A Secret Form to Opt Out of Government Handouts

In a recent story about some of Social Security’s stranger aspects, I promised to tell you how the Amish opted out of the system in a future article.

Well, grab some popcorn because here it is…

The Social Security Act — which marked the beginning of the system we know today — passed Congress in 1935.

But for the first 20 years, it didn’t cover farmers.

So it was only in the middle of the 1950s when most Amish first had to pay into Social Security — a prospect that created a real ethical dilemma for them.


Because even though the IRS characterized Social Security payments as a simple tax, Social Security also very clearly contains the name “Old Age, Survivors, and Disability Insurance.”

And to the Amish, insurance demonstrates a lack of faith in God’s plan.

You can see why they weren’t keen on paying into — or collecting from — Social Security.

This prompted the Amish to send a 14,000-name petition to Washington asking for an exemption from Social Security.

And when that went unanswered, they pretty much just stopped paying.

In retaliation, Uncle Sam decided to start seizing property.

Of course, it’s pretty hard to take stuff from people who don’t have bank accounts or much in the way of worldly possessions.

So the government had to get creative.

By 1959, an Amish man named Valentine Byler from western Pennsylvania had racked up $308.96 in back taxes and interest.

And like many others, Mr. Byler had explained to the IRS precisely why he couldn’t make the payments.

Undeterred, the IRS decided to take three of Mr. Byler’s six horses and auction them off.

Remember, these weren’t show horses or pets. They were Mr. Byler’s livelihood because he used them to plow his fields.

The implications of the seizure were clearly lost on the IRS, with the Pittsburgh region’s IRS Chief of Collections reportedly saying, “Plowing never occurred to me. I live in an apartment.”

Nor had Uncle Sam thought through the fact that auctioning off the horses in the largely Amish area would fall flat on its face.

In the end, yes, the government got its money. But media outlets all over the place picked up the story, and were largely supportive of Mr. Byler.

Meanwhile, the Amish put additional pressure on Washington through meetings, letters, and threats of legal action.

By 1965, their point had been made:

When the amendment to the Social Security Act establishing Medicare and Medicaid was passed that year, it contained a clause that exempted the Old Order Amish from paying into the system.

At the time the legislation passed, Lancaster Bishop David Fisher reportedly told House Ways and Means Chairman Wilbur Mills:

“We take care of our own people and if we start paying in, the next generation will collect and we don’t want no government handouts.”

Of course, the story didn’t end there…

Another Social Security scuffle took place between the Amish and Washington in the early 1980s.

The battleground? Western Pennsylvania yet again.

The crux of the matter: Whether Amish employers needed to pay into Social Security for their workers.

You see, by the 1980s some Amish found themselves operating more mainstream businesses such as furniture factories and construction outfits.

That posed a problem on whether they were required to pay into Social Security for their employees, especially those who were also Amish.

A man named Ed Lee became the face of the issue after refusing to pay into Social Security for 30 Amish men who worked for his construction business.

The case ultimately went to the Supreme Court, where Mr. Lee lost.

As the Court noted:

“A comprehensive national Social Security system providing for voluntary participation would be almost a contradiction in terms and difficult, if not impossible, to administer.”

Lee still kept up the fight — writing to President Reagan, gathering signatures, and pursuing other legal avenues.

And again, the Amish ultimately prevailed:

By the end of the decade, Amish employers were no longer required to pay into the system for their Amish employees.

Today, Amish families quickly fill out IRS form 4029 after their child is baptized. This document exempts them from the Social Security system entirely.

So what do you think?

Would you opt out of the system if you were able to?

And since some very small segments of the population are able to opt of the system … why isn’t anyone philosophically opposed to government handouts able to do the same — regardless of their membership in a religious order established before 1950?

I know what the stock answer is. It’s the same one offered by the Supreme Court back in 1982.

But clearly that didn’t stop the Amish from winning their right to self-sufficiency … nor did it even force every local and state government employee to participate in the system.

To a richer life,

Nilus Mattive

Nilus Mattive,
Editor The Rich Life Roadmap

You May Also Be Interested In:

The Triple-A Triangle?

You need strong “wants” and “don’t wants” on the road to riches. If they’re not strong enough the reality of the road ahead may be greater than your reasons. To help you focus in on what will push you along, I’ll share the formula that worked for me…

Nilus Mattive

Nilus is the editor for the daily e-letter The Rich Life Roadmap and a Paradigm Press analyst.

Nilus began his professional career at Jono Steinberg’s Individual Investor Group, where he published his original research through a regular investment column. Later, he worked for a private equity business and spent five years editing Standard and Poor’s...

View More By Nilus Mattive