Club 75 Alliance

At PorcFest in June 2022, I attended a presentation called “Escape Income Tax via Secession”. The presenter, Stephen Villee, wrote and executive produced the documentary Proclivity for Taxing Income. I caught up with Steve this week for a more in-depth discussion of his film and latest project, the Club 75 Alliance.

Steve grew up in the Boston area. He spent 14 years in Phoenix, Arizona, then 10 years in Manhattan, before moving to New Hampshire in December 2003. He’s been a software developer for his entire career, working freelance for the past five years.

For years, Steve felt that secession was the only realistic way for the Free State Project to achieve its goal. Note that the FSP is NOT a secessionist organization. But some of its participants are!

In late 2019 Steve got the idea to make a film about income taxes. His original idea was to make a film narrated by Free Staters. But in September 2020 he reorganized the script to be more in the style of a documentary. Filming took place in November 2020, and production was completed in April 2021.

Proclivity for Taxing Income was released on May 17, 2021. Its release on the day that Federal income taxes were due was intentional. (Note that, in the U.S., Tax Day is usually April 15th. It was delayed one month in 2021 due to the COVID-19 pandemic.)

The film makes four key points about income tax:

1. In most countries, income tax benefits the majority.
2. Some countries get along just fine without it.
3. It gives some people a strong incentive to leave the country, even when they truly want to help those in need.
4. It gives lots of people some motivation to leave the country.

Tyranny of the Majority

The film breaks down how insidious income tax is. Frank Chodorov dubbed it ‘The Root of All Evil’ in his 1954 classic (which can be read for free on the Foundation for Economic Education’s website ). Governments love an income tax because it brings in a lot of revenue. And voters support it because, for most of them, it works to their advantage. Most people pay less in income tax than they would under other tax strategies raising the same amount of income for the government. A minority of upper income earners wind up subsidizing the majority of lower income people. Income tax therefore constitutes a “tyranny of the majority”.

In the U.S., the dividing line between those who benefit from income tax vs those who are penalized is around $75,000. Steve calls members of the minority group “Club 75”.

Monaco and the UAE are two examples of first world countries with no income tax. The film points out that neither supports the same level of social and lifestyle freedoms as the U.S. Most glaringly, homosexuality is illegal in the UAE. So Americans considering expatriating in order to lower their tax burden have to take this into account.

High Income Case Studies

The film presents detailed examples of two upper income individuals. One, “Alice”, is a multimillionaire who lives modestly and donates several million dollars of investment earnings a year to charities. Even after deducting all of her charitable contributions, Alice would wind up paying far less in taxes living in Monaco than she does in the U.S. Another, “Cathy”, is a freelance software developer who makes $83,000/year. Like many knowledge workers today, Cathy can work remotely. The film shows how much Cathy could save in taxes by relocating to a country without income tax, such as the UAE.

The 43-minute documentary proposes a fascinating strategy for gaining support for an independent New Hampshire: turn it into a tax haven for higher income Americans.

Over 40 million people in the U.S. have an adjusted gross income of $75,000 or more. The film posits the question: what if a number of these people moved to New Hampshire and pushed for independence? Assuming that 1.4 million members of Club 75 are remote workers like “Cathy”, this subgroup is called Remote Club 75.

“They’d be better off without income tax… and they’re in a position to do something about it”.

Proclivity for taxing income

The logistical barriers to relocating from elsewhere in the U.S. to New Hampshire are much lower than those of relocating to a place like Dubai. If only a fraction of Remote Club 75 moved to New Hampshire, they’d join the Club 75 members already living there. Together, they might be enough to gain the voter majority needed to gain independence.

The film is very well done, making a clear, easily understandable case for why income tax penalizes upper income earners. If this minority banded together in New Hampshire, they could create a new country without income tax.

Multilateral Secession

Steve is a strong proponent of multilateral secession. He believes it will be necessary for New Hampshire to negotiate its withdrawal from the union with the Federal government. The way BREXIT was structured might be used as an example. Also, New Hampshire residents who don’t want the state to secede could have their relocation expenses covered to move to an adjacent state.

I think the ideas presented in the film and PorcFest presentation deserve a viewing by anyone interested in a free New Hampshire. As a member of Club 75 myself, I can certainly get behind this!

The website for the Club 75 Alliance is still under construction. In the meantime, you can download a copy of the Powerpoint from the PorcFest presentation, and watch the documentary, at https://club75alliance.com/.