FAQ Update

[Number Six]

It's a great FAQ--Dan Evans should be given a government job with real power to make his encyclopedic knowledge of tax enforcement more effective.
That being said, I have dozens of questions more of an ideological or practical nature.
On the practical side, you could treat tax enforcement like game theory. What are my chances of getting in trouble with a given tax-beating tactic or strategy--i.e. percentages? If someone is running a self-employed, service-oriented business in a given state, depositing checks into a non-interest bearing account and are either non-filers or filers with an unscrupulous accountant, the chances are small of getting nailed unless said tax cheat is posting on Quatloos, Sui Juris, Lost Horizons, etc. or protesting at the local p.o..

Apologies if this posting is upsetting the flow of the thread.

[Famspear]

Famspear wrote:

Steve, the FAQ runs for over 250 pages, with innumerable arguments by tax protesters. What's so special about the materials you've cited? Answer: Nothing. Indeed, much of these materials (Gallatin, for example) are not only secondary authority, they have already been shot down by the courts.

SteveSy wrote:

Of course its inconsequential authority when it proves you wrong. However all evidence no matter how ridiculous that supports your conclusion is always important. btw, show me where Gallatin was shot down by the courts....my guess is you just made that up.

What!!!????!!!

Did Weston White get hold of SteveSy's password, or something??!!?

Steve! Pay attention!!

From the Pollock case:

But Albert Gallatin, in his "Sketch of the Finances of the United States," published in November, 1796, said:

"The most generally received opinion, however, is that, by direct taxes in the Constitution, those are meant which are raised on the capital or revenue of the people; by indirect, such as are raised on their expense.

[ . . . . ]

He [Gallatin] then quotes from [Adam] Smith's [An Inquiry into the Nature and Causes of the] Wealth of Nations, and continues:

"The remarkable coincidence of the clause of the Constitution with this passage in using the word 'capitation' as a generic expression, including the different species of direct taxes, an acceptation of the word peculiar, it is believed, to Dr. Smith, leaves little doubt that the framers of the one had the other in view at the time, and that they, as well as he, by direct taxes, meant those paid directly from, and falling immediately on, the revenue, and, by indirect, those which are paid indirectly out of the revenue by falling immediately upon the expense."

3 Gallatin's Writings (Adams' ed.) 74, 75.

(bolding added).

Steve, that's an argument considered by the United States States Supreme Court in the first Pollock decision, at 157 U.S. 429 (1895).

The Court rejected those arguments!!!!! The Court concluded that, by "direct tax," the Constitution means capitations and taxes on property by reason of ownership. The Court stated that taxes on revenues are indirect taxes -- EXCEPT for taxes on income from property. And, of course, the effect of the Pollock ruling -- treating taxes on income from property as "direct" taxes required to be apportioned -- was overruled by the Sixteenth Amendment.

Where have you been, buddy?

And don't give me any crap about an income tax being a "capitation." We've heard enough of that nonsense from Weston White.

Why do you challenge me on stuff when you know I'm right, Steve? After all this time, do you really think that I make any thing up? You are a masochist.

[SteveSy]

Steve, that's an argument considered by the United States States Supreme Court in the first Pollock decision, at 157 U.S. 429 (1895).

The Court rejected those arguments!!!!! The Court concluded that, by "direct tax," the Constitution means capitations and taxes on property by reason of ownership. The Court stated that taxes on revenues are indirect taxes -- EXCEPT for taxes on income from property. And, of course, the effect of the Pollock ruling -- treating taxes on income from property as "direct" taxes required to be apportioned -- was overruled by the Sixteenth Amendment.

Dude, you really need to stop smoking crack. The court did not reject those arguments. They certainly never said they rejected them. In fact they used them to justify the thing that struck the law down as unconstitutional. We would have to assume the court quoted numerous things that show a direct tax includes a tax on income and then rejected them without EVER quoting anything whatsoever to support the claim that it wasn't a direct tax. That's just plain idiotic Famspear...you've topped yourself this time. Take for instance:

Mr. Hamilton also argued: 'If the meaning of the word 'excise' is to be sought in a British statute, it will be found to include the duty on carriages, which is there considered as an 'excise.' ... An argument results from this, though not perhaps a conclusive one, yet, where so important ad istinction in the constitution is to be realized, it is fair to seek the meaning of terms in the statutory language of that country from which our jurisprudence is derived.' 7 Hamilton's Works (Lodge's Ed.) 333.

If the question had related to an income tax, the reference would have been fatal, as such taxes have been always classed by the law of Great Britain as direct taxes.

Ummmm, the court is clearly showing Hamilton's reasoning would make the income tax a direct tax. The court never says anything that refutes this in anyway.

Why do you challenge me on stuff when you know I'm right, Steve? After all this time, do you really think that I make any thing up? You are a masochist.

No, its clear your mind is so warped you see things that aren't there.

[Nikki]

Steve:

Dan's FAQ and web site is personal work on his part.

If you have issues with him, take it up with him -- OFF SITE.

Don't attempt -- again -- to grab a thread just to air your opinions.

This thread is related to recent updates to Dan's site -- not to your underlying disagreement with various aspects of the tax laws.

If you think Dan's wrong, take it to him there, not here.

[Famspear]

Steve, that's an argument considered by the United States States Supreme Court in the first Pollock decision, at 157 U.S. 429 (1895).

The Court rejected those arguments!!!!! The Court concluded that, by "direct tax," the Constitution means capitations and taxes on property by reason of ownership. The Court stated that taxes on revenues are indirect taxes -- EXCEPT for taxes on income from property. And, of course, the effect of the Pollock ruling -- treating taxes on income from property as "direct" taxes required to be apportioned -- was overruled by the Sixteenth Amendment.

Dude, you really need to stop smoking crack. The court did not reject those arguments. In fact they used them to justify the thing that struck the law down as unconstitutional.

Why do you challenge me on stuff when you know I'm right, Steve? After all this time, do you really think that I make any thing up? You are a masochist.

No, its clear your mind is so warped you see things that aren't there.

No, Steve. The Court specifically stated that the ruling applied only to income from PROPERTY. Tax protesters can cite Pollock from now until doomsday for the Gallatin argument, but that doesn't change the point that the Supreme Court rejected Gallatin's definition of "direct tax."

If you were right, Steve, we wouldn't be having this conversation right now.

[SteveSy]

Steve, that's an argument considered by the United States States Supreme Court in the first Pollock decision, at 157 U.S. 429 (1895).

The Court rejected those arguments!!!!! The Court concluded that, by "direct tax," the Constitution means capitations and taxes on property by reason of ownership. The Court stated that taxes on revenues are indirect taxes -- EXCEPT for taxes on income from property. And, of course, the effect of the Pollock ruling -- treating taxes on income from property as "direct" taxes required to be apportioned -- was overruled by the Sixteenth Amendment.

Dude, you really need to stop smoking crack. The court did not reject those arguments. In fact they used them to justify the thing that struck the law down as unconstitutional.

Why do you challenge me on stuff when you know I'm right, Steve? After all this time, do you really think that I make any thing up? You are a masochist.

No, its clear your mind is so warped you see things that aren't there.

No, Steve. The Court specifically stated that the ruling applied only to income from PROPERTY. Tax protesters can cite Pollock from now until doomsday for the Gallatin argument, but that doesn't change the point that the Supreme Court rejected Gallatin's definition of "direct tax."

If you were right, Steve, we wouldn't be having this conversation right now.

No, supposedly the 16 fixed it...not the court. Its amazing how far many of you have warped reality in order to maintain your belief.

But I digress, I've been warned that I'm not allowed to openly expose Dan's FAQ as being biased or one sided. That is only to be done in private. We're only allowed to speak about it in a positive fashion here....so I suppose I'm done.

[Imalawman]

Steve:

Dan's FAQ and web site is personal work on his part.

If you have issues with him, take it up with him -- OFF SITE.

Don't attempt -- again -- to grab a thread just to air your opinions.

This thread is related to recent updates to Dan's site -- not to your underlying disagreement with various aspects of the tax laws.

If you think Dan's wrong, take it to him there, not here.

I think its OK, just discussing the FAQ...

[Lambkin]

I think its OK, just discussing the FAQ...

Ditto; if it needs a new thread then let's have it.

[Nikki]

But I digress, I've been warned that I'm not allowed to openly expose Dan's FAQ as being biased or one sided. That is only to be done in private. We're only allowed to speak about it in a positive fashion here....so I suppose I'm done.

There's nothing wrong with expressing your personal opinion as to your perception of Dan's slant or bias.

However, if you want to challenge him as to his conclusions based on legal facts, do it in another thread.

[jg]

But I digress, I've been warned that I'm not allowed to openly expose Dan's FAQ as being biased or one sided. That is only to be done in private. We're only allowed to speak about it in a positive fashion here....so I suppose I'm done.

There's nothing wrong with expressing your personal opinion as to your perception of Dan's slant or bias.
However, if you want to challenge him as to his conclusions based on legal facts, do it in another thread.

Better yet, propose your conclusion with your support as the main issue SteveSy and all of us can weigh in as we choose. If you want to juxtapose your conclusion to that of a particular FAQ or other opinion do that as well.

Please do not pretend SteveSy that there is any limit on what you are free to opine upon here in regard to the validity, constitutionality or legality of the income tax as it is written and applied.

[Weston White]

The Court stated that taxes on revenues are indirect taxes

Liar! The court never stated any such thing. Furthermore the court was attempting to address what was meant by the phrase "other direct taxes", as in what are the enumerations included therein under that category of taxing power. Furthermore the referenced the established understanding of what capitation taxes were.

And wasn't the sole point of the rehearing only to further clarify a few issues the Justices were split on from the first case and did not overrule a single thing from the first hearing of the POLLOCK case?

"It would deny the character of a direct tax to the income tax of this country, which is always spoken of as such, and is generally looked upon as a direct tax of the most obvious kind, and it would run counter to the common understanding of men on this subject, which is one main clue to the meaning of the legislature." At the time the Constitution was framed and adopted, under the systems of direct taxation of many of the States, taxes were laid on incomes from professions, business, or employments, as well as from "offices and places of profit;" but if it were the fact that there had then been no income tax law such as this, it would not be of controlling importance. A direct tax cannot be taken out of the constitutional rule because the particular tax did not exist at the time the rule was prescribed. As Chief Justice Marshall said in the Dartmouth College case:

"It is not enough to say that this particular case was not in the mind of the convention when the article was framed, nor of the American people when it was adopted. It is necessary to go further, and to say that, had this particular case been suggested, the language would have been so varied as to exclude it, or it would have been made a special exception. The case, being within the words of the rule, must be within its operation likewise unless there be something in the literal construction so obviously absurd or mischievous or repugnant to the general spirit of the instrument as to justify those who expound the Constitution in making it an exception."

If that be stricken out, and also the income from all invested personal property, bonds, stocks, investments of all kinds, it is obvious that by far the largest part of the anticipated revenue would be eliminated, and this would leave the burden of the tax to be borne by professions, trades, employments, or vocations, and in that way what was intended as a tax on capital would remain in substance a tax on occupations and labor. We cannot believe that such was the intention of Congress. We do not mean to say that an act laying by apportionment a direct tax on all real estate and personal property, or the income thereof, might not also lay excise taxes on business, privileges, employments, and vocations. But this is not such an act, and the scheme must be considered as a whole.

Second. We are of opinion that taxes on personal property, or on the income of personal property, are likewise direct taxes.

AND

4. Whether Particular Taxes Are Direct or Indirect – a. On Income. – A tax upon one’s whole income is a tax upon the annual receipts from his whole property, and as such falls within the same class as a tax upon that property, and is a direct tax within the meaning of the Constitution.
The federal statutes annotated [1905]
http://books.google.com/books?id=eN04AAAAIAAJ&pg=PA306

Quoting: "He [Hamilton] gives, however, it appears to us, a definition which covers the question before us. A tax upon one's whole income is a tax upon the annual receipts from his whole property, and as such falls within the same class as a tax upon that property, and is a direct tax in the meaning of the Constitution."

AND

Mr. Justice Paterson said: "All taxes on expenses or consumption are indirect taxes; a tax on carriages is of this kind."

AND

""... by direct taxes, meant those paid directly from, and falling immediately on, the revenue, and, by indirect, those which are paid indirectly out of the revenue by falling immediately upon the expense.""

AND

Mr. Sedgwick said that "[1] a capitation tax, and taxes on [2] land and [3] on property and [4] income generally were direct charges, as well in the immediate as ultimate sources of contribution. He had considered those, and those only, as direct taxes in their operation and effects. On the other hand, a tax imposed on a specific article of personal property, and particularly if objects of luxury, as in the case under consideration, he had never supposed had been considered a direct tax within the meaning of the Constitution."

I could keep going but I have rubbed your face in enough of it... and look at that I did not even bother quoting Dr. Adam Smith!

[Weston White]

“Gallatin, for example) are not only secondary authority, they have already been shot down by the courts.”

What court “shot down” Gallatin?


If you are referring to:

But Albert Gallatin, in his "Sketch of the Finances of the United States," published in November, 1796, said:

"The most generally received opinion, however, is that, by direct taxes in the Constitution, those are meant which are raised on the capital or revenue of the people; by indirect, such as are raised on their expense.

[ . . . . ]

He [Gallatin] then quotes from [Adam] Smith's [An Inquiry into the Nature and Causes of the] Wealth of Nations, and continues:

"The remarkable coincidence of the clause of the Constitution with this passage in using the word 'capitation' as a generic expression, including the different species of direct taxes, an acceptation of the word peculiar, it is believed, to Dr. Smith, leaves little doubt that the framers of the one had the other in view at the time, and that they, as well as he, by direct taxes, meant those paid directly from, and falling immediately on, the revenue, and, by indirect, those which are paid indirectly out of the revenue by falling immediately upon the expense."

Than you are saying the court shot down both Gallatin and Smith with the same stone. It also means they shot down what everybody in Congressional Reports has states about this issue was also shot down, because they concurred with what has been written by Smith and Gallatin. What you are really saying though is that the court based their opinions on nothing as their decisions were made entirely without any consideration to what those who were actually knowledgeable economics, their decisions were made without any support. It also means they brought up all these issues in court merely for the purpose of rejecting them. Absurd insinuations that you make.

The real truth is never did they actually state within the case, your claims. What they were making a comparison to within the case was the issue at bar, what was meant by specifically by the use of the phrase “direct taxes”, what was meant by capitation taxes was never included within the debate, that was not the issue, that was not what was causing the confusion. Just as with all of the other cases pertaining to direct taxation. As if the people of that time were not well aware of how capitation and poll taxes were laid within their competing nations... the nations they had traveled from merely years earlier or traveled back and forth from occasionally.

[Famspear]

Note: The discussion with Weston White (and SteveSy) regarding "Gallatin" is continued here:

viewtopic.php?f=8&t=4216

[LPC]

Sybil is on my ignore list, so I haven't read what he's written, and don't plan to. But for the benefit of those who want to argue with him, I'd like to offer some comments about the scope and content of my FAQ and the section on "direct taxes."

1. The section on "direct taxes" explains that the 16th Amendment specifically authorizes a tax on incomes without apportionment, but offers an explanation of the meaning of "direct tax" before the ratification of the 16th Amendment because "tax protesters" (e.g., Sybil) "continue to insist that a tax on incomes was a 'direct tax' both before the ratification of the 16th Amendment and even afterwards."

2. The FAQ also states that "Exactly what the framers of the Constitution meant by 'direct Taxes' has been subject of much debate."

3. The FAQ then presents a chronological exposition of both Supreme Court rulings on the meaning of "direct taxes" and writings contemporaneous with the ratification of the Constitution that are consistent with the Supreme Court rulings in order to show that the Supreme Court rulings were not arbitrary or capricious but well-founded.

[silversopp]

Dan your FAQ is so one sided, it might as well have been written by the taxman himself.

The purpose of the FAQ is to explain what the law is so that folks will not make the mistakes of tax-protesters and wind up financially ruined and/or in prison. The FAQ is not a place to debate what the tax law SHOULD be, but rather what it is IS.

If I wrote a FAQ concerning the shape of the Earth, would you say that I'm biased because I did not include statements from folks who, a thousand years ago, said the Earth is flat?

[Weston White]

Dan your FAQ is so one sided, it might as well have been written by the taxman himself.

The purpose of the FAQ is to explain what the law is so that folks will not make the mistakes of tax-protesters and wind up financially ruined and/or in prison. The FAQ is not a place to debate what the tax law SHOULD be, but rather what it is IS.

If I wrote a FAQ concerning the shape of the Earth, would you say that I'm biased because I did not include statements from folks who, a thousand years ago, said the Earth is flat?

Absolutely, I would, if you are going to write a complete FAQ about such an issue, it is important to know the history of the issue, otherwise you can't truly comprehend it for yourself. As another example there other theories that planets actually grow... when including such information you keep the doors that lead to creativity, imagination, and possibilities open.

[.]

there other theories that planets actually grow

Planet Weston, for instance, is clear evidence of that.

Last I checked, it had become larger than even Planet Van Pelt, which is not an insignificant feat of narcissism.

[Judge Roy Bean]

There is a significant difference between an FAQ and an article. The history behind an answer becomes nice-to-know but doesn't fall within the need-to-know category.

For examples:

Q: Can you be sued and fined for following the advice of Weston White in matters relative to law and taxes?

A: Yes. There may also be criminal penalties if you persist.

What else do you really need to know?

[Weston White]

there other theories that planets actually grow

Planet Weston, for instance, is clear evidence of that.

Last I checked, it had become larger than even Planet Van Pelt, which is not an insignificant feat of narcissism.

Actually, if you were to look into the issue you might actually be quite surprised.

[Weston White]

There is a significant difference between an FAQ and an article. The history behind an answer becomes nice-to-know but doesn't fall within the need-to-know category.

For examples:

Q: Can you be sued and fined for following the advice of Weston White in matters relative to law and taxes?

A: Yes. There may also be criminal penalties if you persist.

What else do you really need to know?

Correct answer would be:

No, the IRS is one large paper tiger they have no authority for anything, concerning the individual. Their only hope is to scare you through notice after notice after notice.