An Income Tax Bloodbath A-Brewing?
Brian Doherty | January 19, 2007, 9:56am
In New Hampshire, a couple who believes they have no legal obligation to pay income tax is convicted; the wife Elaine Brown is in custody, while husband Ed Brown, with "25 armed supporters," barricades himself in their Plainfield home:
Brown, in a phone interview with The Associated Press, quoted Revolutionary War figure John Stark.
"Live free or die," he said. "What else can I say?"
Brown said he expected federal agents to swarm his property soon.
"My life is destroyed, what more can I say?" Brown said in a brief interview. "I lost my wife and she lost her business."
Brown warned he would not surrender to authorities.
"The verdict is in. I can guarantee you all hell's going to break loose," Brown said earlier in an interview with WNTK-FM in New London. "It's all bogus charges. None of these charges are lawful."
For now, at least, "marshals say they have no plans to raid the site."
My 2004 Reason feature story on the "we have no legal obligation to pay income tax" movement here.
zman | January 20, 2007, 3:13pm | #
The Federal Reserve is a private corporation, not a government agency. They have a license from Congress to print money.
According to the US Treasury:
"Federal Reserve Banks obtain the notes from our Bureau of Engraving and Printing (BEP). It pays the BEP for the cost of producing the notes, which then become liabilities of the Federal Reserve Banks, and obligations of the United States Government."
Source - http://www.treas.gov/education/faq/currency/legal-tender.shtml
Still, the Reserve performs duties as a private corporation that might have been the fiduciary responsibility of Congress and the treasury. For instance, they are in charge of bank audits. Since the Federal Reserve is made up of banks and other financial institutions, I find that rather odd. They receive no outside audits?
Lastly, the Fed is the agency that permits the government to deficit spend. Once a budget is blown, Congress, who should come to the people and request more revenue, go behind our backs, without our permission and issue instruments of debt to the Fed. The Fed happily obliges using Federal Highways, Federal buildings and unclassified military equipment as collateral. To my knowledge it's never happened but that means your local interstate might turn into Citicorp highway, including tolls and we'd have no say in it.
Then politicians get on the, "we must pay off the debt" mantra. It would be nice if the lazy media asked "why?" You created it, you pay it. But I won't hold ny breath awaiting that event.
collective knowledge | January 20, 2007, 10:13pm | #
"Modern interpretation
In Commissioner v. Glenshaw Glass Co.,[12] the Supreme Court laid out what has become the modern understanding of what constitutes 'income' to which the Sixteenth Amendment applies, declaring that income taxes could be levied on "accessions to wealth, clearly realized, and over which the taxpayers have complete dominion." Under this definition, any increase in wealth—whether through wages, benefits, bonuses, sale of stock or other property at a profit, bets won, lucky finds, awards of punitive damages in a lawsuit, qui tam actions—are all within the definition of income, unless Congress makes a specific exemption as it has for items such as life insurance proceeds received by reason of the death of the insured party,[13] gifts, bequests, devises and inheritances,[14] and certain scholarships.[15]
[edit] Recent rulings
On December 22, 2006, the United States Court of Appeals for the District of Columbia Circuit vacated its own August 2006 ruling in Murphy v. Internal Revenue Service and United States.[16] In its original August 2006 decision, the Court had ruled that 26 U.S.C. § 104(a)(2) was unconstitutional under the Sixteenth Amendment to the extent that the statute purported to tax, as income, a recovery for a non-physical personal injury for mental distress and loss of reputation not received in lieu of taxable income such as lost wages or earnings.
The Murphy ruling had been mandatory precedent only in the District of Columbia. The December 2006 order vacating the Court's own prior judgment also included a scheduling for a rehearing for April 23, 2007.
[edit] Tax protester arguments regarding ratification
The article Tax protester constitutional arguments covers this topic in considerably more detail, including details on the specific arguments made against ratification.
Some tax protesters, conspiracy investigators, and others opposed to income taxes cite what they contend is evidence that the Sixteenth Amendment was never "properly ratified." One such argument is that because the legislatures of various states passed resolutions of ratification with different capitalization, spelling of words, or punctuation marks (e.g. semi-colons instead of commas) from the text proposed by Congress, those states' ratifications were invalid. A related argument is that various states illegally violated procedural requirements of their constitutions when passing their ratification resolutions. Another argument made by some tax protesters regards Ohio, one of the states listed as ratifying the amendment. They contend that because Congress did not pass an official proclamation recognizing Ohio's date of admission (1803) to statehood until 1953 (see Ohio Constitution), Ohio was not a state until 1953 (and, therefore, could not have ratified the Sixteenth Amendment). These and similar arguments have been universally rejected by the courts."
kevrob | January 21, 2007, 9:33am | #
I'm not suicidal enough to be join the tax protestors, however much they may have my sympathy. One of my favorite anti-income tax arguments goes like this: Prior to the imposition of the Income Tax, an income, in plain English, was something you realized from an investment. Rent was income, as was interest on long-term government bonds and other securities. If you read 18th and 19th century fiction, when some middle or upper-class lady trying to arrange a suitable match for her daughter and some gentleman considered husband material, the fellow is inevitably described as "having an income of £(some large number) per annum."
In short, wages weren't considered income. Wages were undependable, and one had to do some kind of
work for them. "Income" was a river of cash, flowing like snowmelt from the mountain of capital owned by your family. At most you might have to hire a land agent or farm manager, and oversee your overseer. Eligible Young Gentlemen, when they came of age, often had An Income settled on them: the proceeds of This Estate or That Plantation, the interest from a specified amount of "gilts" issued by the Bank of England, etc. (We have the Long Bond. The UK under the gold standard had "centuries.") Junior would not necessarily own these assets, which his Pater might hold onto until passing away. Ownership might devolve on the younger man when he reached a certain age, or he married, as the family patriarch pleased.
So, when the Income Tax went through, yeoman farmers and factory hands never expected it to apply to them, and at the 1% rate mentioned above, it wouldn't, either. Only when the government's hunger for cash became ravenous did the income tax start touching on middle-class folks, then eventually those in the lower quintiles.
Of course, the IRS and the courts will not accept the "wages aren't income" argument, if for no other reason than that they believe that the
...from whatever source derived ... verbiage in the 16th Amendment authorizes the government to ignore what "income" meant of old, and supercede the English language with a legal term of art that happens to use the same letters in the same order. Since they have the power to enforce that, almost everyone has come around to their view.
Kevin
Peter K. | January 21, 2007, 5:39pm | #
Kevrob –
Yet another reason why the IRS and the courts will not accept the "wages aren't income" argument is that it is total, complete, utter bullshit.
Even if, as you say, at the time of ratification of the 16th Amendment “income” did not include wages, that just means Congress’ power to tax it does not derive from the 16th Amendment. Before and after the 16th Amendment, the Constitution said, and still does say, in Article I, Section 8:
"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."
Nothing in that taxing power excludes a tax on wages. Furthermore, the Supreme Court held that taxes on occupations were “excises” or indirect taxes, not subject to the apportionment requirement of Article I, Section 9.
The 16th Amendment did not give Congress any new taxing power. But to the extent the income tax is a "direct" tax, Congress is relieved by the 16th Amendment of the requirement to apportion it. Also, to the extent the income tax is an "indirect" tax, Congress was never subject to an apportionment requirement.
(Bear in mind, also, that in Pollock v. Farmers’ Loan & Trust Co. -- the case which held taxes on income from property to be “direct” taxes subject to the apportionment requirement, the reason for the subsequent proposal and ratification of the 16th Amendment – there was no challenge to the tax as it pertained to income from compensation for services.)
Therefore, Congress was free to define “income” to include wages and salaries. And (contrary to what this buffoon Aaron Russo says), it did. United States Code, Title 26 ,Subtitle A, Chapter 1, Subchapter B, Part I, section 61, subsection (a) says:
“Except as otherwise provided in this subtitle, gross income means all income from whatever source derived, including “(but not limited to) the following items:
“(1) Compensation for services, including fees, commissions, fringe benefits, and similar items;
“(2) Gross income derived from business;
“(3) Gains derived from dealings in property;
“(4) Interest;
“(5) Rents;
“(6) Royalties;
“(7) Dividends;
“(8) Alimony and separate maintenance payments;
“(9) Annuities;
“(10) Income from life insurance and endowment contracts;
“(11) Pensions;
“(12) Income from discharge of indebtedness;
“(13) Distributive share of partnership gross income;
“(14) Income in respect of a decedent; and
“(15) Income from an interest in an estate or trust."
Subsection (b) of same says:
“For items specifically included in gross income, see part II (sec. 71 and following). For items specifically excluded from gross income, see part III (sec. 101 and following). “
Wages and salaries are “compensation for services”, are they not?
