By United
States law, there is a tax on “income” for
which anyone who receives “income” is liable.Further, the income tax law is fully constitutional.While, most people may not actually be in
receipt of “income”, there is most likely testimony on record, provided by
themselves and others, which says that they are.Until that testimony is corrected, one is
obligated to pay the tax, and it is NOT voluntary.
That said, CtC has helped people recover over $10,808,006.46 from federal and state
agencies by simply following the law.
"Ignorance is not not knowin' –
Ignorance is knowin' what ain't so."
Mark Twain
"No
capitation, or other direct, Tax shall be laid, unless in Proportion to the
Census or Enumeration herein before directed to be taken."United States Constitution, Article
1, Section 9, 1787
There is a fascinating ongoing debate in America
pertaining to the nature of the federal income tax.Unfortunately, debate is a bit too generous a
euphemism since in many ways this is more of a full out war that the IRS is
waging on the liberty of the people of this country.
I have had the opportunity to debate numerous
self-proclaimed “CtC-deniers” in open forums and these IRS apologists in
these debates (primarily accountants, lawyers and IRS agents) all have a few
things in common: they all benefit from the status quo of the alleged
ubiquitous federal income tax; none have even read CtC, despite their
dedication to “debunk” it; their arguments all have a color of truth; and their
arguments and positions themselves seem to represent quite a bit of back
pedaling in the face of what the “tax honestly” movement has already forced
into the open where the IRS used to be able to simply say, the 16th
Amendment allows a direct tax upon your income, end of discussion.
"There are two distinct classes of men...those who
pay taxes and those who receive and live upon taxes."
Thomas Paine
These individuals are the emperor’s emissaries carrying out
his wishes to verify that his New Cloths® are really made of spun gold, and now
carry on the duty to convince the public of the same.
“We must note
here, as a matter of judicial knowledge, that most lawyers have only scant
knowledge of tax law.”
Bursten v. U.S., 395 F 2d 976, 981 (5th
Cir. 1968)
In addition to the opportunity to debate this topic with
myriad IRS apologists, I have also had the opportunity to introduce this topic
to many new to this debate, laymen and lawyers alike.Upon seeing the federal income tax in this
new light, people almost always declare that this information will cause
tectonic shift in American politics with grand lawsuits against the IRS and
etc.Personally, I don’t believe this is
the case.Technically, the IRS has never
done anything wrong, they have simply allowed (and helped) us to be misled
about the many legally defined terms involved and, of course, the fundamental
nature of the tax, but the information that follows has always been
available.I have found that many or
most people are unlikely to read the comparatively straight forward four pages
of instructions on a W-9 (or even believe it when certain facts are pointed out
but contrary to what they would have guessed), let alone the 3 million plus
words of Internal Revenue Code.In the
long term, with luck, we will be able to turn back the generations of
misinformation.In the short term, however,
the real revolution may be in your own life.Once you learn the reality of the income tax, and you learn the
importance that the role that the testimony on record plays, both correct
testimony and incorrect testimony that has gone uncorrected, you may very well
find a new found liberty that you never thought possible.
Everything upon which the arguments laid out in this paper
rely is sourced only from Supreme Court decisions and various dictionaries, and
then backed up by various Congressional hearings and is consistent with literal
interpretation of tax laws.No historic
documents are considered outside of that which the Supreme Court has itself
relied upon.Conversely, these points
can be, only rarely, contradicted by statements and various published documents
from the IRS, the Department of Treasury, the Department of State and etc, and
other sources relying on these, all or most of which never actually has a name
to which such information can be attributed.In particular, in true Orwellian fashion, Wikipedia has been used to
reflect their (changing) arguments.
As most are aware, this country, as embodied in the
Constitution and Declaration of Independence, was founded during a time of deep
caution toward the potential abuse of power by governmental bodies.Therefore, the Constitution was created with
strict rules as to the roles and powers of the federal and state
governments.Further, one of the
Founder’s highest concerns, if not the
highest concern, was the damage that taxation can cause to liberty.
“An external tax
is a duty laid on commodities imported; that duty is added to the first cost
and other charges on the commodity, and, when it is offered to sale, makes a
part of the price. If the people do not like it at that price, they refuse it.
They are not obliged to pay it. But an internal tax is forced from the people
without their consent, if not laid by their own representatives. The stamp act
says we shall have no commerce, make no exchange of property with each other,
neither purchase nor grant, nor recover debts; we shall neither marry nor make
our wills,-unless we pay such and such sums; and thus it is intended to extort
our money from us, or ruin us by the consequences of refusing to pay.”Franklin,
in 1766, had said, upon his examination before the house of commons, 16 Parl.
Hist. 144.
(as quoted in) Pollock v. Farmers’
Loan & Trust Co., 157 U.S.
429 (1895)
Over the years, the United States Supreme Court has defended
the liberty of the people from unconstitutional taxation quite consistently.In terms of taxation, the relevant clauses
from the Constitution are:
The first clause
of section 8 reads thus: 'The congress shall have power to lay and collect
taxes, duties, imposts and excises, to pay the debts and provide for the common
defense and general welfare of the United States; but all duties, imposts and
excises shall be uniform throughout the United States.' And the third clause
thus: 'To regulate commerce with foreign nation, and among the several states,
and with the Indian tribes.'
The fourth,
fifth, and sixth clauses of section 9 are as follows:
'No capitation,
or other direct, tax shall be laid, unless in proportion to the census or
enumeration hereinbefore directed to be taken.
'No tax or duty
shall be laid on articles exported from any state.
'No preference
shall be given by any regulation of commerce or revenue to the ports of one
state over those of another; nor shall vessels bound to, or from, one state, be
obliged to enter, clear, or pay duties in another.'
Pollock v. Farmers’ Loan &
Trust Co., 157 U.S.
429 (1895)
One of the most fundamental aspects to be understood here is
the potential difference between the two terms, “An Income Tax” and “The Income
Tax”, where the former is a tax upon each person as measured by the money he
brings in, as commonly understood worldwide, and the latter is the federal
income tax as implemented.It is crucial
that the reader keeps this distinction in mind as a potentiality.
When used in this paper:
“An
Income Tax” - as commonly understood worldwide, a tax upon each person as
measured by the money or other remuneration he brings to himself.
“The
Income Tax” - the federal income tax as implemented.
Overall, there have really been only a few pivotal United
States Supreme Court cases on the subject of taxation which are:
Hylton v. U. S. (1796), the Supreme
Court held an act to tax the “usage” of carriages to be constitutional,
because it was not a direct tax.
In the debates in
the house of representatives preceding the passage of the act of congress to
lay 'duties upon carriages for the conveyance of persons,' approved June 5,
1794 (1 Stat. 373, c. 45), Mr. Sedgwick said that 'a capitation tax, and taxes on land and on property and
income generally, were direct charges, as well in the
immediate as ultimate sources of contribution. He had considered those, and
those only, as direct taxes in their operation and effects. On the other hand,
a tax imposed on a specific article of personal property, and particularly of
objects of luxury, as in the case under consideration, he had never supposed
had been considered a direct tax, within the meaning of the constitution.'
(as quoted in) Pollock v. Farmers’
Loan & Trust Co., 157 U.S.
429 (1895)
Springer v. U. S. (1880), the Supreme
Court held “the income tax” to
be constitutional, as it was not considered to be laying a direct tax.
Pollock v. Farmers' Loan & Trust
Co. (1895), the Supreme Court held “the income tax” to be unconstitutional, but only insofar as
it held that a tax on income resulting from property is the same as a tax
on the property, and therefore direct.Pollock v. Farmers' Loan & Trust Co. is especially useful as it
gives a thorough background of the history of taxation.
Brushaber v. Union Pacific R. Co., 240
U.S.
1 (1916), the first Supreme Court hearing on the 16th
Amendment.
First, it is important to understand the fundamental
principles upon which this country is founded, and embodied in the Constitution
and Declaration of Independence.In
modern discussions, it is often fancied that a republic is a mere stepping
stone on the road to democracy, that a democracy is the real end goal but a
republic can be used in the interim until the people can finally wrest control
to rule themselves
(read: eachother.)However, this is a misguided, and even
authoritarian, view (perhaps as the result of the mass government education
system) where government is king and the best hope for a population is to
remove the king and replace it with their collective selves.
“We the people, through are [sic]
representatives, can most certainly create laws and enforce them. If you are
physically present within the geographic United States the federal laws most
certainly can be used to "stick you in jail" for violating those laws
created under the process described in the Constitution (whether it is for
possession of drugs that the laws say are prohibited, or for not registering
for the draft, or for tax crimes, or any other law which you may not
individually agree is proper). Citizens of the United States are guaranteed due
process in the application and enforcement of those laws. We the people,
through our representatives, also can change those laws as we see fit.”Jdg, IRS apologist and accountant, posted -
07/18/2006, www.losthorizons.com/Forum3/)
At best this creates a tyranny of the majority, however,
under the principles of liberty, as described in the Declaration of Independence;
it is not possible to have a king in any form, whether a single person or a
collective group of people, and such was never considered under the
Constitution.Further, the Founders
clearly had a different understanding:
Democracies have been found incompatible with personal
security or the rights of property; and in general been as short in their lives
as they have been violent in their death.
“The right to follow any of the common
occupations of life is an inalienable right…It has been well said that 'the
property which every man has in his own labor, as it is the original foundation
of all other property, so it is the most sacred and inviolable. The patrimony
of the poor man lies in the strength and dexterity of his own hands, and to
hinder his employing this strength and dexterity in what manner he thinks
proper, without injury to his neighbor, is a plain violation of this most
sacred property’.”United States
Supreme Court, Butcher Union Co. v. Crescent City Co., 111 U.S. 746 (1883)
“Included in the
right of personal liberty and the right of private property- partaking of the
nature of each- is the right to make contracts for the acquisition of property.
Chief among such contracts is that of personal employment, by which labor and
other services are exchanged for money or other forms of property”United States Supreme Court, Coppage
v. Kansas, 236 U.S. 1 (1915)
Stepping through a few simple mental exercises:
Imagine a man, completely isolated
and self reliant.Is it possible for this
person to have any income?Everything he
has, does and consumes is completely of himself and his natural
environment.At no time would he receive
what anyone would consider income.
Now let’s expand this to two
people, and assume that these two people are equal, honorable and independent,
they are free to share, cooperate and trade with one another, but not to steal
from, use or control each other.Viewed
as a whole, these two people are no different than the one, and equally
incapable of receiving income.It is
possible that individually, one could consider that what each receives from the
other in trade could be regarded as gross income, but since each trade would be
done in full knowledge, it would be given that what was given up would be of
equal value to what was received, so net income would still be zero.
If we expand this to a community of
people, the result does not change.Trades will become more complex, currencies will naturally develop from
whatever commodities are best suited for such, but the principle that what
comes in is equal to what goes out for any given individual, does not change.
Now let’s imagine that this
community is divided by a river.Naturally, crossing this river is a common daily practice among the
people of this community, they swim, build boats and even give people rides in
their boats in exchange for something else (from here on out trades will be
assumed to involve whatever currency has developed, i.e. “money”, those
spending money will be said to “pay”.)
Now let’s say that a group of
people from this community (Group A) decide to build a bridge across this
river.They sell bonds for which they
will pay interest to raise money to pay people to build the bridge.They expect that the bridge will have lots of
traffic, so they build it large enough so that people can set up shops to sell
goods on it.They also set up a toll to
help pay for it.
The business plan of Group A
includes expecting a kickback from each person involved.The bond holders are to give back a
percentage of the interest, the builders and the person they hire to operate
the toll booth are expected to give back a percentage of their pay, and
finally, the people setting up shop are expected to give back a percentage of
their profits.Exclusively from the
perspective of Group A, all these items could reasonably be considered to be
(and are simply collectively referred to as) the ‘income’ of those
involved.Also, it is fully within the
right of Group A to collect a kickback from all these sources, since, as an
alternative, they could simply have paid less in interest, paid less to the
builders and toll booth operator and individually contracted with each shop
keeper.(As a specific example of this
policy, to license Oracle’s software, one has an option to (1) pay as a factor
of how much it would or could be used, by the power of the computer it is run
on, or (2) pay a percentage of the money one makes using it.)Notice that once all accounts are settled, the
community as a whole and any subdivision thereof, such as Group A or any
individual, do not and could not have any net income other than zero.
The 'Government' is an abstraction, and its possession of
property largely constructive. Actual possession and custody of Government
property nearly always are in someone who is not himself the Government but
acts in its behalf and for its purposes. He may be an officer, an agent, or a
contractor. His personal advantages from the relationship by way of salary,
profit, or beneficial personal use of the property may be taxed...
United
States Supreme Court, United States v. County of Allegheny,
322 US 174 (1944)
Now, the community comes to need
and/or desire mutual defense and a few other general public services, the community
contracts with Group B to provide for these things.To these ends, the community gives Group B a
special privilege of collecting a certain amount of money upon the consumption
of certain goods or upon certain activities within the community, assuming the
goods and activities are not required for life or liberty of any
individual.And upon dire need, the
community allows Group B to collect directly from individuals under certain
requirements and procedures.Other than
these few privileges and responsibilities agreed upon between Group B and the
community, Group B is no different than any other subdivision of the
community.Thus, Group B also adopts
revenue policies such as those of Group A, which of course was fully within its
right, however, those liable by this policy as property holders (receiving
investment income) successfully argue that this violates the contractual
conditions for collecting directly from people of the community.
Group B and the community therefore
modify the conditions of the contract.
“…an amendment to
the Constitution conferring the powerto levy an income tax upon the
National Government without apportionment among the
States in proportion to population.”President William Taft before the U.S. Senate CONGRESSIONAL RECORD -
SENATE - JUNE 16, 1909
And this amendment was necessary because, as Taft had said,
the Pollock ruling, and others that followed, “deprived the
National Government of a power which, by reason of previous decisions of the
court, it was generally supposed that government had.”
The 16th Amendment says:
The Congress
shall have power to lay and collect taxes on incomes, from whatever source
derived, without apportionment among the several States, and without regard to
any census or enumeration.
United States Constitution,
Sixteenth Amendment, 1913
Note that the 16th Amendment does not say “to tax
income” or “to lay and collect taxes upon income”, it merely says “on
incomes”.The plural usage of income is
itself revealing, but more importantly is the usage of “on”.One of the definitions given in Webster's
Seventh New Collegiate Dictionary (1971) shows that the word "on"
means "with regard or respect to". The dictionary also shows that the
word "regard" means "an aspect to be taken into
consideration".[1]Further:
on ... 22. a. In
regard to, in reference to, with respect to, as to.
The Oxford English Dictionary, Second Edition, 1989,
pg. 795.
on ... 12. with
respect or regard to.
Random House Unabridged Dictionary,
Second Edition, 1993, pg. 1352.
on ... (5) the
object in connection with which payment, computation of interest, reduction or
similar settlement is made. ... 7 a : with regard to : with reference or
relation to : about.
Webster's Third New International
Dictionary of the English Language, Unabridged, 1993, pg. 1575.
Such that the 16th Amendment can easily be read
as meaning:
Congress shall have power to lay
and collect taxes with regard to or with respect to or in
consideration of or measured by incomes, from whatever [type of]
source derived, without apportionment among the several States, and without
regard to any census or enumeration.[2]
Put simply “The Income Tax” is “on incomes”, but, as President Taft said, “upon the National Government”.This was/is a more powerful tax than one
might imagine, think National Banks (and Bankers), National Railroads (and
Railroad Barons) and etc. and the 16th Amendment was essential to
complete what would otherwise be a natural right for this particular group of
people, i.e. the federal government.Further, this interpretation of the 16th Amendment is
completely consistent with what the Supreme Court has said:
“We are of
opinion, however, that the confusion is not inherent, but rather arises from
the conclusion that the 16th Amendment provides for a hitherto unknown power of
taxation; that is, a power to levy an income tax which, although direct, should
not be subject to the regulation of apportionment applicable to all other
direct taxes. And the far-reaching effect of this erroneous assumption will be
made clear by generalizing the many contentions advanced in argument to support
it...” United States Supreme Court, Brushaber v. Union
Pacific R. Co., 240 U.S.
1 (1916)
"The
provisions of the Sixteenth Amendment conferred no new power of taxation . .
." United States Supreme Court, Stanton v. Baltic Mining Co., 240
U.S. 103 (1916)
“The Sixteenth
Amendment, although referred to in argument, has no real bearing and may be put
out of view. As pointed out in recent decisions, it does not extend the taxing
power to new or excepted subjects...”United States Supreme
Court, Peck v. Lowe, 247 U.S.
165 (1918)
And to this point, is seems Congress has never been
confused:
“While the
federal government has the exclusive right to impose custom duties, the state
governments have the exclusive right to impose direct taxes on both the real
and personal property of this country.”Non-public
records of Cordell Hull obtained by the Honorable Ron Paul from the Library of
Congress marked as 383, Cordell Hull SUBJECT FILE Taxation 1916-33, page 7.
“The Supreme Court,
in a decision written by Chief Justice White, first noted that the Sixteenth
Amendment did not authorize any new type of tax, nor did it repeal or revoke
the tax clauses of Article I of the Constitution, quoted above.Direct
taxes were, notwithstanding the advent of the Sixteenth Amendment, still
subject to the rule of apportionment and indirect
taxes were still subject to the rule of uniformity."Howard M. Zaritsky, Legislative
Attorney, American Law Division of the Library of Congress, Report No. 80-19A,
entitled “Some Constitutional Questions Regarding The Federal Income Tax Laws”,
page CRS-5 (1979)
Figure 2 – Congressional Record,
Proceedings and Debates of the 78th Congress,
March 2, 1943, to
April 5, 1943
Note that while
Congress made it clear that “the income
tax” is a tax upon “certain activities and privileges,” the sentence prior
simply says it is a “privilege of carrying on any activity or owning any property which
produces income,” thus making it clear that within context “income” and
“taxable income” are interchangeable, which, once stated, should be obvious.
Since the real meaning of the 16th Amendment is
seeping back into the awareness of the public causing the IRS apologists to
retreat, this discussion now often falls on the difference between direct
taxation and indirect (i.e. excise) taxation, where it is often suggested that
which is not direct, whatever that may be, must therefore be permitted, without
apportionment as an indirect tax.I
believe this view comes from the often quoted Hamilton: 'The following are presumed to be
the only direct taxes…All else must, of necessity, be considered as indirect
taxes.' 7 Hamilton's
Works (Lodge's Ed.) 332.
And then, when we get to the Supreme Court’s sometimes
narrow inclusions into direct taxation, one may wonder how the common and legal
definitions became so different.Any
layman or economist considers “An Income
Tax” as being a direct tax, as it is a tax directly on the person as
measured by their success, i.e. income.Occasionally Supreme Court judges, while often tipping a hat to such
economists, say that “It may be rightly affirmed that, in the
practical construction of the Constitution by Congress, direct taxes have been
limited to taxes on land and appurtenances and taxes on polls, or capitation
taxes”' Veazie Bank v. Fenno, and at times limit “capitations” to a “poll tax simply, without regard to property, profession, or any
other circumstances.” Hylton v. U. S.This is then taken to an extreme by the apologists saying that it is
only a capitation if it is a “tax of a uniform, fixed amount
per taxpayer” (which we will examine further on) so that they can then
reason that “An income tax is neither a poll tax nor a
capitation, as the amount of tax will vary from person to person depending on
each person's income” Wikipedia.
As we will see, sources such as Wikipedia work
very nicely for the redefinitions required to hold this argument.First, it was necessary to narrow the
definition of “capitation” to something that would not include “An Income Tax” and once done, since a
direct tax has been said to be “taxes on land and
appurtenances and taxes on polls, or capitation taxes”, direct taxes
then seem contrary to everyone’s common understanding.That is, if these were the only rules to
consider, it would then be almost possible to claim that “An Income Tax” is not considered to be a direct tax.
Despite the fact that this argument falls down in more than
a few ways, this is the latest and strongest of the apologists’ arguments, and
holds some truth.Most or all
apportioned taxes, as implemented, were taxes upon land and slave count and
there were at least a few Supreme Court statements to support the idea that
direct taxes were thus limited.Upon
reading these cases it seems important to remember, that the subject of their
discussions are often only on the narrow aspect of whatever case and laws are
at hand, and only rarely will they elaborate enough to give a glimpse of how
what they say might relate to the world beyond.Considering this, perhaps there is another reason the Supreme Court has
limited, not the definition itself, but what can be considered direct
taxes.First note in the quote above
from Veazie Bank v. Fenno the Supreme Court said “in the practical construction of the
Constitution by Congress, direct taxes have been limited to…” and then
consider:
Mark, of course,
in saying this we are not here considering a tax not within the provisions of
the 16th Amendment, that is, one in which the regulation of apportionment or
the rule of uniformity is wholly negligible because the tax is one entirely
beyond the scope of the taxing power of Congress, and where consequently no
authority to impose a burden, either direct or indirect, exists.
STANTON v. BALTIC MINING CO, 240 U.S.
103 (1916)
So, it seems that despite the claims of congress having unlimited
taxing authority, there is something – a sort of dark hole alluded to here –
beyond their reach.But what else then
is there that is forbidden to Congress in the Constitution?The only part of the Constitution that would
have any such effect would be Article I, Section 9.5:
No Tax or Duty
shall be laid on Articles exported from any State.
United States Constitution, Article
1, Section 9, 1787
If one assumes that this applies only to the narrow event of
exporting goods then this clause would have no bearing on this debate.But, perhaps, under closer consideration this
is more important than one might guess.
If it be
true that by varying the form the substance may be changed, it is not easy to
see that anything would remain of the limitations of the constitution, or of the rule of taxation and representation, so carefully
recognized and guarded in favor of the citizens of each state. But constitutional provisions cannot be thus evaded. It is the substance, and not the form, which controls, as has
indeed been established by repeated decisions of this court. Thus in Brown v. Maryland, 12 Wheat. 419,
444, it was held that the tax on the
occupation of an importer was the same as a tax on imports, and therefore void. And Chief Justice Marshall said: 'It is
impossible to conceal from ourselves that this is varying the form without
varying the substance. It is treating a prohibition which is general as if it
were confined to a particular mode of doing the forbidden thing.'
Pollock v. Farmers’ Loan &
Trust Co., 157 U.S.
429 (1895)
If a tax on an importer is a tax on imports then a tax on an
exporter would be a tax on exports.Following this to its conclusion anyone who produced anything of value,
which could even potentially be exported, (i.e. the private/commercial sector)
would be untouchable by taxation on that basis as the tax on production or
productive capacity in general of the economy would violate this prohibition,
at least within the 50 states of the union.Going back to the Hylton case:
It is
not necessary to determine whether a tax on the product of land be a direct or
indirect tax. Perhaps, the immediate product of land,
in its original and crude state, ought to be considered as the land itself; it
makes part of it; or else the provision made
against taxing exports would be easily eluded.
Hylton v. U. S. (1796)
The logic would be the same for persons and property as well
(i.e. active and passive incomes), in that the Supreme Court could just as well
have said “It is not necessary to determine whether a tax on the product of
people be a direct or indirect tax…” or “It is not necessary to determine
whether a tax on the product of capital be a direct or indirect tax…”.Therefore, in restricting the definition of
direct taxes, the court was restricting congressional authority, not expanding
it.And in fact, the provision in the
Constitution allowing a direct tax is a special authority given to Congress
that it would not otherwise have, neither under the fundamental laws of
liberty, nor under this provision in the Constitution which actually prohibits
taxation on production, which in a traditional sense is the bulk of what would
constitute a direct tax.This also explains
the observation of Hendrickson and others that the private sector, that of
commerce, is not now, nor has ever been in the realm of that which is taxable
by Congress in the 50 states.Although,
this may in fact be restricted again upon consideration that one’s right to
contract cannot be impaired to which the following line of reason might apply:
"To take
over to its control any one of the great number of subjects of public interest,
jurisdiction of which the states have never parted with ... by a so-called tax
... would be to break down all constitutional limitation of the powers of
Congress."
Chief Justice William Taft, 1922
(Bailey v Drexel, 259 US
20, 38), the same William Taft that was president
Also, I think it is important to note that, at least in
pertinent cases which I have reviewed, while judges often discuss whether
something falls under a direct tax, whether it be a tax on real-estate,
property or profession, or the income from such, the word capitation has never
been questioned or discussed, even though the modern concept of “an income tax” fits almost every
definition found of capitation.Giving a
significant indication that whatever was meant by “the income tax” is not and has never been:
CAPITATION: A
poll tax; an imposition which is yearly laid on each person according to his
estate and ability.
Bouvier’s Constitutional Law
Dictionary, 6th Edition, 1856
Or:
The taxes which,
it is intended, should fall indifferently upon every different species of
revenue, are capitation taxes
Adam Smith, Book V, CH.
II, Art. IV of ‘The Wealth of Nations’, 1776.
Figure 3 – Albert Gallatin is honored
with a statue in front of the U.S.TreasuryBuilding
in Washington, D.C.Gallatin was appointed Secretary of the Treasury when Jefferson became President. Gallatin served in that post
for thirteen years, the longest term in history for that office
Albert Gallatin,
in his Sketch of the Finances of the United States, published in November,
1796, said: 'The most generally received
opinion, however, is that, by direct taxesin the constitution, those are
meant which are raised on the capital or
revenue of the people; by indirect, such as are raised on their expense. As that
opinion is in itself rational, and
conformable to the decision which has taken place on
the subject of the carriage tax, and as it appears important, for the sake of
preventing future controversies, which may be not more fatal to the revenue
than to the tranquility of the Union, that a fixed interpretation should be
generally adopted, it will not be improper to corroborate it by quoting the
author from whom the idea seems to have been borrowed.' He then quotes from
Smith's Wealth of Nations, and continues: 'The remarkable coincidence of the
clause of the constitution with this passage in using the word 'capitation' as
a generic expression, including the different species of direct taxes,-an
acceptation of the word peculiar, it is believed, to Dr. Smith,-leaves little
doubt that the framers of the one had the other in view at the time, and that
they, as well as he, by direct taxes, meant those paid directly from the falling immediately on the revenue; and by indirect, those which are paid indirectly out of the revenue by falling immediately upon the expense.' 3 Gall. Writings (Adams' Ed.)
74, 75.
Pollock V. Farmers' Loan &
Trust Co., 157 U.S.
429 (1895)
"The
Congress possess the power of taxing all
taxable objects, without limitation, with the
particular exception of a duty on exports. There are two restrictions only on the exercise of this
authority: 1. All direct taxes must be
apportioned. 2. All duties, imposts, and excises must be uniform." Hylton v. U.S.
"It is true
that the power of congress to tax is a very extensive power. It is given in the
constitution, with only one exception and only two qualifications. Congress cannot tax exports, and it must impose direct
taxes by the rule of apportionment, and indirect taxes by the rule of
uniformity. Thus limited, and thus only, it reaches
every subject, and may be exercised at discretion." The License Tax
Cases, 72 U.S.
462 (1866)
The Constitution creates four distinct quadrants of taxation
(see Figure 4), as the whole is divided by external and internal
taxes, and then divided again by direct and indirect taxation.The first quadrant, that upon exports is
forbidden all together; the second, a tax upon imports is allowed although
forbidden to the states; the third, direct taxes are allowed if apportioned
among the states; and the fourth, that of excise taxes[3] is allowed if uniform
among the states.
So while the more versatile forms of direct taxation may
have been allowed if apportioned, going back to the words of Franklin, “that duty is added to the first cost and other charges on the
commodity, and, when it is offered to sale, makes a part of the price,” and
therefore would be embedded into anything exported and, according to the
Supreme Court, “constitutional provisions cannot be thus
evaded.”
An across the board national sales tax would
unquestionably increase the cost of production on American soil, as previously
pointed out. To avoid this, and other unwanted effects of an across the
board national sales tax, common sense dictates we must exclude from the list
of taxable items, tools of production, supplies necessary to conduct business, services
needed to sustain business, and the necessities of life (food, shelter,
clothing, medical expenses) i.e. all those items which makes labor possible
must also be excluded. In simple language, a consumption tax plan ought to be
limited to articles of luxury, and each article must be individually selected
by Congress and the appropriate amount of tax must be determined for each
specific item chosen, just as was done in the first revenue raising Act of our
country!
John William Kurowski, founder of
The American Constitutional Research Service before the Committee on Ways And Means, United States House of
Representatives, June 1995
From an economics point of view this is a beautiful system
to the advantage of everyone but the beneficiaries of a would-be plundering
government.It sets up every individual
for success and each individual then pays for his government when he attains
whatever level of success he wishes.It
also means that anyone can abstain from activities that would finance the
government (a group of people) when he feels that their actions are morally
repugnant, so that we may remain free of slavery.
“To compel a man to furnish contributions of money for
the propagation of opinions which he disbelieves and abhors, is sinful and
tyrannical”
Thomas Jefferson
"The rich alone use imported articles, and on these
alone the whole taxes of the General Government are levied. ... Our revenues
liberated by the discharge of the public debt, and its surplus applied to
canals, roads, schools, etc., the farmer will see his government supported, his
children educated, and the face of his country made a paradise by the
contributions of the rich alone, without his being called on to spend a cent
from his earnings."
Thomas Jefferson,
1811
"[Taxes on consumption] may be compared to a fluid,
which will in time find its level with the means of paying them.The amount to be contributed by each citizen
will in a degree be by his own option, and can be regulated by an attention to
his own resources.The rich may be extravagant,
the poor can be frugal; and private oppression may always be avoided by a
judicious selection of objects proper for such impositions...It is a signal
advantage of taxes on articles of consumption that they contain in their own
nature a security against excess.They
prescribe their own limit, which can not be exceeded without defeating the end
proposed.... that is, an extension of revenue."
“The [federal]
income tax is, therefore, not a tax on income [earnings] as such. It is an
excise tax with respect to certain activities and privileges which is measured
by reference to the income which they produce. The income is not the subject of
the tax: it is the basis for determining the amount of tax."F. Morse Hubbard, Treasury Department
legislative draftsman.House
Congressional Record March 27th 1943, page 2580
As revealed in CtC terms commonly
used in the tax laws are narrowly defined to:
“Income”-- as the
term is used within, and in regard to, the tax code-- has a narrow legal
meaning confined to the monetary proceeds from the exercise of federally
privileged activities, such as holding or administering a government office, or
working in one. If you get any of that, the "income" tax
applies. Working at common (private sector) occupations is NOT a
privileged activity, and is NOT taxable; and no language to the contrary will
be found in the law.
“Wages” and
"self-employment income", as used in connection with any tax statute,
form, document, regulation, IRS instruction or publication, etc., are also
narrow legal (statutory) terms, meaning remuneration for privileged-based
activity, chiefly government employment, and explicitly NOT the proceeds or
remuneration from common occupations, which are NOT taxable, and which are
explicitly excluded from the law.
“Employment”,
“employee”, and "trade or business", insofar as those words or
phrases are used in connection with any tax statute, form, document,
regulation, IRS instruction or publication, etc., are also narrow legal terms,
referring chiefly to government work and workers, and explicitly NOT to private
work and workers.[4]
For example:
(a)Wages
For purposes of
this chapter, the term “wages” means all remuneration (other than fees paid to a public
official) for services performed by an employee for his employer, including the cash value of all remuneration
(including benefits) paid in any medium other than cash; except that such term
shall not include…
…
(c)Employee
For purposes of
this chapter, the term “employee” includes an officer, employee,
or elected official of the United States, a State [which is, as defined
in this context, a territory or other U.S. possessions], or any political subdivision thereof, or the District of
Columbia, or any agency or instrumentality of any one or more of the foregoing.
The term “employee” also includes an officer of a [federally controlled] corporation.
"Inclusio
unius est exclusio alterius.The
inclusion of one is the exclusion of another.The certain designation of one person is an absolute exclusion of all
others. ... This doctrine decrees that where law expressly describes [a]
particular situation to which it shall apply, an irrefutable inference must be
drawn that what is omitted or excluded was intended to be omitted or
excluded."Black's Law
Dictionary, 6th edition.
VIII. THE eighth and
last branch of the king's extraordinary perpetual revenue is the duty upon
offices and pensions; consisting in a payment of I s. in the pound ( over and
above all other duties) out of all salaries, fees, and perquisites, of offices
and pensions payable by the crown. This highly popular taxation was imposed by
statute 31 Geo. II. c. 22. and is under the direction of the commissioners of
the land tax.
Commentaries on the Laws of England, BOOK
1, CHAPTER 8, William Blackstone
This seems to have been widely understood at least until the
1940s.
“For 1936,
taxable income tax returns filed represented only 3.9% of the population…The
largest portion of consumer incomes in the United States is not subject to
income taxation.Likewise, only a small
proportion of the population of the United States is covered by the
income tax.”“Collection at
Source of the Individual Normal Income Tax”, Treasury Department’s Division of
Tax Research, 1941
And then with a little help from Disney, WWII, wage withholdings,
the Victory Tax, the expansion of the government education system and other
means, this understanding seems to have been lost since.But the current state of misunderstanding
does not change the law, the laws and Constitution are still in full force for
those who wish learn and wield them!
"A capitation is more natural to slavery; a duty on
merchandise is more natural to liberty, by reason it has not so direct a
relation to the person.”
Thomas Jefferson as
Montesquieu wrote in Spirit of the Laws, XIII,c.14.
As noted in Direct vs. Indirect9
it is argued that “An Income Tax” is
not considered a direct tax.However,
the first obstacle that must then be argued is that it would not be a
“capitation” since the Constitution itself states capitations as being direct,
i.e. "No capitation, or other direct, Tax…”.A few modern sources seem to help make this
argument possible:
A poll tax, soul
tax, or capitation is a tax
of a uniform, fixed amount per individual (as opposed to a percentage of
income). Such taxes were important sources of revenue for many countries into
the 19th century, but this is no longer the case…
The capitation clause of Article I
of the United States Constitution, reads
"[n]o capitation, or other direct, tax shall be laid, unless in proportion
to the census or enumeration herein before directed to be taken." Capitation here means a tax of a uniform, fixed amount per
taxpayer[1].
Direct tax
means a tax levied directly by the United Statesfederal government on
taxpayers, as opposed to a tax on events or transactions[2].
(And it seems an earlier, simpler Wikipedia version simply
said:
The capitation clause
of Article I of the United
States Constitution, requiring apportionment
among the states of "direct taxes", makes imposition of a poll tax by
the federal government unfeasible.
Where at first you don’t succeed, just rewrite history,
redefine words and quash the opposition.
Let’s read again, in 1856 the definition was:
CAPITATION: A
poll tax; an imposition which is yearly laid on each person according to his
estate and ability.
Bouvier’s Constitutional Law
Dictionary, 6th Edition, 1856
In fact a “poll tax” did not even mean “fixed amount per
taxpayer”:
In the different
poll-taxes which took place in England
during the reign of William III the contributors were, the greater part of
them, assessed according to the degree of their rank; as dukes, marquisses,
earls, viscounts, barons, esquires, gentlemen, the eldest and youngest sons of
peers, etc. All shopkeepers and tradesmen worth more than three hundred pounds,
that is, the better sort of them, were subject to the same assessment, how
great soever might be the difference in their fortunes. Their rank was more
considered than their fortune. Several of those who in the first poll-tax were
rated according to their supposed fortune were afterwards rated according to
their rank. Serjeants, attorneys, and proctors at law, who in the first poll-tax were assessed at three shillings in the pound of
their supposed income, were afterwards assessed as
gentlemen. In the assessment of a tax which was not very heavy, a considerable
degree of inequality had been found less insupportable than any degree of
uncertainty." - Adam Smith, The Wealth of Nations, Book V, CH.
II, Art. IV (1776)
The editors of Wikipedia should go beyond government agencies for
information. But more importantly, in order to correct their publications,
bureaucrats of the various administrative departments merely need to step
outside and consult the giant statue standing in front of the U.S. Treasury
Building in Washington, D.C. (see Figure
3):
“…it will not be
improper to corroborate [this reasoning] by quotingthe author from whom the idea seems to have been borrowed…The remarkable
coincidence of the clause of the Constitution with this passage in using the
word 'capitation' as a generic expression, including the different species of
direct taxes [is] an acceptation of the word
peculiar, it is believed, to Dr. [Adam] Smith”
Albert Gallatin, in his Sketch of
the Finances of the United States, 1796 as quoted in Pollock v. Farmers’ Loan
& Trust Co., 157 U.S.
429 (1895)
In other words Gallatin
is attributing Dr. Smith with essentially coining the term “capitation” as used
in the Constitution.
The taxes which,
it is intended, should fall indifferently
upon every different species of revenue, are capitation taxes,”… “Capitation taxes, if it is attempted to proportion them to the fortune orrevenueof each contributor, become
altogether arbitrary. The state of a man's fortune varies from day to day, and
without an inquisition more intolerable than any
tax, and renewed at least once every year, can only be
guessed at.” … “Capitation taxes, so far as they are levied upon the lower ranks of people, are direct taxes upon the wages of labour, and are attended with all the inconveniences of such taxes.”…” In
the capitation which has been levied in France without any interruption since
the beginning of the present century, the highest orders of people are rated
according to their rank by an invariable tariff; the lower orders of people,
according to what is supposed to be their fortune, by an assessment which
varies from year to year.” - Adam Smith, The Wealth of Nations, Book V, CH.
II, Art. IV (1776)
And is supported by:
From the report
of Oliver Wolcott, when secretary of the
treasury,on direct
taxes, to the house of representatives, December 14,
1796,-his most important state paper (Am. St. P. 1 Finance, 431),-and the
various state laws then existing, it appears that prior to the adoption of the
Constitution nearly all the states imposed a poll
tax, taxes on land, on cattle of all kinds, and various kinds of personal
property, and that, in addition, Massachusetts,
Connecticut, Pennsylvania, Delaware, New Jersey, Virginia, and South Carolina assessed their citizens upon their profits from
professions, trades, and employments.
Pollock v. Farmers’ Loan &
Trust Co., 157 U.S.
429 (1895)
direct tax
n.
A tax, such as an
income or property tax, levied directly on the taxpayer.
And here, while mostly correct in the first paragraph, Wikipedia, once again,
cannot get its facts straight in the second:
A direct tax a tax that is collected directly by government from the persons (legal
or natural) on which it is levied. Examples include income
tax and corporate
taxes and transfer
taxes. It contrasts with an indirect
tax (such as sales tax or Value
Added Tax (VAT)), which are collected by
intermediaries and the proceeds passed on to government.
In the United
States, Article I, Section 9 of the Constitution
requires that direct taxes imposed by the national government be apportioned
among the states on the basis of population; this provision made it difficult
for Congress to impose a national income
tax that applied to all forms of income until the 16th Amendmentwas ratified in 1913.
And also, once again, this was their older version found at http://encyclopedia.thefreedictionary.com/Direct+Tax,
7/20/2006, their latest version has been upgraded to reflect the more
sophisticated arguments of the apologists (http://en.wikipedia.org/wiki/Direct_tax)
as discussed in the chapter Direct vs. Indirect9
of this paper.Now, suddenly, they claim,
“an income tax” is not considered a direct tax (but only in the U.S.)Common sense would lead one to ask, if either
version is true, then why has it been necessary to change the story?But, I suppose, at least they are closer now.Now they merely need to change it to “In the
Unites States, the federal income tax is not a direct tax but rather is an
‘excise tax with respect to certain [federal] activities and privileges which
is measured by reference to the income which they produce.’”
Also, it is not particularly difficult for congress to
impose apportioned direct taxes; it is simply reserved for specific
circumstances.
This method of extinguishing deficits appears in seven
of the ratification documents which gave life to the United States Constitution. The
first emergency DIRECT tax was imposed in 1798, to extinguish part of the
Revolutionary War debt. It was later used during the War of 1812, and
also to extinguish deficits during the Civil War…The Sixteenth Amendment to the
United States
Constitution did not repeal or alter Congress' power, or OBLIGATION, to impose
the emergency direct tax should a deficit arise. The power of Congress to
impose a direct tax still exists, and direct taxes are still required to be
apportioned among the states, as pointed out by the United States Supreme Court
[see Stanton v. Baltic Mining Co., 240 U.S. 103 (1916); Eisner v. Macomber, 252
U.S. 189 (1920); and, Bromely v. McCaughn, 280 U.S. 124 (1929). Also see
Congressional Research Service Report No. 84-168 A 784/275, which was updated
September 26, 1984].
John William Kurowski, founder of
The American Constitutional Research Service before the Committee on Ways And Means, United States House of
Representatives, June 1995
There are a few other ideas that the apologists grasp at
from time to time to try to justify what they believe is true, but simply isn’t
so.I may address these specifically in
the future.
“Taxation of earnings from labor is on a par with forced
labor. Seizing the results of someone's labor is equivalent to seizing hours from
him and directing him to carry on various activities”
Honor, justice, and humanity, forbid us tamely to
surrender that freedom which we received from our gallant ancestors, and which
our innocent posterity have a right to receive from us. We cannot endure
the infamy and guilt of resigning succeeding generations to that wretchedness
which inevitably awaits them if we basely entail hereditary bondage on them." -Thomas Jefferson (Declaration of the Causes and Necessities of Taking
up Arms, 6 July 1775)
It is not the
function of our government to keep the citizen from falling into error; it is
the function of the citizen to keep the government from falling into
error."
-U.S. Supreme Court Justice Robert
H. Jackson, 1950
In one particular debate, while answering all my questions,
the apologists simply let stand my introduction that:
“The only thing [they] agree on is that
we are all hopelessly entrapped in one of the most burdensome feudal systems in
history, i.e. slaves from birth.”
By the fact that, as demonstrated here, they must contort
every key definition involved to maintain this position that they have tacitly
admitted to, it seems conclusive that they are guilty of conspiracy to deprive
all Americans of their rights as a free people.But against this, we have been warned, armed and protected by the
country’s founders.
“If we run
into such debts as that we must be taxed in our meat and in our drink, in our
necessaries and our comforts, in our labors and our amusements, for our
callings and our creeds, as the people of England are, our people, like them,
must come to labor sixteen hours in the twenty-four, and give the earnings of
fifteen of these to the government for their debts and daily expenses;
“And the
sixteenth being insufficient to afford us bread, we must live, as they do now,
on oatmeal and potatoes, have no time to think, no means of calling the mismanagers
to account; but be glad to obtain subsistence by hiring ourselves to rivet
their chains around the necks of our fellow sufferers;
“And this is
the tendency of all human governments. A departure from principle in one
instance becomes a precedent for a second, that second for a third, and so on
'til the bulk of the society is reduced to be mere automatons of misery, to
have no sensibilities left but for sinning and suffering...
“And the
forehorse of this frightful team is public debt. Taxation follows that, and in
its train wretchedness and oppression.”
Thomas Jefferson
But this was just never meant to be the case!Now read Cracking the Code- The
Fascinating Truth About Taxation In America and file your tax returns
accurately for the first time in your life, enjoy your own wealth and bring
yourself the power that knowledge brings.
“Ever wonder just
which line in the Constitution obliges everyone to function as federal
clerks-- recording and reporting all their payments to others?
I can't find that
line, can you?
Of course, CtC
points out that the only people who REALLY ARE under that obligation are... ...federal
clerks...
How about that?
Isn't it nice how
the truth helps clarify everything?”
I am always amazed at how once an aspect of reality is
understood in the correct context, everything then false into place.This has certainly been true regarding
evidence that can be seen in the case of “the income tax”.I will be updating this list with such evidence
periodically.
Many people are under the impression that the original tax
form was from 1913 (the year of the 16th Amendment), yet the income
tax forms are as old as the income tax.So,
now we know that the income tax form today (the 1040) is functionally no
different than this form from 1862:
Figure 6 – Snippet from the original
income tax form for 1862
That is, in filling out this form, you are testifying to the
“gains, profits, or income…subject to an income tax under the
excise laws of the United States”.Further, “Excises are a species of tax consisting generally of duties laid upon the
manufacture, sale, or consumption of commodities within the country, or upon
certain callings or occupations, often taking the form of exactions for licenses to pursue them” (Pollock V. Farmers' Loan
& Trust Co.), of which there were many at the time.In 1862, quite a number of goods and
professions required federal licenses.If you are using such federal licenses (or are federally employed), you
know it.If not, would you really feel
all too comfortable adding up all the money you happened to see for the year
and applying it to this form under the penalties of perjury?Click here for an amusing
allegory on how this form and the others have come to be so misunderstood and
misused.
(That’s not to say that this form is not to be used!Quite the contrary, if you were to fill out
this form correctly, that is, actually fill in the “gains,
profits, or income…subject to an income tax under the excise laws of the United States”
that you have actually received, then, by law, you get the first and last word
– it also helps to explicitly correct the incorrect testimony against you, i.e.
W-4s, 1099 and etc.See Cracking
the Code or just go to www.losthorizons.com)
An income tax is
neither a property tax nor a tax on occupations of common right, but is an excise tax...The legislature may
declare as 'privileged' and tax as such for state revenue, those pursuits not
matters of common right, but it has no power to declare as a 'privilege' and
tax for revenue purposes, occupations that are of common right.
People are often under the impression, not understanding
contextual importance of the income tax, that if they leave money that they
happened to earn out of their 1040 then they risk an IRS audit where the IRS
will then add up everything from their bank account statements or even what
they may have spent money on and charge the tax regardless and penalize for
omissions.However, explicitly by law,
the IRS authority to poke through bank accounts is extraordinarily limited in
scope as clearly explained in this short brief.Further, the IRS also has no authority to
override what “income” you have testified to receiving in your 1040 as enacted
in the first income tax laws:
“Sec.93. And be
it further enacted,…that any party, in his or her own behalf,…shall be
permitted to declare, under oath or affirmation, the form and manner of which
shall be prescribed by the Commissioner of Internal Revenue,... ...the amount
of his or her annual income,… liable to be assessed,… and the same so declared
shall be received as the sum upon which duties are to be assessed and
declared.”
Revenue Act of 1862
More recent reenactments of this section have changed form,
but not meaning.Note, that with the
common understanding of the income tax, none of this makes sense.How could IRS investigative authority apply
only to those engaged in the administration or enforcement of internal revenue
laws and a few others?How could “an
income tax” ever then be enforced?Simple, it’s not.
Acting upon the knowledge he revealed in CtC, Peter
Hendrickson has stuck strictly to the truth in all testimony he has provided to
the IRS, and, in doing so has forced the IRS and DOJ to the state of
children.In a desperate PR lawsuit
(described here by Publius, J.D. and here on Pete’s
own page) the IRS and DOJ have been reduced to begging the court to force
Pete and his wife to change their testimony and file their returns as the IRS
would like them to (this, of course, is impossible).
In turn, the court obliged, turning the IRS and DOJ into
their own worse enemies.Skipping all the
pesky burdens like following proper court procedures, such as a trial, Judge
Nancy G. Edmunds issued an order that the Hendricksons cease filing their
bothersome returns stating “’zero’ or no income” followed shortly by an order
denying the Hendricksons' motion for relief from judgment and motion for
reconsideration, and, in doing so, made clear for all to see the lies and
fallacies relied upon in the attempt to disprove the facts put forth by Pete
Hendrickson (which, of course, is impossible.)
In the initial order, Judge Edmunds stated that:
Defendants’ contention that
withholding applies only to government workers is frivolous and false. See,
e.g., Sullivan v. United States, 788 F.2d 813, 815 (1st Cir. 1986); United
States v. Latham, 754 F.2d 747, 750 (7th Cir. 1985); (contention that “under 26
U.S.C. § 3401(c) the category of ‘employee’ does not include privately employed
wage earners is a preposterous
reading of the statute.”); O’Connor v. United States, 669 F. Supp. 317,
322 (D. Nev. 1987). Defendant Peter
Hendrickson was an employee of Personnel Management, Inc. in 2002 and 2003
within the meaning of IRC § 3401(c).
[emphasis added]
Recall that the term “wages” is defined as:
For purposes of this
chapter, the term “wages” means all remuneration (other than fees paid to a
public official) for services performed by an employee for his employer…
And “employee” as:
For purposes of this
chapter, the term “employee” includes an
officer, employee, or elected official of the United
States, a State, or any political subdivision thereof, or
the District of Columbia,
or any agency or instrumentality of any one or more of the foregoing. The term
“employee” also includes an officer of a corporation.
The catch here is the term “includes” is defined in Title 26
§ 7701 as:
(c) Includes and including
The terms “includes” and
“including” when used in a definition contained in this title shall not be
deemed to exclude other things otherwise within the meaning of the term defined.
So, fully written out using substitution, the term
“employee” would be:
For purposes of this
chapter, the term “employee” includes an
officer, employee, or elected official of the United
States, a State, or any political subdivision thereof, or
the District of Columbia,
or any agency or instrumentality of any one or more of the foregoing. The term
“employee” also includes an officer of a corporation [not be deemed to exclude
other things otherwise within the meaning of the term “employee”].
Note that the definition is not excluding other things with
the term, notword,
“employee”.What else is within the
defined term “employee”?Nothing explicitly.However, in the cases cited by Judge Edmunds,
it was logically concluded that since “wages” means “all remuneration … for
services performed by an employee for his
employer” and that since the term “employee” is not exclusive,
then anyone having received “wages” would then not be excluded from the
term.Who else would be receiving
“wages”?Well, for the purposes of the
cases cited, it happened to be people that had left or put on record that they
were in receipt of “wages” but then tried to claim that they were not
“employees”.
Therefore,
this contorted argument presented by the IRS, DOJ and Judge Edmunds can be
reduced to:
Since Pete was in receipt of wages, his argument that
“withholding only applies to the
pay of federal government workers, exactly as it always” (as narrowly quoted from CtC) and that he was not an
“employee” because he was in the private sector is obviously wrong;
and, since he was an “employee”, his claim that he did
not receive “wages” is wrong.
This actually becomes a rather simple example of the logical
fallacy known as Circular cause and consequence
invoked to avoid the fact that they cannot simply say that his private sector
earnings constitute “wages” (this of course is impossible).
Next, in the subsequent order denying the Hendricksons'
motion for relief from judgment and motion for reconsideration, Judge Edmunds
tries to put her previous contorted fallacies behind her and simply resort to
lying:
The majority of Defendants’ motion
attempts to re-argue the previously rejected assertion that wages do not
constitute income for federal tax purposes, and thus, does not meet the
requirements of L.R. 7.1(g)(3).
After trying so hard to refute Pete’s testimony that he
received no wages, this is now put aside in favor of trying to claim that he,
in fact, never said such but rather that he argued that his wages do not
constitute income.The truth is, he
never said anything close to this and this is clearly a blatant lie simply to
avoid having to argue that his private sector earnings constitute “income” (because
this, of course, would be impossible).
The final fallacy lies within the entire premise of this
(civil) suit.The DOJ brought the suit
asking for the court to order the Hendricksons to change their testimony based
on the charge that their filings were “false and fraudulent”.However, the Hendricksons have never even
been charged for fraud because there is no evidence to support such a case,
therefore, the assertion that the filings were “false and fraudulent” is
completely groundless and it’s never been proven that the Hendricksons were not
following the law.However, were the
Hendricksons to actually follow this order, and change their testimony to the
liking of the IRS, in doing so, they would be providing the evidence for the
DOJ to then charge them with fraud, thus, in contradiction to the 5th
Amendment they would be forced to testify against themselves (which, according
to the Constitution, is impossible).
Thus Judges Edmonds’ justification that “Defendants will not
be harmed by the entry of an injunction against them because they will only be
required to obey the law” is another fallacy as it presupposes the fact that it
has already been proven that they disobeyed the law, which could not be done
without them changing their testimony.This circular fallacy is used to try to circumvent the fact that the
filer’s testimony is the first and last word (which is impossible, see IRS Power to
Audit30).
Needless to say, while IRS, DOJ and Judge Edmunds are
enjoying their breakfast at Milliways, the Hendricksons have submitted their
appeal.Hopefully they are preparing
charges against Judge Edmunds for witness tampering as well.While this most surely must be a burden on
the Hendricksons, it is a blessing for the rest of us, for the extent to which
the IRS will use misrepresentations and mental contortions (not to mention
intimidation) to studiously avoid having to address the reality of the income
tax has been laid bare.
This, many claim, is not merely impossible but clearly
insane, which is why the advertising executives of the star system of Bastablon
came up with this slogan: "If you've done six impossible things this
morning, why not round it off with breakfast at Milliways, the Restaurant at
the End of the Universe?"
Douglas Adams in
"The Restaurant at the End of the Universe"
[3]“Excises are a
species of tax consisting generally of duties laid upon the manufacture, sale,
or consumption of commodities within the country, or upon certain callings or
occupations, often taking the form of exactions for licenses to pursue them.”POLLOCK v. FARMERS' LOAN & TRUST CO., 157 U.S. 429 (1895)
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AR-SA'>[5] “Adam Smith and the invisible hand” by Helen Joyce
