“The freedoms won by Americans in 1776 were lost in the revolution of 1913,” wrote Frank Chodorov. Indeed, a man’s home used to be his castle. The income tax, however, gave the government the keys to every door and the sole right to change the locks. Today the American people are no longer the master and the government has ceased to be the servant. How could this be? The Revolution fought in the name of the inherent natural rights to life, liberty and the pursuit of happiness promised to enthrone the gains of individualism. Instead, federal taxation bribes the States and individuals to serve the interests of ever-greater submission to the centralized will. How did tax slavery come to the land of the free? [Full Article]
Source link: http://archive.mises.org/2449/the-origin-of-the-income-tax/
The Origin of the Income Tax
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All lamentable and quite true, especially the closing quote from Frank Chodorov, “America is no longer the America of the Declaration of Independence.” However, the seeds of destruction were sown within that very document itself. It contained fatal flaws which ultimately led to the subversion of its principles, and to the gross distortion of its intentions that exists in the United States of America today – a process which history shows started soon after the conflict, relating to its creation, was over. A full critique of this significant, but not to be revered, document can be read at http://selfsip.org/critiques/declarofindepen.html
Mr. Young’s History of the Income Tax fails to address what “income” means in law. It is though ignoring — and intentionally distorting — its meaning allows the tax to be grossly misapplied and mis-enforced. In US law, an income tax is nothing except an excise tax, a form of indirect tax. An excise tax can only be imposed upon the exercise of a privilege. Working for a living is not a privilege, it’s a right, and rights cannot be taxed except by a direct tax. In fact, very few people in the United States actually owe an
For a much more complete explanation, see (Link)
If one takes a look at the 10 planks of the communist manifesto, one finds that a heavy, progressive income tax is plank number 2.
If one looks at the other 9 planks, one finds that the US has directly or indirectly implemented all but one or two of the 10 planks. Karl Marx said ANY state practicing 6 or more planks (in any form) was practicing communism. Therefore, the US is practicing communism. If the US is practicing communism, then are the muslims fighting the communists (again)? Are we actually what we were taught to fear and loathe in school?
The documents the founding fathers created are not “flawed” as the other poster states. They have been taken advantage of via manipulation and undermining the spirit of what they meant. They have been made to appear that they are flawed via the subtle tricks of the forked tongues of a thousand lawyers attempting manipulation for two hundred years at the behest of their political masters and for their own personal gain.
Things are “they way they are” because we have allowed communist/socialist philosophy to take control of almost everything we now do and think in the US. Change the philosophy and the rest will fall in line…
Kitty and Dave both refer to the same thing, written law as opposed to enforced law. Sure, Dave, I’ve read all that too, and tried it. Too bad, they ignored me utterly and that was the end of that.
The fact is that until there is a mass perception change, those few who are able to make the government actually recognize their own laws are going to be few and far between.
Dave has it right. The 16th Amendment can only be “enforced” if you know the meaning of the word “income”. The Supreme Court defined it in Eisner v. McComber, 252 US 189 as a profit or a gain from a source. Actually, the best definition of income is “when your money, makes money.” When YOU make money, that’s not income. It’s INCREASE.
One of the arguments in Eisner was that income was like an orchard of fruit trees. The trees being the source, the fruit being the income. But what if you add 10 more trees? Are they taxable as “income”? Of course not because they are inCREASE. Capital is not taxable as income but Capital Gain, is. Which is also another definition of income.
By the way, the 16th Amendment did NOT amend the Constitution. So said the Supreme Court in Brushaber v. Union Pacific Railroad, 240 US 1. It was ruled that the 16th Amendment just removed the income tax from the direct taxation clauses of the Constitution (A1, S2, C3 & A1, S9, C4) and put it in the indirect taxation clause (A1, S8) “to which it inherently belongs.”
As for the actual validity of the 16th Amendment, since the amendment process was flawed and filled with errors by the States…well, another time perhaps.
Before the Income Tax
by G. Edward Griffin
Danger of Direct Taxes
Direct taxes were viewed by the Founding Fathers as dangerous because they give government great power over its citizens and also because, in order to assess such taxes, agents must have the authority to snoop into the private lives of the citizens. They agreed, therefore, that direct taxes are safer if administered by the states, where elected representatives are closer to the people and easier to control.
Indirect taxes, on the other hand, were viewed as less dangerous, because people could avoid them if they wanted merely by not purchasing the items being taxed. This assumes the establishment of taxes only on those items that are considered nonessential, such as liquor and tobacco, often called luxury taxes. Furthermore, the process of collecting indirect taxes does not endanger the individual’s right of privacy.
For these reasons, the delegates to the Constitutional Convention agreed that indirect taxes would be more appropriate for the federal government. The compromise that allowed the states “to form a more perfect union” consisted of two provisions:
1) The federal government was to derive its primary revenue from indirect taxes, and these were to be uniform in all states.
2) In the event of war or similar emergencies, the federal government, with the consent of Congress, would have authority to levy direct taxes “passed through” the states to their citizens, but these were to be proportional to the number of representatives that each state had in Congress.
This process is called apportionment. In other words, if there were 100 representatives in Congress, and the state of Virginia had seven of them, the voters in Virginia would have to pay seven percent of the direct national, emergency tax. The specific wording establishing the Uniform Apportionment Tax is found in Article I of the Constitution, and specifies:
Representatives and direct taxes shall be apportioned among the several states which may be included within this Union…. The Congress shall have power to lay and collect taxes, duties, imposts, and excises, to pay the debts and provide for the common defense and general welfare of the United States; but all duties, imposts and excises shall be uniform throughout the United States…. No capitation [a head tax, sometimes called a poll tax], or other direct, tax shall be laid, unless in proportion to the census or enumeration herein before directed to be taken.
A sample of the extensive historical record of the founding era demonstrates the reasoning of the men who created the concept. Alexander Hamilton, who was to become the first Secretary of the Treasury, wrote in The Federalist, #21:
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 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…. Impositions of this kind usually fall under the denomination of indirect taxes, and must for a long time constitute the chief part of the revenue raised in this country. Those of the direct kind, which principally relate to land and buildings, may admit of a rule of apportionment.
Before the Income Tax
by G. Edward Griffin
Full Article(Link)
Excellent article except for the misinformation about whose income the 16th amendment applies to. Here are some Supreme Court cases and federal regulation facts:
“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… [and one of the examples they give is...] ‘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 (1938)]
For support, they cite another case (Evans v. Gore), and here are some quotes from that case (emphasis added):
“[T]o enable Congress to reach all TAXABLE income more conveniently and effectively than would be possible as to much of it if an apportionment among the states were essential, the Sixteenth Amendment was proposed and ratified. In other words, the purpose of the amendment was to eliminate all occasion for such an apportionment because of the source from which the income came, A CHANGE IN NO WISE AFFECTING THE POWER TO TAX but only the mode of EXERCISING it.”
“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.”
“It is not, in view of recent decisions, contended that [the 16th Amendment] rendered anything taxable as income that was not so taxable before.” [EVANS v. GORE, 253 U.S. 245 (1920)]
If “from whatever source derived” DOES NOT MEAN “from whatever source derived” literally, as the Supreme Court says, then what about the statute based on that amendment (now 26 USC § 61)? In answer, the federal regulations for decades have shown that the Constitution itself limits the scope of the otherwise broadly worded statute. The older regulations defining “gross income” specifically pointed out that some income was exempt, not because of any statute, but because it was “UNDER THE CONSTITUTION, NOT TAXABLE BY THE FEDERAL GOVERNMENT” (emphasis added) [26 CFR § 39.22(b)-1 (1956)]. Since then that has disappeared from the corresponding regulations, which now just talk about some income being “excluded by law” (26 CFR § 1.61-1), but do not say WHAT “law” that includes. (The Constitution is not mentioned by name.)
The current regulations also mention the Constitutional exemptions (though not in the general definition of “gross income”). Go to: http://www.access.gpo.gov/nara/cfr/waisidx_04/26cfrv4_04.html and click section 1.312-6 and read subsection (b).
Here is part of that section (emphasis added):
“(b) Among the items entering into the computation of corporate earnings and profits for a particular period are all income exempted by statute, INCOME NOT TAXABLE BY THE FEDERAL GOVERNMENT UNDER THE CONSTITUTION, as well as all items includible in gross income under section 61 or corresponding provisions of prior revenue acts.” [26 CFR 1.312-6(b)]
How are we to know what is Constitutionally exempt? Or better yet, what is NOT exempt? Go to: http://www.access.gpo.gov/nara/cfr/waisidx_04/26cfr1_04.html and click section 1.861.8T. Read subsection (d)(2) and it will tell you. [26 CFR § 1.861-8T(d)(2)]
It is my understanding that libertarians are opposed to tarrifs because they interfere with free trade. They are also opposed to income tax for some of the reasons stated in this article. I understand that libertarians prefer a much smaller government than we have today however they also do see some role for the government in society. How do libertarians propose the government raise funds to pay for its legitimate services?
Michael:
I would propose that all taxation be voluntary. Turnabout is fair play so, by the same token, net tax consumption would be outlawed.
Failing that, a sales tax or tariff would be closer to the ideal of a voluntary tax since, theoretically anyway, a person could be self-sufficient and thereby avoid the tax if he so chose.
An income tax is the worst of all worlds though. Penalizing wealth-generation, adding all sorts of externalities to economic activity, destroying financial privacy. Absolutely awful.
Michael, some libertarians believe in a limited role for government in society. Some libertarians do not believe in any government whatsoever. The latter obviously oppose all taxes. I lean toward that end of the spectrum, but am happy with any steps made in the right direction.
The former must concede some taxation is necessary, though they would probably desire user-fees (ex: road tolls) and voluntary contributions to the greatest extent possible. Some call for the only the excise taxes allowed in the Constitution. Others prefer a head tax. It is simple, it does not lend itself to social engineering, etc. Still others (Georgists, after Henry George) say that only land should be taxed. Some call for a flat income tax or the “Fair Tax”, a national sales tax, but it’s hard to make a case that these schemes are really libertarian. They may (or may not) be “less bad” than the current mess, but that does not make them libertarian.
Also, most libertarians who allow for the existence of some government would prefer to see much more of the government at a local level, as opposed to national. This too can affect the type of tax system used.
Dave has it wrong, Mr. Holliday, and so do you. Instead of parroting something you read on a fringe web site, why don’t you actually read Eisner v. Macomber (note correct spelling) and get back to us on what it was really about? There’s a very clear definition of income in the Eisner decision, and it includes gains derived from labor.
Even if the law were on your side–which it isn’t–are you really naive enough to think that that would protect you? Gun control is unconstitutional, but they do it anyway. So is federal funding of education. But they do it anyway. So are Medicare and Social Security. But they do it anyway. Government is lawless, and it will do as it pleases. Nothing but woe awaits those who forget that.
What can we do about the Government controling our land? How can we stop this?
Clint, you can start by voting Libertarian. :^) Beyond that, each of us as individuals cannot do much since the state commands overwhelming force. To “do something” physical, as opposed to voting or bringing suit, is to pretty much ensure your becoming a martyr to the cause.
Clint, there are several things we have to do. We have to study and understand the US Constitution first of all. We have to understand the intent of its writers. Then we need to hold our elected officials accountable to it. We need to get actively invovled in protecting our Constitution or eventually we won’t have private property. Private property is the essence of a truly free society. We really don’t have private property now, so we have an uphill battle, but we can still win. There are a few orginazations out there that are doing an admirable job in this battle. The best is the John Birch Society(Link). This statement may get some negative or even vicious comments, but these will be from folks who have no personal knowledge of the JBS or who have an agenda. Decide for yourself.
I have attached an excerpt from a good article on this.
Congress and the Constitution(Link)
by Gary Benoit
The understanding that is necessary includes a recognition that ours is a government of laws and not of men, a republic and not a democracy. Enough Americans must be brought to an understanding that Congress, acting in the name of the people for some greater good, cannot execute any non-enumerated powers, no matter how popular or tempting — unless the power in question is first granted to the Congress through the amendment process.
Of course, this does not mean that other levels of government cannot — or, for that matter, should not — execute any powers not embodied in the U.S. Constitution. Only the federal government cannot do so; the state governments can exercise powers authorized by their own state constitutions, and county and local governments can perform other functions allowed by law. But this concept of federalism, along with the concept of enumerated powers, has been largely forgotten, allowing a dangerous concentration of powers on the federal level that threatens not only the rights of the states, but the freedom of the individual.
As understanding grows, more Americans will recognize that the problem is not the Constitution or the government it created, but lack of adherence to the Constitution. And as they hear from a growing number of informed constituents, more busy congressmen will surely find the time to learn about the document they have sworn to uphold.
I strongly urge all parties, concerned, to read the well written and researched “The Law that Never Was” by Bill Benson. The fact remains that the income tax amendment was NOT ratified as reported by the Secretary of State at the time Philander Knox. Note that this is also the origin of the term “philanderer”. In fact, Benson obtained certified documents from all 48 states proving that only a handful voted for ratification of the 16th amendment. New research indicates that the 13th amendment creating the Federal Reserve may also have been foisted upon the American People in the same manner! In either case we have gone from a free people to financial serfdom.
regards,
Mark
There’s a strong tendancy for American Austrian economists to ignore the history beyond your shores. The Australian states had income tax several years before the USA and federation specificly allowed it.
The debates we had at federation focused on expendature distribution and tarrif reduction not income tax itself.
Australian tax history is found below:
http://www.ato.gov.au/corporate/content.asp?doc=/content/tax_history.htm
It’s biased history from the tax office its self but they don’t know there’s a problem.
I note the author chooses to reside in an “oppressive” country where he is forced to pay onerous taxes…me, too. I am the grandchild and great-grandchild of people who sought out this country (USA)for the opportunities it offered. I, like any intelligent citizen, hope for and work for a more equitable taxation-from each, according to…-but in the meantime, I am grateful for a country where I have the chance to progress and better my lot in life. Like EVERYTHING, this has its price. in America, that price is paying my dues…helping to ensure that everyone else who has come to these shores, including the first nations, has the same chances I do. I have seen enough in 68 years to tell me that if the weakest in society fail, all of us will fail. If you have studied human development, you know that the most self-centered being on earth is the newborn…it thinks only of the tit and its own needs. Hopefully, we progress from that primitive stage(grow up)and, generally, we do. I know not where the “Austro-Libertarian” falls in this scale, but I can tell you where an American will be.
Curt Howland refers to my comments of 9/7/04 and states, “The fact is that until there is a mass perception change, those few who are able to make the government actually recognize their own laws are going to be few and far between.” Quite correct – a paradigm shift is needed, and that starts with the few who are concerned enough to make the effort to understand the fundamental issues of the distortion of reality caused by governments. This information AND an actual proposed solution is the prime purpose of the Self-Sovereign Individual Project(Link) – Rational freedom by self-sovereignty & social contracting.
I have some issues with some things I read on the Self Sovereign Individual Project website. This for instance, from the critique of government founding documents section: “The cry is often heard that “we need to return to our roots”. If this exhortation is meant as a recipe to save “us” from current faulty social and political practices, it is surely incorrect logically, since it is those very roots which have lead to that current predicament.”
Wrong! We are in this predicament due to our failure to understand and follow the law and wisdom provided by such documents. While the Constitution is not a perfect document, ( it can’t be, as it is a creation of imperfect men) it and its creators are the reason we live in the most free and prosperous nation in history. This is changing and we are sinking into socialism and tyranny like the rest of the world because of ignorance of our founding principles and failure to hold our government accountable to the laws of the Constitution as intended by its writers. It is our failures that have led to our present situation, not theirs. Our ignorance and arrogance is at fault.
A criticism espoused at this site is that the Constitution does not protect or delineate any rights of men, “After the high point of The Declaration of Independence (TDOI), the understanding of, and the written protection for the fundamental rights of individuals to life, liberty, property and the pursuit of happiness was greatly compromised by the initial Constitution document, completed on September 17, 1787, which contained no statement of rights at all. Though the first ten amendments, which followed soon after, were called the “Bill of Rights” and were intended to rectify this deficiency…” This statement shows a basic ignorance of the purpose of the Constitution of the United States. It’s purpose was to restrict government, thereby protecting rights. Our founders knew that there is no such animal as society without government. A document or theory alone cannot protect us from the fallen nature of man. A vehicle is necessary. That vehicle is government. The question was and is, “How much is necessary for protection and how do you control it?” Their wisdom provided us with the best structure to date. They did not set up a vehicle to control people, but a vehicle to control government.
Here is a truly arrogant statement from this site: “It is unfortunate that the most influential statesmen of the time (the “Federalists”) were not able to think deeply enough to understand that the basic flaws of the Articles of Confederation (see my critique of the Articles for a detailed analysis) could be remedied without such a strong central government which was bound to grow and destroy all semblance of the ideas of freedom for which so many gave their lives in the revolutionary war.”
Our founders did not give us “such a strong central government”. It has become strong and is growing because we are not holding the government (men) accountable to the law.
The “Federalists” were not able to think deeply enough?
This is quite a statement. I guess Kitty and her intellectuals are able to think deeply enough? Kitty and company are putting themselves in a league above those who made great sacrafices in blood and family and through their wisdom and foresight, gave us the structure and protections, which, as I stated earlier, created, with all its faults, the most free and prosperous nation in history.
The unfortunate reality is that government is not only necessary, it is inescapable due to man’s fallen nature. There is no such thing as governmentless society. Government can provide the vehicle for both tyranny and protection. The U.S. Constitution was set up to provide mutual protections among the states, but while doing so, provide the people protection from government itself.
Chad Bull’s comments re. the Self-Sovereign Individual Project are off-topic for this blog thread – to discuss/comment on the paper “The Origin of the Income Tax” by Adam Young. He is quite welcome to post them to the MoreLife Yahoo group(Link) where the archives are public, or to any other public forum that he names; Paul Wakfer (author of the critique to which he refers) and I will be glad to respond there. This is *not* the place.
Kitty,
Sorry if I ventured “off topic”. I believe you asked us to view your website as it prescribes the cure for the problems mentioned in the original topic.
“…a paradigm shift is needed, and that starts with the few who are concerned enough to make the effort to understand the fundamental issues of the distortion of reality caused by governments. This information AND an actual proposed solution is the prime purpose of the Self-Sovereign Individual Project(Link) – Rational freedom by self-sovereignty & social contracting.”
I heartily disagree with your solutions and your websites criticisms of our Founding documents. If you did not desire your positions to be scrutinized, you should not have offered your website as an outlet for the solutions to the problems raised on this thread.
I most definitely did intend that my statement should encourage readers of this blog to read the Self-Sovereign Individual Project’s essays, and then take their questions and comments (positive or negative) to MoreLife Yahoo as is stated (as a minimum) at the bottom of each page. To carry on such discussion here on this blog is highly inappropriate – apparently I should have made that clear for those who wouldn’t realize this themselves.
Again, if some other general political/philosophical public forum for discussion is desired then name it – not a blog for a specific authored article.
Common Kitty…”Highly inappropriate”? Again, you offered your website as the solution for issues raised on this thread. I rebutted. Enough with the motherly chastisements.
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