Murphy - or are lawyers natural contortionists?

[natty]

Now, how would you apply that principle to the facts of the Murphy decision? How much of the money she spent on her education was included in the recovery for "emotional distress" and damage to her "vocational reputation"? I can't see how her educational costs have anything whatsoever do with those damages, because none of the knowledge she acquired in her education was damaged in any way..

For some reason you keep demanding TANGIBLE proof of a loss while I have stated from the begining that most losses to human capital are INTANGIBLE. Her basis is the sum total of everything she has ever spent on herself. That includes but is not limited to education, everything that builds her self-esteem, the food choices she makes, how she chooses to live, the health care she gets, etc.

One tangible loss Murphy suffered was trips to the doctor concerning her teeth grinding. She won't be able to fully deduct those expenses.

[Famspear]

SteveSy wrote:

Please answer the question; I know you hate to give up your tool to alter reality. You're like a religious fanatic being confronted with facts and their response always results in "it's a matter of faith".

Does congress have the power to trump the constitution with legislation?

Well, I will ask you a question: Does SteveSy have the legal power to trump a court's ruling on whether an Act of Congress comports with the Constitution?

Now, I'll answer the question for you: No. SteveSy does not have the legal power to trump a court's ruling on whether an Act of Congress comports with the Constitution.

Under our legal system, the Congress does NOT have the power to trump the Constitution with legislation. In deciding real cases brought before a court, part of the constitutional function of that court is to rule on whether legislation enacted by Congress comports with the Constitution. The legally and logically authoritative answer to whether that legislation comports with the Constitution is made by THE COURT under our legal system, not by the tax protesters.

--Famspear

[Cpt Banjo]

The legally and logically authoritative answer to whether that legislation comports with the Constitution is made by THE COURT under our legal system, not by the tax protesters.

But if the Court's decision is "illogical" by Stevie's standards, then he thinks he's free to ignore it. Legal reality has never stopped Stevie from living in his own fantasyland, in which the Supreme Court's definition of an excise is is completely immaterial, and the only authority is a nineteenth century legal dictionary.

[SteveSy]

SteveSy wrote:

Please answer the question; I know you hate to give up your tool to alter reality. You're like a religious fanatic being confronted with facts and their response always results in "it's a matter of faith".

Does congress have the power to trump the constitution with legislation?

[no]

--Famspear

I don't know why you find it necessary to add in commentary unrelated to my question as if I asked something related to it.

There's really no reason to continue because it doesn’t appear you’re even sure what is or is not taxable under an income tax. Kinda just going along with whatever someone else says but don't understand why they're saying it. It seems you think that real property can’t be included but you give no explanation why, considering you said in a previous statement that congress could tax whatever it wanted under an income tax I find that nonsensical. You’ve offered no reasonable explanation or logical explanation why that excludes property.

[Nikki]

Now, how would you apply that principle to the facts of the Murphy decision? How much of the money she spent on her education was included in the recovery for "emotional distress" and damage to her "vocational reputation"? I can't see how her educational costs have anything whatsoever do with those damages, because none of the knowledge she acquired in her education was damaged in any way..

For some reason you keep demanding TANGIBLE proof of a loss while I have stated from the begining that most losses to human capital are INTANGIBLE. Her basis is the sum total of everything she has ever spent on herself. That includes but is not limited to education, everything that builds her self-esteem, the food choices she makes, how she chooses to live, the health care she gets, etc.

One tangible loss Murphy suffered was trips to the doctor concerning her teeth grinding. She won't be able to fully deduct those expenses.

Second things first: To the extent that the award specifies that it is compensating her for medical expenses, they are not taxable.

However, the taxability depends on the specific language of the award.

Now, first things second: Compare her expenses on herself to a business' expenses on its equipment. Are the routine upkeep / maintenance costs expended on a machine in a factory capital investments or are they operating expenses? Are the costs for fuel to run the machine, air conditioning to keep it in its proper operating temperature capital or operating?

Her expenses, which you mentioned, (with the possible exception of education -- which is deductible under certain rules) are all operating expenses just to keep her running. None of them are an investment in an asset.

Now, if slavery were still legal, you might have some good arguments as to the expenditures a slave-owner made to purchase and keep up HIS human capital. Unfortunately, that discussion was moot decades before the income tax came into existence.

[natty]

What is the difference between an expense and capitalized cost? If you assert that you have a basis in human capital, should one be able to amortize those costs? If so, over what period of time?

Human beings are not machines in the sense that they exist to only produce income or that they have a finite life span in which to produce income.
Human beings live whether they work or not and they die whether they work or not.

[natty]

One tangible loss Murphy suffered was trips to the doctor concerning her teeth grinding. She won't be able to fully deduct those expenses.

Second things first: To the extent that the award specifies that it is compensating her for medical expenses, they are not taxable.

However, the taxability depends on the specific language of the award.

Not the "language of the award" but the language of Congress. The court held that her damages were mental, thus not excluded from gross income. Thus she could not deduct a trip to a therapist or doctor concerning her teeth grinding.

[SteveSy]

What is the difference between an expense and capitalized cost? If you assert that you have a basis in human capital, should one be able to amortize those costs? If so, over what period of time?

Human beings are not machines in the sense that they exist to only produce income or that they have a finite life span in which to produce income.
Human beings live whether they work or not and they die whether they work or not.

lol.....Really nice attempt to make a distinction between your position on the award as income and compensation for services as income. Unfortunately they are synonymous. Your current statement eliminates your argument concerning human capital.


Btw, machines are not only produced to make income. Cars for instance can be used for business or pleasure. Humans can be used for business or pleasure. Both have a limited life span dependent on maintenance, environment and operability based on fuel. One is an organic machine the other is not, they are both machines both serving the same dual purpose when it comes to income or pleasure.


Murphy was decided the way it was because the arguments are synonymous. Can’t have that door even slightly cracked open.

I'll leave your thread alone now.....

[natty]

Natty:

With respect to your definitions above, who made the investment in the EMPLOYEE'S education, etc?

Following that, to whom does the "Human Capital" intangible asset belong?

I don't think the definitions are limited to only employer/employee relationships.
Why can't you invest in yourself and what about the self-employed?

[Famspear]

Well, actually, these two statements:

-----"I don't read Murphy (or Penn Mutual) as applying that broadly. Under current case law, a tax on property BY REASON OF ITS OWNERSHIP (whether realty or personalty) would probably still be considered a direct tax, not an excise.

and:

-----"[T]hat under the Constitution there is no requirement that something actually "be" income in order for Congress to validly CALL it income and TAX it as though it were income. The courts are right."

--actually do stand in tension to a degree. So, you are essentially correct when you say I am "taking it back" -- at least in part -- when I say that I don't take Murphy and Penn Mutual as applying so broadly that a property tax could be imposed without apportionment simply by calling it an income tax. I am acknowledging that if taken to an EXTREME, the power to tax ANYTHING as "income" might be interpreted as a power to tax property itself by simply calling the tax something else -- and I am saying that I doubt that the courts would interpret the Constitution to that EXTREME.

Now, let's look at your statement: "I fail to see where you [Famspear] have given any indication of what can or can not be taxed as income. It's kind of impossible to argue a point when you've given such a vague understanding of what income is."

Aw, come on now. We have just spent page after page in this (or other) threads discussing what is or is not true economic income, what is or is not Sixteenth Amendment income, what is or is not section 61 income, and so on.

Yes, there is often some vagueness at play, but I do not believe you are having any serious problem with "vagueness." You ARE having a problem accepting the truth: that the law is what the courts rule the law is, and not what you want the law to be, based on your own method of reasoning.

If you are this uncomfortable with uncertainty, complexity, and vagueness, then the study of law may be the wrong place for you to be. The ESSENTIALS of the U.S. Federal income tax law are not, however, so vague, so complex, or so uncertain as to be "unconstitutional" or "not understandable" by a person of normal intellect. Again, to quote Justice Blackmun's dissent in the Cheek case (talking about wages being income, and being taxable):

-----"It seems to me that we are concerned in this case not with "the complexity of the tax laws," ante, at 200, but with the income tax law in its most elementary and basic aspect: Is a wage earner a taxpayer and are wages income? [ . . . ] t is incomprehensible to me how, in this day, more than 70 years after the institution of our present federal income tax system with the passage of the Revenue Act of 1913, 38 Stat. 166, any taxpayer of competent mentality can assert as his defense to charges of statutory willfulness the proposition that the wage he receives for his labor is not income, irrespective of a cult that says otherwise and advises the gullible to resist income tax collections. One might note in passing that this particular taxpayer, after all, was a licensed pilot for one of our major commercial airlines; he presumably was a person of at least minimum intellectual competence.

--Famspear

[natty]

Really nice attempt to make a distinction between your position on the award as income and compensation for services as income. Unfortunately they are synonymous. Your current statement eliminates your argument concerning human capital.

If so, please provide any correlation of LOSS between Murphy's compensation and compensation for services.

When you sell your services for compensation, what did you lose?
You still are able to labor another day, and if anything, the gained experience actually increases your human capital.

[Famspear]

SteveSy wrote:

I don't know why you find it necessary to add in commentary unrelated to my question as if I asked something related to it.

There's really no reason to continue because it doesn’t appear you’re even sure what is or is not taxable under an income tax. Kinda just going along with whatever someone else says but don't understand why they're saying it. It seems you think that real property can’t be included but you give no explanation why, considering you said in a previous statement that congress could tax whatever it wanted under an income tax I find that nonsensical. You’ve offered no reasonable explanation or logical explanation why that excludes property.

No, it appears that I am very clear about "what is or is not taxable under an income tax." Yes, I go along with "whatever someone else says" on that point where that someone is a judge making a ruling in an actual court case. And I understand pretty well why judges rule the way they do; I've studied literally thousands of actual court decisions (and not just tax-related decisions) for over twenty years, and I'm comfortable with my understanding of how the legal system works.

You say that "It seems you [Famspear] think that real property can’t be included but you give no explanation why, considering you said in a previous statement that congress could tax whatever it wanted under an income tax I find that nonsensical." Yes, Steve, you find that "nonsensical" in the sense that you find it "illogical." And under your SteveSy logic, it is illogical. You are using the SteveSy Logic System -- the wrong system for analysis. You will continue to come up with wrong answers as you continue to use the SteveSy System.

You also say that I've "offered no reasonable explanation or logical explanation why". Well, I've offered nothing that satisfies YOU, Steve. Unfortunately, other people are not put here in life to satisfy YOU, Steve. The rest of us are not here to persuade you that the law is what it is. We are here to teach you, not to persuade you. Accepting the teaching vel non is your business.

--Famspear

[SteveSy]

Aw, come on now. We have just spent page after page in this (or other) threads discussing what is or is not true economic income, what is or is not Sixteenth Amendment income, what is or is not section 61 income, and so on.

But you support your theory of income based on what congress has defined as income using "basis". "Basis" is defined by congress to exclude certain expenses. The word "basis" does not appear in the constitution. Congress cannot trump the constitution therefore they cannot define basis therefore saying “the laws says” is irrelevant to this discussion. We’re talking about what should be taxed as income according to the confines of the constitution.

Yes, there is often some vagueness at play, but I do not believe you are having any serious problem with "vagueness." You ARE having a problem accepting the truth: that the law is what the courts rule the law is, and not what you want the law to be, based on your own method of reasoning.

I personally do not believe you know what is or is not the law concerning income. You cannot provide any precision to a definition of income without stepping all over yourself. Instead you chose to just go with a moving target. The premise used to call something an expense or gain in one argument seems to change without reason in another.

[Nikki]

Btw, machines are not only produced to make income. Cars for instance can be used for business or pleasure. Humans can be used for business or pleasure. Both have a limited life span dependent on maintenance, environment and operability based on fuel. One is an organic machine the other is not, they are both machines both serving the same dual purpose when it comes to income or pleasure.

When a business acquires a car, how does it account for it? It establishes a capital asset which it depreciates over time.

All other costs associated with operating the car, insuring it, maintaining it, and so on are expenses.

Due to legislative decision, the depreciation and expenses are permissible deductions as a cost of doing buisness.

Natty:

Please demonstrate exactly how a person pays to acquire himself, thereby establishing a depreciable asset.

Next, please show where, in the law, expenses associated with the operation of the person are permissible deductions.

And DO NOT argue how things should be, just show how they are and how that supports your position.

[Famspear]

SteveSy wrote:

But you support your theory of income based on what congress has defined as income using "basis". "Basis" is defined by congress to exclude certain expenses. The word "basis" does not appear in the constitution. Congress cannot trump the constitution therefore they cannot define basis.

Baloney, Steve. Go sell it to Irwin Schiff, Bonita Lynne Meredith, Tom Clayton and Kent Hovind.

Like the word "basis," the word "income" is not in the Constitution, Steve. The terms "Air Force" and "Securities and Exchange Commission" and "Federal Communications Commission" and "wage" and "dividend income" and "deduction" also are not in the Constitution. The statement that "Congress cannot trump the constitution therefore they cannot define basis" is laughable, SteveSy idiosyncratic, emotional, pseudo-legalistic gibberish. Under our legal system Congress can validly enact statutes with words in those statutes, and can validly define those words (OR, can choose NOT to define those words, as is often the case), regardless of whether those words are found in the Constitution.

Half the time tax protesters argue that the tax law is invalid because certain words are NOT defined, and the other half of the time tax protesters argue that the tax law is invalid because certain words ARE defined.

You, Steve, are making this up as you go along.

You also wrote:

I personally do not believe you know what is or is not the law concerning income. You cannot provide any precision to a definition income without stepping all over yourself. Instead you chose to just go with a moving target. The premise used to call something an expense or gain in one argument seems to change without reason in another.

No, Steve, you personally believe that I, Famspear, know QUITE WELL what is or is not the law concerning income. You just want to be argumentative. You are blowing rhetorical smoke, and I am not buying it. Go sell it to Irwin Schiff.

Interestingly, you are actually closer to truth when you say that I (actually, not I, but the courts) cannot provide any precision to a definition of income without stepping all over myself, etc. The courts have indeed come up with various definitions of income from time to time, as the case law has evolved. "Income" actually IS a moving target -- to some degree.

Too bad. Neither I nor the courts nor the tax laws depend for our legitimacy on your personal, idiosyncratic evaluation, Steve.

--Famspear

[natty]

Earlier, in another thread, Natty wrote:

There is a "basis bank" that is intangible and priceless. It is everything that went into making you who you are. It is your education, your health, your well being, your reputation.

(Emphasis added by LPC.)

In this thread, natty has written that only personal living expenses "over and above food necessary for subsistence" go into "human capital."

But isn't the "food necessary for subsistence" also necessary for good health and well being? Natty seems to be inconsistent (again) in asserting that good health and well being are part of "human capital" but the costs of creating that good health and well being are not part of "human capital."

It is not inconsistent at all because I am proving human capital has a cost basis. The critics of the "human capital" argument contend that there is no cost basis in human capital and the "human capital" argument merely provides fodder for tax protesters.

I concede an argument can be made that in order to labor, a person must consume food and water. Thus, the cost of minimum food could be considered a deduction necessary to calculate income derived from labor. But as a said before, a worker could work on the energy provided by a bean burrito. Thus, this food cost is negligible. And since every laborer must eat, it does not matter in the overall scheme of income taxation.

TPs take the argument WAY too far when they insist all living expenses are costs which must be deducted.

[Famspear]

Natty wrote:

It is not inconsistent at all because I am proving human capital has a cost basis. The critics of the "human capital" argument contend that there is no cost basis in human capital and the "human capital" argument merely provides fodder for tax protesters.

No, Natty, you are ARGUING that human capital has a cost basis. You haven't "proved" that, and you cannot "prove" that. That's a legal issue, not a factual issue. Legal issues are not generally a matter of "proof." Legal issues are determined by reference to the Constitution, the Code, the regs, the treaties, the case law, etc., using rules of legal analysis.

Maybe the Congress should change the statute to provide for a "cost basis" in "human capital." If and when Congress ever does do that, then I will agree that the law is what Congress has changed the law to be.

--Famspear

[natty]

Natty:

Please demonstrate exactly how a person pays to acquire himself, thereby establishing a depreciable asset.

Next, please show where, in the law, expenses associated with the operation of the person are permissible deductions.

And DO NOT argue how things should be, just show how they are and how that supports your position.

My position is that there is a cost basis in "human capital". How do your questions affect that position?

[Famspear]

SteveSy wrote:

I don't know why you find it necessary to add in commentary unrelated to my question as if I asked something related to it.

Yes, I know, Steve, it can be painful when other people don't just answer your questions without adding additional coments. This is, of course, the real world. Neither you nor I can limit the discussion and analysis here in this forum. Ask a dumb question and you're likely to get more of an answer than you bargained for.

--Famspear

[Nikki]

Natty:

Please demonstrate exactly how a person pays to acquire himself, thereby establishing a depreciable asset.

Next, please show where, in the law, expenses associated with the operation of the person are permissible deductions.

And DO NOT argue how things should be, just show how they are and how that supports your position.

My position is that there is a cost basis in "human capital". How do your questions affect that position?

They affect that position by requiring you to substantiate it beyond just your opinion.

Let's start simply.

What is the value -- basis -- in the human capital asset when it is acquired by the person? Hint: that's normally what is paid to acquire the asset.