“The moment you abandon the cardinal principle of exacting from all individuals the same proportion of their income or their property, you are at sea without rudder or compass, and there is no amount of injustice or folly you may not commit.” — British Economist J. R. McCulloch (1845)
I have just finished reading the remarkable story of one of my childhood favorite actresses, Hayley Mills, the star of Disney’s “Pollyanna” and “The Parent Trap.” Her book is called “Forever Young,” and it is available on Amazon.
Her career was a remarkable success… until the taxman came calling.
All her earnings for nearly 10 years from doing films for Disney and other producers were placed in a trust that she would inherit and have control over when she turned 21. The trust had been set up by her father’s solicitors. All the earnings from her films had been transferred into the trust, and the income taxes were paid. The trust funds were to be distributed at age 21.
At that age, she met with her solicitors in London and was handed over a large envelope from Inland Revenue. Her solicitor explained what was in the envelope:
“Well, my dear, basically the Revenue have attacked your trust company. They are going to tax you at the full rate on all your earnings… Ninety-one percent.”
91% plus penalties!
She was devastated but was told she could appeal. So, she appealed the ruling, but lost time and again. She concluded, “I felt utterly hopeless — I was being ordered to hand over essentially everything.”
All she had left was a house that she owned.
Her final appeal was to the Highest Court of Justice, which is like our Supreme Court, and after four grueling days in court, the judge ruled in her favor. Justice finally prevailed!
The Rest of the Story
But wait, there’s one final chapter in this sad tale:
Inland Revenue (the Crown) appealed the High Court’s decision to the House of Lords! Here, we are told that, “the final judgment was given — unanimously. In favor of the Crown. And with costs.”
Hayley Mills had to pay a surtax of £106,598 — equivalent to £2 million today.
She concluded, “The state plundered my trust like a horde of pirates, which is really what they were. It was all over. Seven years of battle, seven years of uncertainty, the highs and the lows, not to mention seven years of paying my solicitors to challenge the case — the whole debacle had left me emotionally and financially exhausted.”
She said the only asset she had left was a villa in the south of France. And that was after nearly 10 years of performing in some classic films and making (but not keeping) millions.
The Danger of the Graduated Income Tax
The lesson here is that the Hayley Mills story is a cautionary tale for all those who favor a super-progressive tax on “the rich.”
Who would come to her defense? Not the average citizen. Most want to be rich like Hayley Mills, but until then, they are envious and favor taxing the rich at confiscatory levels.
It’s a classic case of the tyranny of the majority.
Yes, everyone should pay some taxes each year, according to the only legitimate justification for taxation: The Benefit Principle. That is, if you benefit, you pay. Usually, that means a flat tax on income or profits. The other principle of taxation is the “ability to pay.” Typically, this is a justification for a progressive tax, where the tax rate increases with income. Rich people can usually afford to pay a higher rate. But it can lead to great injustice and folly, as happened to Hayley Mills.
A flat income tax — adopted by over a dozen countries, including Russia — is a much better policy that protects the private property of all citizens, especially the wealthy, against the taxman.
“The power to tax is” indeed “the power to destroy.”
John Cleese Was Censored at South by Southwest Festival!
Breaking News: Last week, I announced that famed British actor and producer John Cleese will be our keynote speaker at this year’s FreedomFest, July 13-16, 2022, at the Mirage Hotel & Casino in Las Vegas.
Cleese is the most creative English actor, comedian, screenwriter and producer in the past 50 years. He is known for his films “Monty Python” and “A Fish Called Wanda.”
You won’t want to miss his irreverent performance on the new “cancel” culture. Here’s a controversial sample from the hit British TV show “Fawlty Towers.”
Well, Cleese has done it again. His microphone was taken away at the South by Southwest film festival last week for joking about how France and Italy owed the British people slave reparations due to the Roman Empire and the Norman invasion of 1066.
Cleese’s career in comedy spans seven decades, but he’s been risking it all to combat the recent trend in cancel culture, wokeism and political correctness. He’s going to tell us all about his fight for the future of freedom of expression when he speaks at FreedomFest on July 15.
Cleese is also a successful business leader and a passionate advocate of the need to encourage creativity in life. He even wrote the book “Creativity: A Short and Cheerful Guide.” At FreedomFest, his talk will be called “What’s So Funny? Tips for Success in Education, Business and Relationships.”
Our Early-Bird Special Ends on March 31!
Other big-name speakers who already confirmed their attendance include Kennedy from Fox News, who will be our emcee on all four days, Steve Forbes, actor Ben Stein, economist Art Laffer, former congressman Justin Amash, reporter Glenn Greenwald and libertarian comedian Dave Smith.
We also have a great line-up of financial experts for our three-day investment conference at FreedomFest, including Oxford Club’s Alex Green and our own Eagle Financial investment guru, Jim Woods, as well as foreign investment guru Adrian Day and coin expert Van Simmons. Plus, special guest star Jim Rogers will visit us from Singapore!
Don’t forget: The early-bird discount ends in one week on March 31. You pay only $399 per person, and you can bring up to three guests for only $299 each. After April 1, the registration goes up to $499, and guests will cost $399 each.
Use the code EAGLE to get the early-bird discount of $399 for you, and $299 each for up to three guests. To register, go to www.freedomfest.com, or call Hayley at 1-855-850-3733, ext. 202.
You Blew It!
‘Define a Woman’ Becomes a Gotcha Question
Who would have ever thought that “What is the definition of a woman?” would be a gotcha question in 2022?
Cartoonists and Saturday Night Live will have a field day with this week’s hearings regarding Supreme Court nominee Ketanji Brown Jackson, who refused to define the word “woman” at the Senate hearings.
“No, I can’t,” she said. “I’m not a biologist.”
Watch this painful one-minute clip.
It is too bad that Senator Marsha Blackburn didn’t follow up with the question, “Are you a woman?” If Jackson answered “Yes,” then the senator could have asked the following up question, “Why are you a woman?”
The question came up after a transgender athlete, Lia Thomas, handily won a swimming competition at the NCAA women’s swimming & diving championships in Atlanta on March 17. The audience roundly booed Thomas.
As Michael Shermer, publisher and editor of Skeptic magazine, stated, “Puberty is a performing enhancing drug. When male-to-female trans athletes like collegiate swimmer Lia Thomas compete and win against biological females it is cheating and must end.”
Read Shermer’s commentary and see the photo of the difference in size of Thomas compared to the other swimmers. Thomas must be a foot taller.
It’s a sad commentary that the NCAA allows this sort of cheating in the name of fairness.