Other Taxes

Other Taxes That Support War

Most of NWTRCC’s web pages deal with federal income taxes, the top source of revenue for the federal government’s general fund. See the War Resisters League pie chart for a breakdown on how the federal government spends this money.

However, there are other taxes and sources of government revenue that contribute to the general fund (besides borrowing) and thus get parceled out for war. Many people who do not want to pay for war want to withdraw their support wherever possible; some taxes are easier to resist than others, and we have listed some options. Many people do not owe income taxes and want to know if there are other taxes they can resist.

Click on the link for the tax you are interested in for a short write up is on this site. War tax resister David Gross has done much of the research on this, and his blog, The Picket Line, has more details about the history of some of the excise taxes, amount of the tax, and more specifics on some of the resistance tactics. Many links below connect to his research on the topic.

If there is no link, we have not researched the tax in detail. The laws for these taxes change; if you have updates — or additional ideas — for this site please email us.

Type of Federal Tax 2010 Revenue
Revenue data
Tobacco Excise Tax $17 billion
Alcohol Excise Tax $9 billion
Local Telephone Service Excise Tax $1 billion
Excess Contributions to an IRA [need data]
Air Travel (Federal Security Fee & more) $12 billion
Highway and Gas Taxes [need data]
Other Excise Taxes [need data]
Customs duties $25 billion
Estate & gift taxes $19 billion
Social Security and Medicare $865 billion

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Tobacco

A federal excise tax is applied in varying amounts on all types of tobacco products: small cigarettes, large cigarettes, small cigars, large cigars, chewing tobacco, snuff, pipe tobacco, roll-your-own tobacco, blunt wrappers, rolling papers, cigarette tubes. The federal tax on a pack of cigarettes is $1.01 in 2011.

As far as resisting the tax, you could tell the clerk at the store that you don’t want to pay the federal tax because of war and this might lead to an interesting discussion, however, it is unlikely they will sell you the item without your paying the tax.

How to Resist

  • Avoid purchasing, manufacturing, selling, or using tobacco products.
  • While we are disinclined to encourage smoking, some grow their own tobacco. The process is complex but not completely out of reach of the small-scale producer. You can find stories about this option on the internet. Here’s one article from Feb. 2010.

More info on The Picket Line (12/20/10 entry, scroll down to the section on tobacco)

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Alcoholic Beverages

All alcoholic beverages sold in the United States, except home-brewed beer and wine or bootlegged liquor, have federal excise taxes applied to their manufacture. The tax varies from about 23 cents per gallon on hard cider, to $13.50 per gallon on distilled spirits, and $18 per gallon on beer made by large brewers.

As far as resisting the tax, you could tell the clerk at the store that you don’t want to pay the federal tax because of war and this might lead to an interesting discussion, however, it is unlikely they will sell you the item without your paying the tax.

How to Resist

  • Avoid purchasing, manufacturing, selling, or drinking alcoholic beverages.
  • Brew your own wine, beer, or cider, so long as you stay under 100 gallons per year (distilling spirits at home is possible but is not legal).
  • Bring a small quantity of alcoholic beverages back from a foreign country without being required to pay an import duty

More info on The Picket Line(12/21/10 entry, including links to home brewing instructions).

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Local Telephone Service

Telephone tax resistance has a long history in the war tax resistance movement, because it has a long history of being associated with war and can be an easy tax to resist.  NWTRCC maintains a page about this form of war tax resistance: Hang Up On War.

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Excess contributions to an IRA

Be careful not to owe more in taxes by being unaware of the rules of an investment plan. Especially if you are trying to reduce taxable income by contributing to an IRA so as to owe less in federal taxes and for war, should sure you know the limits for contributions (ask the administrator of your fund for the details). A 6% excise tax penalty may apply for excess contributions to a TraditionalIRA, Roth IRASEP IRA, or 403(b). There is lots of information on the IRS website and on the internet about this if you search on “excess contributions to IRA.”

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Air Travel

There is a 7.5% federal excise tax on the price of an airline ticket (except in periods when Congress does not update the legislation as has been true in July/August 2011). In addition, for every domestic flight, or leg of a flight, that begins and ends in the United States there is an excise tax ($3.70); for flights that begin or end in Alaska or Hawaii the charge is higher ($8.10); for international flights that begin or end in the United States, the charge is higher still ($16.10). There are also excise taxes on airplane fuel.

Most of these taxes are targeted for the Airport and Airway Trust Fund or pay to the airport collecting the fund for maintenance and improvements. The Federal Security Fee on domestic flights was passed in 2002 to pay for the TSA, a section of the Department of Homeland Security. A chart on the Air Transport Association website shows a breakdown of where the various taxes and fees on air travel are directed.

How to Resist

  • Don’t travel by air. Use ground transportation or staying closer to home.
  • The law seems to leave open the possibility of refusing to pay the excise tax at the time of ticket purchase. Click on “more info” to read more about this on.

More info on The Picket Line (12/24/10 entry).

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Highway & Gas Taxes

Many people ask about the taxes related to driving. We have not researched this thoroughly, but most of these taxes are collected from the producer, importer, or retailer and deposited in the general fund. Revenues from these taxes are accounted in the Highway Trust Fund, although this is another opportunity for such monies to be borrowed for general federal spending.

While the contribution of these taxes to war is peripheral, the fact the wars are being fought for oil and energy resources is unquestionable.

How to Resist

  • Not owning a car; not driving; not partaking in car travel.
  • Reduce oil dependency by driving less, car pooling, etc.

The Federal Highway Administration has a write up on the highway and gas taxes that pay into the Highway Trust Fund.

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Estate and Gift Taxes

The estate tax is imposed on the transfer of the “taxable estate” of a deceased person, whether via a will, according to the state laws of intestacy, or otherwise, such as a transfer of property from a trust, certain life insurance benefits, or financial account sums to beneficiaries. For deaths occurring in 2011, estates over $5,000,000 from an individual or $10,000,000 for married couples incur the estate tax.

The gift tax is imposed on transfers of property during a person’s life and is often used to give away parts of an estate in order to avoid the estate tax. Transfers up to $13,000 per person per year (as of 2011) are not subject to the tax. Parents may each tranfer up to $13,000 to a child per year.

NWTRCC’s Practical Series WTR #7 contains more information on these taxes, but check with legal or financial advisors for the best information regarding these taxes.

How to Resist

  • Federal estate taxes apply at such a high level that for most resisters this is not a factor. However, it is best to check with legal or financial advisors if you fall into this category and are concerned about these taxes. Gift taxes are manageable, but war tax resisters will find that holding large sums in bank accounts becomes more problematic if they have a debt with the IRS. It is usually not the transfer that is the problem, but the receipt of larger sums that create tax concerns. Again, NWTRCC’s Practical Series WTR #7 has some ideas on dealing with inheritance.

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Other Excise Taxes

When you start looking into it, the number of federal taxes on specific items or activities seems to get longer and longer. Each of these taxes raises hundreds of millions annually. Some are revenue for the general fund; many are transferred to special funds, such as for maintenance related to the activity taxed. The only way to avoid the taxes in this section is not to participate in the activity. Lifestyle choices of war tax resisters vary, and the choice to avoid some of these taxes may have more to do with lifestyle choices than a specific act of war tax resistance.

You can read about many excise taxes, how they are applied, and who pays them in IRSPublication 510 (if the link does not work, go to www.irs.gov and search on the publication number).

  • Private Foundation Net Investment Income tax, paid annually at the time for filing a 990 return or in quarterly estimated tax payments if the total tax for the year is $500 or more.
  • Gas Guzzler TaxEPA website
  • Ocean Cruise excise tax: IRS Pub. 510
  • Indoor Tanning Services Tax: IRS Pub. 510
  • Wagering and Lotteries: For state authorized wagers placed with bookmakers and lottery operators there is a tax of 0.25% of the wager, if it is legal. If the wager is not legal, the tax is 2% of the wager. Form 730 has instructions and rates. State Lotteries, game show prize money, etc. — the federal government gets a cut as well by taxing as income the winnings of the big ticket winners. More on State Lotteries.
  • Manufacturers’ Taxes including: Sport fishing equipment; Fishing rods and fishing poles; Electric outboard motors; Fishing tackle boxes; Bows, quivers, broadheads, and points; Coal; Taxable tires; Vaccines (see also The Picket Line — 12/31/10 entry)
  • Fuel Taxes and Fuel Tax Credits and Refunds: IRS Pub. 510
  • Oil Spill and Ozone depleting chemicals excise tax
  • Foreign Insurers Policies: Tax is imposed on insurance policies issued by foreign insurers. Any person who makes, signs, issues, or sells any of the documents and instruments subject to the tax, or for whose use or benefit they are made, signed, issued, or sold, is liable for the tax. IRS Pub 510

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Other Ways of Reducing Support to the Federal Government

Overwithholding

Why loan the federal government your money interest-free? If you are getting a big tax refund every year, it is perfectly legal to adjust your withholding allowances and cut this stream of support. Read more about this on The Picket Line (12/26/10 entry).

Treasury Bonds

It may seem obvious, but if you are buying Treasury Bonds as an investment (or for a birthday present for a child), you are directly supporting activities of the U.S. government, including war. Once called “war bonds,” they are held as a debt by the government while the money helps states carry out activities that, in many cases, would be better left unfunded. Here’s was economist Michael Hudson has to say about states and debt:

“Almost all governments, for hundreds of years, have been in balance in their domestic spending. War is what pushes up debt, as it has done in the United States.” (Read the full interview on Democracy Now, 8/2/11

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Social Security and Medicare Taxes (FICA)

The Federal Insurance Contributions Act (FICA) is a payroll tax imposed by the federal government on both employees and employers to fund Social Security and Medicare. The FICA tax is approximately 15.3% of gross compensation, up to $106,800 for Social Security with no limit for the Medicare portion (making Social Security a regressive tax because the effective rate decreases as income increases. For salaried employees, the employer pays half of the 15.3%; self employed persons are responsible for the total amount. (In 2011 and after, the rate may differ by a few percentage points as the government with proposed and passed tax breaks to stimulate spending. Wikipedia and other sources on the internet keep this information up-to-date.)

Opinions vary among war tax resisters regarding payment of Social Security taxes. Most self-employed/below-taxable resisters who refuse payment of Social Security taxes resist not because of objections to the programs funded by the tax, but because of the way temporary surplus income from the tax is invested (and borrowed) by the federal government. Though technically a trust fund, a portion of every Social Security payment is placed into reserve investment in U.S. treasury bonds, thereby contributing indirectly to military spending.

Resisters should note that federal penalties, both civil and criminal, for refusing payment of Social Security taxes are the same as those for refusing payment of income taxes. The IRS does not distinguish between these two kinds of taxes in terms of applying penalties, and it is unclear if payments intended as Social Security taxes are distinguished as such either. However, income tax resisters who file quarterly and/or annual returns do have their earnings credited to their Social Security account.

More information about Social Security and Medicare for war tax resisters is in NWTRCC’s Practical Series WTR #7.

How to Resist

  • As a payroll tax for those in salaried jobs, Social Security and Medicare taxes are impossible to resist. The employer pays half, and the salaried worker’s portion is deducted from their pay as a flat tax, independent of allowances on your W-4. Even if you choose not to file, this amount is taken from your paycheck.
  • If you are self-employed and file, you can choose to refuse to pay the “self-employment” portion of taxes along with the income tax portion. Schedule SE is used to calculate the self-employment tax, and that amount is entered on a separate line on the 1040. Those two lines are added together (after being adjusted by payments, credits, and other taxes) for the total tax. Resisters can decide how much they want to refuse to pay at that point. As per above, the collection process for self-employment taxes by the IRS is the same as for income tax. Other pages on this website discuss those consequences of this form of civil disobedience.
  • If you are self-employed, you can choose not to file or participate in the federal tax system. If you make more than $400 in a year, then technically you owe Social Security/self-employment taxes. More information on low income/simple living as a way to refuse this tax is in NWTRCC’s Practical WTR Series #5.

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Please help us keep our information accurate and up-to-date. Let us know if you have more information about resisting federal excise taxes. Contact NWTRCC at (800) 269-7464 or by Email.