Ok, before I say anything else I want to first say that I am not a tax protestor. I have however studied that issue while researching the income tax laws for about 10 years now and I have some questions that no one seems able to answer, including the IRS.
Here goes:
The US constitution is where our government derives it’s authority from. Congress can only pass laws that are in accordance with the provisions of the Constitution.
Everyone seems to feel that the 16th Amendment gave Congress some new power to tax, which is not true according to Stanton v. Baltic Mining Co., 240 U.S. 103, at 112 (1916). (The 16th Amendment “conferred NO NEW POWER of taxation but simply prohibited the previous complete and plenary power of income taxation possessed by Congress FROM THE BEGINNING from being taken out of the category of indirect taxation to which it inherently belonged…” )
So, any tax laws created now still have to follow the same rules as are found in the original Constitution.
This statement: "Excises are ‘taxes laid upon the manufacture, sale, or consumption of commodities within a country, upon licenses to pursue certain occupations, and upon corporate privileges.’” Flint v. Stone Tracy Co., 220 U.S. 107, at 151 (1911). (Emphasis added) appears to say that an income tax (also known as excise taxes) are laid on certain licensed privileges.
Now, there are numerous other court cases I have run across over the years, like this one from Oregon:“The individual, unlike the corporation, cannot be taxed for the mere privilege of existing. The corporation is an artificial entity which owes its existence and charter powers to the state; but the individuals’ rights to live and own property are natural rights for the enjoyment of which an EXCISE cannot be imposed.” Redfield v. Fisher, 292 P. 813, at page 819 (1930). (Emphasis added) that appear to tell me that a person cannot be taxed directly merely for supporting him/herself by working for a living.
Knowing this the question needs to be asked: What Act of Congress makes what a person earns supporting him/herself taxable? When I queried the IRS concerning this, the answer was that “The IRS enforces the tax laws passed by Congress” When I said, fine, please tell me which tax law makes working for a living a revenue taxable activity, I got the same answer, so they must not know what tax laws they are enforcing. It would seem that Congress knows full well since this is found in the Congressional Record:
“The income tax is, therefore, not a tax on income as such. It is an excise tax with respect to certain activities and privileges which is measured by reference to the income which they produce. The income is not the subject of the tax: it is the basis for determining the amount of tax.
House Congressional Record, 3-37-43, page 2580
It would seem that this, along with other info I have, would seem to say that, unless you are involved in an activity which has been specified as a revenue taxable activity then you are not liable for or subject to the income tax, doesn’t it?
Because see Bowers v. Kerbaugh-Empire Co., 271 US 170 (1926).
The court’s argument is:
Congress has always had the power to tax incomes, indirectly. However, until the 16th amendment, Congress couldn’t levy a direct tax on incomes. The 16th amendment removed the distinction between direct taxes and indirect taxes. So, now, because of the 16th Amendment, all incomes, “from whatever source derived” are under Congress’s taxing power.
What part of “Congress shall have power to lay and collect taxes on incomes, from whatever source derived” don’t you understand?
Your last sentence is a complete non sequitur. Do you even understand what the words you quoted from Stanton vs. Baltic Mining mean? Congress always had the power to tax incomes. Before 1913, courts had ruled that any income tax which included investment income was a direct tax which had to be apportioned among the states according to population. The Sixteenth Amendment removed that restriction. This in no way supports your case.
Oooooh, here`s a good one that always follows; (Protestor Argument)
Define Income as it pertains to the IRS and Taxes…
I`ve heard that it is in reference to corporate profits and what we actually earn is/are wages, not income.
It would be helpful to the OP if someone could quote from the IRS Tax Regulation the exact part where income is defined and then follow with the section that relates that to the worker and his/her tax liability.
The best way to not have to pay income taxes is to not earn any money.
As I said at the start of my post, I am not a tax protestor, it goes without saying that the government has the right to tax, so long as it does so in accordance with the authority given to it.
I understand the Stanton case just fine, jklann, what it says is that the 16th Amend. did not change anything regarding the tax laws, that it merely restated a fact, that the so-called income tax was an indirect tax and had to be administered as such, and, for your info, the court also said, as did Congress, that it is not the income that is being taxed, the income is the measure of the tax.
Capt. Amazing, the court said though, that the 16th Amend. didn’t change anything, according to what the included quote states, so congress would still have to tax in accordance with the provisions of the Constitution, we have to remember that, since there is no wording in the 16th that would repeal or alter the original provisions of the Const., that they would still be in effect, so the 16th merely makes a statement, which was expanded on by the Court, and basically says what I just wrote.
whuckfistle, here is what the court says regarding “Income”:
“The general term “income” is not defined in the Internal Revenue Code. United States v. Ballard, 535 F.2d 400, 405 (8th Cir. 1976). Congress has defined all the terms such as “gross income” etc., but has not defined the term “income” in the Tax Code.
and:
“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,….Here we have the essential matter: not a gain accruing to capital, not a growth or increment of value in the investment; but a gain, a profit, something of exchangeable value proceeding from the property, severed from the capital however invested or employed, and coming in, being “derived,” that is, received or drawn by the recipient for his separate property. Nothing else answers the description. Eisner v. Macomber, 252 U.S. 189 at 206-207 (1920).
I have read a lot of tax protestor cases regarding the “wage” issue. Basically there have been a lot of people who have claimed that “wages” don’t constitute “income”, and are therefor not taxable. Their total argument in court when brought in on tax evasion charges was just that, and nothing more. To start with, they missed the fact that the courts have said that it is not the income that is being taxed, that the income is the measure of the tax, and that it is the activity they are involved in that may or may not be taxable. So to maerely say in defense of themselves that the wages they earned were not income, is no defense at all. A better argument would have been to argue that the job they had was not a recognized revenue taxable activity.
It should also be noted that these court cases, while old, have not been overturned and are still case law on the matter.
If individual liberties and rights are supposedly protected by the Const., and supposedly our Gov. cannot infringe on those rights, then a right that has been identified as such by the Court, in regards to an individuals right to labor, could not be taxed, could it?
“Included in the right of personal liberty and the right of private property-partaking of the nature of each-is the right to make contracts for the acquisition of property. Chief among such contracts is that of personal employment, by which labor and other services are exchanged for money or other forms of property.” Coppage v. Kansas, 236 U.S. 1, at 14 (1915).
The question still stands: What Act of Congress makes an individual liable for or subject to the so-called income tax, which is a tax on certain activities, not the actual income (which is merely used to determine the amount of the tax that has to be paid) who merely works to support himself?
The sixteenth amendment. Sorry, I know what an overly verbose judge said in 1916, but he’s simply wrong. The prevailing precedent was that the income tax was a direct tax, and the 16th amendment changed that. Even if it hadn’t, that no new power was created doesn’t mean that its scope wasn’t changed. It’s new law. Give it up, already.
Every word that a judge utters in a case is not law. Much verbiage in court decisions is there for illumination – it’s called “dictum” – and while it can be cited, it doesn’t carry the same weight as the actual statements of law relevant to the decision.
A speech in the Congressional record is not law. Law only results from a vote; a speech may be considered by a judge as evidence of the intent of the legislature in passing an ambiguous law, but they can ignore intent if they feel it’s appropriate.
The word “income” is defined in every dictionary, and that definition is what Congress meant, and that’s what it means in the tax code. You’ll notice that Congress didn’t define “of,” “the,” or “is,” either.
This message board does not say what the law is; neither do you. The courts say what the law is, and the Supreme Court says it loudest, and they have said, repeatedly, that Congress has the power to levy a tax on income, to be collected exactly as they’ve been doing it.
Hey OP, you may wanna refine your concept of “tax protestor” because, despite your statements to the contrary, you is one, bub.
The Official Taxguy Position on threads of this sort is to not participate other than to (1) link to the excellent Tax Protestor FAQ (which has already been done above) and (2) point out that it doesn’t matter to your tax liability what you think the Constitution or the Internal Revenue Code means, it matters only what the Supreme Court thinks it means, and so far they’ve been pretty adamant that your arguments here are dead wrong. I’ll let everyone know if they change their mind.
And exactly how is the income tax, as an indirect tax, being administered in an unconstitutional manner?
By the way, if you’ve already made up your mind on these issues and wish to debate the constitutionality of the income tax, as opposed to asking a question, it would be appropriate to e-mail a moderator and ask to move this to Great Debates.
Well, no, what the court said is that the government has always had the power to tax income…Congress is given no new power to tax by the 16th amendment. What the 16th Amendment does is give the government the power to tax income directly, unlike before the 16th Amendment, when the government had to tax income indirectly. So even though the 16th Amendment doesn’t add any new power to tax, it lets Congress exercise its power more generally.
Here’s a link to Bowers, if you need it. From the case (bolding mine)