Senator Cruz: keep income tax, lower top rates. [Archive]

johnwk

02-11-2014, 09:55 AM

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For those who are interested in tax reform and the hearing conducted in 1995 before the Committee on Ways and Means for the purpose of replacing the federal income tax, you may be interested in the submission offered by the American Constitutional Research Service which promotes a return to our Constitution's original tax plan, CLICK HERE (https://www.google.com/url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=3&ved=0CDIQFjAC&url=https%3A%2F%2Fbulk.resource.org%2Fgpo.gov%2Fhe arings%2F104h%2F21846.pdf&ei=UjL6UuKfDKH4yQHS8YGABw&usg=AFQjCNE6sL0uzFYjIWtvLqYyZmRn0X7maQ) and scroll down to page 687

In 1996, the following year, a second round hearing was held to replace the federal income tax and the American Constitutional Research Service presented another submission before the Committee on Ways and Means. To view that submission CLICK HERE (https://www.google.com/url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=16&ved=0CDkQFjAFOAo&url=https%3A%2F%2Fftp.kdis.edu.cn%2F211-xkkr-10%2Fdoc%2Fyuguan%2F104th%2520Congress%2520(1995-1996)%2F50.pdf&ei=azf6UqK8BeHbyQGvh4C4Dg&usg=AFQjCNFmH1tqOX2a3HB9qdA3tSBPPVXokA) and scroll down to page 236

Have you ever heard a "conservative" radio talk show host [Rush Limbaugh, Sean Hannity, Glenn Beck, Laura Ingraham, Schnitt, Mark Levin, Dennis Prager, Bill O'rielly, Mike Gallagher, Doc Thompson, Lee Rodgers, Neal Boortz, Mike Huckabee, Tammy Bruce, Monica Crowley, Herman Cain, etc.] discuss our Constitution's original tax plan as laid out during the above hearings?

And why has Mark Levin, who is embraced by "conservatives", neglected to lay out and promote a return to our Constitution's original tax plan by giving his support to the following resolution? Instead, he promotes keeping alive taxes calculated from incomes with one of his liberty amendments!

House/Senate Joint Resolution

Proposing an amendment to the Constitution of the United States to repeal the sixteenth article of amendment and end taxes calculated from profits, gains, salaries and other “incomes”.

Section 1: The sixteenth article of amendment to the Constitution of the United States is hereby repealed.

Section 2: Congress is henceforth forbidden to lay ``any`` tax or burden calculated from profits, gains, interest, salaries, wages, tips, inheritances or any other lawfully realized money.

Section 3: This article shall be inoperative unless it shall have been ratified as an amendment to the Constitution by three fourths of the several States, as provided in the Constitution, within seven years from the date of the submission thereof to the States by the Congress.
___

“…..with all these blessings, what more is necessary to make us a happy and a prosperous people? Still one thing more, fellow-citizens—a wise and frugal Government, which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement and shall not take from the mouth of labor the bread it has earned. This is the sum of good government, and this is necessary to close the circle of our felicities“. Thomas Jefferson, First Inaugural Address

ClydeCoulter

02-11-2014, 12:11 PM

I recommend reading the material that @johnwk posted above (on page 687 of the link), it is very well done.

johnwk

02-11-2014, 05:24 PM

I recommend reading the material that @johnwk posted above (on page 687 of the link), it is very well done.

I appreciate your kind words!

I believe those who support and defend out Constitution’s legislative intent, which Mark Levin is fond of talking about, would expect that each state is held to the constitutional requirement that its share of representatives sent to Congress is proportional to its share of any direct tax laid by Congress. The two formulas being:

States’ population

---------------------------- X SUM TO BE RAISED = STATE’S FAIR SHARE

Total U.S. Population

State`s Pop.
___________ X House size (435) = State`s No. of Representatives
U.S. total pop

And with regard to the rule of apportionment, Congress does have authority to lay a capitation tax which is a direct tax, and may be levied directly upon the people by Congress. However, this tax boils down to be an equal per capita tax under the rule of apportionment if laid directly upon the people! For example, if a capitation tax were laid today and the people of New York each had to pay one dollar to meet New York’s apportioned share of the total sum being raised by Congress, the people of Idaho would likewise only have to pay one dollar each if the tax were shared evenly among the people living in Idaho. And, although New York’s total share of the tax would be far greater than that of Idaho because of New York’s larger population, New York is compensated by its larger representation in Congress, which is also part of our Constitution’s fair share formula!

The wisdom of our founder’s rule of apportionment is, that although a particular state with a large population has an overwhelming representation in Congress when spending federal revenue such as New York, it would be held in check by the rule of apportionment which commands they pay a larger share of the tab whenever a direct tax is laid among the states.

Is it not obvious that our big spending Congressional Delegations such as New York, California, Pennsylvanian, New Jersey, etc., love our Constitution’s rule of apportionment when it comes to one man one vote, but they fear with a passion the rule of apportionment being applied to taxation which requires one vote one dollar which is not being enforced, is why they engage in reckless spending and borrowing?

JWK

If the America People do not rise up and defend their existing Constitution and the intentions and beliefs under which it was adopted, who is left to do so but the very people it was designed to control and regulate?

Zippyjuan

02-11-2014, 10:34 PM

johnwk

02-12-2014, 12:06 AM

Cutting taxes is nice but it will only add to the deficit- unless you cut more in spending than the tax cuts reduce revenues. Ron Paul has said the budget and the debt taken care of before doing much on taxes otherwise you end up making things worse. He would like to get rid of all taxes- but not until the debt is gone which will be never.

Following our Constitution's original tax plan would immediately encourage every State's Congressional Delegation sent to Washington to immediately cut federal spending to avoid the apportion tax if Congress spent more than was brought in from imposts, duties and miscellaneous excise taxes.

Can you picture the outrage of the Governors and Legislatures of our “progressive” states like California’s, New Jersey, New York, Pennsylvania or Massachusetts if their Congressional Delegation returned home with a bill in hand to extinguish an annual deficit they helped to create while in Washington, and these Governors and Legislatures would have to transfer that money out of their own state treasury and into the United States Treasury? The truth is, our founder’s tax plan is based upon principles which do not change with the passage of time and creates a very real moment of accountability which would end the irresponsible spending in Washington and encourage each State’s Congressional Delegation to follow sound fiscal policies to produce a healthy and vibrant economy to avoid the apportioned direct tax.

JWK

Sonny Tufts

02-12-2014, 10:26 AM

Can you picture the outrage of the Governors and Legislatures of our “progressive” states like California’s, New Jersey, New York, Pennsylvania or Massachusetts if their Congressional Delegation returned home with a bill in hand to extinguish an annual deficit they helped to create while in Washington, and these Governors and Legislatures would have to transfer that money out of their own state treasury and into the United States Treasury? The truth is, our founder’s tax plan is based upon principles which do not change with the passage of time and creates a very real moment of accountability which would end the irresponsible spending in Washington and encourage each State’s Congressional Delegation to follow sound fiscal policies to produce a healthy and vibrant economy to avoid the apportioned direct tax.

What if, as was the case under the Articles of Confederation, some States don't pay? This flaw in the pre-Constitution requisition system was recognized by Hamilton:

Except as to the rule of appointment, the United States has an indefinite discretion to make requisitions for men and money; but they have no authority to raise either, by regulations extending to the individual citizens of America. The consequence of this is, that though in theory their resolutions concerning those objects are laws, constitutionally binding on the members of the Union, yet in practice they are mere recommendations which the States observe or disregard at their option. Federalist No. 15.

Congress, by the articles which compose that compact (as has already been stated), are authorized to ascertain and call for any sums of money necessary, in their judgment, to the service of the United States; and their requisitions, if conformable to the rule of apportionment, are in every constitutional sense obligatory upon the States. These have no right to question the propriety of the demand; no discretion beyond that of devising the ways and means of furnishing the sums demanded. But though this be strictly and truly the case; though the assumption of such a right would be an infringement of the articles of Union; though it may seldom or never have been avowedly claimed, yet in practice it has been constantly exercised, and would continue to be so, as long as the revenues of the Confederacy should remain dependent on the intermediate agency of its members. What the consequences of this system have been, is within the knowledge of every man the least conversant in our public affairs, and has been amply unfolded in different parts of these inquiries. It is this which has chiefly contributed to reduce us to a situation, which affords ample cause both of mortification to ourselves, and of triumph to our enemies.

What remedy can there be for this situation, but in a change of the system which has produced it in a change of the fallacious and delusive system of quotas and requisitions? What substitute can there be imagined for this ignis fatuus in finance, but that of permitting the national government to raise its own revenues by the ordinary methods of taxation authorized in every well-ordered constitution of civil government? Ingenious men may declaim with plausibility on any subject; but no human ingenuity can point out any other expedient to rescue us from the inconveniences and embarrassments naturally resulting from defective supplies of the public treasury.

The more intelligent adversaries of the new Constitution admit the force of this reasoning; but they qualify their admission by a distinction between what they call internal and external taxation. The former they would reserve to the State governments; the latter, which they explain into commercial imposts, or rather duties on imported articles, they declare themselves willing to concede to the federal head. This distinction, however, would violate the maxim of good sense and sound policy, which dictates that every POWER ought to be in proportion to its OBJECT; and would still leave the general government in a kind of tutelage to the State governments, inconsistent with every idea of vigor or efficiency. Who can pretend that commercial imposts are, or would be, alone equal to the present and future exigencies of the Union? Taking into the account the existing debt, foreign and domestic, upon any plan of extinguishment which a man moderately impressed with the importance of public justice and public credit could approve, in addition to the establishments which all parties will acknowledge to be necessary, we could not reasonably flatter ourselves, that this resource alone, upon the most improved scale, would even suffice for its present necessities. Its future necessities admit not of calculation or limitation; and upon the principle, more than once adverted to, the power of making provision for them as they arise ought to be equally unconfined. I believe it may be regarded as a position warranted by the history of mankind, that, in the usual progress of things, the necessities of a nation, in every stage of its existence, will be found at least equal to its resources.

To say that deficiencies may be provided for by requisitions upon the States, is on the one hand to acknowledge that this system cannot be depended upon, and on the other hand to depend upon it for every thing beyond a certain limit. Those who have carefully attended to its vices and deformities as they have been exhibited by experience or delineated in the course of these papers, must feel invincible repugnancy to trusting the national interests in any degree to its operation. Its inevitable tendency, whenever it is brought into activity, must be to enfeeble the Union, and sow the seeds of discord and contention between the federal head and its members, and between the members themselves. Can it be expected that the deficiencies would be better supplied in this mode than the total wants of the Union have heretofore been supplied in the same mode? It ought to be recollected that if less will be required from the States, they will have proportionably less means to answer the demand. If the opinions of those who contend for the distinction which has been mentioned were to be received as evidence of truth, one would be led to conclude that there was some known point in the economy of national affairs at which it would be safe to stop and to say: Thus far the ends of public happiness will be promoted by supplying the wants of government, and all beyond this is unworthy of our care or anxiety. How is it possible that a government half supplied and always necessitous, can fulfill the purposes of its institution, can provide for the security, advance the prosperity, or support the reputation of the commonwealth? How can it ever possess either energy or stability, dignity or credit, confidence at home or respectability abroad? How can its administration be any thing else than a succession of expedients temporizing, impotent, disgraceful? How will it be able to avoid a frequent sacrifice of its engagements to immediate necessity? How can it undertake or execute any liberal or enlarged plans of public good?

Let us attend to what would be the effects of this situation in the very first war in which we should happen to be engaged. We will presume, for argument's sake, that the revenue arising from the impost duties answers the purposes of a provision for the public debt and of a peace establishment for the Union. Thus circumstanced, a war breaks out. What would be the probable conduct of the government in such an emergency? Taught by experience that proper dependence could not be placed on the success of requisitions, unable by its own authority to lay hold of fresh resources, and urged by considerations of national danger, would it not be driven to the expedient of diverting the funds already appropriated from their proper objects to the defense of the State? It is not easy to see how a step of this kind could be avoided; and if it should be taken, it is evident that it would prove the destruction of public credit at the very moment that it was becoming essential to the public safety. To imagine that at such a crisis credit might be dispensed with, would be the extreme of infatuation. In the modern system of war, nations the most wealthy are obliged to have recourse to large loans. A country so little opulent as ours must feel this necessity in a much stronger degree. But who would lend to a government that prefaced its overtures for borrowing by an act which demonstrated that no reliance could be placed on the steadiness of its measures for paying? The loans it might be able to procure would be as limited in their extent as burdensome in their conditions. They would be made upon the same principles that usurers commonly lend to bankrupt and fraudulent debtors, with a sparing hand and at enormous premiums. Federalist No. 30

There was a reason the Constitution specified only one thing (exports) that Congress can't tax, and that was to give Congress the authority to impose taxes without having to rely on the discredited requisition system.

johnwk

02-12-2014, 02:19 PM

What if, as was the case under the Articles of Confederation, some States don't pay? .

That was corrected with the taxing powers granted to Congress which does allow for direct taxes, such as a capitation tax so long as it is apportioned among the States. But the founders intended that if Congress should lay any direct taxes, which reach the people or their property directly, the states would have an opportunity to pay their share rather than have the federal government enter the states and collect the tax directly from the people. This is made know in a number of the State Ratification documents, e.g., see Ratification of the Constitution by the State of New Hampshire (http://avalon.law.yale.edu/18th_century/ratnh.asp)

Fourthly That Congress do not lay direct Taxes but when the money arising from Impost, Excise and their other resources are insufficient for the Publick Exigencies; nor then, untill Congress shall have first made a Requisition upon the States, to Assess, Levy, & pay their respective proportions, of such requisitions agreeably to the Census fixed in the said Constitution in such way & manner as the Legislature of the State shall think best and in such Case if any State shall neglect, then Congress may Assess & Levy such States proportion together with the Interest thereon at the rate of six per Cent per Annum from the Time of payment prescribed in such requisition-

Also see the Act laying a direct tax for $3 million (http://memory.loc.gov/cgi-bin/ampage?collId=llsl&fileName=003/llsl003.db&recNum=94) in which the rule of apportionment is applied and each State’s Congressional Delegation returned home with a bill in hand for their State’s share of the direct tax.

And then see Section 7 of direct tax of 1813 (http://memory.loc.gov/cgi-bin/ampage?collId=llsl&fileName=003/llsl003.db&recNum=112) allowing states to raise and pay their respective quotas in their own chosen way and be entitled to certain deductions in meeting their payment on time.

JWK

Sonny Tufts

02-12-2014, 02:52 PM

But the founders intended that if Congress should lay any direct taxes, which reach the people or their property directly, the states would have an opportunity to pay their share rather than have the federal government enter the states and collect the tax directly from the people. This is made know in a number of the State Ratification documents, e.g., see Ratification of the Constitution by the State of New Hampshire (http://avalon.law.yale.edu/18th_century/ratnh.asp)

You seem to suggest that Direct Taxes under the Constitution are those that are payable by the people. That is not and never has been the law. Indeed, the material from the 1995 hearing that you posted a link to discusses luxury taxes, which are clearly taxes upon the people and their property and that were held to be indirect taxes that needn't be apportioned in the 1796 Hylton case.

johnwk

02-12-2014, 05:50 PM

You seem to suggest that Direct Taxes under the Constitution are those that are payable by the people. That is not and never has been the law. Indeed, the material from the 1995 hearing that you posted a link to discusses luxury taxes, which are clearly taxes upon the people and their property and that were held to be indirect taxes that needn't be apportioned in the 1796 Hylton case.

I'm not sure I understand you above comment.

As I recall in Hylton the tax was upon the "use" of a particular piece of property considered to be luxury, and not upon the property itself, and was thus considered to be an indirect tax.

Aside from that, there seems to be a consistency among the founders comments that direct taxes are those assessed to the individual by government, while indirect taxes are costs added by government to things which individuals are free to acquired or reject. For example, Hamilton's brief in the Hylton carriage case says: 'The following are presumed to be the only direct taxes: Capitation or poll taxes, taxes on lands and buildings, general assessments, whether on the whole property of individuals, or on their whole real or personal estate. All else must, of necessity, be considered as indirect taxes.'

But how does all this apply to going back to our Constitution's original tax plan?

JWK

Sonny Tufts

02-12-2014, 06:47 PM

As I recall in Hylton the tax was upon the "use" of a particular piece of property considered to be luxury, and not upon the property itself, and was thus considered to be an indirect tax.

That's the conventional wisdom, but the tax wasn't a one-time levy like a tariff or a sales tax, but rather a tax levied each year just like a property tax. There's little if any difference between an annual property tax based on the ownership of property and one based on its use. In other words, I think the tax was a property tax, and the only reason it was held to be an indirect tax is that the Justices thought that the only direct taxes under the Constitution were capitations and taxes on land.

My point regarding the original tax plan is that I don't agree that the Framers intended that direct taxes in the form of requisitions were necessarily to be resorted to in the event external taxes and luxury taxes were insufficient to raise needed revenue. Given the failure of the requisition system under the Articles of Confederation, it's more reasonable to assume that they intended to give Congress an extremely broad power to tax, and they left it up to Congress to determine the subject matter and methods to be employed. In other words, the category of Direct Taxes was intended to be a narrowly-defined category, as Hamilton's brief suggests. History has born this out, as the Supreme Court has restricted Direct Taxes to capitations and taxes on the mere ownership of property.

Of course, Congress could impose a direct tax without going through the States. For example, it could impose a national real property tax -- but the problem is that such a tax would have to be apportioned by population, and as pointed out in the Hylton case such an apportioned tax would result in far different tax rates for the landowners in each State, thereby making it politically untenable.

erowe1

02-12-2014, 06:49 PM

He would like to get rid of all taxes- but not until the debt is gone which will be never.

Fixed.

erowe1

02-12-2014, 06:51 PM

In light of the way this discussion has gone, I guess an alternate thread title could be:

johnwk: keep taxes, just change the type

Dianne

02-12-2014, 07:56 PM

NEVER FORGT !!!! Cruz's wife is an executive with Goldman Sax ... Need I remark any further??????

CRUZ = GOLDMAN SAX .... never forget that.

johnwk

02-12-2014, 11:02 PM

My point regarding the original tax plan is that I don't agree that the Framers intended that direct taxes in the form of requisitions were necessarily to be resorted to in the event external taxes and luxury taxes were insufficient to raise needed revenue. .

Well, I can only go by the documentation which shows the founders intentions. For example, several of the state ratification documents contain similar language as contained in the Ratification of the Constitution by the State of New Hampshire (http://avalon.law.yale.edu/18th_century/ratnh.asp)

Fourthly That Congress do not lay direct Taxes but when the money arising from Impost, Excise and their other resources are insufficient for the Publick Exigencies; nor then, untill Congress shall have first made a Requisition upon the States, to Assess, Levy, & pay their respective proportions, of such requisitions agreeably to the Census fixed in the said Constitution in such way & manner as the Legislature of the State shall think best and in such Case if any State shall neglect, then Congress may Assess & Levy such States proportion together with the Interest thereon at the rate of six per Cent per Annum from the Time of payment prescribed in such requisition-

JWK

“He has erected a multitude of new offices (Washington‘s existing political plum job Empire) (http://www.firstgov.gov/Agencies/Federal/All_Agencies/index.shtml) , and sent hither swarms of officers, to harass our people, and eat out their substance” ___Declaration of Independence

Weston White

02-13-2014, 03:24 AM

Just a few of my own thoughts acquired so far:

The reason for prohibiting export taxes was merely to proffer protection to the non-industrial states (e.g., still today many states depend upon their exports to generate expanding revenues); which later effected a prime causation leading to the Civil War, as Congress was laying heavy taxes upon manufactured products, thusly burdening purchases being made by the Southern agricultural states in the process.

Direct taxes are those levied upon the people or their property and collected by their residing state or from the people thereof. The are two divisions of direct taxes:

1. ‘personal taxes’: ‘capitation’ and ‘poll’ taxes; taxes on chattel or personalty
2. ‘other direct taxes’: assessments; land and realty taxes (as opposed to usage or transference)

Clarifying on the process of levying and collecting direct taxes is (Congressional Record of April 28,1909, page 1569-1570, Senator Brown of Nebraska):

“In order for Congress to levy a “Capitation, or other direct, Tax” they must first establish the amount of tax dollars to be collected, for this is what is to be apportioned according to population. Second, they must determine whether the tax will be assessed upon “people” (capitation) or upon “property” (or other direct). Third, this amount of tax is divided among the several States on the basis of their respective populations and the States can elect to pay the tax out of their own treasury. Or, if the States refuse, Congress can collect the tax directly from the population based upon the per-capita, per-acre or per-whatever “object” they made the assessment upon.”

Concerning the contextual construction of the “Taxing and Spending Clause”, Madison (father to the U.S. Constitution) held a more constricted view than did Hamilton; however, Hamilton speaking on the matter causes issue due to his absence through much of the Constitutional Convention. Moreover, Hamilton’s—pro-nationalistic—rhetoric was rejected at the Philadelphia Convention.

Further noting the core issue with the catch-all federal income tax scheme, which is that through trivial games of semantics and economical rhetoric new strategies of taxing can be readily levied without anybody being the wiser that they are actually either being taxed directly or in an matter constitutionally off-limits by the federal government, albeit using indirect (or ad valorem) means never intended by the U.S. Constitution, for example, taxing individual wage-earners upon their capital is in-fact a direct tax and has always been realized as being so:

Chief Justice Fuller in Pollock v. Farmers 158 U.S. 601, 625-626: “He gives, however, it appears to us, a definition which covers the question before us. A tax upon one’s whole income is a tax upon the annual receipts from his whole property, and as such falls within the same class as a tax upon that property and is a direct tax in the meaning of the Constitution.”

And moreover having prior stated (ibid, 157 U.S. 427, 583): “But the acceptance of the rule of apportionment was one of the compromises which made the adoption of the Constitution possible, and secured the creation of that dual form of government, so elastic and so strong, which has thus far survived in unabated vigor. If by calling a tax indirect when it is essentially direct, the rule of protection could be frittered away, one of the great landmarks defining the boundary between the Nation and the States of which it is composed, would have disappeared, and with it one of the bulwarks of private rights and private property.”

Finally, levying and collecting direct taxes is only constitutional when exigent circumstances arrive, thus the consequence becomes realized that the status quo interpretation of the modern day federal income tax—being both a tax upon source-capital and its resulting gain or profit—renders itself unconstitutional.

johnwk

02-14-2014, 08:40 AM

Weston,

I agree with your summary. The only thing I would like to clarify is that Hamilton actually agreed with Madison on the taxing and spending clause during the framing and ratification debates. He later changed his view after the Constitution had been adopted!

The historical fact is, the Hamilton “view” which the Court relied upon in the Social Security case was not made during the framing and ratification debates of our Constitution. It was made after the Constitution had been ratified when Hamilton was Secretary of the Treasury, and was made to gain support for appropriating revenue from the federal treasury to be used to encourage specific manufactures.

In his report on Manufactures, Hamilton writes with reference to the meaning of the phrase “general welfare” and Article 1, Section 8, Clause 1, See Page 136 (http://memory.loc.gov/cgi-bin/ampage?collId=llsp&fileName=009/llsp009.db&recNum=140)

“These three qualifications excepted, the power to raise money is plenary and indefinite, and the objects to which it may be appropriated, are providing for the common defense and general welfare. The terms “general welfare” were doubtless intended to signify more than was expressed or imported in those which preceded: otherwise, numerous exigencies incident to the affairs of a nation would have been left without a provision. The phrase is as comprehensive as any that could have been used; because it was not fit that the constitutional authority of the Union to appropriate its revenues should have been restricted within narrower limits than the “general welfare;” and because this necessarily embraces a vast variety of particulars, which are susceptible neither of specification nor of definition.”

But this comment made by Hamilton after the Constitution is adopted is in direct conflict with what Hamilton wrote in Federalist No. 83 to gain support for the adoption of the Constitution. In No. 83 Federalist and in explaining the meaning of the Constitution, Hamilton, in crystal clear language, refers to a “specification of particulars” which he goes on to say “evidently excludes all pretension to a general legislative authority“.

Hamilton writes:

"...the power of Congress...shall extend to certain enumerated cases. This specification of particulars evidently excludes all pretension to a general legislative authority, because an affirmative grant of special powers would be absurd as well as useless if a general authority was intended..."

This view expressed by Hamilton in the Federalist Papers during the framing and ratification debates is also in harmony with what Madison states during the framing and ratification debates:

Madison, in No. 41 Federalist, explaining the meaning of the general welfare clause to gain the approval of the proposed constitution, states the following:

"It has been urged and echoed, that the power "to lay and collect taxes...to pay the debts, and provide for the common defense and the general welfare of the United States amounts to an unlimited commission to exercise every power which may be alleged to be necessary for the common defense or general welfare. No stronger proof could be given of the distress under which these writers labor [the anti federalists] for objections, than their stooping to such a misconstruction...But what color can this objection have, when a specification of the object alluded to by these general terms immediately follows, and is not ever separated by a longer pause than a semicolon?...For what purpose could the enumeration of particular powers be inserted, if these and all others were meant to be included in the preceding general power...But the idea of an enumeration of particulars which neither explain nor qualify the general meaning...is an absurdity."

Likewise, in the Virginia ratification Convention Madison explains the general welfare phrase in the following manner so as to gain ratification of the constitution: "the powers of the federal government are enumerated; it can only operate in certain cases; it has legislative powers on defined and limited objects, beyond which it cannot extend its jurisdiction."[3 Elliots 95]
Also see Nicholas, 3 Elliot 443 regarding the general welfare clause, which he pointed out "was united, not to the general power of legislation, but to the particular power of laying and collecting taxes...."

Similarly , George Mason, in the Virginia ratification Convention informs the convention

"The Congress should have power to provide for the general welfare of the Union, I grant. But I wish a clause in the Constitution, with respect to all powers which are not granted, that they are retained by the states. Otherwise the power of providing for the general welfare may be perverted to its destruction.". [3 Elliots 442]

For this very reason the Tenth Amendment was quickly ratified to intentionally put to rest any question whatsoever regarding the general welfare clause and thereby cut off the pretext to allow Congress to extended its powers via the wording provide for the “general welfare“.

JWK

Sonny Tufts

02-14-2014, 12:52 PM

for example, taxing individual wage-earners upon their capital is in-fact a direct tax and has always been realized as being so

No court in the history of the country has ever held that a federal tax on wages is a direct tax that has to be apportioned. The first case in which this claim was made was Springer v. U. S., 102 U.S. 586 (1881). The Court rejected Mr. Springer's claim and held that the only direct taxes under the Constitutions were capitations and taxes on land. In so doing, it quoted Hamilton's brief in the Hylton case:

[Hamilton] suggests that the boundary line between direct and indirect taxes be settled by 'a species of arbitration,' and that direct taxes be held to be only 'capitation or poll taxes, and taxes on lands and buildings, and general assessments, whether on the whole property of individuals or on their whole real or personal estate. All else must, of necessity, be considered as indirect taxes.'

The tax here in question falls within neither of these categories. It is not a tax on the 'whole . . . personal estate' of the individual, but only on his income, gains, and profits during a year, which may have been but a small part of his personal estate, and in most cases would have been so. This classification lends no support to the argument of the plaintiff in error...

Our conclusions are, that direct taxes, within the meaning of the Constitution, are only capitation taxes, as expressed in that instrument, and taxes on real estate; and that the tax of which the plaintiff in error complains is within the category of an excise or duty.

It should be noted that Chief Justice Fuller's description of Hamilton's position, quoted from the Pollock case by Mr. White, is incorrect. Hamilton's brief never referred to a "tax upon one's whole income", but rather a tax on one's whole property. Pollock dealt solely with the question of whether a tax on investment income was a direct tax; it did not involve a tax on wages. In dicta, however, the Court recognized the validity of such a tax:

We have considered the act only in respect of the tax on income derived from real estate, and from invested personal property, and have not commented on so much of it as bears on gains or profits from business, privileges, or employments, in view of the instances in which taxation on business, privileges, or employments has assumed the guise of an excise tax and been sustained as such...

According to the census, the true valuation of real and personal property in the United States in 1890 was $65,037,091,197, of which real estate with improvements thereon made up $39,544,544,333. Of course, from the latter must be deducted, in applying these sections, all unproductive property and all property whose net yield does not exceed $4,000; but, even with such deductions, it is evident that the income from realty formed a vital part of the scheme for taxation embodied therein. If that be stricken out, and also the income from all invested personal property, bonds, stocks, investments of all kinds, it is obvious that by far the largest part of the anticipated revenue would be eliminated, and this would leave the burden of the tax to be borne by professions, trades, employments, or vocations; and in that way what was intended as a tax on capital would remain, in substance, a tax on occupations and labor. We cannot believe that such was the intention of congress. We do not mean to say that an act laying by apportionment a direct tax on all real estate and personal property, or the income thereof, might not also lay excise taxes on business, privileges, employments, and vocations. But this is not such an act, and the scheme must be considered as a whole. Being invalid as to the greater part, and falling, as the tax would, if any part were held valid, in a direction which could not have been contemplated, except in connection with the taxation considered as an entirety, we are constrained to conclude that sections 27 to 37, inclusive, of the act, which became a law, without the signature of the president, on August 28, 1894, are wholly inoperative and void.

Pollock was an exeedingly unpopular 5-4 decision, and it has the ignominious distinction of being one of only three Supreme Court decisions to be overturned by a constitutional amendment. Regardless of arguments over what the Founders thought about income taxes, the 16th Amendment makes it perfectly clear that an income tax doesn't have to be apportioned.

Weston White

02-14-2014, 02:47 PM

As usual Sonny is being entirely misleading and incorrect:

1. That is simply because SCOTUS to date has refused to hear all such case, and it is not as if they have had plenty of opportunities to have done so… Must we really ponder as to why?
2. Sonny is taking the Springer case out of context, the Court had simply enumerated the only forms of direct taxation that Congress had instituted up to that point in time, in a historical context. That was not to mean there would not or could not be others assessed in the future… Otherwise such a nonsensical notion would require for itself to be applied to all modern forms of indirect taxation not specifically stipulated within the U.S. Constitution.
3. While the Court has found the federal income tax to generally be a direct tax (as it had been intended by England’s several revisions of this method of taxation starting in 1799)—and subsequently it has since even been written into a few federal regulations and acknowledged by the IRS (on their student learning Website)—ergo, that the individual income tax is effectively a direct tax. This is precisely why the Sixteenth Amendment was ratified. Otherwise there would have never been such a necessity.
4. The core of the matter is not specifically “wages” (as Sonny so avariciously clings to), but capital—i.e., one’s ‘source’, which is representative of the so-called “wages” concern—and moreover of one’s whole private property acquired throughout a given tax-period.
5. You are only partially correct, in that income taxes no longer require apportionment; however, when attempting to apply that very income tax in a manner that is intended to circumvent constitutional constraint, it then requires apportionment—which is exactly and undoubtedly what the progressive mindset attempts to do. The federal government has neither the business nor necessity to be collecting over $2.3-trillion annually from working class, hard-working Americans.

Actually, the court in Pollock was quoting from 7 Hamilton’s Works, 848: “A tax upon one's whole income is a tax upon the annual receipts from his whole property, and as such falls within the same class as a tax upon that property, and is a direct tax in the meaning of the Constitution.” Further see, ibid, 247 U.S. 179, 185 (1918); 247 U.S. 330, 335 (1918).

And still quoting more from Mr. Hamilton, ibid, 157 U.S. 429, 591; 158 U.S. 601, 626 (1895), this being from 3 Hamilton’s Works, 34: “This principle, which seems critically correct, would exempt as well the income as the capital of the property. It protects the use as effectually as the thing. What, in fact, is property but a fiction without the beneficial use of it? In many cases, indeed, the income or annuity is the property itself.”

Again reemphasizing that the Court clearly stated that: "He [Mr. Hamilton] gives, however, it appears to us, a definition which covers the question before us [i.e., his or her whole income, annual receipts, whole property]." Now it just does not get any more transparent, any more clearer than that.

I rest my case. It was certainly a pleasure. Thank you. :D

johnwk

02-14-2014, 03:48 PM

No court in the history of the country has ever held that a federal tax on wages is a direct tax that has to be apportioned.

And our Supreme Court has recently held "Obamacare" is constitutional. What's your point especially if a court's opinion is not in harmony with the legislative intent of our constitution?

As to whether or not a tax on earned wages is direct or not, a review of Adam Smith, Wealth of Nations, a contemporary writing of the time which our Founders were very much familiar with, we find the following reference regarding a capitation tax as being a direct tax:

“Capitation taxes, so far as they are levied upon the lower ranks of people, are direct taxes upon the wages of labor.” Adam Smith, Wealth of Nations, id. at pg. 540.

From the historical documents I have read [ contemporary to our founder's times] it appears that direct taxes are those assessed directly to the individual by government, while indirect taxes are costs added by government to things which individuals are free to acquired or reject.

JWK

Sonny Tufts

02-14-2014, 05:32 PM

As to whether or not a tax on earned wages is direct or not, a review of Adam Smith, Wealth of Nations, a contemporary writing of the time which our Founders were very much familiar with, we find the following reference regarding a capitation tax as being a direct tax:

“Capitation taxes, so far as they are levied upon the lower ranks of people, are direct taxes upon the wages of labor.” Adam Smith, Wealth of Nations, id. at pg. 540.

Smith's definition of a capitation was one that is payable from whatever revenue the payor might have -- "The taxes which, it is intended, should fall indifferently upon every different species of revenue, are capitation taxes, and taxes upon consumable commodities. These must be paid indifferently from whatever revenue the contributors may possess; from the rent of their land, from the profits of their stock, or from the wages of their labour." (Part II, Article IV) In other words, a capitation, unlike an income tax, isn't aimed at any particular fund. When he says that capitations levied on the lower rakns are effectively a tax on their wages, all he means is that wages are the only fund out of which the lower ranks can pay.

But this doesn't mean that a tax on wages is a capitation under the Constitution. If it were, it would only be a capitation as to the lower ranks, while a tax on the higher ups would not be a capitation because they wouldn't necessarily have to pay it out of wages.

From the historical documents I have read [ contemporary to our founder's times] it appears that direct taxes are those assessed directly to the individual by government, while indirect taxes are costs added by government to things which individuals are free to acquired or reject.

The Hylton case, decided just 8 years after the ratification of the Constitution by a court 3 out of the 4 justices of which had been directly involved in the constitutional conventions, says otherwise. The carriage tax was assesed directly to Mr. Hylton, yet it was held to be an indirect tax.

Sonny Tufts

02-14-2014, 06:25 PM

As usual Sonny is being entirely misleading and incorrect:

1. That is simply because SCOTUS to date has refused to hear all such case, and it is not as if they have had plenty of opportunities to have done so… Must we really ponder as to why?

Because the Court has a limited amount of time to decide cases, and it doesn't need to waste it on crackpot arguments that have been consistently and uniformly rejected by every other court that has has to waste its time listening to them.

2. Sonny is taking the Springer case out of context, the Court had simply enumerated the only forms of direct taxation that Congress had instituted up to that point in time, in a historical context.

The Springer case dealt with the Civil War income tax, which applied to all income over a certain amount, including wages. The Court unanimously held that it was not a direct tax. Nothing is out of context.

3. While the Court has found the federal income tax to generally be a direct tax (as it had been intended by England’s several revisions of this method of taxation starting in 1799)—and subsequently it has since even been written into a few federal regulations and acknowledged by the IRS (on their student learning Website)—ergo, that the individual income tax is effectively a direct tax. This is precisely why the Sixteenth Amendment was ratified. Otherwise there would have never been such a necessity.

False. The only time in history that the Court held an income tax to be a direct tax was in Pollock, and it restricted its holding to investment income (interest, rents, dicvidends, etc.) The reason the 16th was needed was so that the tax could reach the investment income of the rich.

You are only partially correct, in that income taxes no longer require apportionment; however, when attempting to apply that very income tax in a manner that is intended to circumvent constitutional constraint, it then requires apportionment—which is exactly and undoubtedly what the progressive mindset attempts to do. The federal government has neither the business nor necessity to be collecting over $2.3-trillion annually from working class, hard-working Americans.

Mr. White is hopelessly wrong. The only constitutional constraint on the income tax is that it must be geographically uniform and that it not violate things like equal protection and due process. The $2.3 trillion figure is the total of all taxes collected by the federal government. The individual income tax accounted for only $1 trillion, and of this amount the bottom half of all taxpayers paid only $30 billion. See http://taxfoundation.org/article/summary-latest-federal-income-tax-data

Actually, the court in Pollock was quoting from 7 Hamilton’s Works, 848: “A tax upon one's whole income is a tax upon the annual receipts from his whole property, and as such falls within the same class as a tax upon that property, and is a direct tax in the meaning of the Constitution.” Further see, ibid, 247 U.S. 179, 185 (1918); 247 U.S. 330, 335 (1918).

And still quoting more from Mr. Hamilton, ibid, 157 U.S. 429, 591; 158 U.S. 601, 626 (1895), this being from 3 Hamilton’s Works, 34: “This principle, which seems critically correct, would exempt as well the income as the capital of the property. It protects the use as effectually as the thing. What, in fact, is property but a fiction without the beneficial use of it? In many cases, indeed, the income or annuity is the property itself.”

A citation to 7 Hamilton's Works 848 doesn't appear in either the Pollock or Southern Pacific cases cited. And the language citated to 3 Hamilton's Works 34 dealt with a report on the public credit in which Hamilton discussed contracts with citizens of a foreign country. Not sure what this has to do with taxes.

johnwk

02-14-2014, 08:32 PM

Smith's definition of a capitation was one that is payable from whatever revenue the payor might have -- "

And, in Hamilton's brief in the Hylton carriage case he says: 'The following are presumed to be the only direct taxes: Capitation or poll taxes, taxes on lands and buildings, general assessments, whether on the whole property of individuals, or on their whole real or personal estate. All else must, of necessity, be considered as indirect taxes.'

The fact is, you cannot provide one instance during the time period our Constitution was being framed and ratified in which a tax was levied upon a working person's earned wage and not considered to be direct.

JWK

johnwk

02-14-2014, 08:44 PM

The Hylton case, decided just 8 years after the ratification of the Constitution by a court 3 out of the 4 justices of which had been directly involved in the constitutional conventions, says otherwise. The carriage tax was assesed directly to Mr. Hylton, yet it was held to be an indirect tax.

Yes, it was held to be indirect but that does not help you absurd opinion that a tax on earned wages is not a direct tax. As to the carriage case let us look at the facts which you fail to post and instead offer your opinions.

In the Hylton Case, the carriages were consider articles of luxury and the excise was upon luxury and therefore indirect just like the tax in Flint was not upon income but upon the privilege of being a corporation making the tax indirect while the amount of tax to be paid was measured by the income realized under the privilege. And this distinction to tax carriages as a luxury is made known in crystal clear language in the “Act laying duties upon carriages for the conveyance of persons.” (http://memory.loc.gov/cgi-bin/ampage?collId=llsl&fileName=001/llsl001.db&recNum=497)

Provided always, That nothing herein contained shall be construed to charge with a duty, any carriage usually and chiefly employed in husbandry, or for transporting or carrying, goods, wares, merchandise, produce or commodities.”

However, taxes laid upon property are considered to be direct taxes and this fact was also stated during the House Debates with reference to a tax upon carriages!

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 if 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."SEE: House of Representatives, Tuesday, May 6th, 1794,page 644 (http://memory.loc.gov/cgi-bin/ampage?collId=llac&fileName=004/llac004.db&recNum=319)

JWK

MRK

02-14-2014, 10:11 PM

I've been critical of Cruz lately, but that headline is completely ridiculous. All he said was that he's in favor of cutting taxes.

I like it. It reminds the reader that the income tax is not a given like we were conditioned and raised to believe.

Weston White

02-15-2014, 03:47 AM

Sonny’s response on the quoting of Smith is again nonsensical. If for but a few of the following reasons:

1. Only the lower ranks of people or the proletariats labored under wages.
2. The lower ranks of people did not possess any land for which to rent; the lower ranks of people did not possess any stock from which to profit.
3. The key distinction concerning ‘capitation taxes’ is that they are assessed directly upon the person themselves with regard to their own industry or occupation, and ergo, correlating their competency, livelihood, or subsistence; further ‘poll taxes’ are assessed directly on who you are as a person.
4. No, that is certainly not the only thing Smith intended, he ends that sentence specifically emphasizing such means of taxing to be a “direct tax upon those wages”, in other words every individual’s capital.
5. Otherwise the apportionment clauses within the U.S. Constitution are meaningless as Congress may easily circumvent them at any turn, upon any whim, or at their pleasure or desire to do so. Thusly, rendering all such clauses and references to be utterly meaningless and as statutory surplus, a clear violation of core statutory cannons.
6. An individual’s labor, just as their money, is their private property and common labor is an immutable right not to be trifled through legislation, in-part from Butcher’s Union Co. v. Crescent City Co., 111 U.S. 746, 757, 762 (1884) in quoting from Dr. Adam Smith’s “Wealth of Nations” (1776):

“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. . . .”

7. Further quoted form Pollock, clarifying exactly just how badly incorrect Sonny is for even daring to argue this issue (and why he retains his anonymity as a troll of the Internet and sock-puppet for the government):

“But 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 taxes in 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. …”

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, and falling immediately on, the revenue, and, by indirect, those which are paid indirectly out of the revenue by falling immediately upon the expense.”

Firstly, to simply state that the tax within Hylton was merely upon “coaches” (the luxury item of its day, used for public travel) is rather dishonest; as in 157 U.S. 429, 569 (1895): “Fisher Ames declared that he had satisfied himself that it was not a direct tax, as “the duty falls not on the possession, but on the use.” Annals 730.”

And more at 157 U.S. 429, 570 (1895) 570: “3 Gallatin's Writings (Adams' ed.) 74, 75. The act provided in its first section ‘that there shall be levied, collected, and paid upon all carriages for the conveyance of persons, which shall be kept by or for any person for his or her own use, or to be let out to hire or for the conveyance of passengers, the several duties and rates following,’”

Secondly, in referencing both the Hylton and Springer cases, their scope had been narrowed by the subsequent findings of Pollock—and Sonny just loves to overlook that truth, because of its inconvenience for him. Debating Hylton or Springer is little else than a red-herring (e.g., much of the logic depended upon within Hylton is just downright deplorable.)

Pollock found taxes laid upon income derived from property to be direct, which logically indicates that taxes upon property itself are also direct. The Sixteenth Amendment only ever intended to transpose the former method. Furthermore, the Court has always acknowledged a clear and distinct differentiation between the two, as explicitly set forth within our U.S. Constitution.

This is so far from being a crack-pot issue; the IRS even recognizes it to be a major and ongoing concern to their overall “mission”, by a sum of over 10,000 filers, which only grows with each passing year. Actually, it is such a major issue that the IRS lobbied Congress for a new weapon that was impended as of 2007, the amending of 26 USC 6702 into a tool for which to wage mass-abuse—and the IRS has since unscrupulously used their revamped tool to do just that, meanwhile greatly creeping outside of its rightful breadth.

It is the primary duty of the U.S. Supreme Court to address all questions of constitutionality, without regard to how much of a “crackpot argument” it may sound—still the fact remains the issue has been left unresolved by the Court. Furthermore, it is the duty of every court, including SCOTUS to remain impartial and just in all instances.

And if you really want to reference the Court not having the time to hear such cases, one becomes compelled to ponder if the reason for that could be attributed to them instead wasting the majority of their highly valuable time hearing other tax related arguments that unlike the current argument, have time-and-time again already been so well settled by the Court that the matter should of been blatantly obvious to begin with.

In the Springer case, the matter of “wages” was never addressed, as always it was “income, gains, and profits” that was central to the breadth of the case. In the year 1865, Mr. Springer had reported earnings of $50,798—while he was an attorney that was actively involved in politics from a young age and at the time of this case (1880) was a longtime congressman (D-IL)—so no he was not just some common laborer seeking mere competency.

“False.” Actually, not so much; as technically that is what I had insinuated (if you do not believe me, I suggest for you to review my discourse—a link is located in my signature). While ironically it is precisely “interest, rents, dividends, etc.” which is the primary scope of the federal income taxing scheme.

I am not incorrect on the prior point. The income tax may only be levied upon what was legislatively argued (viz., legislative history) as being ‘constitutional income’—including federal regulations as: “income not taxable by the Federal Government under the Constitution”—ergo, there must first exist a capitalistic source from which the income tax may seek its gain or profit from.

As to comment about the $2.3-trillion, yet again I must remind Sonny that figure includes the additional taxes respective to one’s reported or withheld gross income, which additionally include: Medicare, Social Security, (add to this the ACA), etc., and their employer’s FICA—for without surpassing the income reporting threshold those would all amount to zero.

Sonny is again incorrect, both of my above quotations may be readily viewed HERE (https://supreme.justia.com/cases/federal/us/158/601/case.html#625).

Let us put an end to this matter now. I will just include the full quotation, as from Pollock v. Farmers' Loan & Trust Company, 158 U.S. 601, 625-626 (1895):

”... 7 Hamilton's Works, 848. Mr. Hamilton therefore clearly supported the law which Mr. Madison opposed, for the same reason that his friend Fisher Ames did, because it was an excise, and, as such, was specifically comprehended by the Constitution. Any loose expressions in definition of the word "direct," so far as conflicting with his well considered views in the Federalist, must be regarded as the liberty which the advocate usually thinks himself entitled to take with his subject. He gives, however, it appears to us, a definition which covers the question before us. A tax upon one's whole income is a tax upon the annual receipts from his whole property, and as such falls within the same class as a tax upon that property, and is a direct tax in the meaning of the Constitution. And Mr. Hamilton, in his report on the public credit, in referring to contracts with citizens of a foreign country, said: "This principle, which seems critically correct, would exempt as well the income as the capital of the property. It protects the use as effectually as the thing. What, in fact, is property but a fiction without the beneficial use of it? In many cases, indeed, the income or annuity is the property itself." 3 Hamilton's Works 34.”

As to the first quotation, it appears to actually be a paraphrasing of Hamilton by the Court, (I had always presumed they were further expanding upon text from the prior cited quotation from that same work—well that better explains why the following portion does not contain quotation marks—egg on my face); but is in-fact part of Hamilton’s carriage tax briefing being referenced (viewable at: The Works of Alexander Hamilton, (Federal Edition), vol. 8, p. 239 (http://files.libertyfund.org/files/1385/Hamilton_0249-08_EBk_v7.0.pdf)):

“The following are presumed to be the only direct taxes. Capitation or poll taxes. … General assessments, whether on the whole property of individuals, or on their whole real or personal estate; all else must of necessity be considered as indirect taxes.”

As to the follow-up reference concerning 3 Hamilton's Works 34, again it was resourced in Pollock—not just once, but within both Pollock decisions, so the Justices must have felt value by having included it, at any rate, it is its context that is to be regarded, as it is solidly founded by logical tenets that are irrefragable.

In summary:

“Whatever difficulty there may be about a precise and scientific definition of “income,” it imports, as used here, something entirely distinct from principal or capital either as a subject of taxation or as a measure of the tax, conveying, rather, the idea of gain or increase arising from corporate activities.”
Doyle v. Mitchell Bros. Co., 247 U.S. 179, 185 (1918) (http://supreme.justia.com/cases/federal/us/247/179/case.html#185)

“We must reject in this case, as we have rejected in cases arising under the Corporation Excise Tax Act of 1909 ..., the broad content on submitted in behalf of the government that all receipts -- everything that comes in -- are income within the proper definition of the term "gross income," and that the entire proceeds of a conversion of capital assets, in whatever form and under whatever circumstances accomplished, should be treated as gross income.”
Southern Pacific Co. v. Lowe, 247 U.S. 330, 335 (1918) (http://supreme.justia.com/cases/federal/us/247/330/case.html#335)

“The Court has hitherto consistently held that a literal reading of a provision of the Constitution which defeats a purpose evident when the instrument is read as a whole is not to be favored. … “From whatever source derived,” as it is written in the Sixteenth Amendment, does not mean from whatever source derived. …”
Wright v. United States, 302 U.S. 583, 607 (1938) (http://supreme.justia.com/cases/federal/us/302/583/case.html#607)

Weston White

02-15-2014, 04:02 AM

Well, John has this thread on lockdown. My services don’t seem to be needed here… The IRS will be sad to hear that I am sure. :rolleyes:

Sonny Tufts

02-15-2014, 04:39 PM

An individual’s labor, just as their money, is their private property and common labor is an immutable right not to be trifled through legislation, in-part from Butcher’s Union Co. v. Crescent City Co., 111 U.S. 746, 757, 762 (1884) in quoting from Dr. Adam Smith’s “Wealth of Nations” (1776):

“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. . . .”

Tax protesters love to quote this passage, but they are either oblivious to, or wish to conceal, the fact that it is from the concurring opinion of a single Justice in an antitrust case that had absolutely nothing to do with taxation. Moreover, the Justice who wrote it voted to uphold the Civil War income tax in the Springer case just 3 years earlier.

Firstly, to simply state that the tax within Hylton was merely upon “coaches” (the luxury item of its day, used for public travel) is rather dishonest; as in 157 U.S. 429, 569 (1895): “Fisher Ames declared that he had satisfied himself that it was not a direct tax, as “the duty falls not on the possession, but on the use.” Annals 730.”[/quote[]

There is no distinction between taxing Hylton's ownership and taxing his use. It was stipulated in Hylton that the carriages were not used for commercial purposes but were solely for personal use.

[quote]Secondly, in referencing both the Hylton and Springer cases, their scope had been narrowed by the subsequent findings of Pollock—and Sonny just loves to overlook that truth, because of its inconvenience for him. Debating Hylton or Springer is little else than a red-herring (e.g., much of the logic depended upon within Hylton is just downright deplorable.)

What Mr. White overlooks is that Pollock has been completely eviscerated, so his clinging to it is simply a case of denial. First of all, one of its holdings (that a tax on investment income is a direct tax that has to be apportioned) was overturned by the 16th Amendment. Second, its reasoning was later characterized as erroneous by the Court itself. Third, its other holding that interest on state and local bonds is constitutionally exempt from federal income taxation was overturned by the Court itself in 1987.

“The Court has hitherto consistently held that a literal reading of a provision of the Constitution which defeats a purpose evident when the instrument is read as a whole is not to be favored. … “From whatever source derived,” as it is written in the Sixteenth Amendment, does not mean from whatever source derived. …”
Wright v. United States, 302 U.S. 583, 607 (1938) (http://supreme.justia.com/cases/federal/us/302/583/case.html#607)

Ah yes, the Wright case that ignorant tax protesters (a redundant term) like to cite. The problem is that few have ever read the case. First, the quotation from Wright is dictum, that is, language that is totally unnecessary to the holding of the case (Wright involved the issue of whether a bill conferring jurisdiction on the Court of Claims had been legally passed -- it did not involve the Sixteenth Amendment in the slightest). Second, it is BAD dictum; that is, the Wright decision was purportedly citing the quoted statement as having been announced by a prior decision, Evans v. Gore, 253 U.S. 245 (1920). Unfortunately, the Evans decision doesn't contain the statement. Evans involved the issue whether salaries of federal judges could be constitutionally subject to an income tax that was generally applicable to all citizens, in light of the provision in Article III, 1 of the Constitution that prohibits the diminution of a federal judge's salary while in office. The Evans decision held that the Sixteenth Amendment did not override the prohibition in Article III, but it never uttered the statement attributed to it by Wright. By the way, Evans was later overruled in O'Malley v. Woodrough, 307 U.S. 277 (1939), so that federal judges are now subject to the income tax like everyone else. The other cases cited by Wright after referring to Evans v. Gore likewise had absolutely nothing to do with either the 16th Amendment or with Congress’ taxing power.

People like Mr. White who claim that an unapportioned federal tax on wages is unconstitutional have three problems: first, they cannot point to any provision in the Constitution that says so; second, they cannot find any court decision that has ever said so; and third, they cannot distinguish the countess cases that have rejected this idiotic claim. All they do is whine about the "corrupt courts", which fits nicely into their paranoid outlook.

johnwk

02-16-2014, 07:04 AM

Firstly, to simply state that the tax within Hylton was merely upon “coaches” (the luxury item of its day, used for public travel) is rather dishonest; as in 157 U.S. 429, 569 (1895): “Fisher Ames declared that he had satisfied himself that it was not a direct tax, as “the duty falls not on the possession, but on the use.” Annals 730.”[/quote[]

There is no distinction between taxing Hylton's ownership and taxing his use. It was stipulated in Hylton that the carriages were not used for commercial purposes but were solely for personal use.

.

The only one being dishonest is you who ignores the documented facts, especially the legislative intent under which the tax upon carriages was adopted. I previously wrote:

[QUOTE=Sonny Tufts;5418282]

The Hylton case, decided just 8 years after the ratification of the Constitution by a court 3 out of the 4 justices of which had been directly involved in the constitutional conventions, says otherwise. The carriage tax was assesed directly to Mr. Hylton, yet it was held to be an indirect tax.

Yes, it was held to be indirect but that does not help you absurd opinion that a tax on earned wages is not a direct tax. As to the carriage case let us look at the facts which you fail to post and instead offer your opinions.

In the Hylton Case, the carriages were consider articles of luxury and the excise was upon luxury and therefore indirect just like the tax in Flint was not upon income but upon the privilege of being a corporation making the tax indirect while the amount of tax to be paid was measured by the income realized under the privilege. And this distinction to tax carriages as a luxury is made known in crystal clear language in the “Act laying duties upon carriages for the conveyance of persons.” (http://memory.loc.gov/cgi-bin/ampage?collId=llsl&fileName=001/llsl001.db&recNum=497)

Provided always, That nothing herein contained shall be construed to charge with a duty, any carriage usually and chiefly employed in husbandry, or for transporting or carrying, goods, wares, merchandise, produce or commodities.”

However, taxes laid upon property are considered to be direct taxes and this fact was also stated during the House Debates with reference to a tax upon carriages!

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 if 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."SEE: House of Representatives, Tuesday, May 6th, 1794,page 644 (http://memory.loc.gov/cgi-bin/ampage?collId=llac&fileName=004/llac004.db&recNum=319)

JWK

Weston White

02-17-2014, 11:15 AM

* I was awaiting for Sonny to first respond to John’s post prior to posting my follow-up, but he was on earlier for a bit and went offline without responding, so I guess he is simply going to again ignore John.

My follow-up:

Not being a tax protester myself, I cannot speak to the loves and whatnot of supposed tax protesters—i.e., personally I have no problem with taxation in general (or constitutional governance), and believe that the income tax, when being correctly and responsibly imposed, is actually a fairly reasonable method of internal taxation, but unfortunately due to overwhelming greed and power-lust emanating from within the government, this is far, far from being the case.

Did Sonny purposefully confabulate the fact that the quoted material was from Dr. Adam Smith, thereby directing the very matter into one of economy and taxation—which is likely Locke inspired (i.e., Section 27 of his “Second Treatise of Civil Government”)?

Still further, when the context of a stated principle is relationally applicable, the framed subject-matter of a case is not relevant. And a principle pertaining to the right of individual competency and to property does relationally pertain to the subject-matter of individual taxation. Regardless, the source-in-reference retains its relevancy as persuasive authority. What is important is that the Court relied upon the material in rendering its decision.

The fact the Justices collectively upheld an income tax is also not relevant; ergo, there was nothing bad or wrong about the income tax until around the 1940’s—because up to that point, it had been imposed in a manner that was perfectly constitutional, at least until Pollock and later corrected by the Sixteenth Amendment.

While the decisions pertinent to the subject-matter presented before the Court in Pollock, including its rehearing, is, at least largely, no longer applicable, what still retains its applicability however, is the Court’s in-depth and thoughtfully researched context, its myriad of references, quotations, citations, and responsible logic that the Justices had wisely, and at great length dispersed throughout its findings.

Moreover, I can only ponder why Sonny lacks the observation skills to realize that Pollock has been frequently referenced within subsequent Court decisions (e.g., from Google, about 2,800 results are returned for the query: “site:justia.com pollock and 157 and 429 or 158 and 601”).

What Sonny is apparently advocating for is that the sum of referenced materials, tenets, records, doctrines, dictum, cannons, etc. used in a case that has gone on to be overturned (and most likely without concern to the degree of being overturned) somehow becomes tainted within that process, all being relegated into legal irrelevance—a vastly dangerous cause to be advocated.

I suppose that Sonny has just conveniently overlooked John’s posts. Wherein he referenced (House of Representatives, 3rd Congress, 1st Session, June 5, 1794):

“SECTION. 1. . . . Provided always, That nothing herein contained shall be construed to charge with a duty, any carriage usually and chiefly employed in husbandry, or for the transporting or carrying of goods, wares, merchandise, produce or commodities.” p.374

‘If, then, the Legislature be authorized to impose a tax on every subject of revenue, (and surely pleasure carriages, as objects of luxury, and, in general, owned by those to whom contributions would not be inconvenient, were fair and proper subjects of taxation,) and a tax on them could not be apportioned by the Constitutional ratio, it would follow irresistibly that such a tax, in this sense of the Constitution, is not “direct.”’ p. 644

“According to these opinions, 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 effect. On the other hand, a tax imposed on a specific article of personal property, and particularly if 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.” pp. 644-645

“He said his colleague [Mr. SEDGWICK] had stated the meaning of direct taxes to be a capitation tax, or a general tax on all the taxable property of the citizens; and that a gentleman from Virginia [Mr. NICHOLAS] thought the meaning was, that all taxes are direct which are paid by the citizen without being recompensed by the consumer; but that, where the tax was only advanced and repaid by the consumer, the tax was indirect. He thought that both opinions were just, and not inconsistent, though the gentleman had differed about them. He though that a general tax on all taxable property was a direct tax, because it was paid without being recompensed by the consumer.” p. 646

Regarding the Wright case, not exactly, “MR. JUSTICE STONE, dissenting in part” and “MR. JUSTICE BRANDEIS concurs in this opinion” cited to over one-dozen cases within that specific section, expanding upon several instances of what “the Court has consistently held…”

Regardless, dictum that is profound holds value in itself; while not controlling, it is authoritative. Sonny is in error for asserting that by labeling something as mere ‘dicta’/‘dictum’ (consisting of various classifications, such as ‘obiter dictum’, which is more an instance of being an opinionated side-thought, observation, or commentary) it should just be outright ignored.

(Sonny is now reducing himself to the use of redundant terms? Gee, he must be slipping up.)

Concerning the quotation from Wright (Possibly mistakenly paraphrased from a brief not included within its published opinion?), it could otherwise be a paraphrasing from Evans v. Gore, 253 U.S. 245, 262 (1920), likely relative to the following, which is in reference to each of the following: Brushaber, Eisner, Robertson, Gompers, Bain Peanut Co., and U.S. v. Lefkowitz:

“Thus, the genesis and words of the amendment unite in showing that it does not extend the taxing power to new or excepted subjects, but merely removes all occasion otherwise existing for an apportionment among the states of taxes laid on income, whether derived from one source or another. And we have so held in other cases.

In Brushaber v. Union Pacific R. Co., 240 U. S. 1, 240 U. S. 17-18, where the purpose and effect of the amendment were first drawn in question, the Chief Justice reviewed at length the legislative and judicial action which prompted its adoption, and then, referring to its text and speaking for a unanimous Court, said:

‘It is clear on the face of this text that it does not purport to confer power to levy income taxes in a generic sense -- an authority already possessed and never questioned -- or to limit and distinguish between one kind of income taxes and another, but that the whole purpose of the amendment was to relieve all income taxes when imposed from apportionment from a consideration of the source whence the income was derived. ...that is, determining whether a tax on income was direct not by a consideration of the burden placed on the taxed income upon which it directly operated, but by taking into view the burden which resulted on the property from which the income was derived, since, in express, terms the amendment provides that income taxes, from whatever source the income was derived, shall not be subject to the regulation of apportionment.”’

And as to the principle, perhaps more from, Eisner v. Macomber, 252 U.S. 189, 206 (1920):

“A proper regard for its genesis, as well as its very clear language, requires also that this amendment shall not be extended by loose construction, so as to repeal or modify, except as applied to income, those provisions of the Constitution that require an apportionment according to population for direct taxes upon property, real and personal. This limitation still has an appropriate and important function, and is not to be overridden by Congress or disregarded by the courts.”
Additionally, in Robertson v. Baldwin, 165 U.S. 275, 281-282 (1897): Quoted below (i.e., infra).

Additionally, in Gompers v. United States, 233 U.S. 604,610 (1914):

“But the provisions of the Constitution are not mathematical formulas having their essence in their form; they are organic, living institutions transplanted from English soil. Their significance is vital, not formal; it is to be gathered not simply by taking the words and a dictionary, but by considering their origin and the line of their growth.”

Additionally, in Bain Peanut Co. v. Pinson, 282 U.S. 499, 501 (1931):

“The interpretation of constitutional principles must not be too literal. We must remember that the machinery of government would not work if it were not allowed a little play in its joints.”

Additionally, in United States v. Lefkowitz, 285 U.S. 452, 467 (1932):

“And this Court has always construed provisions of the Constitution having regard to the principles upon which it was established. The direct operation or literal meaning of the words used do not measure the purpose or scope of its provisions.”

And most importantly, yes we can (see we too can hang just like “President Barack Obama”):

1a. Declaration of Independence: “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. —That to secure these rights, Governments are instituted among Men…”

1b. U.S. Constitution (A1,S9,C3): “No capitation, or other direct, tax shall be laid, unless in proportion to the census or enumeration herein before directed to be taken.” (Noting that I had previously written upon the various types of direct taxes—including other direct taxes—a few posts back.)

1c. Fifth Amendment (as to the respect of due process): “…nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.”

1d. All respective rights are respectfully enumerated in historical context by such documents as: Code of Hammurabi (1772 B.C.), Magna Carta (1215), English Bill of Rights (1689), Virginia Declaration of Rights (1776), Declaration of the Rights of Man (France, 1789), et al.

1e. Being further emphasized in Robertson v. Baldwin, 165 U.S. 275, 281-282 (1897):

“The law is perfectly well settled that the first ten amendments to the Constitution, commonly known as the “Bill of Rights,” were not intended to lay down any novel principles of government, but simply to embody certain guaranties and immunities which we had inherited from our English ancestors, and which had, from time immemorial, been subject to certain well recognized exceptions arising from the necessities of the case. In incorporating these principles into the fundamental law, there was no intention of disregarding the exceptions, which continued to be recognized as if they had been formally expressed. …”

1f. Hamilton stating in Federalist No. 84:

“The truth is, after all the declamations we have heard, that the constitution is itself in every rational sense, and to every useful purpose, A BILL OF RIGHTS. . . . Here, in strictness, the people surrender nothing, and as they retain everything, they have no need of particular reservations. ‘WE, THE PEOPLE of the United States, to secure the blessings of liberty to ourselves and our posterity, do ORDAIN and ESTABLISH this Constitution for the United States of America.’”

2a. This point is frivolous, it makes a presumption that the prior establishing of common law on a specific subject-matter is a first element required in establishing ripeness to set-forth a legal action, seek redress, or protest—it is not; if that be true there would be no common law; there would be no grievances; and there would never be any protesting, as there would just be no point, at all.

2b. Not that specifically use the term ‘wages’, but there are dozens of U.S. Supreme Court cases (also including a myriad of constitutional debates, legislative histories, major economical writings, and other such persuasive authorities) that directly address the tenets of private labor, property, capital, and competency.

3. If the Court has never addressed the matter of “wages”—as you had just asserted above—the Court could not have rejected it; because, obviously, they have never bothered addressing it in the first place.

Sonny Tufts

02-17-2014, 12:33 PM

The only one being dishonest is you who ignores the documented facts, especially the legislative intent under which the tax upon carriages was adopted.

If the reason why the carriage tax was an indirect tax is that it was imposed on luxuries, why didn't the Justices use that as the basis for their opinions? Why instead was their rationale (a) only taxes that can be reasonably apportioned are direct taxes; (b) the only direct taxes are capitations and taxes on land (Chase and Paterson)?

Sonny Tufts

02-17-2014, 12:59 PM

The fact the Justices collectively upheld an income tax is also not relevant; ergo, there was nothing bad or wrong about the income tax until around the 1940’s—because up to that point, it had been imposed in a manner that was perfectly constitutional, at least until Pollock and later corrected by the Sixteenth Amendment.

Glad you have finally conceded that a tax on pay-for-work (which was included in every revenue act from 1861 to 1940) is constitutional.

While the decisions pertinent to the subject-matter presented before the Court in Pollock, including its rehearing, is, at least largely, no longer applicable, what still retains its applicability however, is the Court’s in-depth and thoughtfully researched context, its myriad of references, quotations, citations, and responsible logic that the Justices had wisely, and at great length dispersed throughout its findings.

Its "logic" was rejected by the 16th Amendment and later by the Court itself. When the entire rationale for a decision is rejected, there's not much left of the case except as an historical relic.

Regardless, dictum that is profound holds value in itself; while not controlling, it is authoritative. Sonny is in error for asserting that by labeling something as mere ‘dicta’/‘dictum’ (consisting of various classifications, such as ‘obiter dictum’, which is more an instance of being an opinionated side-thought, observation, or commentary) it should just be outright ignored.

Then you should have no problem with the dicta from the second Pollock decision recognizing the validity of a tax on pay-for-work:

We have considered the act only in respect of the tax on income derived from real estate, and from invested personal property, and have not commented on so much of it as bears on gains or profits from business, privileges, or employments, in view of the instances in which taxation on business, privileges, or employments has assumed the guise of an excise tax and been sustained as such...

According to the census, the true valuation of real and personal property in the United States in 1890 was $65,037,091,197, of which real estate with improvements thereon made up $39,544,544,333. Of course, from the latter must be deducted, in applying these sections, all unproductive property and all property whose net yield does not exceed $4,000; but, even with such deductions, it is evident that the income from realty formed a vital part of the scheme for taxation embodied therein. If that be stricken out, and also the income from all invested personal property, bonds, stocks, investments of all kinds, it is obvious that by far the largest part of the anticipated revenue would be eliminated, and this would leave the burden of the tax to be borne by professions, trades, employments, or vocations; and in that way what was intended as a tax on capital would remain, in substance, a tax on occupations and labor. We cannot believe that such was the intention of congress. We do not mean to say that an act laying by apportionment a direct tax on all real estate and personal property, or the income thereof, might not also lay excise taxes on business, privileges, employments, and vocations. But this is not such an act, and the scheme must be considered as a whole.

Weston White

02-17-2014, 02:08 PM

So this is your response? It is nearly laughable; although, leaves itself wanting.

johnwk

02-17-2014, 04:41 PM

Originally Posted by johnwk View Post

The only one being dishonest is you who ignores the documented facts, especially the legislative intent under which the tax upon carriages was adopted.
If the reason why the carriage tax was an indirect tax is that it was imposed on luxuries, why didn't the Justices use that as the basis for their opinions? Why instead was their rationale (a) only taxes that can be reasonably apportioned are direct taxes; (b) the only direct taxes are capitations and taxes on land (Chase and Paterson)?

If this and if that. Your question is irrelevant when reviewing the documented intentions under which the carriage tax was adopted. You place too much stock in a Court decision which is not supported by the expressed intentions relevant to the tax.

Now, take your time and study the legislative intent as expressed during its adoption which I previously posted for you. I wrote:

In the Hylton Case, the carriages were consider articles of luxury and the excise was upon luxury and therefore indirect just like the tax in Flint was not upon income but upon the privilege of being a corporation making the tax indirect while the amount of tax to be paid was measured by the income realized under the privilege. And this distinction to tax carriages as a luxury is made known in crystal clear language in the “Act laying duties upon carriages for the conveyance of persons.” (http://memory.loc.gov/cgi-bin/ampage?collId=llsl&fileName=001/llsl001.db&recNum=497)

Provided always, That nothing herein contained shall be construed to charge with a duty, any carriage usually and chiefly employed in husbandry, or for transporting or carrying, goods, wares, merchandise, produce or commodities.”

However, taxes laid upon property are considered to be direct taxes and this fact was also stated during the House Debates with reference to a tax upon carriages!

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 if 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."SEE: House of Representatives, Tuesday, May 6th, 1794,page 644 (http://memory.loc.gov/cgi-bin/ampage?collId=llac&fileName=004/llac004.db&recNum=319)

JWK

Those who reject and ignore abiding by the intentions and beliefs under which our Constitution was agree to, as those intentions and beliefs may be documented from historical records, wish to remove the anchor and rudder of our constitutional system so they may then be free to “interpret” the Constitution to mean whatever they wish it to mean.

johnwk

02-17-2014, 04:47 PM

Glad you have finally conceded that a tax on pay-for-work (which was included in every revenue act from 1861 to 1940) is constitutional.

If you make a statement as you did above, it should be accompanied with the appropriate documentation. Now, post the documentation.

JWK

johnwk

02-17-2014, 07:11 PM

Seems that Sonny is not familiar with the intentions for which the 16th Amendment was adopted, nor what the Victory Tax of 1942 was intended by deception to accomplish. Let us look at the historical facts.

To fully understand this issue one must first recall the progressive movement of the late 1800s and early1900s, a movement which was, among other things, intentionally designed by its leadership to enslave the working class person, not to mention seizing an iron fisted regulatory control over America’s businesses and industries.

In 1913 the leadership of the progressive movement convinced the working person [that’s your ordinary working person] to get behind the 16th Amendment. It was sold to the working person as a means to get those greedy corporations to pay their “fair share” in taxes.

During the 16th Amendment debates we find Mr. HEFLIN agitating the working class people into supporting the amendment by saying “An income tax seeks to reach the unearned wealth of the country and to make it pay its share.”44 Cong. Rec. 4420 (1909). Note the wording “unearned wealth“ as distinguished from earned wages.

And this was shortly after Mr. BARTLETT of Georgia had begun the class warfare attack by preaching to the working poor: As I see it, the fairest of all taxes is of this nature [a tax on gains, profits and unearned income], laid according to wealth, and its universal adoption would be a benign blessing to mankind. The door is shut against it, and the people must continue to groan beneath the burdens of tariff taxes and robbery under the guise of law.” 44Cong. Rec. 4414 (1909).

But what these cunning con artists really had in mind was to create a tax allowing the expansion of the federal government’s manipulative iron fist over the economy which would eventually be used to squeeze the working people’s earned wages from their pockets in a more devastating manner than any tariff had ever done, and make them dependent upon government for their subsistence! But they cleverly waited for one generation to pass after the adoption of the 16th Amendment and a war to begin before completing their mission which was the imposition of the Temporary Victory Tax of 1942!

Roosevelt’s class warfare tax expanded the “income tax” upon corporations and businesses to include a 5 percent “temporary” tax upon working people’s earned wages. And although the 16th Amendment was sold as a way to tax “unearned income”, the temporary tax on working people’s earned wages was sold as a patriotic necessity in the war effort. But somehow Roosevelt’s class warfare tax, which robs the bread working people earned by the sweat of their brow, is still to this very day being collected, and its burden has constantly increased over the years, forcing millions upon millions of poor working people into a state of poverty and then dependency upon government for their subsistence, an outcome which is needed by corrupted political leaders to maintain a permanent and captive voting block!

JWK

If we can make 51 percent of America’s population dependent upon an Obama, welfare, food stamp, section 8 housing, college loan check, and now free Obamacare along with FREE BACON (http://www.youtube.com/watch?v=zI8HRGWKCRc), we can blackmail them for their vote, keep ourselves in power and keep the remaining portion of America’s productive population enslaved to pay the bills ____ Obama’s Marxist Free Stuff Party, which is designed to establish a federal plantation and redistribute the wealth which wage earners, business and investors have worked to create.

Weston White

02-18-2014, 07:19 AM

I would only further add that:

1. Judges and juries may only consider the evidence as presented before them; ultimately it is the “framing” of a case that is central to its breadth (i.e., its pleading (‘complaint’/’petition’) as filed or amended—then ‘answered’ by the other party or parties), not the specific subject-matter being argued before the court. The outcome or successfulness of a case is pinned by its evidence as submitted and arguments made by the parties involved within that established breadth (e.g., this is largely why pro se parties so frequently loose against government attorneys, the court (or judge) cannot aid either side; ergo, it is not that they are necessarily in the wrong on the issues involved, but that they just don’t have the resources and familiarity with the legal system that professional attorneys do).

2. It is clear that the only visible reference made to items of “luxury” within Hylton is at 180-181 in quoting a passage from Dr. Smith—which exception was made for by the 1794 act:

“Consumable commodities, whether necessaries or luxuries, may be taxed in two different ways: … the coach tax and plate tax are examples of the former method [“the consumer may either pay an annual sum on account of his using or consuming goods of a certain kind”] of imposing”

3. Individuals have since set forth a compelling argument that the Hylton case had been conspired by the Federalists, with Alexander Hamilton serving as their mouthpiece, so as to gain favor in expanding the Nation’s powers of taxation (e.g., also considering that Hylton had complied with their desires (Witness tampering?), and likely lied about owning 125-carriages—that he only actually owned 1-carriage—which is plausible, as really why would an individual own so many carriages for non-business use? And raising many flags as well: where would they all be stored at; how long would it have taken for them all to be manufactured; imagine the investment and maintenance (and tax) costs involved).

4. The Court has since on many occasions gone on to find that Congress may not impose indirect taxes upon an activities shadow in order to avoid a source that if otherwise itself taxed would either require apportionment or find itself constitutionally exempted from taxation.

ETA:

Springer v. United States, 102 U.S. 586, 597 (1880):

Perhaps the two most authoritative persons in the convention touching the Constitution were Hamilton and Madison. The latter, in a letter of May 11, 1794, speaking of the tax which was adjudicated upon in Hylton v. United States, 3 Dall. 171, said,

"The tax on carriages succeeded in spite of the Constitution by a majority of twenty, the advocates of the principle being reinforced by the adversaries of luxury."

2 Mad. Writings (pub. by Congress) p. 14. In another letter, of the 7th of February, 1796, referring to the case of Hylton v. United States, then pending, he remarked:

"There never was a question on which my mind was better satisfied, and yet I have very little expectation that it will be viewed in the same light by the court that it is by me."

Id., 77. Whence the despondency thus expressed is unexplained.

johnwk

02-18-2014, 07:31 AM

BTW, my personal view of the tax on carriages is that it was unconstitutional as it was assessed directly upon the tax payer's property, which is far different from laying an excise tax on the manufacture of a product or product sold.

JWK

Sonny Tufts

02-18-2014, 07:43 AM

Seems that Sonny is not familiar with the intentions for which the 16th Amendment was adopted, nor what the Victory Tax of 1942 was intended by deception to accomplish.

I am, but you are not.

In 1913 the leadership of the progressive movement convinced the working person [that’s your ordinary working person] to get behind the 16th Amendment. It was sold to the working person as a means to get those greedy corporations to pay their “fair share” in taxes.

A tax on corporations measured by income had already been enacted in 1909, and its constitutionality had been upheld by the Supreme Court in 1911, so the 16th wasn't needed for this purpose. The real aim of the 16th was to tax investment income.

Pay-for-work was taxed from the very first tax act in 1861. Read it here and learn something

Sec. 49. And be it further enacted, That on and after the first day of January next, there shall be levied, collected, and paid upon the annual income of every person residing in the United States, whether such income is derived from any kind of property, or from any profession, trade, employment or vocation carried on in the United States or elsewhere, or from any other source whatever, if such annual income exceeds the sum of eight hundred dollars, a tax of three percentum on the amount of such excess over eight hundred dollars... http://memory.loc.gov/cgi-bin/ampage?collId=llsl&fileName=012/llsl012.db&recNum=340

The following year the statute was modified by lowering the exemption and mentioning salaries by name:

Section 90. And be it further enacted, That there shall be levied, collected, and paid annually upon the annual gains, profits, or income of every person residing in the United States, whether derived from any kind of property, rents, interest, dividends, salaries, or from any profession, trade, employment, or vocation carried on in the United States or elsewhere, or from any other source whatever, except as hereinafter mentioned, if such annual gains, profits, or income exceed the sum of six hundred dollars and do not exceed the sum of ten thousand dollars, a duty of three percentum…
http://memory.loc.gov/cgi-bin/ampage?collId=llsl&fileName=012/llsl012.db&recNum=504

Weston White

02-18-2014, 08:58 AM

1. Day laborers do not normally acquire gains or profits, which is to emphasize ‘incomes’, (i.e., “annual gains, profits, or income”).

2. The context of business, professional activities, and privilege within the statute (And further expanded up within Section 91—requiring the tax to be deducted from employees of the federal government and from activities associated from certain other privileged businesses such as banks, insurance, railroads, steam and ferry boats, etc.) is clearly enumerated (i.e., it states “whether derived from” and not simply “whether from”—this overlook was addressed at length within the Eisner case): “whether derived from any kind of property, rents, interest, dividends, salaries, or from any profession, trade, employment, or vocation carried on in the United States or elsewhere, or from any other source whatever”.

3. Day-laborers do not earn “salaries”; usually that entitlement is reserved only to officers and the like—wages are not synonymous to salaries.

4. In 1862, good day-labors were paid up to $1 a day, while average day-laborers earned up to $16 a month; and each worked between 8-months and 1-year. So presuming the both worked the entire year, without a single day off (which being a Christian nation would have always taken Sunday off) that puts their wages at between $192 and $365 per annum—clearly the intent of the Legislature’s $600 threshold was to entirely exclude day-laborers in all respects.

Sonny Tufts

02-18-2014, 09:26 AM

1. Day laborers do not normally acquire gains or profits, which is to emphasize ‘incomes’, (i.e., “annual gains, profits, or income”).

Of course they do, just as a $10 million/year executive does.

The context of business, professional activities, and privilege within the statute (And further expanded up within Section 91—requiring the tax to be deducted from employees of the federal government and from activities associated from certain other privileged businesses such as banks, insurance, railroads, steam and ferry boats, etc.) is clearly enumerated (i.e., it states “whether derived from” and not simply “whether from”—this overlook was addressed at length within the Eisner case): “whether derived from any kind of property, rents, interest, dividends, salaries, or from any profession, trade, employment, or vocation carried on in the United States or elsewhere, or from any other source whatever”.

As usual, your command of English hasn't imporoved one bit, but it seems you are trying to argue that (a) only income from "privileged" occupations or businesses was covered, and (b) only income derived from rents, interest, etc. was covered. Both of these arguments are absurd. First of all, the statute isn't limited to privileged activities, which should be made perferctly clear by the phrase "from any other source whatever". Second, if only income derived from salaries is taxable, it follows that only income derived from interest, dividends, and other investment income is taxable but not the investment income itself, which is preposterous.

In 1862, good day-labors were paid up to $1 a day, while average day-laborers earned up to $16 a month; and each worked between 8-months and 1-year. So presuming the both worked the entire year, without a single day off (which being a Christian nation would have always taken Sunday off) that puts their wages at between $192 and $365 per annum—clearly the intent of the Legislature’s $600 threshold was to entirely exclude day-laborers in all respects.

Indeed. The exemption amount was purely an arbitrary number selected by Congress. It cound have set the exemption at $1 if it had wished to, since there is no constitutional requirement that any minimum amount of income be exempt from taxation. The point is that pay-for-work, in whatever amount, may be constitutionally reached by an unapportioned tax.

Weston White

02-18-2014, 10:58 AM

1. In general, day-labors through their right to privately contract earn only their competency (i.e., a livelihood) in a fair exchange of their sacrificing their time, energy, and efforts—meanwhile providing greater benefit to their employer and society in general. There is, for most laborers, no gain or profit involved, while for others there is, such as paid sick or vacation time, annual bonuses, etc.

2. If Sonny is advocating that the principal (i.e., corpus) of an investment is taxable without apportionment along with its gain, he would be incorrect.

3a. lolol at: “As usual, your command of English hasn't imporoved one bit”.

3b. Sonny is again confabulating the purposed context. The operation of a business, occupation, trade, vocation, etc., is a privilege unto itself—it is not merely a matter of the businesses, occupations, trades, or vocations being decreed as “privileges”; viz., one does not possess a birthright necessity or individual right to operate the above stated manmade privileges. Although, for example, the Internal Revenue Code specifically does address certain activities or classifications of employment, such as: railroads; government employment, seamen, and military; insurance, sales, and stock companies; alcohol, firearm, and explosive manufacturing; non-citizen employments; etc.

3c. To realize the context Sonny seeks to be a reality, the Legislature would have been obliged to greatly simplify the statute, crafting it similarly to state the following:

“That there shall be levied, collected, and paid annually upon the annual income of every person residing in the United States, from any source whatever, except as hereinafter mentioned…”

At last, clearly this was not the case and if it would have been, it would of caused public outrage like never before realized; and would have certainly never, ever made it through ratification.

3d. The inclusion of the phrase “from any other source whatever” is intended as a catch-all and is to be taken in context to its included enumerations, not to override them. Two elements are to be required, (1) one or more constitutionally taxable sources (e.g., monetary principal or capital) from which is to be (2) derived a gain or profit (e.g., monetary excess or wealth), serving as the ‘gross income’. Merely including legal verbiage in the form of “from anything whatsoever” does not as a consequence empower the Legislature to bypass constitutional constraint.

4. I am asserting that unless specifically excluded within the Internal Revenue Code, all bona fide gains and profits—which are part and parcel to the popular phrasing of ‘income’—are constitutionally taxable without apportionment and without exigent circumstances being presented. Very simply stated, ‘income’ means the excess above whatever capitalistic source that has come-in within a given tax-period.

5. Not exactly, because in this instance it entirely changes the disposition of the act, from one of an indirect tax that was marketed as being only upon excess, to one of becoming a direct tax upon absolute necessity.

johnwk

02-18-2014, 10:30 PM

Originally Posted by johnwk
Seems that Sonny is not familiar with the intentions for which the 16th Amendment was adopted, nor what the Victory Tax of 1942 was intended by deception to accomplish.

I am, but you are not.

I suggest you go to POST NO. 39 (http://www.ronpaulforums.com/showthread.php?443685-Senator-Cruz-keep-income-tax-lower-top-rates&p=5421418&viewfull=1#post5421418) which is titled “The 16th Amendment and Victory Tax of 1942” and learn before you make an insulting remark to me.

Pay-for-work was taxed from the very first tax act in 1861. Read it here and learn something

Sec. 49. And be it further enacted, That on and after the first day of January next, there shall be levied, collected, and paid upon the annual income of every person residing in the United States, whether such income is derived from any kind of property, or from any profession, trade, employment or vocation carried on in the United States or elsewhere, or from any other source whatever, if such annual income exceeds the sum of eight hundred dollars, a tax of three percentum on the amount of such excess over eight hundred dollars... http://memory.loc.gov/cgi-bin/ampage....db&recNum=340

You are a bit presumptuous my friend. I have gone over those statutes many years ago [back in the early 1980s] and have referenced both many, many times in various forums. Additionally, having studied them very carefully, which you apparently have not, I found nothing in either about “pay-for-work” or “earned wages” being taxed. In fact, the tax was imposed upon “income” which a business owner may realize who hires employees for a particular profession, trade, employment or vocation and realized a profit or gain, collectively referred to as “income” which was then taxed. But the average wage earner at that time period was lucky to earn $10.00 for a 60 hour week and the tax in question did not apply to them! I cannot imagine an ordinary wage earner earning $800 a year at that time period which was the threshold for the tax. Nor can I imagine earned wages being considered, for tax purposes, "income".

JWK

seraphson

02-18-2014, 11:09 PM

IMO eliminate property and income tax and adjust budgets to accommodate said changes.

Sonny Tufts

02-19-2014, 08:27 AM

Nor can I imagine earned wages being considered, for tax purposes, "income".

Then your imagination is confined to the tax protester mythology. The claim that wages do not constitute income is one of the most consistently and uniformly rejected frivolous arguments there is, so much so that people who continue to make it are fined by the courts for wasting their time with such rubbish.

And did you overlook the term "salaries" in the 1862 Act? Or do you, like Mr. White, claim that an executive's pay is income but a hourly worker's pay isn't?

johnwk

02-19-2014, 09:05 AM

Originally Posted by johnwk

Nor can I imagine earned wages being considered, for tax purposes, "income".

Then your imagination is confined to the tax protester mythology. The claim that wages do not constitute income is one of the most consistently and uniformly rejected frivolous arguments there is, so much so that people who continue to make it are fined by the courts for wasting their time with such rubbish.

And did you overlook the term "salaries" in the 1862 Act? Or do you, like Mr. White, claim that an executive's pay is income but a hourly worker's pay isn't?

So now, instead of having an intelligent discussion you find it necessary to launch a personal attack and name calling?

In reference to the definition of “income” I rely upon the sound reasoning stated in In EISNER v. MACOMBER , 252 U.S. 189 (1920) the SCOTUS gave the characteristics defining “income” as follows:

After examining dictionaries in common use (Bouv. L. D.; Standard Dict.; Webster's Internat. Dict.; Century Dict.), we find little to add to the succinct definition adopted in two cases arising under the Corporation Tax Act of 1909 (Stratton's Independence v. Howbert, 231 U.S. 399, 415 , 34 S. Sup. Ct. 136, 140 [58 L. Ed. 285]; Doyle v. Mitchell Bros. Co., 247 U.S. 179, 185 , 38 S. Sup. Ct. 467, 469 [62 L. Ed. 1054]), 'Income may be defined as the gain derived from capital, from labor, or from both combined,' provided it be understood to include profit gained through a sale or conversion of capital assets, to which it was applied in the Doyle Case, 247 U.S. 183, 185 , 38 S. Sup. Ct. 467, 469 (62 L. Ed. 1054).
Brief as it is, it indicates the characteristic and distinguishing attribute of income essential for a correct solution of the present controversy.
So, we now learn that all money that comes in is not “income” within the meaning of the 16th Amendment, but only that portion which represents a “profit” or “gain” And, “profits“ or “gains, are calculated by deducting all necessary expenses and outlay from gross receipts …the remaining portion being “profits” and or “gain“!

It should also be noted that the income from a business which is wholly illegal was held subject to income tax in United States v. Sullivan, 274 U.S. 259. Nevertheless, it was necessary to determine what that income was, and the cost of an illegal purchase of liquor was subtracted from proceeds of the illegal sale of the liquor in order to arrive at the gain from the illegal transaction which were subjected to income tax in that case.

And, in Sullenger vs. Commissioner, the Court allowed the business owner [who made illegal purchases of meat] to deduct the cost of meat purchased at a higher price then set by the Office of Price Administration, a World War II price control agency, which he then resold for profit. The “income” from those sales was being taxed which was at issue in the case. The Court went on to cite Sullivan and concluded:
“No authority has been cited for denying to this taxpayer the cost of goods sold in computing his profit, which profit alone is gross income for income tax purposes.”

The point being, even crooks engaged in illegal activities may deduct their outlays and expenses in computing a “profit” which is then taxed as “income”. But the way things are today, working people get shafted and are not allowed to deduct their necessary expenses and outlays such as transportation to and from work, the cost of food which fuels their body during working hours, the cost of medical expenses which are essential to health so they may work and provide their labor, nor is there a calculation for working people to deduct the most important outlay they make in pursuit of earning a wage___ eight hours of their lives each day which they invest and make available to their employer, the value of which the employer deducts from gross receipts and not the employee who has invested the outlay of their labor in pursuit of a wage.

And what did one our founding fathers think about taxing a working person’s wage?

“…..with all these blessings, what more is necessary to make us a happy and a prosperous people? Still one thing more, fellow-citizens—a wise and frugal Government, which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement and shall not take from the mouth of labor the bread it has earned. This is the sum of good government, and this is necessary to close the circle of our felicities“._____ Thomas Jefferson, First Inaugural Address

Finally, what you forgot was the average wage earner at that time period was lucky to earn $10.00 for a 60 hour week and the tax in question did not apply to them! I cannot imagine an ordinary wage earner earning $800 a year at that time period which was the threshold for the tax. Nor can I imagine earned wages being considered, for tax purposes as being "income".

JWK

If the provisions of the constitution can be set aside by an act of congress, where is the course of usurpation to end? The present assault upon capital is but the beginning. It will be but the stepping-stone to others, larger and more sweeping, till our political contests will become a war of the poor against the rich,-a war constantly growing in intensity and bitterness. 'If the court sanctions the power of discriminating taxation, and nullifies the uniformity mandate of the constitution,' as said by one who has been all his life a student of our institutions, 'it will mark the hour when the sure decadence of our present government will commence.' , Pollock v. Farmers' Loan & Trust Company, (1895)

Weston White

02-19-2014, 09:15 AM

Then your imagination is confined to the tax protester mythology. The claim that wages do not constitute income is one of the most consistently and uniformly rejected frivolous arguments there is, so much so that people who continue to make it are fined by the courts for wasting their time with such rubbish.

And did you overlook the term "salaries" in the 1862 Act? Or do you, like Mr. White, claim that an executive's pay is income but a hourly worker's pay isn't?

Ah, so there is where that kettle hath gone.

Executives are corporate officers, laborers are not; executives enjoy six or more figures, laborers earn only a fraction of that; laborers actually toil for their remuneration, executives either do not or otherwise minutely toil; executives are provided a host of benefits and options, laborers either are not or their benefits are greatly limited by comparison.

However, in general a salary (which is not as clear cut an issue as wages) is only appropriately taxable as income when itself is associated with a gain or profit, e.g., being provided popular stock options, $20,000 annual good performance bonus, or a 4-week paid vacation, as part of their salary package.

Regardless, the intention is crystalizing, 'salaries' were enumerated, while 'wages' were omitted.

Sonny Tufts

02-19-2014, 10:48 AM

In reference to the definition of “income” I rely upon the sound reasoning stated in In EISNER v. MACOMBER , 252 U.S. 189 (1920) the SCOTUS gave the characteristics defining “income”

SCOTUS has confined Macomber to its facts and has declined to use it as a litmus test for determining what income is:

Nor can we accept respondent's contention that a narrower reading of 22 (a) [the 1939 Code's version of the current Section 61(a)] is required by the Court's characterization of income in Eisner v. Macomber, 252 U.S. 189, 207 , as "the gain derived from capital, from labor, or from both combined." 6 The Court was there endeavoring to determine whether the distribution of a corporate stock dividend constituted a realized gain to the shareholder, or changed "only the form, not the essence," of his capital investment. Id., at 210. It was held that the taxpayer had "received nothing out of the company's assets for his separate use and benefit." Id., at 211. The distribution, therefore, was held not a taxable event. In that context - distinguishing gain from capital - the definition served a useful purpose. But it was not meant to provide a touchstone to all future gross income questions. Helvering v. Bruun, supra, at 468-469; United States v. Kirby Lumber Co., supra, at 3. Commissioner v. Glenshaw Glass Co., 348 U.S. 426, 430 (1955)

The point being, even crooks engaged in illegal activities may deduct their outlays and expenses in computing a “profit” which is then taxed as “income”.

Not quite. Drug dealers, for example, may not deduct their business expenses, although they may deduct their cost of goods sold. See Section 280E.

But the way things are today, working people get shafted and are not allowed to deduct their necessary expenses and outlays such as transportation to and from work, the cost of food which fuels their body during working hours, the cost of medical expenses which are essential to health so they may work and provide their labor, nor is there a calculation for working people to deduct the most important outlay they make in pursuit of earning a wage___ eight hours of their lives each day which they invest and make available to their employer, the value of which the employer deducts from gross receipts and not the employee who has invested the outlay of their labor in pursuit of a wage.

That's because personal living expenses aren't deductible per Section 262. Here's how one court addressed your concerns:

Petitioners do not argue that the various expenditures at issue in this case are without the scope of section 262 or that respondent has improperly calculated the amount of self-employment tax in accordance with sections 1401 and 1402. Rather, their principal argument is that Congress, by denying deductions for personal, living, and family expenses in the computation of taxable income, has exceeded its authority under the Sixteenth Amendment to the Constitution to lay and collect taxes on "incomes." The cornerstone of petitioners' argument is the definition of income stated by the Supreme Court in Eisner v. Macomber, 252 U.S. 189, 207 (1920), as "the gain derived from capital, from labor, or from both combined." They argue that the "gain" from labor cannot be determined until the "cost of doing labor," i.e., their expenditures at issue, has been subtracted from the amount received from the sale of labor. Petitioners attempt to support their method of arriving at the figure reflecting "income" which may constitutionally be taxed by analogizing the "living expenses" of one who depends upon the sale of his services for his livelihood to the "cost of goods sold" concept in certain business contexts. See Sullenger v. Commissioner, 11 T.C. 1076 (1948); Anderson Oldsmobile, Inc. v. Hofferbert, 102 F. Supp. 902 (D.C. Md. 1952), affd. 197 F.2d 504 (4th Cir. 1952). Appeal is made to history and philosophy and to analysis of legal, social, and economic concepts, none of which leads, however, to the result they seek.

It is difficult, if not impossible, to respond to arguments such as petitioners have put forth without becoming embroiled in a game of semantics. The logical force requiring rejection of their arguments -- apart from their assertions of personal political philosophy which do not provide a basis for us, a Court sitting to interpret the law, to decide the questions dispositive of this case -- is essentially a matter of the definition of terms. Thus, should we hold that "gain" is an essential element of income, compare Conner v. United States, 303 F. Supp. 1187 (S.D. Tex. 1969), affd., revd., and remanded 439 F.2d 934 (5th Cir. 1971), with McGuire v. United States, an unreported case ( N.D. Cal. 1970, 25 AFTR2d 1127, 70-1 USTC par. 9384), we would still face the problem of defining what constitutes "gain." Compare Conner v. United States, supra, with McCabe v. Commissioner, 54 T.C. 1745, 1748 (1970). It is in situations like this that one can truly admire the wisdom of Mr. Justice Holmes, in particular, as he expressed in United States v. Kirby Lumber Co., 284 U.S. 1 (1931), "We see nothing to be gained by the discussion of judicial definitions." n4

- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -

n4 That petitioners place too much reliance upon the words used to define income in Eisner v. Macomber, 252 U.S. 189, 207 (1920), is aptly demonstrated by Commissioner v. Glenshaw Glass Co., 348 U.S. 426 (1955), where, at page 431, the Court rejected those words as "a touchstone to all future gross income questions."

- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - - [**9]

Nevertheless, accepting the conclusion that some kind of "gain" must be realized for there to be income, the flaw in petitioners' analogy of what they call the "cost of doing labor" to the "cost of goods sold" concept -- essentially its failure to acknowledge the difference between people and property -- may be shown. The "cost of goods sold" concept embraces expenditures necessary to acquire, construct or extract a physical product which is to be sold; the seller can have no gain until he recovers the economic investment that he has made directly in the actual item sold. See Estate of Johnson v. Commissioner, 42 T.C. 441, 444-445 (1964), affd. per order 355 F.2d 931 (6th Cir. 1965), and cases cited thereat. Labor, on the other hand, is, in the current context, behavior performed by human beings in exchange for compensation. One's living expenses simply cannot be his "cost" directly in the very item sold, i.e., his labor, no matter how much money he spends to satisfy his human needs and those of his family. Of course we recognize the necessity for expenditures for such items as food, shelter, clothing, and proper health maintenance. They provide both the mental and physical nourishment essential to maintain the body at a level of effectiveness that will permit its labor to be productive. We do not even deny that a certain similarity exists between the "cost of doing labor" and the "cost of goods sold" concept. But the sale of one's labor is not the same creature as the sale of property, and whether the distinction comports with petitioners' philosophical rationalization for their argument, it is recognized for Federal income tax purposes. See Hahn v. Commissioner, 30 T.C. 195 (1958), affd. per curiam 271 F.2d 739 (5th Cir. 1959). One's gain, ergo his "income," from the sale of his labor is the entire amount received therefor without any reduction for what he spends to satisfy his human needs.

Without constitutional backing for their position concerning the definition of income, petitioners are left with a bald assertion that section 262 is unconstitutional. However, it has long been established that "Congress has power to condition, limit, or deny deductions from gross income in order to arrive at the net that it chooses to tax." Helvering v. Independent Life Ins. Co., 292 U.S. 371, 381 (1934). And, as the Supreme Court has also stated:

"For income tax purposes Congress has seen fit to regard an individual as having two personalities: "one is [as] a seeker after profit who can deduct the expenses incurred in that search; the other is [as] a creature satisfying his needs as a human and those of his family but who cannot deduct such consumption and related expenditures." [Fn. ref. omitted.]

United States v. Gilmore, 372 U.S. 39, 44 (1963). This Court has no power to enlarge the deductions for personal exemptions authorized by section 151 to comport with petitioners' actual living expenses. Crowe v. Commissioner, 396 F.2d 766 (8th Cir. 1968). Reading v. CIR, 70 T.C. 730, 732-734 (1978)

And what did one our founding fathers think about taxing a working person’s wage?

Here's another Jefferson quote to ponder:

I approved, from the first moment, of the great mass of what is in the new Constitution: the consolidation of the government; the organization into executive, legislative, and judiciary; the subdivision of the legislative; the happy compromise of interests between the great and little states by the different manner of voting in the different houses; the voting by persons instead of states; the qualified negative on laws given to the executive, which, however, I should have like better if associated with the judiciary also, as in New York; and the power of taxation. I thought at first that the latter might have been limited. A little reflection soon convinced me it ought not to be. Letter to Francis Hopkinson, March 13, 1789.

The Supreme Court has made it clear on numerous occasions that wages are income:

[T]he earnings of the human brain and hand when unaided by capital ... are commonly dealt with as income in legislation. Stratton’s Independence, Ltd. v. Howbert, 231 U.S. 399, 415 (1913).

There is no doubt that the statute could tax salaries to those who earned them...Lucas v. Earl, 281 U.S. 111, 114 (1930).

[The tax code] is broad enough to include in taxable income any economic or financial benefit conferred on the employee as compensation, whatever the form or mode by which it is effected. C.I.R. v. Smith, 324 U.S. 177 (1945).

Wages usually are income ... Central Illinois Public Serv. Co. v. United States, 435 U.S. 21, 25 (1978).

[T]he premise that personal injury awards cannot involve gain is obviously false, since they often are intended in significant part to compensate for the loss of gain, e. g., lost wages. (Citation omitted.) Since the gain would have been income, surely at least that part of a personal injury award that replaces it must also be income. Lukhard v. Reed, 481 U.S. 368, 375 (1987), (plurality opinion of Justice Scalia, joined by Rehnquist, White, and Stevens, Blackmun concurring in the result; footnote omitted).

The definition of gross income under the Internal Revenue Code sweeps broadly. Section 61(a), 26 U.S.C. 61(a), provides that ‘gross income means all income from whatever source derived,’ subject only to the exclusions specifically enumerated elsewhere in the Code. As this Court has recognized, Congress intended, through 61(a) and its statutory precursors, to exert ‘the full measure of its taxing power,’ [citation omitted] and to bring within the definition of income any ‘accessio[n] to wealth.’ [citation omitted] There is no dispute that the settlement awards in this case [for ‘back wages’ to compensate for sex discrimination] would constitute gross income within the reach of 61(a). United States v. Burke, 504 U.S. 229, 233 (1992). Later in the same opinion, the Supreme Court referred to the compensation received by the taxpayers as “the wages properly due them - wages that, if paid in the ordinary course, would have been fully taxable.” 504 U.S. at 241.

It [I.R.C. section 104, relating to compensation for personal injuries] also excludes from taxation those damages that substitute, say, for lost wages, which would have been taxed had the victim earned them. O’Gilvie v. United States, 519 U.S. 79 (1996).

Even if we suppose that strike benefits are made to compensate in a sense for the loss of wages, the principle of payments in compensation does not apply because the thing compensated for, the wages, had they been received, would have been included in gross income. United States v. Kaiser, 363 U.S. 299, 311 (1960).

It was therefore error to instruct the jury to disregard evidence of Cheek’ s understanding that, within the meaning of the tax laws, he was not a person required to file a return or to pay income taxes and that wages are not taxable income, as incredible as such misunderstandings of and beliefs about the law might be. Cheek v. United States, 498 U.S. 192, 204 (1991), (emphasis added)

....it is incomprehensible to me how, in this day, more than 70 years after the institution of our present federal income tax system with the passage of the Revenue Act of 1913, 38 Stat. 166, any taxpayer of competent mentality can assert as his defense to charges of statutory willfulness the proposition that the wage he receives for his labor is not income, irrespective of a cult that says otherwise and advises the gullible to resist income tax collections. (Justice Blackmun, dissenting in Cheek, 498 U.S. at 209. It should be noted that both the majority and the dissenters in Cheek agreed that Cheek's argument that his wages weren't income was preposterous; they just differed on whether his alleged sincere belief that they weren't negated the element of willfullness).

johnwk

02-19-2014, 11:19 AM

Originally Posted by johnwk

In reference to the definition of “income” I rely upon the sound reasoning stated in In EISNER v. MACOMBER , 252 U.S. 189 (1920) the SCOTUS gave the characteristics defining “income”

SCOTUS has confined Macomber to its facts and has declined to use it as a litmus test for determining what income is:

So now, instead of providing sound reasoning as to the definition of "income" for tax purposes, you decide to offer opinions which have nothing to do with sound reasoning to determine the meaning of "income".

Flooding your post with irrelevant material does not help your absurd position. It merely shows you cannot support your opinion with sound reasoning.

JWK

oyarde

02-19-2014, 11:24 AM

They can start by slashing spending .

erowe1

02-19-2014, 11:36 AM

Sonny Tufts

02-19-2014, 11:44 AM

So now, instead of providing sound reasoning as to the definition of "income" for tax purposes, you decide to offer opinions which have nothing to do with sound reasoning to determine the meaning of "income".

Flooding your post with irrelevant material does not help your absurd position. It merely shows you cannot support your opinion with sound reasoning.

It's obvious that in your world, "sound reasoning" is confined to anything that agrees with your preconceived ideas. Your problem, of course, is that you cannot find a single instance in which any court in the history of the country has held that wages aren't income for federal tax purposes, and you cannot distinguish the countless cases that uniformly and without exception hold to the contrary.

Look, SCOTUS gave a definition of income in the Glenshaw Glass case, in which it characterized income as an accession to wealth, clearly realized, over which one has control. This was much broader than the definition given by Macomber (gain derived from capital, labor, or both combined), which would not have covered the punitive damages that were at issue in the Glenshaw case. It should be obvious that wages meet the Glenshaw definition, but even if they didn't Congress can still impose an excise on the receipt of pay-for work.

ZENemy

02-19-2014, 11:47 AM

I'm having trouble following this thread. It looks like it's a debate about which kinds of taxes conform to various make-believe laws that people made up and that judges gave make-believe rulings about.

Is there more to it than that?

Anything as complicated as this thread should not be legal.

:)

Sonny Tufts

02-19-2014, 12:17 PM

I'm having trouble following this thread. It looks like it's a debate about which kinds of taxes conform to various make-believe laws that people made up and that judges gave make-believe rulings about.

Is there more to it than that?

If the laws and rulings were make believe there would be no consequences for violating them, but I can assure you that there are.

erowe1

02-19-2014, 12:23 PM

If the laws and rulings were make believe there would be no consequences for violating them, but I can assure you that there are.

If the issue is the consequences, then all the debates about what the laws really mean are irrelevant. All that matters, and that isn't just make believe, is how these supposed laws are actually enforced in the real world. Whether this enforcement is in conformity with whatever the laws some human beings made up really mean and whatever opinions about them judges made up about is moot.

ZENemy

02-19-2014, 12:44 PM

If the laws and rulings were make believe there would be no consequences for violating them, but I can assure you that there are.

LOL

ALL laws are "make believe". Court Rulings and laws are opinions backed by idiots that claim control over their fellow man and are willing to KILL those that do not agree.

It was someones opinion that it was OK to have slaves.
Its someones opinion that its OK to obliterate brown children the world over.
It is also someones opinion that the US government can take peoples money, it just happens to have the biggest guns possible to aim at those that disagree.

johnwk

02-19-2014, 04:30 PM

It's obvious that in your world, "sound reasoning" is confined to anything that agrees with your preconceived ideas. Your problem, of course, is that you cannot find a single instance in which any court in the history of the country has held that wages aren't income for federal tax purposes, and you cannot distinguish the countless cases that uniformly and without exception hold to the contrary.

Once again you avoid sound reasoning to judge opinions of the court, especially a court which recently admitted in the Kelo case it was changing the meaning of public use as it was understood by our founders in order to allow folks in government to take private property and transfer it to another for a profit making business venture, asserted to be a" public purpose", and justifying such tyranny because of the “evolving needs of society”!

I take it you do not even read and analyze what you post. Part of one of the opinions you offered from the court stated:

Labor, on the other hand, is, in the current context, behavior performed by human beings in exchange for compensation. One's living expenses simply cannot be his "cost" directly in the very item sold, i.e., his labor, no matter how much money he spends to satisfy his human needs and those of his family. Of course we recognize the necessity for expenditures for such items as food, shelter, clothing, and proper health maintenance. They provide both the mental and physical nourishment essential to maintain the body at a level of effectiveness that will permit its labor to be productive. We do not even deny that a certain similarity exists between the "cost of doing labor" and the "cost of goods sold" concept. But the sale of one's labor is not the same creature as the sale of property …

Really? Seems to me our Supreme Court, using sound reasoning previously articulated 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 him from 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."___ Butchers’ Union Co. v. Crescent City Co., 111 U.S. 746 (1884)

The very reason for slavery when openly practiced in America was to take procession of the wealth created by property slaves had in their own labor.

Today the game is a bit different in that modern day slavery is carried out through forms of taxation, but with the same end result of confiscating the wealth produced by the property each working person has in their own labor.

In any event I am a big supporter of returning to our Constitution’s original tax plan which was based upon principles which to not change with the passage of time.

Keep in mind that if our Constitution’s original tax plan were in effect, Congress would be forced to finance its functions from imposts, duties, and excise taxes on specifically selected articles of consumption, preferably articles of luxury. Raising revenue as described above limits Congress’ revenue to taxes on consumption. Hamilton, in Federalist No. 21 points out with regard to taxes on consumption,

“There is no method of steering clear of this inconvenience, but by authorizing the national government to raise its own revenues in its own way. Imposts, excises, and, in general, all duties upon articles of 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 at his own option, and can be regulated by an attention to his 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. If inequalities should arise in some States from duties on particular objects, these will, in all probability, be counter balanced by proportional inequalities in other States, from the duties on other objects. In the course of time and things, an equilibrium, as far as it is attainable in so complicated a subject, will be established everywhere. Or, if inequalities should still exist, they would neither be so great in their degree, so uniform in their operation, nor so odious in their appearance, as those which would necessarily spring from quotas, upon any scale that can possibly be devised.

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 cannot be exceeded without defeating the end proposed, that is, an extension of the revenue. When applied to this object, the saying is as just as it is witty, that, "in political arithmetic, two and two do not always make four .'' If duties are too high, they lessen the consumption; the collection is eluded; and the product to the treasury is not so great as when they are confined within proper and moderate bounds. This forms a complete barrier against any material oppression of the citizens by taxes of this class, and is itself a natural limitation of the power of imposing them.”

Let us say for conversation purposes that Congress is only allowed to raise its revenue by selecting specific articles of luxury and placing a specific amount of tax on each article selected. The flow of revenue into the federal treasury under such an idea would of course be determined by the economic productivity of the nation. If the economy is healthy and thriving and employment is at a peak, the purchase of articles of luxury will be greater than if the economy is stagnant and depressed. And thus, Congress is encouraged to adopt policies favorable to a healthy and vibrant economy because the flow of revenue into the federal treasury can be disrupted should Congress adopt oppressive regulations which impeded and burden our founder’s intended free market system.

And so, if Congress is limited to raising its revenue by taxing specifically selected articles of luxury, it suddenly becomes in Congress’ best interest to work toward a healthy and vibrant economy which in turn produces a productive flow of revenue into the federal treasury! It should also be noted that taxing any specific article too high, will reduce the volume of its sales and diminish the flow of revenue into the national treasury, and thus, taxing in this manner allows the market place to determine the allowable amount of tax on each article selected as Hamilton indicates above.

Some may claim that if Congress is required to select each specific article for taxation and place a specific amount of tax on each article, such a system would invite abuse and allow Congress to exercise favoritism with impunity and would certainly pander to countless lobbyists looking for an advantage in the selection of taxable articles. But let us take a closer look at the consequences involved if Congress should attempt to abuse this power. If Congress should abuse the system and tax one article while excluding another for political gain, consumers are treated to a tax free article and Congress reduces its own flow of revenue into the national treasury. In addition, for every penny lost by excluding a lobbyist’s particular article from taxation, another article’s tax will have to be increased to reclaim that penny. And with each increase upon any specific article the reality of diminished sales becomes a very sobering factor for Congress to deal with as explained by Hamilton in Federalist No. 21.

Finally, under our Constitution’s original tax plan, let us remember that if Congress does not raise sufficient revenue from imposts, duties and miscellaneous excise taxes on specifically chosen article of consumption and spends more than is brought in which creates a deficit, it is at this time that the apportioned tax is to be used to extinguish the deficit created, and each state’s congressional delegation must return home with a bill in hand for its state’s apportioned share of this tax and place this burden upon their Governor and State Legislature, and would deplete their own state’s treasury.

The bottom line is, what do you think would happen if New York State’s big spending Congressional Delegation had to return home with a bill for New York to pay an apportioned share to extinguish the 2013 federal deficit? I kind of think tea parties would change to tar and feather parties and big spenders in Congress would REAP THEIR JUST REWARDS (http://www.imageenvision.com/illustration/1775-the-bostonians-paying-the-exciseman-or-tarring-and-feathering-by-jvpd) for their irresponsible and tyrannical spending.

Why is it that not one of our “conservative” media personalities [Rush Limbaugh, Sean Hannity, Glenn Beck, Laura Ingraham, Schnitt, Mark Levin, Dennis Prager, Bill O'rielly, Mike Gallagher, Doc Thompson, Lee Rodgers, Neal Boortz, Mike Huckabee, Tammy Bruce, Monica Crowley, Herman Cain, etc.] will discuss the wisdom of our Constitution’s original tax plan, especially when it paved the way to not only control Congress, but created the economic underpinning which led to America becoming the economic marvel of the world?

JWK

"To lay with one hand the power of the government on the property of the citizen [a working person’s earned wage] and with the other to bestow upon favored individuals, to aid private enterprises and build up private fortunes [Obama’s Solyndra, Chevy Volt, Fisker, Exelon swindling deals], is none the less a robbery because it is done under forms of law and called taxation."____ Savings and Loan Assc. v. Topeka,(1875).

Sonny Tufts

02-20-2014, 09:22 AM

Really? Seems to me our Supreme Court, using sound reasoning previously articulated 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 him from 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."___ Butchers’ Union Co. v. Crescent City Co., 111 U.S. 746 (1884)

Sigh...when will tax protesters take the time to actually read cases instead of cutting and pasting from crackpot websites? This passage was written by a single concurring Justice in an antitrust case that had absolutely nothing to do with taxation.

Once again you avoid sound reasoning to judge opinions of the court...

Oh, I get it -- you can cite dictum from a totally irrelevant case, but I can't cite decisions that are spot on, is that it?

Weston White

02-20-2014, 09:49 AM

That is Sonny’s right hand, he is employed with the government, he asserts that there is a federal law saying he can take directly from your pockets and mine each pay-period as much cash as the Congress has permitted him to, plus whatever additional penalties, fees, and interest he alone determines—meanwhile in absolute avoidance of due process.

If this be true does it make him and his actions any less contemptibly unethical, immoral, and unjust than it would otherwise have been if it be not true?

http://www.iwarrior.net/template/images/you-are-taking-my-property.jpg

Now, do you find that Sonny has conveniently discarded America's republican roots in favor of a rapacious kleptocracy?

Weston White

02-20-2014, 09:59 AM

John hammered the point home very well, so I will defer most of what I would have otherwise responded with, to his post. (You can observe this from Sonny starting to become flustered and restoring to snippy retorts.)

Instead I will only follow-up on several other important points:

SCOTUS has confined Macomber to its facts and has declined to use it as a litmus test for determining what income is: …

Well, it is nice that you are at least no longer asserting the position that the Eisner case has been overruled, outright.

Still a vast obstacle lay in your path: “In that context - distinguishing gain from capital - the definition served a useful purpose. But it was not meant to provide a touchstone to all future gross income questions.”

Rather, in Helvering the consideration was largely as to the physical “severing” of the property involved. Further noting this to be yet another example of a blatantly moronic issue that the U.S. Supreme Court bothered taking on (e.g., the arguments in both cases, Helvering (rental/lease property improvements made by prior tenet) and Glenshaw Glass Co. (equitable award of punitive damages), were already destroyed by the statute’s ending segment “gains or profits and income derived from any source whatever”)—and yet has to date failed to address the far greater question of income taxation being imposed directly upon private-intrastate wages, contracts, and labor.

Not quite. Drug dealers, for example, may not deduct their business expenses, although they may deduct their cost of goods sold. See Section 280E.

Clearly, drug dealers are not operating a business as intended under law; they lack any official status as an entity, and have no permits or licenses, etc. So of course they would not be able to deduct per se “business expenses”, but only the costs associated with their purchasing and manufacturing of their stock or “merchandise”. Not that it really matters, being that paying taxes on their profits is likely very low on the priority lists of most all drug dealers.

However, the principle is sound: The drug dealer is constitutionally entitled to first deduct the source (i.e., invested capital, principal, stock, etc.) from the profit they have derived from selling it (i.e., realized income, gross income, etc.)

That's because personal living expenses aren't deductible per Section 262. Here's how one court addressed your concerns: ...

Actually, it gets much more interesting when you visit the actual statute and realize what is specifically not mentioned, wherein it states only that there are no deductions permitted (unless otherwise stated elsewhere) upon expenses with respect to (1) personal, (2) living, and (3) family. There is zero mention about personal exertion or time expended, laboring or livelihoods, private contracting, recompense, etc.

26 USC 262 (a) General rule
Except as otherwise expressly provided in this chapter, no deduction shall be allowed for personal, living, or family expenses.

Which is because the matter had already been addressed, albeit surreptitiously, in 26 USC 83 (realizing that labor, just as money—or currency is a form of privately owned property that may be readily transferred upon an agreed upon arrangement—or contract):

PROPERTY TRANSFERRED IN CONNECTION WITH PERFORMANCE OF SERVICES

If, in connection with the performance of services [e.g., contractually laboring], property [e.g., hourly pay] is transferred to any person [e.g., an employee] other than the person [e.g., one’s employer or agent] for whom such services are performed, the excess of—
(1) the fair market value [e.g., the determined worth of exchanging one’s personal capital for financial capital—as acquired through contractually laboring for another] of such property [e.g., hourly pay] (determined without regard to any restriction other than a restriction which by its terms will never lapse) ..., over
(2) the amount (if any) paid for such property [e.g., that precise worth established by that very contract to labor for another person on the premise of receiving hourly pay for them having expended or utilized their own time, skill, ingenuity, knowledge, energy, effort, creativity, or ability to the sole profit of their employer], shall be included in the gross income of the person who performed such services [e.g., contractual labor] in the first taxable year...

Within the case quoted, they were arguing simply to deduct their personal expenses from their taxable income and to strike-down Section 262 as being unconstitutional, not that their competency or livelihoods were constitutionally exempted from income taxation: “They argue that the “gain” from labor cannot be determined until the “cost of doing labor,” i.e., their expenditures at issue, has been subtracted from the amount received from the sale of labor.”

Further the opinion of that court is a bit flawed in its analogy by way of the “cost of doing labor” being predicated upon one’s personal expenses, which is rather upon what the economical markets will bear within a given locality and respective contractual arrangements and individual employee value, worth, training, or skill.

And its contradictions in logic, referencing labor as a “gain”, yet earlier clarified: “Labor, on the other hand, is, in the current context, behavior performed by human beings in exchange for compensation.” The government cannot have it both ways; an “exchange” is as much of a “gain” as a “loss” is “compensation”—which undoubtedly neither is the case.

* Though it is important to take into further consider that compensation may not necessarily mean remuneration, it more likely could be used to proffer an act intended to correct or right a wrong, restore balance, or make another whole.

Earning a livelihood in itself does not acquire the laborer gain or profit, and neither does it so ascend them wealth. It accomplishes them one thing, only one thing, to earn them a livelihood (Turgot).

Here's another Jefferson quote to ponder: ...

Seriously, you are revisiting that quote again? Why that one quotation you enjoy, while dismissing the dozens of others presented to you?

I had previously shown to you that you are overlooking the obvious. Aside from its short run-on paragraph being generally vague and unspecific, Thomas Jefferson was more likely than not referring to his prior held position of distrust towards the judicial branch of government, for example (Letter to Judge Spencer Roane, Nov. 1819):

If [as the Federalists say] “the judiciary is the last resort in relation to the other departments of the government,” ... , then indeed is our Constitution a complete felo de se [a destructive or suicidal act]. ... The Constitution, on this hypothesis, is a mere thing of wax in the hands of the judiciary, which they may twist and shape into any form they may please. It should be remembered, as an axiom of eternal truth in politics, that whatever power in any government is independent, is absolute also; in theory only, at first, while the spirit of the people is up, but in practice, as fast as that relaxes. Independence can be trusted nowhere but with the people in mass. They are inherently independent of all but moral law …

An item of concern that he was clearly passionate about, further addressing it many other letters, which includes: Letter to Mr. Jarvis, Sept, 1820, Letter to Thomas Ritchie, Sept. 1820, Letter to C. Hammond, July 1821, Letter to Mr. Nicholas, Dec. 1821, Letter to William Johnson, Mar. 1823, Letter to Judge William Johnson, June 1823, and Letter to Edward Livingston, Mar. 1825.

Now, within the quotation Sonny provided, notice the context of that paragraph is the three branches of government, placing a strong emphasis upon addressing the judiciary, and which one is the latter of the three “executive, legislative, and judiciary”. His reference to taxation was just an aside. He was referring to supporting a less restricted judiciary, not less restrictive taxation.

The Supreme Court has made it clear on numerous occasions that wages are income:

Certainly, wages are income, but that does not necessarily mean that wages qualify as ‘gross income’. Ergo, only ‘constitutional income’ is taxable under the breadth of the federal income tax, this is never the case for source-income (i.e., corpus, capital, principal, etc.)

(P.S. Heh, you know Sonny is getting desperate when he brings out the Cheek case. Not to be outdone by a plethora of Tax Court hearings and Treasury Decisions.)

It's obvious that in your world, "sound reasoning" is confined to anything that agrees with your preconceived ideas. Your problem, of course, is that you cannot find a single instance in which any court in the history of the country has held that wages aren't income for federal tax purposes, and you cannot distinguish the countless cases that uniformly and without exception hold to the contrary.

Actually, for must all of us our so-called “preconceived ideas” with respect to taxation had been battered into our sleepy under developed brains all throughout our public education. If I only had a dollar for each time a teacher (or television show) rattled off some cliched, overplayed phrase about paying our dues to Uncle Sam. Only a small percentage of us are ever lucky enough to wake-up and realize that we are and have been deceived by the public’s trough-feeders. Although, the tide on that inhumane inconvenience is rapidly changing, more and more Americans are awaking and at younger and younger ages (likely a result of new forms of instant, unrestricted communication).

And your problem, of course, is that you cannot articulate the reasoned logic necessary to sustain your position which is why all you (and your Triskelion addicted buddies) can ever do is reference case law, to wit, you then begin disingenuously wrangling as would a plumber work to unclog a lengthy pipe fouled by turds.

Common law is but a single source of many that are available in substantiating a position.

Look, SCOTUS gave a definition of income in the Glenshaw Glass case, in which it characterized income as an accession to wealth, clearly realized, over which one has control. This was much broader than the definition given by Macomber (gain derived from capital, labor, or both combined), which would not have covered the punitive damages that were at issue in the Glenshaw case. It should be obvious that wages meet the Glenshaw definition, but even if they didn't Congress can still impose an excise on the receipt of pay-for work.

That is not very truthful at all; it stated, clearly, that the receipt of punitive damages is qualifying income, which is an accession to wealth. (Yet another example of a waste of a case that the U.S. Supreme Court had bothered hearing.) The core of the argument was because damages awarded by adjudication were not specifically from a “gain derived from capital, from labor, or from both combined” the award was exempted from income taxation. Obviously, this context was never the intention of the Eisner decision.

And certainly in Glenshaw Glass Co., it did define income, referring right back to Section 22 (1939 IRC and preceding), which reads as: “...includes gains, profits, and income derived from salaries, wages, or compensation for personal service...”

But not as either of:

1. “...includes gains, profits, and income from salaries, wages, or compensation for personal service...”

2. “...includes salaries, wages, or compensation for personal service...”

And no, Congress cannot constitutionally tax a laborer or the core of their pay without apportionment and exigency, because such method of taxation equates to either a personal or capitation tax.

Further on this topic, in following Dr. Smith’s great virtuous work, Brown v. Maryland, 25 U.S. 419, 444 (1827)—wherein it was argued that the “tax was not upon the article, but upon the person”:

“It is true the state may tax occupations generally, but this tax must be paid by those who employ the individual or is a tax on his business. The lawyer, the physician, or the mechanic must either charge more on the article in which he deals or the thing itself is taxed through his person. This the state has a right to do because no constitutional prohibition extends to it. So a tax on the occupation of an importer is in like manner a tax on importation. It must add to the price of the article and be paid by the consumer or by the importer himself in like manner as a direct duty on the article itself would be made. This the state has not a right to do, because it is prohibited by the Constitution.”

And in Bromley v. McCaughn, 280 U.S. 124, 140 (1929):

‘To this, Chief Justice Marshall replied (25 U. S. 444) in words that have been repeatedly approved in subsequent decisions of this Court:

"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. All must perceive that a tax on the sale of an article, imported only for sale, is a tax on the article itself. "’

So then, if one were to alter the subject of the sentence so as to reciprocate a similar argument that the “tax was not upon the person, but upon their wages”, where does that leave Sonny’s above case law?

If the laws and rulings were make believe there would be no consequences for violating them, but I can assure you that there are.

Alexander Hamilton stating in Federalist No. 35, Para. 11:

There is no part of the administration of government that requires extensive information and a thorough knowledge of the principles of political economy, so much as the business of taxation. The man who understands those principles best will be least likely to resort to oppressive expedients, or sacrifice any particular class of citizens to the procurement of revenue. It might be demonstrated that the most productive system of finance will always be the least burdensome. There can be no doubt that in order to a judicious exercise of the power of taxation, it is necessary that the person in whose hands it should be acquainted with the general genius, habits, and modes of thinking of the people at large, and with the resources of the country.

And this is all that can be reasonably meant by a knowledge of the interests and feelings of the people. In any other sense the proposition has either no meaning, or an absurd one. And in that sense let every considerate citizen judge for himself where the requisite qualification is most likely to be found.

And further in Federalist No. 79, Para. 1:

In the general course of human nature, A POWER OVER A MAN’s SUBSISTENCE AMOUNTS TO A POWER OVER HIS WILL.

Sonny Tufts

02-20-2014, 05:01 PM

Which is because the matter had already been addressed, albeit surreptitiously, in 26 USC 83 (realizing that labor, just as money—or currency is a form of privately owned property that may be readily transferred upon an agreed upon arrangement—or contract)

No, Section 83 doesn't help you, because (1) it doesn't apply to the transfer of money: "For purposes of section 83 and the regulations thereunder, the term “property” includes real and personal property other than either money or an unfunded and unsecured promise to pay money or property in the future." Reg. §1.83-3(e); and (2) even if it did, there is no cost basis in labor, so the entire amount received is included in gross income.

Thomas Jefferson was more likely than not referring to his prior held position of distrust towards the judicial branch of government

No, he was referring to the power of taxation. The phrase "the latter" obviously refers to the final item in the list of things in the new Constitution that he approved of, and this item is the power of taxation.

Certainly, wages are income, but that does not necessarily mean that wages qualify as ‘gross income’.

They do unless there's a specific exemption. Section 61(a) defines gross income as all income except as otherwide provided in Subtitle A. Since there is no general exclusion for wages, and since you have conceded that wages are income, it follows that they are included in gross income.

And in Bromley v. McCaughn, 280 U.S. 124, 140 (1929):

‘To this, Chief Justice Marshall replied (25 U. S. 444) in words that have been repeatedly approved in subsequent decisions of this Court:

"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. All must perceive that a tax on the sale of an article, imported only for sale, is a tax on the article itself. "

Good grief, Mr. White, do you not realize this is from the dissenting opinion? Are you now relying on losing arguments? The majority opinion in Bromley upheld the constitutionality of the federal gift tax. So if an unapportioned tax on a gratuitous transfer of property is valid, is follows that an unapportioned tax on the transfer of property for a consideration is also valid. Both are transfers on the exercise of a property right (the right to transfer or receive property). You'd be better off to read the majority opinion:

Whatever may be the precise line which sets off direct taxes from others, we need not now determine. While taxes levied upon or collected from persons because of their general ownership of property may be taken to be direct, Pollock v. Farmers Loan & Trust Company, 157 U.S. 429, 158 U.S. 601, this Court has consistently held, almost from the foundation of the government, that a tax imposed upon a particular use of property or the exercise of a single power over property incidental to ownership, is an excise which need not be apportioned, and it is enough for present purposes that this tax is of the latter class. 280 U.S. at 136 (emphasis added)

This was reiterated in 1945:

If the gift of property may be taxed we cannot say that there is any want of constitutional power to tax the receipt of it, whether as the result of inheritance [citation omitted] or otherwise, whatever name may be given to the tax... Receipt in possession and enjoyment is as much a taxable occasion within the reach of the federal taxing power as the enjoyment of any other incident of property. Fernandez v. Wiener, 326 U.S. 340 (1945)

johnwk

02-20-2014, 05:08 PM

Originally Posted by johnwk

Really? Seems to me our Supreme Court, using sound reasoning previously articulated 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 him from 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."___ Butchers’ Union Co. v. Crescent City Co., 111 U.S. 746 (1884)

Sigh...when will tax protesters take the time to actually read cases instead of cutting and pasting from crackpot websites? This passage was written by a single concurring Justice in an antitrust case that had absolutely nothing to do with taxation.

Tax protesters and crackpots?

There you go again. Instead of judging a court's ruling dealing with a tax issue using sound reasoning as expressed in the Butchers Union case, you prefer to engage in a personal attack and insult someone who dares to analyze the case and arrive at a conclusion using sound reasoning.

I take it you do not even read and analyze what you post. Part of one of the opinions you offered from the court stated:

Labor, on the other hand, is, in the current context, behavior performed by human beings in exchange for compensation. One's living expenses simply cannot be his "cost" directly in the very item sold, i.e., his labor, no matter how much money he spends to satisfy his human needs and those of his family. Of course we recognize the necessity for expenditures for such items as food, shelter, clothing, and proper health maintenance. They provide both the mental and physical nourishment essential to maintain the body at a level of effectiveness that will permit its labor to be productive. We do not even deny that a certain similarity exists between the "cost of doing labor" and the "cost of goods sold" concept. But the sale of one's labor is not the same creature as the sale of property …

Are you really suggesting that you agree with the court when it states that "...the sale of one's labor is not the same creature as the sale of property." If so, what is it , other than property, which a laboring person sells when earning a wage? I happen to agree with the sound reasoning stated in the Butchers' Union case confirming labor is property, and a "most sacred property" at 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 him from 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."___ Butchers’ Union Co. v. Crescent City Co., 111 U.S. 746 (1884)

JWK

" I believe that there are more instances of the abridgement of the freedom of the people by gradual and silent encroachment of those in power than by violent and sudden usurpations." ___ Madison Elliot`s Debates, vol. III, page 87 (http://memory.loc.gov/cgi-bin/ampage?collId=lled&fileName=003/lled003.db&recNum=98&itemLink)

ClydeCoulter

02-20-2014, 10:03 PM

@Johnwk and @Weston White,

When thinking of a mans labor (and I think one of you said something of this in passing) could a man not hunt or grow food during his time, instead of exchanging his labor for money. If that be the case, can a mans garden be taxed or his meat or berries that he finds, or the time that he spent doing it? (edit: and if so write off the time spent but not finding). What of his time spent with the kids that could have been exchanged as labor?

I appreciate the time that both of you have spent here in this thread (as well as other times). I have enjoyed seeing sound reasoning being used. And that, whether the world should be as it is, or not. We cannot understand our future until we can come to grips with how we got here. Thank you both.

Weston White

02-21-2014, 06:42 AM

Sigh...when will tax protesters take the time to actually read cases instead of cutting and pasting from crackpot websites? This passage was written by a single concurring Justice in an antitrust case that had absolutely nothing to do with taxation.

You’re actually postulating that the outlining principle being upheld within that quotation—which every man has—really only ever applies in cases involving protections being sought from unfair business practices, but not individuals seeking protections from governmental or corporate tyranny? If so, then I hope you truly do understand the burdening contradiction that your adverse stance takes on.

No, Section 83 doesn't help you, because (1) it doesn't apply to the transfer of money: "For purposes of section 83 and the regulations thereunder, the term “property” includes real and personal property other than either money or an unfunded and unsecured promise to pay money or property in the future." Reg. §1.83-3(e); and (2) even if it did, there is no cost basis in labor, so the entire amount received is included in gross income.

1. Money is not the relevant issue (e.g., it could just as well be bullion, choice cuts of meat, room and board, cord of wood, a cart of fruits and veggies, etc.), what is relevant is the quid pro quo—or “fair market value”, in this instance this involves laboring for individualistic competency. And of course money is itself excluded; it is used as the determining factor in establishing or measuring the fair market value of the property in exchange.

2. Regulations are subordinate to statutes. A regulation cannot deviate from the statute’s context or devise statutory prohibitions when no such stipulations have been provided within that statute. Further Section 83 of the United States Code lacks a prescribing clause to do so.

3. The cost basis of labor is determinable by the legally binding contractual arrangements of the parties involved (e.g., one attorney might charge $500 hourly for representation and another $200)—without lending consideration to the associated costs of performing labor (if one can account for the latter, they can most certainly determine the former). Still further, the Congress has been provided zero constitutional authority to regulate intrastate contracts, quid pro quo, or personal affairs.

4. Finally, in reference to this statute, it is not intended to provide as an answer all unto itself; rather serving as a (telltale) key in unlocking the greater truth that is being concealed by the IRS’ many illegitimacies.

No, he was referring to the power of taxation. The phrase "the latter" obviously refers to the final item in the list of things in the new Constitution that he approved of, and this item is the power of taxation.

You are certainly entitled to your opinion, but realize that is all it is, your opinion. The historical facts are not supportive to your position. Further, there is not just one list, but two lists included within the paragraph; the first as he began his paragraph with listing the judiciary last, and concluding the paragraph after glossing through several relative thoughts.

Additionally, it is awkward to end the sentence and then begin two new sentences simply to expand upon the very last point, being vaguely about taxation. It would have been better written, if so the case, to instead have expressed it similarly to: “and the power of taxation, which at first I thought might have been limited. A little reflection soon convinced me it ought not to be.”

At any rate, we had already gone over this. That letter was written only 9-months after the U.S. Constitution was ratified, all the while Mr. Jefferson was overseas serving as a diplomat, and not attending the Constitutional Convention (view prior discussion (http://www.community.defendindependence.us/viewtopic.php?p=1144#p1144)).

Included are a few Thomas Jefferson quotes on how he felt about the powers of taxation (Jeffersonian Cyclopedia”, Funk and Wagnalls, 1900):

“It is incumbent on every generation to pay its own debts as it goes. A principle which if acted on would save one-half the wars of the world.” – p. 227

“I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them.” – p. 271

“To compel a man to furnish contributions of money for the propagation of opinions which he disbelieves and abhors, is sinful and tyrannical.” – p. 663

And from Montesquieu’s “Spirit of the Laws”, XIII, which was copied into Thomas Jefferson's Commonplace Book:

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.

…You know, actually on second thought, you are absolutely correct. Thomas Jefferson did possess a desire for a limitlessly perpetual means of taxation, inconvertible monetary system, centralized banking, and endless national debt, (Thomas Jefferson: 2nd Inaugural, Washington D.C., March 4, 1805):

At home, fellow-citizens, you best know whether we have done well or ill. The suppression of unnecessary offices, of useless establishments and expenses, enabled us to discontinue our internal taxes. These, covering our land with officers and opening our doors to their intrusions, had already begun that process of domiciliary vexation which once entered is scarcely to be restrained from reaching successively every article of property and produce. If among these taxes some minor ones fell which had not been inconvenient, it was because their amount would not have paid the officers who collected them, and because, if they had any merit, the State authorities might adopt them instead of others less approved.

The remaining revenue on the consumption of foreign articles is paid chiefly by those who can afford to add foreign luxuries to domestic comforts, being collected on our seaboard and frontiers only, and incorporated with the transactions of our mercantile citizens, it may be the pleasure and the pride of an American to ask, What farmer, what mechanic, what laborer ever sees a taxgatherer of the United States? These contributions enable us to support the current expenses of the Government, to fulfill contracts with foreign nations, to extinguish the native right of soil within our limits, to extend those limits, and to apply such a surplus to our public debts as places at a short day their final redemption, and that redemption once effected the revenue thereby liberated may, by a just repartition of it among the States and a corresponding amendment of the Constitution, be applied in time of peace to rivers, canals, roads, arts, manufactures, education, and other great objects within each State. In time of war, if injustice by ourselves or others must sometimes produce war, increased as the same revenue will be by increased population and consumption, and aided by other resources reserved for that crisis, it may meet within the year all the expenses of the year without encroaching on the rights of future generations by burthening them with the debts of the past.

They do unless there's a specific exemption. Section 61(a) defines gross income as all income except as otherwide provided in Subtitle A. Since there is no general exclusion for wages, and since you have conceded that wages are income, it follows that they are included in gross income.

1a. No, a statutory exemption is not at all necessary. With consideration only to individuals, all wages and all income is entirely outside the lawful authority and purview established by Subtitle A of the Internal Revenue Code, until a bona fide increase (i.e., a gain or profit) has been realized through the individual’s financial prudence.

1b. Acts of public law may only consider what is expressly stated within them (establishing its breadth), not all other things intentionally left unmentioned unless expressly excluded or exempted (e.g., 1956 CFR 26 § 29.21-1: “Meaning of net income. … Neither income exempted by statute or fundamental law... enter into the computation of net income”; more at: 1939 CFR 26 § 9.22(b)-1, 1956 CFR 26 § 39.22(b)-1, 1986 CFR 26 § 1.312-6(b)).

2. Neither is there any numeration of ‘wages’ (and for that matter ‘salaries’) within the list provided for Section 61(a); rather there is only mention of: “fees, commissions, fringe benefits, and similar items”—within the provided context of “compensation for services”—to which wages is no such similar item. Those items listed are each intended in going above or beyond the receipt of mere wages.

3. No it does not, rather it states the following—and which was crystallized within Eisner: “Except as otherwise provided in this subtitle, gross income means all income from whatever source derived, including (but not limited to) the following items:”

4. I have always conceded that, it is ludicrous to say that wages are not income. Just as it is ludicrous to postulate that because wages is defined in Subtitle C that through some form of magical interaction coalesces its statutory breathe straight into Subtitle A. Completely absurd.

5. Further keeping in mind that 26 USC is ‘non-positive law’ (meaning that even a century later the Internal Revenue Code is still in the process of being codified into public law), and following the principle of ‘pari materia’, Section 61 (et seq/et al) is contextually bound by its preceding sections (i.e., Section 22 of 1939).

6. Lynch v. Hornby, 247 U.S. 339, 343-344 (1918):

And we deem it equally clear that Congress was at liberty under the amendment to tax as income, without apportionment, everything that became income, in the ordinary sense of the word, . . . Hence, we construe the provision of the act that “the net income of a taxable person shall include gains, profits, and income derived from . . . interest, rent, dividends, . . . or gains or profits and income derived from any source whatever

7. Lynch v. Turrish, 247 U.S. 221, 227-228 (1918):

The government opposes both contentions by an elaborate argument containing definitions of capital and income drawn from legal and economic sources and given breadth to cover a number of other cases submitted with this. The argument, in effect, makes any increase of value of property income, emerging as such and taxable at the moment of realization by sale or some act of separation, as by dividend declared or by distribution, as in the instant case.
. . .
From these definitions are deduced the following propositions, which are said to be decisive of the problems in the cases: “1. Income being derived from the use of capital, the conversion or transfer of capital always produces income. 2. Mere appreciation of capital value does not produce ‘income,’ nor mere depreciation ‘outgo.’ 3. Net income is the difference between actual ‘income’ and actual ‘outgo.’ 4. Income is not confined to money income, but includes anything capable of easy valuation in money.

Good grief, Mr. White, do you not realize this is from the dissenting opinion? Are you now relying on losing arguments? The majority opinion in Bromley upheld the constitutionality of the federal gift tax. So if an unapportioned tax on a gratuitous transfer of property is valid, is follows that an unapportioned tax on the transfer of property for a consideration is also valid. Both are transfers on the exercise of a property right (the right to transfer or receive property). You'd be better off to read the majority opinion: …

Good grief, Sonny, did you not realize that had been spoken by Chief Justice Marshall in his delivering the opinion of the Court in Brown v. Maryland, 25 U.S. 419, 444 (1827), which “in words that have been repeatedly approved in subsequent decisions of this Court” including the Bromley case. Courts do on occasion reference dissenting options in providing consideration to their instant cases; although not controlling they may still be persuasive.

At any rate, we can also observe that quotation in Macallan Co. v. Massachusetts, 279 U.S. 620, 625-627 (1929): “MR. JUSTICE SUTHERLAND delivered the opinion of the Court” and he had further stated:

As it many times has been decided, neither state courts nor legislatures, by giving the tax a particular name or by using some form of words, can take away our duty to consider its nature and effect. Choctaw & Gulf R. Co. v. Harrison…

* Several more additional cases that uphold this principle are listed in Pollock v. Farmers’ Loan & Trust Co., 157 U.S. 429, 581-582 (1895).

As to your referencing of gift taxes, (1) gift (including succession) taxes have historically always been understood as being indirect excise taxes (now as “transfer taxes”), (2) gifts in all respects correctly falls under the definition of being a ‘gain’, and (3) the primary distinction is that with taxes when imposed on gifts and estates, are upon the transferring of ownership from one party to another, whereas no debt or other obligation is involved amongst the parties involved; while obversely, such is simply not the case for those laboring for another, there is a quid pro quo involved, as a duty to one’s livelihood is owed.

This was reiterated in 1945: …

Hassett v. Welch, 303 U.S. 303, 314 (1938), (see also: 263 U.S. 179, 187-188 (1923); 245 U.S. 151, 153 (1917); et al):

In the interpretation of statutes levying taxes, it is the established rule not to extend their provisions by implication beyond the clear import of the language used, or to enlarge their operations so as to embrace matters not specifically pointed out. In case of doubt, they are construed most strongly against the government and in favor of the citizen.

Connecticut Nat. Bank v. Germain, 503 U.S. 249, 253-254 (1992):

[I]n interpreting a statute a court should always turn first to one cardinal canon before all others. We have stated time and again that courts must presume that a legislature says in a statute what it means and means in a statute what it says there.