(c) Copyright 2005 Kenneth R. Conklin, Ph.D. All rights reserved
Are we just a bunch of fools?
April 15 arrives, and we have filed our federal and state income taxes. Each of us has sent thousands of hard-earned dollars to the government(s). Each of us has spent many long hours sweating over the paperwork, or paying someone else to do it for us (and then sweating whether they did it correctly).
But there are some among us who pay no income taxes. No, it's not because they are Japanese tourists. No, it's not because they are poor. No, it's not the usual sort of deadbeats and tax evaders I'm talking about.
There are people asserting Hawaiian nationalist reasons for not paying income tax. Some of these Hawaiian nationalists are quite wealthy. There are a lot of them, including some who have no native ancestry.
It's not necessary to be "Native Hawaiian" to assert some of these theories. Who knows -- you haoles [whites], pake [Chinese], kepani [Japanese] and pilipino [Filipinos] might find a theory you'd like to assert for yourself next year! But why wait? Increase your next paycheck by hundreds of dollars just by telling your boss to cancel your payroll witholding! See below for descriptions of the theories.
Some people are sincere when they assert Hawaiian nationalist tax exemption, while others are merely deadbeats who assert such claims as a convenient excuse for tax evasion. But whether sincere or not, all of these tax evaders are subject to criminal prosecution. Some jail sentences have been handed down; and some cases are currently underway. But some highly visible tax evaders thumb their noses at the rest of us and get away with it. Are we just a bunch of fools?
One very high-profile Hawaiian nationalist loudly proclaims on his long-running weekly radio program that he has not paid federal or state income taxes since 1979. Hayden Burgess, alias Poka Laenui, is an attorney who has broadcast a weekly two-hour radio program for many years, dividing the time equally between pushing Hawaiian independence and viciously bashing the United States for its foreign policy and its "DIE" culture (domination, individualism, exploitation). His weekly two-hour "commercial-free" infomercial is produced and paid for by the "Hawaiian National Broadcast Corporation" (probably tax exempt) whose "national" headquarters are conveniently located at the same address as the Wai'anae Coast Comprehensive Mental Health Clinic where he is the Executive Director. Well, at least the broadcast corporate headquarters are at the right place to get the kind of attention its executives need! At his clinic "Poka" presumably earns a salary, and spends money, from grants and contracts funded by the federal and state governments he despises and refuses to pay taxes to. On his radio program "Poka" sometimes proudly proclaims his non-compliance with tax laws and praises other tax evaders such as "Pilipo" Souza (see below for the Pilipo theory), and 30 bus drivers who were charged in November 2003 according to KITV news.
For more information about "Poka Laenui" including his support for the Akaka bill as a way to get money from the federal government while continuing to follow a secessionist political agenda, bash America, and not pay taxes, see:
KITV television in Honolulu reported on Wednesday November 5, 2003 as follows: "Roughly 30 city bus drivers are under investigation for tax evasion ... Two bus drivers have already been indicted. They're accused of not paying any taxes for four and five years. Several dozen other city bus drivers are also accused of not paying state taxes ... About 30 bus drivers have not paid taxes for years, some of them evading taxes for as long as a decade, sources told KITV 4 News. ... Some of the drivers claimed they didn't have to pay taxes because they believe in Hawaiian sovereignty and they do not recognize the state or federal governments, according to sources."
If the Akaka bill passes, 400,000 people will theoretically become legally allowed to evade federal and state income taxes. 240,000 of them live in Hawai'i -- 20% of our population. Most will continue paying tax at first, because they work for businesses that are not incorporated under the Akaka tribe, or are not located on tribal lands. But as negotiations go forward to establish Akaka tribal lands, as ethnic Hawaiian businesses re-incorporate under the tribe (including Bishop Estate / Kamehameha Schools), and as tribal members change jobs to work for tribal businesses on tribal lands, tens of thousands of people will be removed from the tax base not only for federal and state income taxes but also for property tax, car tax, social security payroll tax, unemployment insurance, workers' compensation, etc. They will be the ali'i (chiefs), while the rest of us will be the maka'ainana (commoners) who must pay the taxes to support the schools, roads, and social services provided to these tribal members who also will still retain voting rights as citizens of the State of Hawai'i.
Let's look at Hawaiian nationalist theories for evading income taxes now, even before the Akaka bill passes.
Every Hawaiian sovereignty activist seeking either independence or the Akaka bill (and that apparently includes most of our mainstream politicians both Democrat and Republican) believes that the United States staged an armed invasion of Hawai'i in 1893, the U.S. overthrew the Kingdom government; the U.S. unilaterally annexed Hawai'i without the consent of Hawai'i's people; and the U.S. took Hawaiian land without compensation. All these claims are false; but all are widely believed. Many Hawaiian sovereignty activists also believe that the U.S. continues in a belligerent military occupation of Hawai'i, and that the statehood vote of 1959 was illegal because it failed to offer the option of independence.
Some ethnic Hawaiians say that as the "indigenous people" of Hawai'i, who were engulfed by the United States without their consent, they do not owe either allegiance or taxes to the United States. They also claim a right to put up tents and live untaxed and unregulated on any beaches, parks, or public lands they wish, because this is their "indigenous homeland."
Some people with or without native ancestry, but who have an ancestor who was a subject of the Kingdom of Hawai'i, claim that they are still subjects of the still-living Kingdom. Since the overthrow, annexation, and statehood vote were all illegal, therefore Kingdom law remains in place. The U.S. has no jurisdiction to impose taxes on Kingdom subjects. Furthermore, the State of Hawai'i is merely a puppet regime of the foreign occupying power (U.S.), so Kingdom subjects do not owe taxes to the State of Hawai'i either. While it is true that the federal and state governments provide services used by Kingdom subjects, the people of an occupied nation have no obligation to pay taxes to help finance their continuing occupation. "Poka Laenui" frequently makes that claim. And all of these arguments can be asserted regardless of someone's race. It is not necessary to have Hawaiian native ancestry to be a subject of the Kingdom.
Recently, one man was sent to prison for failing to pay income tax on the grounds that he is a Kingdom subject -- even though he is NEITHER ethnic Hawaiian NOR has any ancestor who was a Kingdom subject before the overthrow of 1893. He claims that since the overthrow was illegal, it never legally happened, so Kingdom law continues to govern Hawai'i. He claims that under Kingdom law, anyone who is born in the Kingdom is a subject of the Kingdom; and since he was born in Hawai'i, therefore he has a right to assert his status as a Kingdom subject and does not owe federal or state taxes. John Phillip "Pilipo" Souza is correct that under Kingdom law being born in the Kingdom was sufficient to make someone a subject of the Kingdom with full voting and property rights. If he were also correct about his theory of history that Kingdom law still prevails, then not only he but every other person born in Hawai'i could make the same claim that they are not responsible for federal or state taxes.
On December 1, 2004 a feature article about this case was published in "MidWeek" newspaper: "The Kingdom Has Come", pages 10 and 61. MidWeek is mailed free of charge to every household on O'ahu every week on Monday, Tuesday, or Wednesday; and includes feature articles, commentary, and advertising circulars for all the major supermarkets. Unfortunately most articles, including this one, are not available on the newspaper's small website. The December 1 article was about 46 column-inches long, not including a 7x5 inch photograph of six people in front of a decorated 'Iolani Palace. The group "Ke Aupuni O Hawaii Nei" claims to be the revived Kingdomof Hawai'i, and issues its own passports (small photo). The large photo shows six people, but the caption names seven, left to right! The caption on the large photo, with 'Iolani Palace in the background, identifies Leon Siu as foreign minister; Kealoha Aiu, minister of interior; Lydia Amona, kupuna council; William Ko'omelani Amona, kupuna council [and attorney for Pilipo]; Kimo Turnet, minister of finance; Aran Ardaiz, attorney general; and Pilipo Souza, kupuna council. The article was very respectful toward the group, more or less portraying them as patriots fighting for the rights of the Kingdom of Hawai'i by not paying income taxes, not having State of Hawai'i license plates and drivers' licenses, etc. Imagine that! Are we a bunch of fools, glorifying tax evaders this way? The case of "Pilipo" Souza is thoroughly explored at:
Souza claims to be a Hawaiian Kingdom subject simply because he was born in Hawai'i, even though he has neither native ancestry nor any ancestor who was a Kingdom subject. But even people not born in Hawai'i might also be able to claim to be a Kingdom subject. That's because Kingdom law allowed newcomers to become naturalized subjects of the Kingdom by renouncing their citizenship in their nation of origin and by taking an oath of loyalty to the Kingdom. It was also possible for newcomers to become recognized as "denizens" of the Kingdom even without renouncing their other citizenship, and as denizens they would have voting and property rights the same as subjects of the Kingdom. An American coming to Hawai'i who wants to evade federal and state taxes would probably be better off to renounce U.S. citizenship and pay no taxes at all; however, it might be possible to retain dual citizenship and still avoid U.S. taxes by paying those taxes instead to the Kingdom government (if you can find out its address).
There's another very creative theory of Hawaiian nationalism which allows U.S. Citizens to avoid paying federal income tax even if they keep their citizenship and do not claim dual cirizenship as Hawaiian subjects. This highly creative theory relies on the foreign-earned income tax credit, which provides tax exemption for income (up to a certain amount) earned by American citizens while working in foreign lands either for U.S. corporations or for local (foreign) corporations. Since the Kingdom was never rightfully overthrown in 1893, since annexation was done illegally in 1898, and since the statehood vote of 1959 was done illegally, therefore Hawai'i remains a foreign nation and income earned here by U.S. citizens has a hefty tax exemption.
That theory of the foreign-earned income tax exemption was actually asserted by numerous accountants of a major tax preparation firm on behalf of thousands of individuals over a period of many years. Richard Basuel, head of RB Tax Services, and several of his partners, are now serving jail time. Basuel made clear that he (and many of his clients) has no native ancestry, but that the independence of Hawai'i as a sovereign nation was the basis of his tax evasion. There are about 25 pages of published news reports dealing with RB Tax Preparation company, the relation between Basuel and former Bishop Estate trustee Lokelani Lindsey, federal tax fugitive Nathan Keliikui Brown, and "Nation of Hawai'i" leader Bumpy Kanahele. See:
If the Akaka bill passes, there will be a brand new "Native Hawaiian" government possessing political sovereignty, including legal exemption from federal and state income taxes for any Native Hawaiian who lives and works on land that belongs to the tribe. Perhaps 20% of our state's population could eventually have this sort of tax exemption, on as much as half the land of the (current) State of Hawai'i. "203,000 acres of Hawaiian Homelands", including lands leased to businesses, would obviously be owned by the tribe. Perhaps all or most of the 1.8 million acres of the "ceded lands" would be included, comprising 95% of all the publicly owned land of the State of Hawai'i. In addition, it seems likely that all the land owned by Bishop Estate (Kamehameha Schools) would be enfolded within the tribe, together with all the businesses owned by that "charitable" corporation -- places like Royal Hawaiian Shopping Center in Waikiki, and Windward Mall in Kane'ohe. Among the sovereign powers of this phony new tribe will be the power to rewrite its laws for who can be a member of the tribe. Thus the tribe might decide to admit wealthy non-natives who agree to pay an initiation fee or ongoing taxes to the tribe in order to avoid federal and state taxes. Even ordinary non-native deadbeats like "Pilipo" Souza could be admitted to tribal membership.
Are we taxpayers just a bunch of fools? Only if we allow political radicals and deadbeats to get away with paying no taxes. Plenty of these freeloaders are already thumbing their noses at the rest of us even under current law, even before an Akaka tribe gets created. So long as we allow them to get away with tax evasion, we are indeed a bunch of fools. And if we allow a fake Akaka tribe to be created and make this problem far worse, then we will be even greater fools than at present.
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(c) Copyright 2005 Kenneth R. Conklin, Ph.D. All rights reserved