citizen to not pay the taxes, and that if you avoid taxes and you go to tax haven, that's the sign of a bad citizen. I just got to relate one little thing. When I made a trip to Italy in the early 80s, I stayed with a Swiss engineer who was living in Milan, and he said he had designed a building for an Italian company, and they had it designed so there was a chute from the top floor straight down the basement into the furnace.

35:15And that was so... if the tax mayor of the government was having records in the... Yeah, that was before shredders, huh? Yeah, they designed it that way. Yeah, well, that's understandable. The Europeans are kind of surprised me because they do have done this, The interesting example was Sophia Loren, a very beautiful woman and all that wonderful actress and everything. And of course she hadn't paid taxes for years. And at the very same time that Leona Helmsley was in trouble with our people. And maybe I'm missing one of them, Leona who paid $55 million in taxes.

36:04And she made that stupid remark, only little people pay taxes. Taxes, my god, she paid $55 million, cheated on 1%, they put her four years in the slammers, you know, and she was cleaning out toilets and all those wonderful things. And Sophie Lourney just totally, you know, thumbed her nose at the tax system. They gave her 30 days house confinement, and she was really pissed, excuse me, because she I mean, look at the comparison between the European attitude and the courts and the way we are. And of course, when Martha Stewart does the same old story that we love the clobber celebrities and New York especially likes to do that.

36:56And Martha, of course, as I was telling the people, I wrote an article, I don't know if you guys read it, in the Mises Institute. And the article was entitled, What Nat King Cole Would Have Told Martha Stewart. And what Nat King Cole would have told her, because he was a great crooner, I think at the time probably the greatest singer in America, he had very complicated fiscal arrangements. And if you ever go out to Hollywood, you'll see this round Capitol Records building. It's been called the House that Cole built.

37:42And anyway, his lawyer, who I worked for at one time, he told him, he says, when the feds show up, you tell them, I will sing for you, but I won't talk to you. And Martha Stewart should have said, I'll bake you a pie, but I won't talk to you. She blabbers away, gets herself in nothing but trouble. And this lawyer was right. In fact, one client, I remember once, he said, if you do talk to them, I'm out. Get another lawyer, you're through. And I know of an instance where the feds showed up, and I had talked to the particular man. I said, no, when these guys show up, you just tell them, call your lawyer. And of course, he called me one afternoon, about three o'clock, and they'd been there for Five Hours, the Fed's hat, questioning him.

38:31He said, well, all he said is, I have one question, I'm there for five hours. Well, he did drop him completely, you know, the Stacks Lawyer just dropped him completely. He says, you know the rules, you don't talk to them, you talk through my mouth. And that's something all of you should tuck away in your little brains, someday that may I wonder what kind of lawyer she had? What did she tell you?

39:20What did she get? Legal aid or something for free? I mean, the monologue article was published and it showed up all over the place. It didn't show up in Canada if you're in places. I didn't want to get out there. I was thinking that she made a statement to the investigators at some point in time that she was invoking her constitutional right not to say anything And they, in return, claim that she was blocking the investigation and put a charge on that.

40:19And I had a guy who had a story. He got some inside information, and he made a barrel of money on it, bought all these calls at a dime when they're about to run out, and then of course the news came out, and the stock shot up, and he made millions, and the feds picked it up, and he had this carcass bone story that he was going to explain, you know, where he heard about it,

41:19What's the difference between Martha lying to an investigator and Clinton lying to an investigator? I think one of the things to talk about government that really soured me on government, if there's anything less, was the Clinton impeachment proceedings.

42:04And what really bothered me was the Senate taking this oath from the Constitution that they will render impartial judgment. And they all voted a party line, for God sakes. I mean, how can you have any respect for those people? I mean, I don t want to talk about playing grab ass in the White House or whatever you want to call what Clinton did, you know. I thought the whole thing was a disaster. I thought they should have left him alone, because they weren't going to do anything anyway. Nothing was going to come of it. He didn't have the votes. The Democrats were going to stand by their man.

42:50I remember hearing, I think the guy that was the head of the Health Ways and Means Committee got in trouble under the Democrats. and he said that if Nixon had just had them there, they never would have kicked him out of office. They didn't have the votes, you know, to the trial of impeachment of Nixon, so he said it was the wrong thing. But, you know, our presidents aren't always the greatest. Well, wasn't it when Lyndon Johnson, he said, when he's talking about John F. Kennedy and his lady friends and women friends and hookers and everything, he said, hell, he said, I've had more women by chance than he's had by design. That was Lyndon Johnson. So maybe our presidents, you know, they are, they're not pillars of virtue, you know, I think we all know that.

43:47I just mentioned that. I don't know how you people liked the impeachment trial, but I just thought that was such a joke because they had no intention of rendering impartial judgment. And you see, at the time the Constitution was written, the Senate was appointed by the states. There was no election. and these were senior diplomats and senior politicians and senior statesmen and rendering impartial judgment or verdict would have probably been acceptable, understood something they would have done at that time, but of course they didn't do it. Of course, they almost tossed out to Johnson, you know, after the Civil War, and that wasn't very good either, if you know the story of that, is that he just wanted to fire some of his cabinet, and they passed a law that said he couldn't, and he fired them anyway, and so then they'd call that high crimes and misdemeanors, and only one vote, he would have been tossed out.

44:52Well, now let's talk a little bit about Cortes and the conquest of Mexico, and Bizarro and the conquest of Peru, one of the great tax doors of all time, I thought. Cortez, it's almost unbelievable, his story. If somebody had written it up as a novel, you would say it's ridiculous. I mean, here he shows up with a hundred or so men and a few horses and some greyhound dogs and a couple of cannons and so forth. And he conquers a whole nation of Mexico with an army of a million men if they could put together.

45:44and how he ever did it just seemed to be beyond belief, but he lands on Veracruz and he burns all his ships so nobody can get off. He's quite a guy. Anyway, he roams around down there at Veracruz and hears stories about the Aztecs and the great wealth and Montezuma and all that stuff And he runs into some people down there who were tax rebels and hated Montezuma. And he gets the idea that taxes were the chink in Montezuma's armor. And he pursues that and he gets together and of course in the meantime Montezuma is monitoring him and he sends all these reports back about these guys, these white men with beards and how they had these strange animals, horses and greyhound dogs, and they had sticks that spoke with fire, and they had these big guns that rumbled like thunder, and so he became pretty concerned about it, and the question is, were they gods? No, because they desecrated the Aztec temples, and gods wouldn't have done that.

46:59Anyway, he makes his way up, joins forces with some of the tax dissidents, or whatever you want to call them, that hated Montezuma and ultimately he was able to marshal his small armed forces and conquer Mexico and take over Mexico City. And the same thing happened with Bizarro down in Peru. Again, the Inca Empire was also brutally taxed. and see what the Aztecs did is that they had all these cities around them that they had become what you call vassals in a sense and every year they would have to pay to Mexico City a vast amount of wealth and in one of my books I have the picture of what the taxes were from this particular area that went up to Montezuma so that's one of the great tax stories I thought of all time, and somewhat almost unbelievable.

48:04He was simply focusing on taxpayer discontent and exploiting it, and he just, like I say, it was just almost unbelievable what he accomplished. Anybody want to talk about that at all? Any questions on that? Yeah. In your book you had a picture of Cortez with his translator, and I was just wondering, how did he get somebody to learn the language so quickly? Did he send people over ahead of time?

48:50She was, she became, and that's one of the things that makes it like a great novel. I mean, here's this woman who comes in and she becomes this interpreter and they proceed on to Mexico City. It was just, and how they did it, just unbelievable that he could actually have conquered Mexico with an unlimited amount of military. and see what the Aztecs would do, it was they would send out in disguise businessmen or merchants and they'd go to these cities and they'd go in there and they'd see what was there, what was there and so forth and then they'd go back to Montezuma and say well we've been there and these guys got lots of this and that and that and that so then the Aztec armies would go down and then they would surprise them in ambush and of course then they would conquer the city and then they'd make a tax treaty and you've got to send so much stuff Do you think Mises exploited, let's say, their ignorance, that they weren't on God's side?

50:05Yeah. They exploited their . . . well, he used propaganda to fuel the fire of a rumor, perhaps. Yeah. And you know that with their overwhelming numbers, if they knew and had courage enough to take charge of a certain line, they could overwhelm it. Oh, it would've been nothing. It would've been a walk in the park. Nothing, been a walk in the park. You were contaminated by this new found... Yeah, it would be like when the Canadians went into Dunkirk and they said, here's a piece of cake. You guys don't know that. Well, if you were Canadians, you would be very sensitive to Dunkirk.

50:50And what did Dunkirk go into? They went into one of those French cities along the coast and were just slaughtered. Pardon? Am I right? Yeah, okay. It was a terrible thing. And the story, the Canadians are still bitter about it to this day. They have some programs on it. First they were supposed to get battleships that would soften up the area, and then they chickened out on the battleship because they had lost a couple of battleships done in, I guess, in Southeast Asia.

51:53D-Day or was it earlier? D-Day. 1942, the D-UP. D-UP. That's the one. That's how you got the name. A Dunkirk was where the British forces escaped. Yeah, it was D-UP. It was a French port of D-UP that they tried to make a front on. The story is that we learned a lot so in D-Day we didn't do that stupid sort of thing. I'd like to mention that with Dunkirk they were allowed to escape. So on D-Day, we didn't do that stupid, you know, sort of that, yeah. I'd like to mention that at Dunkirk, they were allowed to escape. Yeah, Hitler didn't want to embarrass the British too much. Yeah, that's right. Oh, they had them. They had them at Dunkirk. That's true. I don't know why you get those names, but Dieppe was a many, many, well, I guess it must have been, was it after Dunkirk? I don't remember.

52:39It was about that time. It was about that time, yeah. It was about that time, yeah. But anyway, the Canadians have done it. They're still smarting about it. Canadians have been damn fools as far as going into Britain's wars and getting slaughtered. And they were slaughtered pretty bad. Anyway, that's the Canadian side of it. of it. But I think that is one of the great stories, and I think it's worth just reflecting on the Aztec story and the conquest of Mexico. You want to leave that? Okay. Well, let's talk a little bit about the tax revolts that created modern Germany. We go back to one of the most interesting ones was a guy named Hans the Piper. And Hans the Piper I was concerned about the terrible taxes that the German peasants had to pay, and so he had a vision, I guess, with the Virgin, and he was going to show up in a couple of weeks, and he ordered all the people, the peasants that come, and they were going to create this great peasant revolt.

53:53Well, it so happened that they captured him and they murdered him, and so that was the end of him. But the Germans had been pretty brutal to the peasants. They kind of almost depopulated Germany because of these uprisings. And finally, one of the peasants persuaded him that he said, who's going to harvest the fields if you kill me and all the rest of them? So we had these terrible peasant revolts, which were all tax-oriented. And because of the taxes that were put on the, and Martin Luther's in there too. And he was pretty supportive of the slaughter of the peasants. But then as we move up into the other German area, and my wife wants me to be sure and tell the story of the bell.

54:42And maybe I said, that's why I don't forget it. But I was thinking of the story of Frederick the Great. And Frederick the Great, who became sort of the George Washington of Germany, he didn't like Jews, so he wasn't very good at that. Frederic wanted to know where all the tax money was going, and he noticed that people were paying a lot of heavy taxes and he wouldn't get any of it. So he calls in the finance minister and the chief tax man, he wants the explanation as to where the tax money is going, and he was pretty unhappy with the situation. So, the rather smart guy thinks and he says, I got the answer, I got the answer, he answers. So he whispers to one of the pages, and the pages comes in with a piece of ice, and he hands the ice, Frederic is here, he hands it here, and he says, pass it around the room to Frederic.

55:36And when he got up to Frederic, all they got was a wet hand, because the tax monies went through all these sources, The French tax inspector came out from Paris to try and catch the salt tax evaders because there was a heavy tax on salt in those days and so these guys were collecting salt and distributing it and selling it and evading the tax. So as the attendant, is it what he was called, gathered together his forces to rush in and arrest these guys just as they were collecting their salt, the bell in the town starts to ring and of course all of the tax evaders disappear into the forest.

56:33They come charging out there and there's nothing there. So the attendant goes to the mayor of the town, this is Normandy, and he says, I want you to punish who is responsible for that, the bell ringing. Okay, no problem. So he orders the bell to be taken down, they take it into the town square, and they whip it.

56:58Punish the bell. Anyway, it's one of the most interesting stories. The other thing that was interesting about this is because the French tax farmers were so good, Frederick the Great hired them to come into Germany and collect taxes. And it turned out that he always kept them. They came to Prussia to make their pile. That's an interesting term, you know, we use it occasionally. And so, Frederic was, he called himself the king of the poor, he believed in low taxes, he tried to, but he couldn't do that and carry on all his military obligations.

57:45And once one of his enemies came and stole all of his money, broke into his treasury, and so then he issued leather money to think that maybe that would cover, but it didn't work too well. But anyway, I like Frederick the Great. He was a wise guy and I think that the ice cube story is the one that we should remember him for. I was in an airline once and I looked up and there they had it in there. They had the ice cube story that I had written up and researched. But all he got was a wet hand. Now, if we move on to the ancient regime, which is the term used for France before the Revolution, a Magna Carta was really not necessary because they, how will I explain that?

58:41They had these charters, these charters throughout France in which there was this protection from abusive government and so they didn't really need a Magna Carta, at least so the story goes. But after the revolution, because the revolution was really over taxes, and what they did, the revolution was started, as I mentioned, The French and the Estates Generale thing, well, Louis XVI called the Estates Generale and that was the three classes of French society and he wanted to change the tax system and collect more revenue and I suppose that's the reason why I say they didn't need a Magna Carta because they had a strongly entrenched French law that the king was limited to certain taxes and he couldn't create any new ones.

59:40The commoners were given one place to meet, and then the clergy, and then the aristocracy. Well, the commoners met, and they wouldn't shut up, and they wanted to take over the government, and they did take over the government, and Louis and the rest of them had. So it was this meeting of the estate general and of the commoners to reform the rotten French tax system. And so rotten was it, the one writer wrote, if the devil himself had wanted to ruin France, he couldn't have done a better job than the tax system that was then in force. It was not a good system. Poor old Napoleon, you know, he inherits this, and he wants the card of the world.

1:00:27And he used to ride through Paris on his white horse, and the people would yell, Down with taxes, down with the Republic, long live the Emperor. Well, the problem is, you've got to have taxes if you're going to try to conquer the world. Poor old Napoleon didn't know what to do. He just didn't have an adequate tax base. He tried to solve tax and he tried to do donations and things like that. But that was the reason why he got defeated, is he just didn't have a revenue. The British would say he had a champagne appetite and a beer pocket book when it came to running things. And it was at this day that the British came up with the income tax.

1:01:12And that was an interesting event in world history because the income tax has changed the world. There's nothing in the world that's like it in terms of its revolutionary force. I'd like to go back to when the first income tax was created was back in 1404 in England. And this income tax was so hated that the English people burned all the records so that the world would never know what a monster had been created. That's 1404, and the English didn't ever get around to it until the Napoleonic period, so they really, really worked. We don't know anything about that income tax, it would have been interesting.

1:01:59We know it was an income tax and we know that they stored all the records and they called it a monster. And then, of course, getting up the Napoleons' problem, the British needed their revenue, and so they concocted an income tax. And you know, it's very similar to our own, had schedules and things, you know, just like you could probably get some of those old schedules from 1798 or another day in 1803 and file a tax return and just scribe up a U.S. line and probably go through. The tax was about 10% and it was the tax that beat Napoleon. It was a marvelous tax and it created so much revenue. Then what happened, it was supposed to be a war tax and supposed to be abolished at the end of the war.

1:02:49So at the end of the war, they had an attempt of the government in 1816 to keep the income tax alive. It wasn't a repeal, it was there in the books and they just wanted to keep it going because it was making so much money. And the British House of Commons, they got together and they ordered a vote, did not extend the income tax. And the records say that there was the most tumultuous roar from the British Parliament that had been heard in 500 years when they cancelled the income tax.

1:03:34and the speeches were just brutal and then they ordered, they ordered that just like in the old income tax back in 1404, they ordered that all the tax records be destroyed. And so it is said that the chancellor of these checkers stood there while they brought out the records and they burned the fires and he stoke the fires and they didn't want that Tax to be returned, but it so happened that the Chancellor had a secret duplicate copy of everything in the Income Tax and it was hidden in the basement of the Exchequer Court. We don't know who was behind that, maybe the Prime Minister was, who doesn't know.

1:04:21That kind of gives us, you know, on the way up to the Income Tax. But going back to 1816, and he was ordered by Parliament to destroy them, but he saved a duplicate copy of everything, and of course later on when they reintroduced it they had it around. But going back to France, I digressed a little bit before the French Revolution, you see They were so angry at the tax collectors, and especially the tax farmers, that the guillotine, the guillotine, whatever you want to call it, was really operating in full force against the tax men.

1:05:07Anybody connected with the tax system was hauled off to the guillotine and was beheaded. And one of the great tragedies was a famous scientist who had given us the explanation of how oxygen took a part in combustion, and anyway he was a scientist and he spent a little part-time to keep alive working as a taxman, and of course when the revolutionary tribunals and investigators went down to the tax department they found his name. So they hauled him in before the Revolutionary Tribunal, so the story goes, and he pleaded with them that he was a scientist, and he'd done great things for France, and he had done great things. And that they really should not destroy him. And the Revolutionary Tribunal said, the Republic has no need for geniuses.

1:06:01And they hauled him off to the guillotine, and he lost his head. It was a tragic thing. The thing that you meant about the French Revolution is, boy, they really went after the tax collectors and the tax farmers, and they had this strange feeling that if they killed all these guys, then they wouldn't have any more taxes. I don't know how they ever thought they'd run a country without taxes, but anyway, that was one of their big mistakes. But there were some interesting stories that come out of this period, because even before they slaughtered all of the tax men, the tax men were marked men in this society, and one story is told where the Queen is being questioned by the head of the tax bureau, And he was talking about Bordeaux and he said it is as dangerous, it is more dangerous for a taxman to walk through the streets of Bordeaux.

1:07:13And this was a time that France was at war with Spain than for a French soldier to walk through a Spanish village. So, it gives you some idea of how business they were. And we have one account where there was a young surgeon and they had this fair and rumors got out that he was a taxman. And so they captured him and they paraded him around the fair and they cut off his arms and budgeted him. Now whether he really was a taxman, I don't know, but many times the Paris, which was The Center of the Tax System would send out these intendants, the name would go out to the various provinces of France and so many of them never returned and they would say if he showed up in an inn or something and nobody knew who this person was, then the rumors was he was from Paris, he was a tax investigator and so they'd butcher him as well.

1:08:12So the French were pretty rough and they had a little saying they called Death of the Gabeliers and the gabaliers were the king's taxmen. So it was in that setting of hatred and murder toward the tax that the French Revolution finally really turned on them and destroyed so many of them. Anyway, the French tax bombers passed away with the French Revolution. And France struggled along without a tax system. But I think I'm going to kind of stop on France, I don't want to get too far ahead. The guy's name was Antoine Lavoisier, the one who was the scientist, that the Republic has no need for geniuses.

1:09:04All he was doing was making a few bucks to pay the bills, but that didn't matter. French Revolution was a pretty healthy time. Anything else you'd like to talk about? Can you talk some about Louis XIV?

1:09:46When they tried to make some changes in the tax system, there wasn't any way that the government could change the tax law and then the remedy for the monarchy was to have the king walk in and order the tax law to be changed. And he had that absolute power. But when he was only 14 years old, or maybe he was a little younger than that, he couldn't do it. So some of these tax reforms that went through were pretty good and they had what they call the revolt of the frondi in which they peppered with rocks the tax people. But then of course when he became of age, then he did walk into the government and he did order the tax decrees to be repealed.

1:10:39Do you think anybody ever tried to make a calculation as to what percent of the national wealth he took to do what he wanted? Ten percent. Was it ten? Only ten. That was only ten. What's the answer? Ten percent of GDP. Ten percent. Oh. Yeah. Well, he was quite a king wasn't he? Yeah. Well, Louis II came sometime later, he just was not a strong king, but it's interesting how they, you see there have been a lot of dissidents within France over the Texas, but it was always provincial, it was always local, and so you had all these angry taxpayers around, But they never got together because they were in Bordeaux or they were in Normandy or they were in Brittany.

1:11:37And then when he brought together the Estates General, now he brought all of the commoners and the angry taxpayers together. And it was that assembly together where they spawned the French Revolution. Probably never would have happened if he hadn't done that. Many of your friends had a rotten tax system. One of the ways in which they made money was they would sell offices and, for example, if they needed some money, they would create the office of, let's say, a hides inspector, respect the hides, you know, animal hides, and so forth, and so they would sell him the right to collect the hides, and he would pay that money into the government, and the government would get all that money, and then he would go out and charge so much When, at what point, did the physiocrats come in, I'm trying to remember, at what point in history?

1:12:59I was just wondering if that was from Henry George, if that's where they originated from. No, Henry George originated from them, didn't they? Wasn't that before his day? They still have some of that stuff around, you know, down here in the south, you know, down in Fairhope or something, they're mobile, they adopted the Henry George concept of land tax. It was apparently a popular idea, probably just a crackpot as any of them. Well, it doesn't discourage development.

1:13:45They don't tax the improvements on land. Because there are a lot of problems, especially in cities. It's a property tax because it's based on improvements, mostly. So it discourages people from keeping up their property, and it creates a lot of abandoned properties. There are three of all kinds of problems. So a lot of cities are starting to go towards a land value tax.

1:14:39He's a georgist and he's also a libertarian. He wrote it for a libertarian audience. His name is Harold Curiazzi. It has a libertarian title about why they should endorse the land tax. Tax, and the whole book is written for libertarians, and it gives a lot of philosophical basis from like Robert Nozick, who was a land tax man, and a lot of libertarian thinkers did endorse the concept that it was morally legitimate to tax land only.

1:15:25It's a very interesting book, very well documented, and arguing that this would be, if we have to have a tax, I mean, if you, a lot of people wouldn't accept that premise, but if you think there has to be some kind of tax system, that that would be the morally preferable way to go. Yeah, but wealth today is in money, it's not in land. Well, but I have some people saying... That's a member, when I looked into this some time ago, and I said, yeah, but wealth and money today, it's not in land. Agricultural society or so forth in the old days is Jeffersonian era, but now it's in money. In Texas, we got so fed up with our property tax system, and we're kind of having a revolt.

1:16:14The way they had the appraisal system set up, landed improvements involved, and they separated. You have that total market value, and they would allow, in the current law, your appraisal could be 100, your market value could be 175, and they could increase your appraisal as much as 10% a year, as long as they're up to that CAD value. Then that can increase in CT1. We tried to, in the state legislature, reform this grassroot that's called CloutTexas.com. We have 22,000 members now across the state.

1:17:07And we want to get them to, the politicians are too cowardly to ensure if you want to allow the appraisals to go up, the taxes that they're going to go up, Well, you've got to lower the rate to maintain a level keel that they're allowing in two ways. They'll raise the rate and they appraisal it. So we want to lower that cap to five or three percent because, you know, in ten percent your taxes could double in seven years. Did he just arbitrarily increase everybody's appraisal value? They don't assess everyone's property every year, right? They do it every two years. They do?

1:17:52In the last five years, appreciation has been in some places. Isn't that called the fortune? To go and assess everyone's property every year? Well, they do drive-bys. They don't go in your house or measure everything. They'll take comps from the MLS system. The Inheritability, if you want to be assessed, they do have to come to your house. No, they don't. They go up. They assess every three years in Kentucky. Everything has to be assessed at arm's length valuation. But the revenue can only go up 4% a year, so they have to adjust the tax rate down. We're trying to get the job. Plus, it's kind of complicated for them, about 10 steps in, plus new construction and new development, stuff like that, they can tax that.

1:18:41In Georgia, we have a one where if you bought the land this year, the value cannot be increased until you sell it. The year you buy a new base is set and it can't be increased until you sell it. We call it a day amendment to the Constitution. What? So no one ever moves. They stay in their homes for a long time. Yes, they have catalyzed it deeply. Severely. That's the way Kentucky's was until they introduced the tax system. It's all, it's all. They catalyzed the tax system. They all stayed. This is on a county-by-county basis.

1:19:30Yes, this is Chatham County. There's some other counties that have similar bills, but I don't know, Chatham's, I don't know. I think when they had Gwinnett County in Atlanta, they had that over there for 31 years there. They had the drive-by system there, because they never had it in the house, but I got a real praise several times. It's only been in Auburn for four years, and it's already been changed, and they have it in my house here either. I don't know whether they drive by or just, as he says, use the MLS or what to come up with a new value for you, and never lower on our... What do these drive-by assessments cost, do you know? Nothing.

1:20:15Because they're saying it's going to cost three million dollars just to assess our county, which hasn't been assessed in about 40 years because of the cost. Yeah, I think it's just drive-by, two folks in the truck. I don't know how they do it in my county in Georgia, but I'll tell you, it's doggone accurate. I mean, it's very accurate. I don't know how they do it, but I mean, they're doggone accurate. Are you in the cab where you are? In the cab. But I have the property of what I have to do. And you're right on the book. They're too honest. I have no question what they say is just about exactly right.

1:21:00They have scientific methodologies for doing it. And in the cab it's never more than 28% of your fair market value. Which I can't complain. In Texas, we're trying to limit the reliance on property tax, cut it in half, and perhaps raise our sales tax, mainly for schools for education, because it's just killing property. You don't have an income tax there, do you, in Texas? No, no. I think they are trying to get a deduction for sales tax. John, my son is living in a dream world. He's in Texas now, been there five or six years, and before that he lived and worked in Florida. So I said, you've never been yet to work in the state of Texas.

1:22:07What's the problem with California? You wrote a book, I'm mad as hell, and it was about... Oh yeah, that was Jarvis. Jarvis. Howard Jarvis, he created a revolution there, and of course it spread, too, you know. Well, there's a lot of interesting tax ideas out there. There's one guy in Florida called Just One Tax. That's another tax group, and he has gone into Alexander Hamilton's writings, $1 in $1 every time you spend a dollar, an extra penny, or...

1:23:24and of course it could be done by computers because it would be done through the banking system you see and so nobody would ever now ever see it and he'd been to Congress and I've talked a few times and I don't know how it would work but the I suppose the one thing I think that we need so much is to get away from the attack system requires the police power you know the confiscation concept and that's the In 1833, when the Great Reformed Parliament abolished slavery, then the question came up, should we reintroduce the income tax?

1:24:20And they said, if inquisitional powers are ever spoken of, when were they worse than that? And so, and that was the Chancellor of the Czech Republic, he said, we don't want that. We don't want an income tax. And we had it under Napoleonic period and no income tax for the British. And so it wasn't passed. The whole generation had to die away before they reintroduced the income tax. That was when Sir Robert Peele introduced it for 3% for three years and lasted forever.

1:25:01I heard something, I don't know if it's a myth or not, but I was told that there's actually a group of people in the United States who refuse to pay taxes and the government doesn't do anything to them. They don't pursue them or anything. There's some loophole or something that allows them to refuse. Well, Schiff, oh yeah, I got his book. He sent it to me. In jail. He was in jail when he sent it. Yeah. Yeah. Well, I talked to him. He's a bit of a crackpot. And the thing is that you don't want to underestimate the potential power of the IRS. And you don't want to rub over feathers too much, and they come up with this view, and I've been on a few talk shows and people call in and say, Well, it's a voluntary tax, so you don't have to pay if you want to, and so I'm not paying my tax.

1:25:58I said, Well, that's terrific, you're not paying your tax. What about all the guys in federal prison like you? I said, they didn't think you had to pay tax either, and they come up with some cases, they say, well, what about this case here, and this case, they ruled that you didn't have to pay your tax, and so they couldn't convict these guys, and I said, no, there's a little difference. They ruled it was not a criminal offense if you believed that you didn't owe the tax because you had no criminal intent. And so the crime of tax evasion, like all crimes, has to have a criminal intent, a mens rea is the word.

1:26:44But you still civilly owe the tax and you owe the 50% fraud penalties and the interest and all the other damn things. So if you can beat the jury, which you might do, by really convincing them that in your heart you believe you don't owe it, that's fine. Interest stay under the 27th title, which doesn't have anything to do with the 26th title. What are we talking about? Income tax and penalties and interest. When they impose penalties and interest, they pick this from the alcohol and tobacco title, which is 27. And you can't impose a requirement in the title 26, which is in 27.

1:27:31But if they proceed to assess you, then what do you do? When they assess you, they do that in Title 27. I'm just saying, if you get an assessment from the IRS for interest and penalties and those things, then what do you do? You rebut it. You rebut it, uh-huh. in the Uniform Commercial Civil Conception. It does a roundabout in the Constitution. When I told about it in our government-controlled schools, where all, most of us are illiterate as far as legal things. Yeah, so were the judges, too. So were the courts, too.

1:28:18Right. Yeah, as they come out and take away your house and your car and everything else. The news media, they report these things, but they only report past truths, like Irwin Schiff, the IRS and so forth. They can't even confiscate all his books. They put it all in the newspaper, the news media. But then he went to court, and the court released all his books, so it never got put in the media. I'm not a follower of the permit shift, because I don't believe in this method, but I've been studying the tax laws, and another section of the code that says that all of the state gift and income taxes are gifts to the federal government.

1:29:07Uh-huh. You believe that? Well, you know, I've been just a practicing tax lawyer and so I haven't dealt with those things. I just dealt with people that get the assessments and then we have to file a petition in the tax court or we go to the district court or the court of claims. Well, it came out as the Board of Administrative Appeals, but it is a court in the sense that it adjudicates tax matters. In one sense, Americans are lucky to have a tax court, because you go to most countries and you don't have a right to adjudicate in court a tax dispute until you pay it.

1:29:55So you pay the tax and then you sue to get your money back. We don't have to do that in the tax court. Although it is a pro-government court, it is very much pro-government. But at least it gives you a chance. Well, the United States is supposed to get its money, and it's under the tax code we get from import tariffs. But now that we've got all these free trade agreements, well, we shut down our own industries. We let all these low-priced imports in, and we're not getting import taxes. That's a subject that I can't help you with. You know, it's easier in a country to deal with taxes, like Vietnam, you know.

1:30:44The tax rate is very high, but you can hire the taxman to do it for you, the one who's collecting the tax from you. There are countries where you can make deals with a tax man, and the Netherlands is one for example, they will permit a foreign country to come in their company and you can go them and negotiate a treaty or a treaty with them. And you can go them and negotiate a treaty or basically an agreement on what you will pay in taxes, but we don't do that here, you know, we, anyway, I think it's 3.30, so I'll see you tomorrow.