Okay, let's play."I'm not very good at understanding these things..." That's why we reduced the basic facts to a quiz. We'll take you one step at a time. You read each question and give the answer you think is best. Guess if you don't know! Then see the correct answer and the reason why it is correct. Instant feedback--that's the best way to learn.
"Well, this might be your opinion, but..."
Everything here is based on the tax laws and the Constitution. No opinions, just facts. Along the way we'll give you some excerpts from the law and Supreme Court decisions. You're not going to argue with the Supreme Court, are you?
So what are you waiting for? The truth is a click away...
Of course, having read Section 1 of Title 26 (which says "There is hereby imposed on the taxable income of—" I chose "A) The income itself" as the best of the three choices given.Question 1
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The first thing about the 'income tax' to get straight is what is being taxed.
The subject of the income tax (the thing upon which the tax is laid) is:
A) The income itself
B) The person receiving the income
C) The activity that produced the income
We all know it is "taxable income" on which the tax is imposed (IF WE CAN READ THE STATUTE), so the correct answer is not even listed as an answer.
The reply on the site following my response was:
That does not provide any support for claiming "The subject of the income tax (the thing upon which the tax is laid) is: C) The activity that produced the income"Question 1
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INCORRECT
The subject of the income tax (the thing upon which the tax is laid) is:
Correct answer:
C) The activity that produced the income
Discussion:
The income tax is an excise tax, a type of indirect tax, which means that it is not levied directly on persons or property (one's earnings are property). The tax is actually levied on the activity which produces the income:
"A tax laid upon the happening of an event, as distinguished from its tangible fruits, is an indirect tax.." (Tyler v. U.S., 281 U.S. 497) (1930)
"The income tax is, therefore, not a tax on income [earnings] as such. It is an excise tax with respect to certain activities and privileges which is measured by reference to the income which they produce. The income is not the subject of the tax: it is the basis for determining the amount of tax." (F. Morse Hubbard, Treasury Department legislative draftsman. House Congressional Record March 27th 1943, page 2580.)
So income is used to compute the tax, but it is not the subject of the tax. This turns out to be very important.
Note the use of the word 'privilege'. We will come back to it.
It is just an opinion. No legal basis for the argument given. None at all. Just a description of an indirect tax and a quote from a legislative draftsman that has absolutely no legal authority. Frivolous fluff.
The unfortuante part is that the site will likely live up to the name "How you become liable..." because it will certainly provide a means for some to get sucked into the frivolity and become liable for a $5,000 penalty for frivolous filing. [See US CODE: TITLE 26,6702. FRIVOLOUS INCOME TAX RETURN]
Beware those that claim you do not have to file or pay income taxes!
