I recently received quite an education about how law-abiding taxpayers are treated by the state of California via dozens upon dozens of emails detailing how the Golden State ransacked the bank accounts of law-abiding taxpayers in other states without notification or due process, as if the citizens being looted were crafty bankers who'd stolen church funds to live tax-free in an offshore tax haven.

As we all know, crafty (and politically protected) bankers are free to loot churches, muppets and the taxpayers at will while taxpayers are looted by lawless government. Here is a typical account of state thievery. It is anonymous for a good reason: As I noted last week, law-abiding citizens are terrified of their governments, local, state and Federal, as they know that these agencies are literally above the law and will exact retribution on anyone who reveals their tyrannical trashing of due process or who questions their feudal pillaging of oppressed debt-serfs. (I previously addressed this topic in Welcome to the Predatory State of California--Even If You Don't Live There March 20, 2012)

I received a letter last year that we owed the state of California's Franchise Tax Board $90,000 for taxes in the year 2008.

We replied to the Franchise Tax board in a similar manner as RT stating that:

-- Did not reside in California in 2008

-- Did not file a State income tax return in California in 2008

-- Did not have any outstanding tax issues with California in 2008

-- Did no business in California in 2008

-- Owned no property in California in 2008

The CA Franchise Tax board responded by putting a lien on us in the state - fortunately, our banks and assets have no business in CA or I am certain our accounts would have been robbed as well.

After a great deal of uncertainty and angst, I found an accountant in CA who advised us that we needed to file a complete CA tax return for 2008 even though we did not owe any tax. We filed the return and received a response that we owed the state $625 to cover the State's collection fees. We paid the fee and within two weeks received a "refund" check for the $625.

On reflection, we felt as if we had been "held up" by some powerful gangsters and if it had not been for an honest tax accountant we would have suffered much financial damage.

This basic story is repeated thousands of times annually, and while California may hold special status as the most predatory, parasitic, due-process-be-damned state, it's clear that other state and local governments are pursuing similar strategies of lawless looting under the cover of tyrannical statutes approved by elected lackeys of the financial aristocracy.

Is financial tyranny "legal" if some state legislature claims it is legal? Or is all financial tyranny above the law, regardless of what the elected toadies and apparatchiks claim? Would the Supreme Court, another set of lackeys, ever rule that a state cannot steal funds from a private bank account without due process other than a concocted claim that the person might owe the state taxes?

Of course it won't, for the Supreme Court has long ago given up restricting government's ability to loot and pillage the citizenry. The Court can't even be roused to defend the Bill of Rights, the most sacred set of civil liberties the nation holds (or held-- the Bill of Rights has been annulled by the Orwellian "national defense" NDAA-- Welcome to the United States of Orwell, Part 1: Our One Last Chance to Preserve the Bill of Rights).

Based on dozens of detailed accounts, I finally figured out how the state of California calculates the tax you owe it.

1. If you ever resided in California or filed a tax return there, even 20 years ago, then any 1099 you receive from anywhere from now until your death is "proof" that you owe tax on that income to California.

2. If you live elsewhere but retain a license to do any kind of business in California, you must be hiding income and therefore you owe substantial taxes to California based on bureaucratic calculations of the average income others with your license earned.

3. If you ever filed a tax return in California, if you stop filing tax returns then you will be targeted and brought to earth as a tax dodger. The only way to escape the lawless wrath of the state's Franchise Tax Board is to keep filing tax returns in California until you die, even if you moved away years ago and earned no income there.

Yes, the mere cessation of filing is "proof" you're hiding income and are a tax dodger whose bank account must be stripped clean. Wells Fargo Bank, a recipient of taxpayer funds in the billions of dollars, deducts $100 or even $150 to do the state's dirty work, and then when it's shown the taxpayer owes the state no taxes, the bank doesn't refund the fee--are you kidding?

The banks and their management are still free to plunder, loot, defraud, pillage, misrepresent risk, assets and liabilities--all backstopped by taxpayer funds. If this isn't the acme of Orwellian reversal, then precisely what is? Taxpayers whose accounts have been looted by the state on the flimsy pretenses listed above must then endure the Kafkaesque torture of pleading with California'a Franchise Tax Board to return the money that was stolen from them without due process.

The Franchise Tax Board tells the powerless taxpayer (let's call him Josef K.) that if he's lucky (and who's lucky when caught in a fearsome web of bureaucracy) his money might trickle back to him in 6 to 8 weeks. The $100 stolen by Wells Fargo-- that's your "penalty" for ever having admitted that you lived in California.

It's like the Hotel California--you can move out any time you like, but you can never leave the tax liability. I am not making this up--I have dozens of detailed accounts of people moving out of California many years ago and having no business or property in the state, yet a 1099 from years past or the mere "failure" to keep filing state returns in perpetuity triggers an unannounced and unexplained raid on their private bank account and/or a lien against any property they own in California.

Then, after much anguish and expense, the trumped-up, totally fabricated, delusional claims of tax liability dissolve and then they begin the bureaucratic nightmare of trying to wrest their money from the rogue state's grasp.

Meanwhile, Federal prosecution of financial fraud has fallen to a 20-year low. Coincidence? No; lack of funding and powerful political protection play roles in protecting the real criminals from any risk. Brown-nosing Republicans have made ceaseless efforts to gut any agencies still clinging to an interest in prosecuting financial crimes, but financial tyranny starts by gutting the statutes themselves so fraud, embezzlement, etc. are no longer crimes.

Not filing a tax return in California even though you moved out of the state 10 years ago, however, is a crime--but as in an Orwellian nightmare, the "law" isn't written down, it is embedded in some bureaucratic rules that are hidden from the taxpaying citizens. It isn't "legal," but since due process has been abolished, who cares what's legal or illegal?

It's actually very simple: whatever the state or Federal government does to you, that's legal. Whatever action you take to protect your rights is illegal.

In case you have any doubts about where our "leadership" is taking us, please review these Assorted quotes by Fascists or about Fascism.

If this recession strikes you as different from previous downturns, you might be interested in my new book An Unconventional Guide to Investing in Troubled Times (print edition) or Kindle ebook format. You can read the ebook on any computer, smart phone, iPad, etc. Click here for links to Kindle apps and Chapter One. The solution in one word: Localism.


Readers forum: DailyJava.net.



Order Survival+: Structuring Prosperity for Yourself and the Nation (free bits) (Kindle) or Survival+ The Primer (Kindle) or Weblogs & New Media: Marketing in Crisis (free bits) (Kindle) or from your local bookseller.

Of Two Minds Kindle edition: Of Two Minds blog-Kindle

---

"This guy is THE leading visionary on reality. He routinely discusses things which no one else has talked about, yet, turn out to be quite relevant months later."
--Walt Howard, commenting about CHS on another blog.

---

NOTE: gifts/contributions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.

Thank you, Ray W. ($50), for your exceedingly generous contribution to this site -- I am greatly honored by your steadfast support and correspondence.

Thank you, Ishabaka, (Japanese kitchen knife), for your pragmatically generous contribution to this site -- I am greatly honored by your ongoing support and correspondence.

---

Or send him coins, stamps or quatloos via mail--please request P.O. Box address.

Subscribers ($5/mo) and contributors of $50 or more this year will receive a weekly email of exclusive (though not necessarily coherent) musings and amusings.

At readers' request, there is also a $10/month option.

The "unsubscribe" link is for when you find the usual drivel here insufferable.

Your readership is greatly appreciated with or without a donation.

---

For more on this subject and a wide array of other topics, please visit my weblog.

                                                           

All content, HTML coding, format design, design elements and images copyright © 2012 Charles Hugh Smith, All rights reserved in all media, unless otherwise credited or noted.

I would be honored if you linked this essay to your site, or printed a copy for your own use.