Capitations, other direct taxes, & shape shifting lizards

[Famspear]

In another thread, SteveSy wrote:

Sorry, everything I have said about what was considered a direct tax, or capitation tax by those who created the constitution is not a belief, its a documented fact. Your entire position has no basis in fact. It's entirely derived from make believe land. You quote sources that have no foundation in fact, the sources are completely without merit as they are derived, apparently, out of one's imagination.

For some examples of sources that are only "my imagination" (i.e., federal court cases), see below.

Steve continues:

Strangely you have no problem at all dealing with the fact that not one single person, during or shortly after the adoption of the constitution has said anything even close to what you claim is well known fact. In truth the only things that can be found unequivocally prove your position wrong, but that won't stop you. Ironically, you say I'm the nutball....when in truth your position is about as supportable and the existence of shape shifting lizards.

No, Steve, I don't say you're a "nutball." I say that you wallow in your own emotion, and that you allow your emotion to control your thoughts where you should be using logic and reason instead. For some examples of what you call "shape shifting lizards" (i.e., what the rest of the world calls court cases), see below.

You're like the emperor's servant continually arguing how fine his clothes are. He's even told you how they were created within the finest materials on earth when in fact its clearly obvious he is not wearing any clothes at all but that hasn't deterred you. They're there, they're just invisible. He told you so it must be true, anything else is nothing but a personal belief! While it is true all of the emperor's courts and minions will undoubtedly disagree with people like me, it doesn't change the fact that the emperor is still full of crap.

No, Steve. I'm not the one who rejects the case law. You are.

There is no "emperor", Steve. There is only the law. I don't write the law. I am the messenger.

A capitation is a direct tax based solely on one's status, and is most often epitomized by a poll tax. Considering the large number of cases which consider discrimination settlements "income" subject to taxation within the broad ambit of 26 U.S.C. §61(a), see, e.g., Commissioner of Internal Revenue v. Schleier, 515 U.S. 323, 115 S.Ct. 2159, 132 L.Ed.2d 294 (1995); United States v. Burke, 504 U.S. 229, 112 S.Ct. 1867, 119 L.Ed.2d 34 (1992), the Court finds that the tax withheld by the Internal Revenue Service in this case [i.e., the Federal income tax under the Internal Revenue Code of 1986] is not a "capitation".

---Young v. United States, 2001-2 U.S. Tax Cas. (CCH) ¶ 50,732, fn. 3 (W.D. Ky. 2001) (Federal income tax case).

In Tilley v. United States, the taxpayer made the argument that the Federal income tax was "unconstitutional, since a tax measured by an individual's so-called income is in the nature of a capitation tax and can only be imposed by apportionment [ . . . . ]". That argument was ruled "frivolous" by the court. The court stated:

Several of the Tilleys' claims are frivolous and fail as a matter of law. In one claim, the Tilleys argue that "the taxes were unconstitutional, since a tax measured by an individual's so-called income is in the nature of a capitation tax and can only be imposed by apportionment." (Compl. ¶VI(d)(3)). The Sixteenth Amendment puts such an argument to rest, stating:
The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration."

---See Tilley v. United States, 270 F. Supp. 2d 731, 2003-2 U.S. Tax Cas. (CCH) ¶50,594 (M.D.N.C. 2003) (italics in original).

The following is from a federal estate tax case, but the principle can be applied to the Federal income tax as well. The United States Supreme Court stated:

Even without apportionment, Congress may tax "an excise upon a particular use or enjoyment of property or the shifting from one to another of any power or privilege incidental to the ownership or enjoyment of property. [ . . . . ] A tax imposed upon the exercise of some of the numerous rights of property is clearly distinguishable from a direct tax, which falls upon the owner merely because he is owner, regardless of his use or disposition of the property.

---Fernandez v. Wiener, 326 U.S. 340, 66 S. Ct. 178, 45-2 U.S. Tax Cas. (CCH) ¶10,239 (1945).

Getting back to Weston White, who touts the pronouncements of a foreign economist like Adam Smith over the actual rulings of U.S. federal courts, I reiterate that in Pollock and other cases, the federal courts (including the Supreme Court) rejected the theories of political economists as providing any definition the nature of the terms "direct tax" and "excise tax." Instead, the nature of the tax is determined from the standpoint of the Constitution, not from the standpoint of Adam Smith or any other economist. As the United States Court of Appeals for the Second Circuit (or, as SteveSy would say, a "shape shifting lizard") has stated:

There is not to be found in the cases, a clear definition of precisely what is meant by a direct tax or, indeed, an excise tax. It has become a rule of application to each particular tax. The nature of the tax is to be determined from the standpoint of the Constitution. It may not be answered by the theories of political economists. Pollock v. Farmers' Loan & Trust Co., 157 U.S. 429; Knowlton v. Moore, 178 U.S. 41.

---Anderson v. McNeir, 16 F.2d 970, 1927 CCH ¶7073 (2d Cir. 1927).

Yes, according to Steve, we're all just making the whole thing up.

The United States Court of Appeals for the Fourth Circuit has indicated that after the ratification of the Sixteenth Amendment in 1913, whether an income tax is a "capitation or other direct tax" or not, the apportionment restriction (the rule that capitations or other direct taxes must be apportioned) simply does not apply if the tax in question is an income tax:

The power to tax is conferred on Congress by article I, section 8, clause 1 of the Constitution, but other sections of the Constitution impose certain restrictions upon the manner in which the taxing power of the Federal Government may be exercised. In addition to the general limitations placed upon that power by the due process clause of the Fifth Amendment, Congress is specifically prohibited from laying any tax on the export of goods; whatever indirect taxes it may enact shall be "uniform throughout the United States"' and it may impose a capitation or direct tax only if apportioned among the states according to population. This last restriction, the only one pertinent to the present case (the federal income tax under the Internal Revenue Code of 1954], has been limited in scope by the Sixteenth Amendment which permits taxes "on incomes, from whatever source derived" without regard to the apportionment requirement.

---Simmons v. United States, 308 F.2d 160, 62-2 U.S. Tax Cas. (CCH) ¶9713 (4th Cir. 1962) (emphasis added).

The Sixteenth Amendment to the Constitution grants to Congress "the power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several states, and without regard to any census or enumeration." [ . . . . . ] A direct tax is a capitation tax, a tax upon real estate and upon income derived from real estate and from personal property held for investment, and upon income of personal property. Pollock v. Farmers' Loan & Trust Company, 158 U. S. 601; 15 S. Ct. 912; 39 L. Ed. 1108. The tax created by the challenged Act [the federal income tax under section 501 of the Revenue Act of 1936] has none of the features of a direct tax, and if a tax, is an income tax, and is therefore, subject only to the rule of geographical uniformity which is synonymous with the expression "to operate generally throughout the United States. [ . . . . ] If an income tax, no apportionment is required as provided in Sections 2 and 9 of Article I of the Constitution.

---Kingan & Company, Inc. v. Smith, 17 F. Supp. 217, 36-2 U.S. Tax Cas. (CCH) ¶9551 (S.D. Ind. 1936) (emphasis added).

Ah but SteveSy doesn't like federal court cases. He reserves the right to "decide the law for himself" because the judges are corrupt and are appointed by people trying to usurp the Constitution. To Steve, the case law that Quatloos regulars cite to him over and over is akin to "shape shifting lizards" as he put it.

OK, Steve, if you don't like the actual case law, I guess we're down to secondary authority.

Capitation tax. A poll tax (q.v.).

---Black's Law Dictionary, p. 191 (5th ed. 1979).

Poll-tax. A capitation tax; a tax of a specific sum levied upon each person within the jurisdiction of the taxing power and within a certain class (as, all males of a certain age, etc.) without reference to his property or lack of it.

---Black's Law Dictionary, p. 1043 (5th ed. 1979) (emphasis added).

[Famspear]

Steve, why did you think you could challenge me like that? You've been spending too much time in the off-topic threads. You're rusty, and forgetful, and you're slipping.

Unfortunately, Steve ended up falling for the trap I had laid for Weston White. Weston kept citing Pollock for the argument that the Supreme Court in Pollock had embraced Adam Smith, and I kept pointing out to Weston that the Court in Pollock had rejected Adam Smith. My fellow Quatloosians had actually provided the applicable quotations and citations, but for some reason Weston kept asking me for the same thing. I deliberately kept leading Weston on, teasing him and not providing him what he wanted (knowing of course that Weston would just go off on another evasion even if I copied and re-posted the material). Unfortunately, Steve stepped into Weston's trap and allowed me to nail both of them -- again, without my having to re-post the material that had already been posted by my fellow Quatloosians.

On the "capitation" definition, Steve made the mistake of challenging me without knowing what my response would be. In fairness to Steve, the case law interpreting the term "capitation" is indeed a bit sparse. Unfortunately for Steve, however, there is (as illustrated above) some case law.

More to the point: As other quatloosians have already pointed out, (1) the income tax is not a "capitation", and (2) even if an income tax were a "capitation" (or some other kind of "direct tax"), the Sixteenth Amendment negates any apportionment requirement.

As legal commentator Daniel B. Evans has stated over and over: The Sixteenth Amendment means what it says.

To Steve and Weston: Si tu n'es pas un avocat, evites une disputation avec un avocat au sujet de la loi.

[Red Cedar PM]

Forgive me for not being fully up-to-date on the activities around here as of late - a longer and more stressful than normal tax season coupled with a very successful Spartan basketball team have limited my time here.

Can someone please explain to me (as a simple-minded CPA and not an attorney) why so many electrons have been used up arguing about the definition of capitations, direct taxes, etc. when it clearly doesn't matter? The tax on wages (or compensation for services, or whatever else you want to call it), is the income tax, which has been held to be constitutional. So why does Weston (or anyone else for that matter) care about whether or not the income tax is a capitation or direct tax? Bottom line is that it is constitutional and enforceable. It's like Weston arguing with someone that the anvil that is about to fall on him is charcoal-colored and not black.

[Nikki]

Again with the FACTS -- this approach is B O R I N G

The only way to properly lay to rest Weston's arguments is to demonstrate that your brother-in-law's wife's hairdressers' son' mechanic tried to use Weston's argument and wasn't successful.

Anything other than apocryphal, ninth-hand evidence based on inaccurate reading of case law and interspersion of non-attributable sources is not acceptable to him.

[Imalawman]

I always thought that Baltic Mining was explicitly clear on the subject and as it is very close in time to the 16th, I think it precludes the argument that the court had forgotten or somehow did not know the purpose of the amendment.

Congress from the beginning from being taken out of the category of indirect taxation to which it inherently belonged, and being placed *113 in the category of direct taxation subject to apportionment by a consideration of the sources from which the income was derived,--that is, by testing the tax not by what it was, a tax on income, but by a mistaken theory deduced from the origin or source of the income taxed. Mark, of course, in saying this we are not here considering a tax not within the provisions of the 16th Amendment, that is, one in which the regulation of apportionment or the rule of uniformity is wholly negligible because the tax is one entirely beyond the scope of the taxing power of Congress, and where consequently sequently no authority to impose a burden, either direct or indirect, exists. In other words, we are here dealing solely with the restriction imposed by the 16th Amendment on the right to resort to the source whence an income is derived in a case where there is power to tax for the purpose of taking the income tax out of the class of indirect, to which it generically belongs, and putting it in the class of direct, to which it would not otherwise belong, in order to subject it to the regulation of apportionment.

Stanton v. Baltic Mining Co. 240 U.S. 103, 112-114, 36 S.Ct. 278, 281 (U.S.1916)

How do you you get around that Steve?

Then hot off the press ladies and gentlemen for your reading enjoyment from the brief of the IRS counsel in a ongoing case. (off of Westlaw)

Taxpayer's arguments on appeal, consuming virtually all of his opening brief (Br.), that Congress, and thus the Government, lacks the power to impose non-apportioned, direct tax on income from whatever source not only fails to demonstrate that the District Court's order approving the IRS's proposed levy somehow violated due process, but is frivolous. See United States v. Morse, 532 F.3d 1130, 1133-34 (11th Cir. 2008), quoting Madison v. United States, 758 F.2d 573, 574 (11th Cir. 1985) (“Congress has the power to lay and collect taxes and may ‘lay and collect taxes on income, from whatever source derived, without apportionment among the several states' ” and taxpayer's arguments to the contrary are “frivolous” and sanctionable.); Hyslep v. United States, 765 F.2d 1083, 1084 (11th Cir. 1985) (“The Constitution grants Congress the power to tax ‘incomes, from whatever source derived, without apportionment among the several states ...’ ” (quoting U.S. Const., amend. XVI)); Madison v. United States, 758 F.2d at 574 (“Congress has the power to lay and collect taxes ... and may ‘lay and collect taxes on income, from whatever source derived, without apportionment among the several states ... and [t]he Treasury Department and the Commissioner of Internal Revenue are charged with administering and enforcing the collection of taxes imposed by Congress.”); Davis v. United States Gov't, 742 F.2d 171, 172 (5th Cir. 1984) (describing as “clearly frivolous” and “hav[ing] been rejected by us time and time again” the contention that “the income tax is an excise tax applicable only against special privileges and not assessable against income in general.”); Parker v. Commissioner of Internal Revenue, 724 F.2d 469, 471-72 (5th Cir. 1984) (“At this late date, it seems incredible that we would again be required to hold that the Constitution, as amended, empowers the Congress to levy an income tax against any source of income, without the need to apportion ... or to classify it as an excise tax[.]”); Lonsdale v. Commissioner of Internal Revenue, 661 F.2d 71, 72 (5th Cir. 1981)[FN6] (“The Constitution grants congress power to tax ‘incomes, from whatever source derived ...’ ” (quoting U.S. Const., amend. XVI)); see also In re Becraft, 885 F.2d 547, 548 (9th Cir. 1989) (“We hardly need comment on the patent absurdity and frivolity of [the argument that the Sixteenth Amendment does not authorize a direct non-apportioned income tax].”); Ficalora v. Commissioner of Internal Revenue, 751 F.2d 85, 87 (2d Cir. 1984) (same); Ryan v. Bilby, 764 F.2d 1325, 1328 (9th Cir. 1985) (noting that “[l]ike it or not, the Internal Revenue Code is the law ....”). For this reason, taxpayer's constitutional argument is not only wholly without merit, but it is also frivolous.[FN7]

FN6. This Court has determined that post September 21, 1981 decisions of the Unit B of the former Fifth Circuit are binding precedent. See In re Int'l Horizons, Inc., 689 F.2d 996, 1004 n.17 (11th Cir. 1982); Stein v. Reynolds Sec., Inc., 667 F.2d 33, 34 (11th Cir. 1982).

FN7. The frivolousness of taxpayer's convoluted argument, which, at bottom, asserts that his earnings are not subject to the income tax assessed against him, is made plain by the decisions of this Court and other courts of appeals cited above. In addition, we note that since the ratification of the Sixteenth Amendment, the Supreme Court on numerous occasions has decided income tax cases that do not involve constitutional issues, evidencing that any issue about the constitutionality of the income tax has long been laid to rest. E.g., Knight v. Commissioner, 128 S.Ct. 782 (2008). Taxpayer, who, by his brief, has demonstrated that he is able to research the law, apparently chooses to ignore the established law and waste the time of this Court with frivolous arguments. For this reason, the Government will be filing a separate motion for sanctions. We are not concurrently filing a motion because we require additional time in order to submit an accurate itemization of the litigation expenses incurred in the defense of this appeal.

Finally, taxpayer (Br. 5-8) erroneously states that in the Government's answering brief in United States v. Morse, 532 F.3d 1130 (11th Cir. 2008) “Assistant Attorney General Nathan J. Hochman and his Tax Division attorneys knowingly defied the Supreme court in its interpretation of the 16th Amendment in Brushaber.” Contrary to what taxpayer states (Br. 7), the Government in Morse did not argue that “the 16th Amendment erased the distinction between direct and indirect taxes in the Constitution.” The Government in Morse first noted that before the ratification of the Sixteenth Amendment there was a genuine legal issue regarding the constitutionality of taxes on income arising from the distinction between direct taxes and excise taxes and the apportionment requirement for direct taxes in U.S. Const., art. I, § 9, cl. 4. The Government then explained that, after the ratification of the Sixteenth Amendment, “[t]he distinction between direct taxes and excise taxes lacks continuing significance ... because the Sixteenth Amendment eliminated the apportionment requirement with regard to the tax ‘on incomes from whatever source derived.’ ” Appellee Brief, United States v. Morse, 532 F.3d 1130, at 19-20 n.6. See also Eisner v. Macomber, 252 U.S. 189, 206, 40 S.Ct. 189, 193 (1920) (The Sixteenth Amendment “removed the necessity which otherwise might exist for an apportionment among the states of taxes laid on income.”) Thus, the Government did not maintain that there was no distinction between direct and indirect taxes in the Constitution after the ratification of the Sixteenth Amendment; it maintained that the Sixteenth Amendment rendered the distinction of no significance in considering the constitutionality of the income tax.

U.S. v. Gentile, Slip Copy, 2009 WL 840601. (sanctions order pending)

Then there's this:

On appeal, Hyslep asserts arguments long held to be frivolous. See, e.g., Davis v. United States, 742 F.2d 171, 172 (5th Cir.1984); Lonsdale v. Commissioner, 661 F.2d 71, 72 (5th Cir.1981). He argues that the Secretary of Treasury did not sustain his burden of proving a private individual is liable for tax; that the government does not have subject matter jurisdiction to tax him on all receipts; that he is not an individual subject to tax; that he did not derive any taxable profits (because wages received in compensation for labor are not taxable income); that he did not file a return; and that he was entitled to a jury trial.

[1] [2] The Constitution grants Congress the power to tax “incomes, from whatever source derived, without apportionment among the several states.” U.S. Const. amend. XVI. “Exercising this power, Congress has defined income as including compensation for services. 26 U.S.C. § 61(a)(1).” Lonsdale, 661 F.2d at 72. There is no provision in the Internal Revenue Code permitting an individual wage earner to adjust his gross income by deducting a charge for the “value of labor.” Thus, the argument that individual wage earners are not subject to income tax is completely frivolous and without merit. See, e.g., Simanonok v. Commissioner, 731 F.2d 743, 744 (11th Cir.1984); Lonsdale, 661 F.2d at 72.

Hyslep v. U.S., 765 F.2d 1083 (11th cir, 1985)

Steve did you really think we had no response? Really? Do you think that the courts had never addressed the issue? In any event its moot until the repeal of the 16th amendment. Consider yourself "served".

[Nikki]

How long is it goint to take you all to realize that there's absolutely no possibility of rational debate with, much less convincing, people like Steve, Weston, Van Pelt, and so on.

For whatever their reasons are; be it a nasty divorce and problems with custody and child support, a major overdose of tax evader koolaid, or an underlying mental disorder; these people have reached an unshakable conclusion.

They have done all their research, assembled every necessary bit of information, and are totally satisfied that they are correct in their positions.

It doesn't matter that they have carefully directed their fact-finding to only include information which supports their pre-determined conclustion. It doesn't amtter if there's an abundance of facts which contradict them. It doesn't matter if their theories ahve been soundly trounced in the real world.

It doesn't matter because THEY ARE RIGHT

They have adjusted their real-world filters to admit only information congruent with their beliefs and can categorically deny the correctness of anything which contradicts them.

Be it a reliance on the words and actions of long-dead farmers who were incapable of envisioning the world of today, a belief that a particular guru is only one step short of uttering the infallable word of god, or a psychological defect rendering the person incapable of functioning outside his fantasty world; they have an unshakeable, uncontrovertable KNOWLEDGE that they are right.

Any argument with them is a waste of electrons.

[Judge Roy Bean]

A conundrum indeed.

The vast majority of people don't understand the tax law - they simply go along with the flow.

Scam promoters with sociopolitical motives dream up stuff and purportedly challenge the system, in large part to make themselves rich and famous off their marks. It's a living, at least for a while.

Aside from the fact that WW and other TP's are borderline illiterate, 90% of what has been posted on these topics is way above the understanding of the average person. A casual passerby may root for the TP buffoons simply for political purposes while someone in financial trouble might go away with a reinforced sense of danger in screwing with the tax man, but will continue believing there are ways to stick it to the IRS because there are rich people getting away with it.

The administration is and has been doing a very poor job of explaining the role scam artists are playing in perpetuating these kinds of highly attractive myths. It's almost as if they think they can make a difference by putting out press releases.

If you believe in the power of the press release, you probably believe in the tooth fairy. Trust me, there are firms within walking distance of IRS headquarters who could grind this nonsense into dust and make people like Hendrickson and WW public enemy number one instead of underground heroes.

Putting someone in prison isn't all it's cracked up to be from a PR standpoint. Martyrdom is a powerful thing. Real stories about what happens to the TP/TD crowd aren't getting to the target audience.

[Joey Smith]

Can someone please explain to me (as a simple-minded CPA and not an attorney) why so many electrons have been used up arguing about the definition of capitations, direct taxes, etc. when it clearly doesn't matter? The tax on wages (or compensation for services, or whatever else you want to call it), is the income tax, which has been held to be constitutional. So why does Weston (or anyone else for that matter) care about whether or not the income tax is a capitation or direct tax? Bottom line is that it is constitutional and enforceable. It's like Weston arguing with someone that the anvil that is about to fall on him is charcoal-colored and not black.

Please refrain from asking such rational questions. Instead, you should get out your OUIJA board and channel the Founders, who never, ever, in a million years anticipated the current income tax regime (they never anticipated electronic currency, internet pornography, HBO Late Night, Alberto "What Constitution?" Gonzales, electronic eavesdropping, a black President, a female Secretary of State, the Pentagon Papers, Guantanamo Bay, that the Indian tribes would fleece the non-Indians with enormous and numerous casinos, or for that matter that the armies of the Northern States would occupy or burn much of the Southern States on the way to getting rid of slavery, or numerous other constitutional issues -- but that's all beside the point).

Instead, you should attempt to interpret the Constitution as if the world stopped spinning on September 17, 1787, and no further changes to the world or society occurred. Oh, and you absolutely, positively must ignore any and all Amendments to the Constitution, even though the Constitution specifically provides a process for lawful amendments. Thank you.

[Nikki]

Whatever is written will either be a part of one of the dozens of massive conspiracies to conceal THE TRUTH (said truth being available on any number of Internet sites or low-power AM radio stations), the result of covert action by the {take your pick of zionists, masons, ...} to conceal that they really run the country, or just an example of how Joe did it wrong ecause he didn't follow Method A properly.

In all likelihood, good publicity -- written at a sixth-grade level and accompanied with lots of pictures -- will save a small percentage of potential victims from straying to the dark side.

However, there remains the ever-refreshing-itself core of failures who need someone other than themselves to blame; of those who lost a nasty custody battle, traffic ticket, or zoning law; and others who simply lack the education / socialization / upbringing to act on theri own without being led by the hand.

No matter what is done, there will never be a scarcity of volunteers to grease the wheels of the juggernaut. For comparison, view the same concept in a different sphere -- illegal drugs,

Everyone knows they're illegal. Everyone knows they (many of them) can be seriously harmful. Everyone knows people are killed / jailed over them. Still, the wheels get greased.

[Joey Smith]

It must drive the conspiracists nuts to know that many of the Founders were Masons .....

[Famspear]

The administration is and has been doing a very poor job of explaining the role scam artists are playing in perpetuating these kinds of highly attractive myths. It's almost as if they think they can make a difference by putting out press releases.

If you believe in the power of the press release, you probably believe in the tooth fairy. Trust me, there are firms within walking distance of IRS headquarters who could grind this nonsense into dust and make people like Hendrickson and WW public enemy number one instead of underground heroes.

JRB hit a very important nail on the head, here. It is ironic that many tax deniers believe in non-existent conspiracies. Yet, if the "evil government" really wanted to do so secretly, I believe the government could mount a formidable set of "PSYOPs" that would go a long way to further the crushing, mushing, mashing, slashing, slicing and dicing of the tax denier "movement."

EDIT: I realize "mushing" isn't really the right word here, but it sounds cool to me; I claim poetic license (using the term "poetic" very loosely here, of course).

[SteveSy]

Famspear quoted:

is clearly distinguishable from a direct tax, which falls upon the owner merely because he is owner, regardless of his use or disposition of the property.

Hmmm, doesn't the income tax as you see it fall upon the owner of the income regardless of his use or disposition of it? Maybe the "income" isn't his property in your book. It's the government's.

As far as laying a trap...that's funny. As I stated, quoting numerous sources that have no basis in fact is hardly a trap. No more than a believer of shape shifting lizards would trap someone by quoting the Shape Shifting Lizard foundation as proof the beings existence. You keep on spouting "in our country the courts determine", no they don't. It doesn't say anywhere that the courts get to change the constitution whenever they see fit. It's the people who determine, they are servants to us. If their position is unsupportable then they are just making the crap up and its garbage. Remember, this country was founded upon the principle that "We the people" are in control, we graciously allow them to assist us. I'm not advocating for anarchy, in fact I'm asking for the exact opposite, and asking that they support their position, and not make it up as they go which is nothing but confusion and chaos. If they want us all to believe in fairies then they best damn prove they exist.

As far as I can tell everything you quoted is derived from make believe land. Where was it derived from? Without support its simply concocted out of their imagination. Courts aren't authorized to make up law, they are authorized to interpret what already exists. They certainly aren't authorized to modify the U.S. Constitution, the fundamental document that protects us from the government, including the courts, by fiat.

As I said before in your little world the constitution is meaningless. It was a useless document to begin with because commonly used words can be redefined on demand without prior notification. Also in your little world the founders really gave unlimited power to the court and lied when they said it was the weakest branch of government.

It's an extremely sad day when someone like you remains such a staunch advocate of sources who can not support their position when it concerns the fundamental document that protects us all from an over zealous government.

The opinion of the Federalist has always been considered as of great authority. It is a complete commentary on our Constitution, and is appealed to by all parties in the questions to which that instrument has given birth. Its intrinsic merit entitles it to this high rank, and the part two of its authors performed in framing the Constitution put it very much in their power to explain the views with which it was framed.

- Cohens v. Virginia, 19 U.S. 264 (1821)

How sad that we have strayed so far from our core principles to where we are today where the founders who went to such great lengths to protect us are so easily dismissed in favor of the very entity they intended to protect us from.

[LPC]

you should get out your OUIJA board and channel the Founders, who never, ever, in a million years anticipated the current income tax regime (they never anticipated electronic currency, internet pornography, HBO Late Night, Alberto "What Constitution?" Gonzales, electronic eavesdropping, a black President, a female Secretary of State, the Pentagon Papers, Guantanamo Bay, that the Indian tribes would fleece the non-Indians with enormous and numerous casinos, or for that matter that the armies of the Northern States would occupy or burn much of the Southern States on the way to getting rid of slavery, or numerous other constitutional issues -- but that's all beside the point).

One of my pet peeves is about people who don't understand that the Constitution is about *how* decisions are are made, and not *what* decisions are made.

And they refuse to consider the changes in circumstances that have occurred in the last 200 years.

When the Constitution was ratified, the industrial revolution was just beginning, and the average American citizen was a farmer or tradesman, and most of the food and products they bought were created within 20-30 miles of where they lived. Now, the average American citizen is an employee of a corporation (foreign or domestic), most of the food they buy is grown in south America, and most of the goods they buy are manufactured in China.

In other words, it is difficult for me to believe that anything I buy or consume is grown or manufactured in the state in which I live.

What does the power of Congress to regulate "interstate commerce" mean under those circumstances?

[Duke2Earl]

As I said before in your little world the constitution is meaningless. It was a useless document to begin with because commonly used words can be redefined on demand without prior notification. Also in your little world the founders really gave unlimited power to the court and lied when they said it was the weakest branch of government.

No, not true... the Constitution is not meaningless, The point is that you are not the one that gets to interpret it. Someone has to interpret it. It's not 1787 anymore. Questions come up regularly that were never considered in 1787. There have been numerous amendments since 1787. Someone has to interpret the Constitution. Under our system of laws the courts do that and if the Congress doesn't like their interpretation, they are free to change it. But your beef is much simpler than that... you simply do not agree with the court's interpretation. Guess what, that's just too bad.

[Nikki]

Steve:

In specific, which of the co-authors of the constitution, which of the pre-conctitutional writings should we and, more importantly, rely on in determining the subtle meanings of the document?

Are we to rely on the Federalists, the States' Rightists, the pro-slavery, the authors of dissenting and disregarded opinions?

All of them, none of them, only the ones with whom we agree?

The correct answer is most likely to rely on none of them. They argued, debated, and produced a document on which they all agreed.

They realized that their vision was limited and created a document which could grow with the nation and could withstand and adapt to changes over time.

Steve, you have a right to an opinion regarding Constitutional construction, but it is only that -- your opinion. And, your opinion is contrary to what the majority of courts have decided over the years. So, stop arguing as if your beliefs and opinions are fact.

Accept that you hold a minority viewpoint.

[Famspear]

Famspear quoted:

is clearly distinguishable from a direct tax, which falls upon the owner merely because he is owner, regardless of his use or disposition of the property.

Hmmm, doesn't the income tax as you see it fall upon the owner of the income regardless of his use or disposition of it? Maybe the "income" isn't his property in your book.

OK, I'm going to assume that you never took tax accounting, Steve, or that it's been a long time. This is actually a good question on your part.

YOU HIT THE NAIL ON THE HEAD, STEVE. HIS INCOME IS NOT HIS PROPERTY.

What is Famspear talking about now?

To understand the difference between a property tax and an income tax (which is what we're really talking about here), one way to approach it would be to understand that INCOME IS NOT PROPERTY, in the strictest technical sense.

Yes, I know, the term "income" often is used to mean "the money" (the property itself). Even accountants and lawyers use the term that way (even I do, occasionally), which makes this confusing for a layman.

In terms of the Federal income tax law, however, and in particular in terms of TAX ACCOUNTING, "income" does not, in the very strictest sense, mean "the money" or "the property" itself.

To understand the fallacy behind your question, you need to understand "income" in the way the tax law (and tax accountants) define "income."

First, in the very strictest technical sense, you cannot pay bills with your "income".

That's right. YOU CANNOT PAY ANYTHING WITH "INCOME."

You can only pay bills with the MONEY. It's the MONEY that is the "property," not the "income."

Income is an EVENT. It's the event in which you RECEIVE (or constructively receive) the money, the income REALIZATION event.

The federal income tax is not imposed on you because you OWN the money. It is not a tax on property by reason of its ownership. It's a tax on the INCOME -- the event. YOU are taxed because YOU are the one who realized the INCOME, not because the money itself is your property (although the money certainly is your property).

It's the RECEIPT of the money that's taxed, NOT the OWNERSHIP of the money.

By contrast, a property tax is a tax on property by reason of its ownership. You can be taxed on the very same real estate over and over (e.g., every January 1st, in Texas).

The federal income tax law does not tax you on the SAME MONEY over and over JUST BECAUSE YOU OWN THE MONEY. The federal income tax is imposed on a concept called "taxable income" which in turn is computed from a starting point called "gross income" which in turn deals with AN EVENT, not a "state of being." You are being taxed because YOU REALIZED the income -- not necessarily because whatever "asset" you received is "owned" by you.

UNDERSTANDING THIS FROM THE STANDPOINT OF DEBITS AND CREDITS
If you took accounting, you might be able to understand this from looking at the debits and credits.

If you earn compensation of $100 and you receive $100 cash for that (ignore taxes and other withholdings), the entry is as follows:

debit cash (increase in an asset account) $100
credit revenue (increase in a revenue, or income, account) $100.

Under the federal income tax, what is TAXED here is the $100 CREDIT side of the entry. The $100 debit to cash (which is an INCREASE in cash on your books), is not being taxed. THE DEBIT IS NEVER TAXED. ONLY THE CREDIT IS TAXED -- AND THE ONLY CREDITS THAT ARE TAXED ARE THE CREDITS TO REVENUE (i.e., CREDITS TO INCOME). Not all credits are credits to "revenue."

If you don't understand that, compare it to this entry, for the BORROWING of $100:

debit cash (increase in an asset account) $100
credit loans payable (increase in a liability account) $100

Here, there is no taxable event. No income. Why? Look at the credit side of the entry. "Loans payable" is not a revenue account (it's not "income"). It's a LIABILITY account on your books. No revenue (no income) was REALIZED, and therefore no income tax. And the debit side of the entry -- to cash -- is not a "revenue" account either. A debit entry CAN NEVER BE TAXED UNDER THE INCOME TAX LAWS, for the simple reason that a DEBIT ENTRY can never be an increase in REVENUE. Only the CREDIT side of an entry can possibly be a "revenue."

As far as laying a trap...that's funny. As I stated, quoting numerous sources that have no basis in fact is hardly a trap. No more than a believer of shape shifting lizards would trap someone by quoting the Shape Shifting Lizard foundation as proof the beings existence.

You have my permission to make that argument if you ever have to go to court -- and the government cites the cases I just cited for you above. Your argument will receive the same respect in court as it does here: None.

As far as I can tell everything you quoted is derived from make believe land. Where was it derived from? Without support its simply concocted out of their imagination. Courts aren't authorized to make up law, they are authorized to interpret what already exists. They certainly aren't authorized to modify the U.S. Constitution, the fundamental document that protects us from the government, including the courts, by fiat.

Oh, boo-hoo..... the courts are getting their decisions from make believe land. Oh, boo-hoo, the courts are concocting things out of their imaginations. You have my permission to make that argument if you ever have to go to court -- and the government cites the cases I just cited for you above. Your argument will receive the same respect in court as it does here: None.

As I said before in your little world the constitution is meaningless. It was a useless document to begin with because commonly used words can be redefined on demand without prior notification. Also in your little world the founders really gave unlimited power to the court and lied when they said it was the weakest branch of government.

Unfortunately for your feelings, Steve, "my little world" is the world you and I and all the rest of us live in. The law is what I say the law is, not what you say the law is.

[SteveSy]

Famspear quoted:

is clearly distinguishable from a direct tax, which falls upon the owner merely because he is owner, regardless of his use or disposition of the property.

Hmmm, doesn't the income tax as you see it fall upon the owner of the income regardless of his use or disposition of it? Maybe the "income" isn't his property in your book.

OK, I'm going to assume that you never took tax accounting, Steve, or that it's been a long time. This is actually a good question on your part.

YOU HIT THE NAIL ON THE HEAD, STEVE. HIS INCOME IS NOT HIS PROPERTY.

What is Famspear talking about now?

To understand the difference between a property tax and an income tax (which is what we're really talking about here), one way to approach it would be to understand that INCOME IS NOT PROPERTY, in the strictest technical sense.

Yes, I know, the term "income" often is used to mean "the money" (the property itself). Even accountants and lawyers use the term that way (even I do, occasionally), which makes this confusing for a layman.

In terms of the Federal income tax law, however, and in particular in terms of TAX ACCOUNTING, "income" does not, in the very strictest sense, mean "the money" or "the property" itself.

You're going to apply modern FASB rules to the meaning of the constitution...damn you made me spill beer on myself laughing so hard. I think you realized your quote has proven you wrong so you spouted something off the top of your head without thinking it through whatsoever.

Do I really need to start quoting sources that say income, not in the technical sense which is ummm absurd, is property? They're attempting to tax the increase of a person's wealth which is his property...otherwise it couldn't be attributed to his wealth.

As far as your diatribe about making my arguments in court...well that would be kinda like arguing shape shifting lizards don't exist to the Shape Shifting Lizard society wouldn't it? I wouldn't expect to get them to change their opinion there either.

[Famspear]

You're going to apply modern FASB rules to the meaning of the constitution...damn you made me spill beer on myself laughing so hard. I think you realized your quote has proven you wrong so you spouted something off the top of your head without thinking it through whatsoever.

Do I really need to start quoting sources that say income, not in the technical sense which is ummm absurd, is property? They're attempting to tax the increase of a person's wealth which is his property...otherwise it couldn't be attributed to his wealth.

As far as your diatribe about making my arguments in court...well that would be kinda like arguing shape shifting lizards don't exist to the Shape Shifting Lizard society wouldn't it? I wouldn't expect to get them to change their opinion there either.

No, you didn't spill your beer, and no you didn't laugh.

The FASB (Financial Accounting Standards Board) promulgates the rules for financial accounting, Steve. That's "generally accepted accounting principles" (GAAP)." Financial statements, not tax returns.

We're talking about tax accounting here. I used debits and credits to illustrate the difference between property (the money) and income (the revenue). Since you know what the FASB is, you are admitting you know enough about the difference between financial accounting and tax accounting to understand, so don't try to argue that you don't understand what I wrote.

And save the fakery.

Do you need to starting quoting sources that say income in the non-technical sense is property? No, because it would do you no good. Again, accountants use the terms "income" and "money" to mean the same thing every day. But we know what we mean when we use those terms that way; it's verbal shorthand. Go back and read my post.

That doesn't change the point that in the strict technical sense, income is not money.

You are correct that "they" are trying to tax the INCREASE in wealth. You are incorrect to say that the INCREASE itself is "the property." In other words, you are trying to pretend you can't tell a property tax from an income tax.

Steve, sometimes you pretend that you're stupid. You may pretend you're as stupid as Weston White. But, Steve, I know Weston White. You're no Weston White.

So cut the phony rhetoric, Steve. The income tax is imposed on you not because you OWN the property, but because YOU are the one who REALIZED the income. You aren't so stupid that you don't know the difference between a property tax and an income tax.

[SteveSy]

The income tax is imposed on you not because you OWN the property, but because YOU are the one who REALIZED the income. You aren't so stupid that you don't know the difference between a property tax and an income tax.

That's considering the form and ignoring the substance Famspear. Realizing something and owning it are essentially the same thing. Realizing it means its attributed to you, you have it, you got it, its yours...in other words you own and have or had control of it.

When the court was considering property they weren't only talking about real estate. Besides its already been settled a tax on personal property is also a direct tax.

Are you going to argue that accrued wages or salary isn't the property of the one earning it? Think hard Famspear, you're likely to step in something.

[Famspear]

The income tax is imposed on you not because you OWN the property, but because YOU are the one who REALIZED the income. You aren't so stupid that you don't know the difference between a property tax and an income tax.

That's considering the form and ignoring the substance Famspear. Realizing something and owning it are essentially the same thing. Realizing it means its attributed to you, you have it, you got it, its yours...in other words you own and have or had control of it.

When the court was considering property they weren't only talking about real estate. Besides its already been settled a tax on personal property is also a direct tax.

Are you going to argue that accrued wages or salary isn't the property of the one earning it? Think hard Famspear, you're likely to step in something.

Think hard, Steve, you just stepped in something.

Accrued wages or salary are the property of the person owning those wages. So, does that mean that this ownership is taxed at the time the ownership comes into existence -- MERELY BY REASON OF THE FACT THAT THE OWNERSHIP HAS BEEN CREATED?

If an income tax is the same as a property tax, then moment at which the tax is imposed should be the same for both.

So, if I work for a company and I have earned a salary which has accrued, and to which I am legally entitled as an owner, does the federal income tax law impose that tax on me, even before I have received THE MONEY? What if I never do receive the money? Does the tax law still require the employer to issue a W-2 for that income to me?

The first thing you have to ask is: Am I using (for FEDERAL INCOME TAX PURPOSES) the accrual method of accounting, or the cash receipts and disbursements method of accounting? If I am an individual, then I am using the cash method. That means that, for Federal income tax purposes, the mere ACCRUAL of that wage on the company's books (while it may give rise to a deduction on the accrual method of the company) does NOT give rise to an INCOME REALIZATION EVENT for me. Instead, the income realization event for me occurs LATER -- when the company either pays me (actual receipt) or puts the money at my disposal (constructive receipt).

Thus, even though I have a property right, a vested property right, to receive the money, I am still not taxed on the INCOME until I receive the money. For a cash method taxpayer, merely owning the right to receive the money in the future is not a taxable event, and the "creation" of that right (which is an event) is also NOT a taxable event.

But, wait, you may say: What if the taxpayer is a company, and the company is using the accrual method for tax purposes? Doesn't the company have to report the income as having been realized at the moment of accrual, even though the money has not been received yet?

Yes, you are right. In this situation, the income event occurs when the accrual occurs (i.e., when "the earning process is complete or substantially complete", to use the accounting jargon).

So, doesn't that prove that, at least in the case of an accrual method taxpayer, the property tax and the income tax are really one and the same?

Answer: No.

Why not? Because the imposition of the tax is the same: the tax is imposed on the INCOME REALIZATION event, not on the ownership. The tax is imposed on the company because THE COMPANY is the entity that realized the income (in this case, by accrual rather than by cash receipt), NOT "because" the company "owns" the "account receivable."

Yes, the company OWNS the account receivable, but that's not why the company is taxed on the INCOME at the time of the accrual.

You see, Steve, you're trying to confuse two related but separate concepts -- or you trying to pretend that you're confused.

No, Steve, even if the taxpayer is on the accrual method, the income tax is imposed on the INCOME EVENT, not on the OWNERSHIP of the account receivable. Even though the creation of the ownership and the realization of the income occur at the same time (in the case of an accrual method taxpayer), we are still talking about two separate concepts.

The income tax is not a property tax; it's not a tax on property BY REASON OF ITS OWNERSHIP.

EDIT: Sorry to repeat myself so much, but, uh, some people don't get it unless you POUND IT IN.