If We Would All Stick To The Facts, We Could Win In A Month

I’ve had occasion recently to be reminded of the wealth of talent, energy, and commitment which, while sincerely dedicated to the rule of law in regard to the “income” tax, is nonetheless squandered on misunderstandings for which absolutely no supporting evidence exists, and which defy both the words of the law and the huge body of evidence which DOES exist as to the true nature of the scheme.  Masterful legal pleadings, slick media presentations, and stirring, heartfelt rhetoric are vigorously and sincerely deployed by a host of truly outstanding and patriotic Americans addressing imagined elements and constructions of law which have never made an appearance in a single prosecution or civil action in connection with the tax, or anywhere else, for that matter.

Theories, such as that only foreign (non-American) nationals are subject to the tax, or that only receipts from non-American ‘sources’ are taxed under the law, are brilliantly promoted-- despite the fact that no American has ever faced an official assertion that his or her receipts were taxable because of being from a non-American source, or because (s)he was actually a foreign national.  Is it conceivable that this theory could be correct, yet no indictment or information or civil claim has ever said, “John Smith, having received $xxx in earnings from France (or, “being a French citizen and having earned $xxx while residing in Ohio”), is thereby made subject to the income tax,” or words to that effect?  Another popular and powerfully advocated theory-- that "income" only means "corporate profit"-- falls victim to the same question.  Where are the cases in which any natural American has ever been alleged to actually be a corporation in order to bring the tax to bear upon them?  Indeed, what of the vast number of occasions in which courts (and the words of the law) have unambiguously declared "wages" to be "income" and taxable as such?  Are we to understand that "wages" are "corporate profits"?

The stubborn persistence of these theories astonishes me, particularly in light of the wealth of irrefutable evidence demonstrating the nature of the real "income" tax scheme.  An enormous, vigorous and highly visible program to ensure that virtually every transaction in America is documented as having a connection to the federal government is underway at all times, with the resulting evidentiary documentation being relied upon in practically every criminal and civil action involving the "income" tax.

The simple fact is, since 1862 there has been a tax upon federally-connected receipts.  Looking, for instance, at its application to work-related earnings, it was first enacted as this: 

Sec. 86. And be it further enacted, That on and after the first day of August, eighteen hundred and sixty-two, there shall be levied, collected, and paid on all salaries of officers, or payments to persons in the civil, military, naval, or other employment or service of the United States, including senators and representatives and delegates in Congress, when exceeding the rate of six hundred dollars per annum, a duty of three per centum on the excess above the said six hundred dollars; and it shall be the duty of all paymasters, and all disbursing officers, under the government of the United States, or in the employ thereof, when making any payments to officers and persons as aforesaid, or upon settling and adjusting the accounts of such officers and persons, to deduct and withhold the aforesaid duty of three per centum, and shall, at the same time, make a certificate stating the name of the officer or person from whom such deduction was made, and the amount thereof, which shall be transmitted to the office of the Commissioner of Internal Revenue, and entered as part of the internal duties;…

And then re-enacted (in pertinent part) as this: 

Gross Income Defined:

Section 213. That for the purposes of this title (except as otherwise provided in section 233 [Gross Income Of Corporations Defined -PH]) the term gross income-

(a) includes gains, profits, and income derived from salaries, wages, and compensation for personal service (including in the case of the President of the United States, the judges of the Supreme and inferior courts of the United States, and all other officers and employees, whether elected or appointed, of the United States, Alaska, Hawaii, or any political subdivision thereof, or the District of Columbia, the compensation received as such)…

Then it was re-enacted as this: 

SEC. 22. GROSS INCOME.

(a) General definition.—"Gross income" includes gains, profits, and income  derived from salaries, wages, or compensation for personal service, of whatever kind and in whatever form paid,...

and ultimately this: 

Sec. 61. - Gross income defined

(a) General definition

Except as otherwise provided in this subtitle, gross income means all income from whatever source derived, including (but not limited to) the following items:

(1)

Compensation for services, including fees, commissions, fringe benefits, and similar items;

...,

while subject to the specifications in this law: 

The term "department" means an executive department of the United States Government, a governmental establishment in the executive branch of the United States Government which is not a part of an executive department, the municipal government of the District of Columbia, the Botanic Garden, Library of Congress, Library Building and Grounds, Government Printing Office, and the Smithsonian Institution.
 

The term "position" means a specific civilian office or employment, whether occupied or vacant, in a department other than the following: Offices or employments in the Postal Service; teachers, librarians, school attendance officers, and employees of the community center department under the Board of Education of the District of Columbia; officers and members of the Metropolitan police, the fire department of the District of Columbia, and the United States park police; and the commissioned personnel of the Coast Guard, the Public Health Service, and the Coast and Geodetic Survey.
 

The term "employee" means any person temporarily or permanently in a position.
 

The term "service" means the broadest division of related offices and employments.
 

The term "compensation" means any salary, wage, fee, allowance, or other emolument paid to an employee for service in a position.

So, the compensations of federal workers ("employees") are clearly and uniquely classified in the law as being gross "income", and are taxed (after being distilled down to taxable "income" by the claiming of available deductions, etc.).

Now look at the specifications for creating the 100 million or so W-2’s stridently demanded from every company every year (1099’s amount to the same thing for contractors and others, by a different statutory scheme, which we will not explore here):

Sec. 6051. - Receipts for employees

(a) Requirement

Every person required to deduct and withhold from an employee... ...shall furnish to each such employee…a written statement showing the following:

(1) the name of such person,

(2) the name of the employee (and his social security account number if wages as defined in section 3121(a) have been paid),

(3) the total amount of wages as defined in section 3401(a),

...

and at what “wages as defined in section 3401(a)” are.  (3121(a)’s definition is similar, but too complicated to go through for purposes of this summary):

Sec. 3401. - Definitions

(a) Wages

For purposes of this chapter, the term ''wages'' means all remuneration (other than fees paid to a public official) for services performed by an employee for his employer,…

c) Employee

For purposes of this chapter, the term ''employee'' includes an officer, employee, or elected official of the United States, a State, or any political subdivision thereof, or the District of Columbia, or any agency or instrumentality of any one or more of the foregoing. The term ''employee'' also includes an officer of a corporation. [A “United States Corporation”, defined in Sec. 207 of the Public Salary Tax Act as, “a corporate agency or instrumentality, is one (a) a majority of the stock of which is owned by or on behalf of the United States, or (b) the power to appoint or select a majority of the board of directors of which is exercisable by or on behalf of the United States,” ].

THE TRUTH IS SIMPLE AND STRAIGHTFORWARD.  THE PURPOSE OF W-2’S (AND 1099’S) IS TO RECORD AND REPORT PAYMENTS MADE TO FEDERAL WORKERS.  THE CREATION OF ONE OF THESE FORMS ABOUT ANY GIVEN AMERICAN CONSTITUTES A LEGAL DECLARATION THAT HE OR SHE IS A FEDERAL WORKER AND HAS BEEN PAID TAXABLE FEDERAL COMPENSATION. THAT’S WHY AMERICANS ARE ALLEGED TO BE TAXABLE AND TAXED.  THAT’S WHY EVERY COMPANY IN AMERICA IS BROWBEATEN OR FOOLED INTO ISSUING W-2’S AGAINST THEIR WORKERS, AND 1099’S AGAINST THEIR CONTRACTORS, GENERATING A VERITABLE BLIZZARD OF EVIDENCE AS TO THE TRUE NATURE OF THE SCHEME!  There is, on the other hand, no effort of any kind to cause the creation of evidence that every company is connected with a non-American country, or that every worker is a corporate shareholder (or even that every company is a corporation), or anything of either sort-- because the theories involving these things are simply wrong.

There IS a tax on corporations-- an "income" tax on those corporations chartered as federal or federally-controlled entities, but it has nothing to do with (and is not applied to) natural persons (who are taxed on their "income" by other means, such as that discussed above).  There IS a distinction drawn in the law between "income" from ‘foreign-located sources’ and "income" from ‘domestically-located sources’ in the case of "non-resident aliens" (and a few others), but these terms do not mean what the advocates of the foreign source argument understand them to mean, and the tax scheme does not rely upon the distinction at all, in the sense that those advocates suggest.

It is a great pity that the talent and energy that is devoted to these errors is thus wasted.  It is worse still that many who are introduced to the idea of freedom from a wrongfully applied and hugely destructive tax for the first time thanks to the admirable and accomplished outreach efforts of these mistaken theorists will, upon perceiving the errors in those theories, simply be lost to the cause-- as once burned, twice warned.

I know that over the course of time the real nature of the "income" tax scheme will come to be understood by all, but it could happen a lot faster if overcoming misunderstanding was unnecessary.  And think how quickly that time could come if all of the polished, practiced, and dedicated advocates presently defending the indefensible turned their prodigious talents toward spreading that understanding.  We could win by April 16th.

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