Tag Archives: escrow

Random ‘Laws’

If we put ourselves on a quest to find real justice we cannot look for it in the current legal system as used under political power. Real justice has to be the same everywhere. If it is not then it is just random, arbitrary rules that should be seen as such and disregarded as much as possible, at least it should not be given any credence, and certainly not voluntarily complied with.
One such rule was encountered by a close friend many years ago when he used a small inheritance to buy an even smaller air plane. He had flown this plane at his local flight club as a rental and when sudden influx of money mysteriously coincided with this plane to come up for sale he took the plunge into plane ownership.
He got the money from the bank – in cash – and met the owner at his bank where the transaction was to be done. He paid the money, go the bill of sale and the deal was done. He did not know that he should have used an escrow service to make sure nothing went right – but no harm was done as nobody tried to cheat the other and it was smooth sailing.


Until a few month later he received, out of the blue, a letter from his states Franchise Tax Board demanding payment of some three thousand dollars as use tax. Use tax is the state’s way around the problem of a sale taking place when they cannot collect sales tax with the help of the seller.
Why would the FTB get any money for the sale of an airplane, my friend wondered. There was just no justification for that open hand because there was no service from the state whatsoever. My friend at that time did not know that the states – all politicians in fact – don’t need that at all. But mostly they keep up the appearances and pretend that they have to collect those taxes to maintain the roads, train our kids and protect us from the boogie man.
But all that was not the case for an airplane: airports are a federal matter – the FAA – taxes on aviation fuel was used to maintain those, no streets or installations of the state were used at all.
So, obviously, my friend tried to get out of the need to pay all that money for nothing. He found out quickly that the neighboring state did not collect sales or use tax. As he had not purchased the plane in his own name but in the name of a trust – turned out to be a good idea – he changed the address of that trust to Oregon and told the FTB to buzz off.
They did not give in so easily and wanted to see documentation showing that the plane had not been customarily be located in their state – they always come up with some interesting wording and rule so that they get their way, right? Faking that documentation was a lot cheaper than three thousand bucks, so my friend did that.
But, hey the government, being what it is, wiped all that off the table and said that they wanted the money anyways. Now the problem with tangible objects is that they can be stolen under the color of law. My friend did not want to take that risk and just sold the plane to another trust in another state without sales or use tax – Nevada. The FTB still tried to place a lien on the plane to get their share the next time the plane was sold, but they ultimately failed.
This is just a story of how somebody beat a random rule by using the fact that the rules are not uniform everywhere.
But what should be taken home from this story is the fact that it shows clearly that these rules are random, and that we have to treat them as such. Follow them as little as possible, make it as hard as possible for the perpetrator to enforce them – don’t comply voluntarily, but try not to be hurt by a brutal system that initiates force to get its way.
You wonder where the initiation of force is? Just play through the scenario, had my friend not complied. A lien would have been placed. When the tax would not have been paid for a longer time, the FTB would have foreclosed on their claim, confiscated the plane, sold it and taken whatever they claimed was theirs – without any court involvement. Had my friend tried to protect his property, cops would have come to arrest him and put him away. Had he resisted he would have been shot.
There is no niceness to be expected if you cross the government, make this very clear. So, you are playing with fire if you resist that suppression but we can be successful as some great members of this race have show – Gandhi comes to mind.