Brian Doherty
Five Reasons You Don't Owe Income Tax, Dammit!
Thu Apr 15, 2004 19:59
63.228.145.202

May 2004

Five Reasons You Don't Owe Income Tax, Dammit!
The most heartfelt beliefs of the "tax honesty" movement
http://www.reason.com/0405/fe.bd.five.shtml
Brian Doherty


Here are some of the core arguments against the legality of the income tax one finds in the tax honesty movement. Devotees probably would regard them as oversimplifications. This is certainly not an all-inclusive list.

1) The IRS declares in various documents that the income tax is "voluntary." And in Flora v. U.S. (1960), the Supreme Court announced, "Our system of taxation is based upon voluntary assessment and payment."

2) In Brushaber v. Union Pacific (1916), the Supreme Court declared that "the conclusion that the 16th Amendment provides for a hitherto unknown power of taxation" is "erroneous," and thus the 16th Amendment did not give Congress any taxing powers it did not already have. Hence, an unapportioned direct tax such as the income tax still cannot be legal. (Most mainstream readings of this extremely hard-to-follow decision say the Court meant Congress always had the power to levy an income tax, and that it was merely the question whether it should have to be apportioned that was at issue.)

3) Income, for the purposes of the tax code, should not be understood in any "common sense" way but only as defined by the Supreme Court. The Supreme Court, in Merchant's Loan and Trust Company v. Smietanka (1921), defined it as having the same meaning as in the Corporation Excise Tax of 1909-and as Irwin Schiff has written, "nothing that was received by private persons was taxable as 'income' under that Act." Income is defined as "gain derived…from labor" in a previous Supreme Court decision, Stratton's Independence v. Howbert (1913).

4) Title 26 of the U.S. Code, in which tax-related statutes are found, is inherently "void for vagueness" because it lacks precise definitions of such terms as state, United States, employee, and person. Again, "common sense" definitions aren't good enough. (Many tax honesty types interpret the use of the word includes in the tax code as properly meaning, "is limited to.")

5) According to the tax-honesty reading of U.S. Code 26, Section 861, only income from foreigners or from overseas activity appears to actually be subject to the income tax.


Senior Editor Brian Doherty is the author of This Is Burning Man, to be published this summer by Little, Brown.

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THE DAILY MIS-LEAD
< http://daily.misleader.org/ctt.asp?u=2123413&l=29022 >
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POLLS: AMERICANS NOT BUYING BUSH TAX CUT RHETORIC

President Bush is scheduled to tout his tax cuts today at a Tax Day event in
Iowa. He is expected to repeat his oft-heard mantra that tax cuts have
helped all Americans. But according to a new poll by Money Magazine, "60% of
Americans said the Bush tax cut did not personally help them" (1).
Meanwhile, almost half of all Americans say that their taxes have risen
under Bush (2). And a look at the record shows exactly why that majority
opinion is factually correct.

According to a non-partisan analysis, in the year 2006 88% of Americans will
receive less than $100 from the president's 2003 tax cut (3). Additionally,
the president has refused to extend the full child tax credit to 16 million
children (4), including 250,000 children of military families (5). At the
same time, the president's 2004 budget proposed an increase of almost $6
billion in new federal taxes and fees (6) while creating record-deficits
that have forced states to raise taxes by $14.5 billion since 2001 (7). And
to top it off, he has reduced IRS audits of large profitable corporations
whose tax rates have plummeted (8), while increasing IRS audits of ordinary
Americans (9).

Of course, there is a handful of people who are reaping a personal windfall
from Bush's tax policy: President Bush, Vice President Cheney, and their top
campaign donors. The president himself pocketed more than $30,000 in new tax
breaks this year while the Vice President took in an extra $11,000 (10). And
a new Public Campaign report shows that top Bush-Cheney contributors are
raking in even more (11). For instance, Charles Cawley, CEO of credit card
giant MBNA, raised more than $200,000 for the Bush-Cheney campaign and was
rewarded with at least $276,000 in tax breaks. Similarly, William MaGuire,
CEO of UnitedHealth Group, raised more than $100,000 for the Bush-Cheney
campaign and will get at least $329,000 in new tax breaks from President
Bush.

Sources:
1. "Money poll: Tax cuts unpopular", CNN Money, 04/15/2004,
http://daily.misleader.org/ctt.asp?u=2123413&l=29023.
2. "ASSOCIATED PRESS POLL: Most prefer balanced budget to tax cuts", Grand
Forks Herald, 04/15/2004,
http://daily.misleader.org/ctt.asp?u=2123413&l=29024.
3. "Most Taxpayers Get Little Help From Latest Bush Tax Plan", Citizens for
Tax Justice, 05/30/2003, http://daily.misleader.org/ctt.asp?u=2123413&l=29025.
4. "Bush Tax Plan's Child Credit Boost Leaves Behind One in Four of America'
s Children", Citizens for Tax Justice, 05/29/2003,
http://daily.misleader.org/ctt.asp?u=2123413&l=29026.
5. "Study: Military kids slighted on tax credit", USA Today, 06/04/2003,
http://daily.misleader.org/ctt.asp?u=2123413&l=29027.
6. "Bush's 2004 Budget Proposes More Fees", Washington Post, 04/19/2003,
http://daily.misleader.org/ctt.asp?u=2123413&l=29028.
7. State Budget & Tax Actions 2003, National Conference of State
Legislatures, http://daily.misleader.org/ctt.asp?u=2123413&l=29029.
8. "Corporate tax burden shows sharp decline", Associated Press, 04/13/2004,
http://daily.misleader.org/ctt.asp?u=2123413&l=29030.
9. "IRS More Likely to Audit Individuals", Los Angeles Times, 04/12/2004,
http://daily.misleader.org/ctt.asp?u=2123413&l=29031
ome-headlines.
10. "Bushes, Cheneys Reaped Tax Benefits", Associated Press, 04/14/2004,
http://daily.misleader.org/ctt.asp?u=2123413&l=29032.
11. Campaign Money Watch, 04/15/2004,
http://daily.misleader.org/ctt.asp?u=2123413&l=29033.