Irwin A. Schiff just passed away on October 16th, at the age of 87, still under lock and key as a political prisoner. Most people know Irwin Schiff as the father of investor and fellow gold advocate, Peter Schiff. Irwin Schiff was also known as the most prominent tax protester of our time, a man who stood up to the IRS and was imprisoned as a result. But the legacy he leaves is much deeper than his fight with the IRS, and there are some valuable lessons we can learn from his life and teachings.
For those unfamiliar with Irwin Schiff, he was the son of Jewish immigrants. He served in the Korean War and later opened his own insurance brokerage. He read Henry Hazlitt and F.A. Hayek in college, gaining exposure to Austrian economics. He was a staunch supporter of liberty and limited government, undertaking grassroots campaigns and later staging an (unsuccessful) write-in campaign for Governor of Connecticut. He was also a candidate for the Libertarian Party Presidential Nomination in 1996.
Irwin Schiff was also a supporter of sound money, testifying in 1968 before the Senate Committee on Banking and Currency against the removal of gold-backing for our currency. My personal exposure to Irwin Schiff was through his book ‘How an Economy Grows and Why It Doesn’t’. Originally written as a children’s book in an illustrated comic-book style, it is accessible to everyone, yet contains high-level economic and political concepts that most adults do not understand.
The book starts off with an island economy, and it logically illustrates how that economy grows only through savings and capital goods investment. It then shows the disastrous results that occur when the government inflates and devalues the island’s currency. The book has been updated by his sons, Andrew and Peter, and I would highly recommend it to everyone. It is truly a joy to read. Irwin also wrote a similar book called ‘The Kingdom of Moltz’, which is also very clever.
Of course, most people who know anything about Irwin Schiff focus on his tax theories and, unfortunately, many write him off as a tax cheat who was eventually imprisoned for his actions. But his story is much more nuanced.
It is true that Irwin did not pay Federal income taxes. But unlike most tax cheaters or evaders who fail to pay for monetary reasons, Irwin did it because of his personal, deeply-held conviction that the government’s collection of taxes was unconstitutional.
This can be illustrated by Irwin’s actions. Most tax evaders will do things to try to hide taxable income, such as taking deductions they know they are not allowed, or failing to report all of their income. Irwin Schiff did no such thing, even though as someone working in finance with accounting skills, he probably could have pulled it off.
Instead, he told the government exactly what he was doing, claiming no income tax was owed and attaching an explanation to his return, which he sent to the IRS. He even went so far as to explain his reasoning on television and even wrote six different books on the topic. He was being completely sincere and honest in his actions because, in his mind, what he was doing was right and it was the government that was misinterpreting the law and constitution.
To be clear, neither of Irwin’s sons, Peter and Andrew, recommend that people follow Irwin’s example of not paying taxes. Even though Peter Schiff agrees with his father about the legality of the case, and has even heard from judges off the record that Irwin’s case is sound, Peter notes that in practice, the courts will never concede this and therefore people should focus their efforts on advancing liberty in other ways.
Although I never met Irwin, a few reflections from reading about him and his works come to mind. The first is the example of a true man of conviction. Whether you agree with him or not, he is an incredible illustration of someone who did not compromise on his beliefs, right up to his own death.
Second, he unfortunately provides a real-life confirmation of the fact that the power of government and taxation ultimately comes from the barrel of a gun. Many progressives like to delude themselves that government is The People and that we all happily bear our share of the burden. When asked if it is right for the government to take from some by pointing a gun at them, and then give that money to others, the reaction is almost always “Who said anything about guns?”
Finally, the way Irwin Schiff was treated as a prisoner reveals an unfortunate reality of our current court and prison system. Even if you agree that Mr. Schiff should have ultimately gone to prison, it is hard to read about the lack of care he received and the conditions he endured towards the end of his life.
Chris Kuiper, CFA is currently a student and researcher at George Mason University, pursuing a Master’s of Economics. His previous experience includes asset management, investing and banking.