Scientology founder L. Ron Hubbard, spiritual father of the Fair Tax bill in Congress

[Today’s guest post is by historian Chris Owen, author of ‘Ron the War Hero’]

David Frum has rightly highlighted the Church of Scientology’s hidden role in promoting the so-called ‘Fair Tax’ bill, which House Republicans introduced earlier this year.

Frum linked to a 2007 Bruce Bartlett piece in the Wall Street Journal, but Bruce also wrote at more length about it for a CBS News piece and for the New Republic. I thought I’d add a bit more detail.

Bruce writes in his CBS News piece that the idea of replacing income tax with a national sales tax was promoted by “a man named Steven L. Hayes, the founder of a group called Citizens for an Alternative Tax System (CATS) … and who was … a prominent Scientologist.” And as Bruce says, “It wasn’t hard to figure out the Scientologists’ motives … The IRS had refused to recognize Scientology as a legitimate church … To remedy this situation, Scientologists waged war against the IRS.”

There’s another aspect that Bruce may not have been aware of: Scientology’s founder L. Ron Hubbard was rabidly hostile to the idea of an income tax, for political reasons, well before the conflict between Scientology and the IRS began. During the 1950s, Hubbard was closely aligned with the US far right. He was linked to the circle of the Rev. Gerald L. K. Smith, the leader of the white nationalist, anti-Semitic America First Party, and Kenneth Goff, who chaired Smith’s Christian Youth for America group.

Hubbard emphasized to the apartheid government of South Africa “our loyalty to the Rightist cause” and cited Scientology’s listing in Liberty Lobby founder Willis Carto’s list of “rightist groups” in the United States as evidence of its status as a far-right organization.

Likely reflecting this connection with the far-right anti-government scene of the 1950s, Hubbard was outspoken in denouncing the very concept of income tax. He wrote in 1956 that mankind had become so desperate that: “[H]e will buy almost any ideology whether it is communism or druidism. He will buy the garbage of Marx and even write it unsuspectingly into the United States Constitution under the heading of ‘Income Tax.’”

In 1957, Hubbard issued a bulletin to Scientologists urging them to campaign for radical reform of income tax in the United States on the grounds that: “[T]he basic principles of US income tax were taken from Das Kapital and are aimed at destroying capitalism. Unless the US ceases to co-operate with this Red push, Communism could win in America.”

Not coincidentally, Scientology was raking in huge sums of money which Hubbard skimmed for the personal use of himself and his family. The IRS objected to this and revoked the church’s tax exemption in 1967, to Hubbard’s fury. Hubbard even embedded opposition to income tax into Scientology’s rather convoluted mythology. As Bruce mentions, Hubbard claimed that 75 million years ago, the evil galactic ruler “Xenu used phony tax inspections as a guise for destroying his enemies.”

In a series of still highly confidential memos dubbed the ‘Chug Advices’ written at the start of the 1980s, Hubbard said that millions of years ago, an advanced computer system on the planet Chug had exposed its ruling Duke as a secret criminal with hidden evil purposes. The Duke of Chug had pushed the population to the verge of revolution by embezzling huge sums from his larcenous income tax regime. However, his crimes had been detected by a planetary computer that was immune to “human emotion or reaction,” as Hubbard put it. It acted with speed, precision, and ruthless ethics, and ordered the execution of the Duke of Chug. The planet was saved and returned to normality. Hubbard’s Chug Advices are still used as the foundational principles of Scientology’s custom-built computer system, INCOMM.

It’s worth noting that all of this anti-government, anti-income tax hostility is still part of Scientology’s ‘scriptures’ today – Hubbard’s writings are compiled in numerous volumes which Scientologists still consider to be inerrant and unalterable.

Back to CATS. Launched in 1990, it was a front group that insiders say was wholly controlled by Scientology’s Office of Special Affairs (OSA), the church’s euphemistically named PR/dirty tricks/intelligence department. Vic Krohn, a veteran Scientologist who served as the first Executive Director of CATS, says it was entirely an OSA project. It was created by “a special unit dedicated to keeping the churches open under increasing IRS pressure.”

CATS’ connections with Scientology had to be deniable, as its existence was a blatant violation of the IRS’s requirements that tax-exempt churches shouldn’t engage in political activity. As Krohn put it: “In order to meet the corporate requirements (IRS provisos making substantial political activity a disqualifying factor for church tax-exempt status) for such blatant political/economic reform activity, CATS needed to operate independently of the church. “It was a constant battle to keep CATS activity off of OSA social reform lines [which were attributable to the church].”

Some of this tension can be seen in Scientology’s “social reform” magazine, ‘Freedom,’ which promoted the national sales tax in its pages in the 1990s – skating close to the line mentioned above by Krohn.

In the event, Scientology obtained a still-controversial tax exemption from the IRS in 1993, after years of pressure, litigation, and intense harassment of individual IRS officials, some of whom found their dogs and cats dying in mysterious circumstances. The church seems to have lost interest in a putative national sales tax after it got its tax exemption from the IRS. Scientology’s leader, David Miscavige, declared that “the war is over” in a jubilant speech given to Scientologists on October 8, 1993.

CATS essentially withered after 1993, likely due to OSA withdrawing support. By 2005 CATS was virtually defunct; its website disappeared by the end of 2009. However, it had a legacy which persists to this day. CATS’ proposals were adopted by a conservative organization, Americans for Fair Taxation, which campaigned to promote a sales tax “without the taint of Scientologist involvement,” as Bruce puts it.

Americans for Fair Taxation hasn’t entirely escaped that taint: Steven L. Hayes of CATS is its current Chairman and President. As a committed Scientologist, Hubbard’s opposition to income taxes is almost certainly a motivating factor for Hayes.

The Scientologists’ proposal was rebranded the “FairTax” and was eventually adopted by prominent Republican politicians including John McCain and Fred Thompson. It’s now something of an perennial conservative proposal that keeps reappearing every few years.

— Chris Owen

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Source Code: Actual things founder L. Ron Hubbard said on this date in history

Avast, Ye Mateys: Snapshots from Scientology’s years at sea

Overheard in the Freezone: Indie Hubbardism, one thought at a time

Past is Prologue: From this week in history at alt.religion.scientology

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