Taxes, Patriotism, and Just Plain Goofiness

On this patriotic week, Sheldon Richman lays out why he thinks the tax protest/tax honesty/tax denial movement is more deluded than patriotic. And no one hates the income tax as much as Sheldon Richman does.

My own May 2004 reason feature article on the movement.

Comments

MikeP | July 5, 2007, 3:16pm | #

The simple truth is that if any court ever struck down any commonly accepted and understood tax law or regulation as insufficiently explicit to actually authorize that tax, Congress could and would fix it immediately.

As is the case even in an anarchy, law is the commonly accepted rules of the society -- not what one can torture the words of the law into saying.

Randolph Carter | July 5, 2007, 3:31pm | #

I'm in 100% agreement with this article - the "tax honesty" movement does more to harm real ideological arguments against the tax code than anything else. Also, it tends to be full of people who think think in rather conspiratorial terms - the Amero, NWO, etc.

Jamie Kelly | July 5, 2007, 3:44pm | #

By focusing on dubious and outright false technical matters, the no-tax wackos undermine the credible moral arguments against taxation as employment of force.
Plus, most of them smell like shit and hate them Jeeeeewwwwwwwwwwwwwwwwwwwwwwwwzzzzzzz.

The Wine Commonsewer® | July 5, 2007, 3:50pm | #

Interesting, I saw that the other day and I was going to send the link to you Brian. Then I thought, oh, he's certainly seen it by now so I didn't. Then.....Whoa.....here it is, and you blogged it. That's spooky.

All libertarians should read it.

Couldn't agree more with Jamie, Mike, & Mr Cahtah.

squarooticus | July 5, 2007, 4:02pm | #

As I've said before on numerous occasions, I personally pay taxes because the government has more and better guns than I do and is willing to use them, and because they will successfully make me out to be the bad guy in the eyes of 99% of the public even if they murder me or kidnap and imprison me in the course of making me respect their authorita.

Nonetheless, I give hearty props to anyone foolish enough to be willing to take on the Leviathan. I guess I am fundamentally a coward, but OTOH I suspect I will have more impact as a somewhat free, tax-paying advocate of individual liberty, spreading the word about the government's invisible-in-plain-view thuggery, than I would were I in prison as a result of a well-meaning but ultimately doomed protest against the aggression of taxation.

Jamie Kelly | July 5, 2007, 4:07pm | #

I suspect I will have more impact as a somewhat free, tax-paying advocate of individual liberty, spreading the word about the government's invisible-in-plain-view thuggery, than I would were I in prison as a result of a well-meaning but ultimately doomed protest against the aggression of taxation.

Bingo.
Because Americans absolutely LOVE IT when tax evaders go to jail. When you're all covered in shit, and some guy smells like roses, it feels yummy to see him get splattered with dung.

Randolph Carter | July 5, 2007, 4:09pm | #

addendum:

A special brand of annoying idiot if the America: Freedom to Fascism bot. They walk around with a pocketful of propaganda DVDs, and they always try to sell it by saying, "Have you heard of Aaron Russo? He directed Trading Places with Eddie Murphy. Did you like that movie? Then you will think this DVD RAWKS!"

It's like a poor man's Michael Moore flick.

Dan T. | July 5, 2007, 4:12pm | #

Do we really need somebody to explain why the "tax denial" movement is deluded?

Brandybuck | July 5, 2007, 4:13pm | #

Tax protestors have done more to PRESERVE the income tax than any progressive socialist ever has. They distract the issue. They marginalize true tax reformers. And they latch on to any candidate wanting to abolish the income tax and prevent him from winning.

Some tax protestors call Joe Banister a "plant" to delegitimize their movement. I'll go one step further, and claim that that ALL "tax truthers" are a plant by the IRS to prevent any real solution from ever occuring. Their goal isn't to abolish the IRS (or even get a tax cut). Instead their goal is to alert everyone else to a mythical conspiracy.

Guy Montag | July 5, 2007, 4:18pm | #

Dan T.,

You beat me to it.

No time to read the article right now but I can't wait to see yet another "proof" that Ohio really is a State and that federal income tax is real, no matter how unfair it may be.

Jamie Kelly | July 5, 2007, 4:18pm | #

Do we really need somebody to explain why the "tax denial" movement is deluded?

Did we really need a Warren commission? Did we really need Popular Mechanics to debunk 9/11 conspiracy theories? Do we really need a James Randi to take on the Uri Gellers of the world? Do we really need evidence to counter popular mythologies? Do we really need a troll like Dan T. to show us how unprincipled thinking leads to bad conclusions?

thoreau | July 5, 2007, 4:21pm | #

Hey, Dan hasn't been very trollish lately. I think his was a legitimate question, and you gave a legitimate answer.

Finkelstein | July 5, 2007, 4:28pm | #

"If a thousand people would not pay their taxes this year, that would not be so violent and bloody as it would be to pay the taxes and enable the State to commit violence and shed innocent blood."

- Thoreau. Not the H&R one :)

Pretty "delusional", huh Dan?

Sheldon Richman | July 5, 2007, 6:42pm | #

Thanks, Brian. Yes, we do need to debunk this movement. The serious libertarian movement is ill-served by identification with two idiotic positions: that 1) there is no income tax (or it is unconstitutionally applied to wages) and 2) the Fed is a private firm. Those are Russo's causes. They are baseless and can only harm true efforts to achieve liberty. I am almost tempted to think the leaders of the tax-denial movement are IRS agents, but I'm not sure the IRS is really that clever.

libertreee | July 5, 2007, 7:13pm | #

Mr Richmond takes an extreme anarchist position (one that I sympathize with) that all taxes are evil, and then refuses to look at distinctions that apply to the less extreme example, that their are legitimate constitutional issues surrounding the income tax code, the 16Amendment, etc.

This is unfortunate, because he is engaged in hand wringing and ostracizes sincere people
over issues that could bring discredit to the government and resound in the favor of liberty. He sees "only harm [to} true efforts to achieve liberty". Why?

Does he feel the same way about the government's refusal to strike down the ridiculous legal casuistry surrounding the marijuana laws, including Gonzalez v Raich? Of course not, like all libertarians, he is outraged at the refusal of the state to accept his views on drug laws, and the ridiculous interpretation it gives to the commerce clause.

Yet, when it comes to the income tax, he, like a lot of other comfortable libertarians, is more ready to adopt the government's inconsistencies and obfuscations as holy writ, descended from Sinai!

Could it be that he can smoke his pot in the comfort of his own home in Colorado (I believe) without too much fear of anyone breaking down his door, but in fact if he does challenge the IRS, he is deadly afraid that he might lose some property? A writer of his stature, it must be said, might even be sent to jail.

So, comfortable libertarians with a high profile are quite happy to rail against pot laws which they are quite convinced the government lies about constantly, but they are not so willing to stand up to a trillion dollar legal fraud that might cause them some legal difficulties.

OK. I get it.

libertreee | July 5, 2007, 8:40pm | #

Reply to Mr. Richmond re Income Tax Laws

Mr Richmond writes that the tax honesty movement (he calls it tax denial) has obvious flaws, and will hurt the cause of liberty.

I would like to point out some flaws in his reasoning, and his conclusion.

• 1) The Government has no Constitutional authority to tax wages and salaries.

This is a simplification. The government under the 16th Amendment can tax some wages, if they are excise taxable. Also, the government can tax some wages, but not under the 16th Amendment, if they are foreign earned, or earned within the US by non-resident aliens. The relevant clause here is US Constitution, Art. 1, sec 8, re the Congress’ exclusive jurisdiction over Washington DC, and the territories. See also Article IV, Sec 3.

However, the national government does lack the authority to tax the wages of Americans earned in the 50 states. However, if those Americans voluntarily assess themselves an income tax, and submit it to the Government under penalty of perjury, they become subject to possible Deficiencies and Collections, even if they were not originally liable, and did not realize they were not liable.

• Then he says the courts have looked unfavorably on the arguments, and have put people in prison. But, the courts have looked unfavorably on a lot of liberty oriented arguments, and people have gone to prison on account of bad court decisions, and do everyday in this country. Why the libertarian pass on the income tax issue?

• Then he declares his libertarian bone fides, he is against all taxes, blah blah blah. But, something about the income tax makes him believe that the government, in this one case, is telling the truth…

• But of course that doesn’t mean the income tax is not illegal, no sir. The government, he assures us again in the next paragraph, is certainly telling the truth in this instance.

• The courts have held that Congress has the power to tax anything, including wages and salaries….. OK, Mr Richmond. I am a Chinaman, living in China. I work in a Chinese factory, and I am a Chinese citizen. Can Congress tax my wages? No, OK, then we have determined that the taxing power of Congress does have some limitations. The power of Congress to tax does not extend to the entire planet. Just wanted to make sure we agree on that.

• With the very next sentence, Mr. Richmond then says that yes, indeed, the Congress does have some kind of “presumed rule”. What exactly, is that presumed rule?

Article 1, sec 2 : Representatives and Direct Taxes shall be apportioned among the several States.
So, a direct tax must be apportioned among the States. What exactly is a direct tax? Mr Richmond refuses to explain, saying only that it is a presumed rule.

• Never mind, anyway, because the Sixteenth Amendment fixed all that fussing over what is or is not a direct tax.
Maybe Mr Richmond has never written the IRS, never mind file a Freedom of Information Act with them, but I have done both. And, the IRS says that its authority to tax incomes is the Supreme Court Case Brushaber vs Union Pacific, which held the Income Tax of 1913 Constitutional.

• But, what did Brushaber say?
The Sixteenth Amendment:
1. gave the government no new taxing power.
2. did not NOT overturn Pollock, the decision that stated that a tax on income is a direct tax that must be apportioned.
3. It established that an income tax could be an excise tax
4. It forbade the levying of income taxes on “sources of income” without apportionment.

• Mr Richmond then says that tax “deniers” quote Supreme Court decisions out of context. But, he admits that the Supreme Court cases that are cited did relate to the Income Tax Act of 1913. Did that Act then impose a tax on wages?
• Mr Richmond admits that the word “income” is not in the “income tax code” which is what he provides spurious links to as his authority. (That is patently ridiculous, and demeaning to any intelligent person. The question is not what TITLE authorizes the taxation in question, but WHAT LAW. Even further, courts have ruled that the general language of STATUTES does not impose any liability on a citizen, but only REGULATIONS do. Tax honesty researchers also look to the FEDERAL REGISTER for information as to what the IRS can and cannot legally do, as well as IRS INTERNAL MANUALS including its computer codes. So, by linking to Title 26 as maintained by Cornell University as the law that determines Americans are liable to a tax on wages MR Richmond is being sophomoric and frankly, stupid.)
• Mr Richmond then expounds on why he thinks the word “Income” is not defined in the Code he links us to. But, all his expositions cannot hide the fact that the Supreme Court has already given us the answer as to why the word “income” is not defined in the code.
The Supreme Court states in Eisner v Macomber, 252 US 189, decided in March, 1920, that Congress “cannot by any definition it may adopt conclude the matter (ie, what is income, ed.) since it cannot by legislation alter the Constitution, from which it alone derives its power to legislate, and within whose limitations alone that power can be lawfully exercised. (emphasis added).

The Supreme Court said that Congress cannot define income. If it could, everytime it passed an income tax law, it could be amending the Constitution, because Congress itself put the word income into the Constitution.

• The Supreme Court then defined “income” for good and all, in Merchants Loan and Trust vs Smietanka, 255 US 509.
In that final case defining income, the Court said that income has the same meaning in the Tax Act of 1913 as it had in the Corporate Tax Act of 1909, as well as the Income Tax Acts of 1916 and 1917.
What was the meaning of Income in all these Acts? A corporate profit. That is how “income” is separated from its “source” : by being the final entry in a corporate ledger showing net profit!.

The Supreme Court may smirk and issue irrelevant dicta, but so far, it has never, ever overturned Pollock, or these income tax cases dating to the early 1920’s.

• Yes, there are other instances of income that can be taxed, including some wages. But then we have to get into geographical jurisdiction, non resident alien income, and foreign earned income. I do not have the time here. Suffice it to say that this taxation does not come under the 16th Amendment, and does not affect the true legal obligation of most Americans NOT to pay income tax, unless they VOLUNTARILY want to.

Robert | July 5, 2007, 9:22pm | #

But "income" is not an abstruse technical term that had one meaning at the time it was written in the US Constitution and another meaning now.

An income tax is really a tax on a transaction, and as such can be construed as direct on the payor or indirect on the payee, or vice versa, so the direct-indirect dichotomy was never really operative on that kind of a tax.

The federal (and to a lesser extent state) narcotics laws have a great deal more ambiguity than do the tax laws, and the Constitutional basis of some of their provisions is very weak, but not so the tax laws. It's different because it's different, not because of some different degree of diligence on Sheldon's part.

Anonymo the Anonymous | July 5, 2007, 10:57pm | #

I am a Chinaman, living in China. I work in a Chinese factory, and I am a Chinese citizen. Can Congress tax my wages?

Also, Dude, "Chinaman" is not the preferred nomenclature. "Asian-American," please.

I can't believe no one beat me to this.

kwais | July 5, 2007, 11:09pm | #

Good response Libertree,

I wish I understood the ins and outs of what is lawful and what is not about the tax code.

Honestly, right now, people who refuse to pay the income tax are my heroes.

The income tax, if legal, is immoral, and should not be legal.

kwais | July 5, 2007, 11:11pm | #

I think he was talking about Asian-Canadians, not Asian-Americans.

You can call the Asian-Canadians "Chinamen". I read it somewhere.

libertreee | July 5, 2007, 11:26pm | #

An income tax is really a tax on a transaction, and as such can be construed as direct on the payor or indirect on the payee, or vice versa, so the direct-indirect dichotomy was never really operative on that kind of a tax.

There is some sense in which income is a privileged transaction. In that case, income can be taxed as a transaction. An excise tax is a tax on a "privelege". Some occupations are indeed "privileged". These are occupations that require a federal license. The return for these income taxes are filed on the Federal Form 720, the Quarterly Excise Tax Form.

Another privelege is to be the tax collector for a corporation. This trustee collects the taxes of the corporation and forwards them to the US. These forms for the trustee begin with the number 9, eg 940....

If the individuals in these cases do not submit the money for their privileged occupation or duty, there is a specific delegation of authority in the Federal Register that says an IRS agent can Substitute a Return for them and they are liable for the tax.

There is no such Delegation of Authority for the Form 1040. So, if you are a NONFILER, a NONTAXPAYER, an individual who does not forward a return because he has no liability, it is up to the IRS to prove your liability. You have not self assessed, but you have stood on your Fifth and Fourth Amendment Rights not to be a witness against yourself, and not to obey a rule or regulation that does not apply to you.

I am not saying judges are not corrupt. They are. They do work for the state. They do not work directly for the individual but for the state. Bias is not unusual. However, bias against the drug user is certainly not unusual either. Courts have denied what any reasonable person would say is due process against both nonfilers and drug users.

Why are prominent libertarians then drawing a false line in the sand, pro drug user, anti nonfiler?

Richmond says because the argument that their is no law requiring you to pay is false. However, he does not produce the law. He only links, insultingly, to the entire title. And, he defers to authority, the courts that are corrupt in both types of cases. And, he refuses the Supreme Court ruling authorities that tackled the NATURE of the tax.

Why?

Randolph Carter | July 5, 2007, 11:28pm | #

libertree,
I am sympathetic, and I think the income tax is immoral and wrong, but even if it isn't actually legal, it is de facto legal, and in the minds of most citizens, legal. Because of this, doesn't it make more sense to appeal to the population via the moral argument rather than the legalese (really hard to follow legalese, btw) argument?

Guy Montag | July 5, 2007, 11:42pm | #

Also, Dude, "Chinaman" is not the preferred nomenclature. "Asian-American," please.

I can't believe no one beat me to this.

That is what the Reverand Al Sharpton calls Koreans.

Gilbert Martin | July 6, 2007, 12:06am | #

I'd say a better Constitutional argument to present would be to point out that the 10th Amendment constrains the federal government to ennumerted powers. A very large number of things the federal government does (and collects taxes to pay for) are not pursuant to any ennumerated power.

The federal government cannot collect a tax to fund an unconsitutional activity and therefore the unconstitional activities should be eliminated and the amount of taxes collected should be reduced accordingly.

Brandybuck | July 6, 2007, 12:18am | #

I know who you are, Libertree! You are an IRS agent! You have infiltrated the libertarians in order to unrightly portray them as conspiracy mongering kooks! You take ridiculous and untenable positions, and pass them off as the movement's. You and your fellow IRS agent infiltrators stick you nose into every tax discussion in order to derail it. In order to make real tax protestors look silly.

We are trying to get rid of the income tax, but your efforts are actively and directly preventing that. By your actions in hindering the adoption of genuine anti-tax sentiment in the US, have proven yourself an agent or willing accomplice of the IRS.

Shame on you!

Anonymo the Anonymous | July 6, 2007, 12:21am | #

I think he was talking about Asian-Canadians, not Asian-Americans.

and

That is what the Reverand Al Sharpton calls Koreans.

My comment was a joke; I thought a lot of people here would get the reference.

Randolph Carter | July 6, 2007, 12:26am | #

The anonymous abides

Sheldon Richman | July 6, 2007, 11:05am | #

Four points:
1) My name is Richman, not Richmond.
2) I live in Arkansas, not Colorado, and pot is illegal here.
3) "Extreme anarchist" must be redundant.
4) I don't trust the government in this matter. I simply read and use logic. If you think it's a matter of trust, you misunderstand the subject.

libertreee | July 6, 2007, 11:56am | #

ou are an IRS agent! You have infiltrated the libertarians in order to unrightly portray them as conspiracy mongering kooks! You take ridiculous and untenable positions, and pass them off as the movement's.--Yea, right.

I think this is joke remark, but if it ain't, I feel sorry for whomever wrote it.

Irwin Schiff is a libertarian. Larken Rose is a libertarian (and an anarchist).

There are many ways to fight the power. I do not go around condemning those who use other methods. I do not say they are not correct. I do not insist that people stop paying income taxes. But they insist that people have to continue paying, because that is their "responsible" way. And comfortable, too.

It is establishment libertarians who are involved in trashing those who use different methods than theirs. The tax honesty people put their ass on the line, while they dutifully pay their taxes and smirk at them. Who is contributing more to freedom? I don't think we know at this point, but the establishment libertarians insist they do.

The wring their hands and bloviate about how they have the "responsible" way to fight taxes, and those who are in the trenches in the tax honesty movement are "illogical", and will "hurt the cause" of tax reform.

Yea, right.

libertreee | July 6, 2007, 12:04pm | #

The federal government cannot collect a tax to fund an unconsitutional activity and therefore the unconstitional activities should be eliminated and the amount of taxes collected should be reduced accordingly.

I agree 100%. However, I have also read the law,(including regulations, federal register, IRS Manuals, etc.) and think the taxing clauses of the Constitution are a good place to attack the power.

The We the People Foundation has proceeded politically, with petitions to all three branches of government, and has been written about with some accuracy by the NY Times. They also have an interesting First Amendment Lawsuit to establish the right to petition.

If you go to their website, you can find a brief written by an attorney in Louisiana that contains excellent legal arguments, of about 100 pages, but large type.

It is true the arguments are complicated. But, there are many people I meet who at least know in their minds that the Income Tax is really voluntary, and that somehow the government is covering that up.

I find it passing strange that some libertarians fight against that perception, while endorsing the idea that marijuana is harmless, but somehow the government is covering that up.

MikeP | July 6, 2007, 2:18pm | #

Libertreee,

If marijuana is harmless, the government can't change the fact that it is harmless. If they want to pass laws based on the assertion that marijuana is harmful, the government must cover up the fact that it is harmless.

If income taxes are indeed voluntary, the government can and will, as necessary, change the fact that they are voluntary. If they want to pass laws based on the assertion that taxes are mandatory, they simply will.

You don't see the difference?

Scooby | July 6, 2007, 3:40pm | #

Pretending that the tax code doesn't exist is counterproductive. Even if there were some 100 page brief that contains the magic words "proving" that the average joe doesn't have to pay income tax, men with guns will arrive to convince said joe that he does. No shibboleth will disuade them.

The only way to get the guys with the guns off our backs is to pursuade their masters to change their orders, i.e., convince Congress to change the law. Telling them that their multi-volume magnum opus doesn't apply because there isn't one magic sentence that says "yes, this applies to libertree, too" isn't going to convince them.

kwais | July 7, 2007, 4:37pm | #

Scooby,

The main weapon of the guys with guns is fear. If enough people refuse to pay taxes, that weapon does not work.

There are only so many people they can force to pay taxes, before it starts to hurt their ta

kwais | July 7, 2007, 4:37pm | #

I hate my computer.

fuck it this is a dead thread anyways.