February 4, 2011
As we enter another “Tax Terrorism Season,” as my friend Dave Champion calls it, it may be interesting to many readers to get a little historical perspective on what it is taxpayers pay each year.
Although the government, and specifically the IRS, calls what is paid “Income Tax” that is not what it really is.
Most people assume taxes are paid on the amount of money they make each year – that would be incorrect. The amount of income is solely a measure of how much your tax will be but according to Congress and the Supreme Court the tax is actually an excise or duty that is measured by the income produced.
So, what is an excise tax? According to the IRS: “Excise taxes are taxes paid when purchases are made on a specific good, such as gasoline. Excise taxes are often included in the price of the product. There are also excise taxes on activities, such as on wagering or on highway usage by trucks. Excise Tax has several general excise tax programs. One of the major components of the excise program is motor fuel.”
The IRS further enforces that the excise taxes are special in that: “Under the Code and regulations, each person that engages in certain specified activities relating to excise tax must be registered by the IRS before engaging in that activity.” (Bold added.)
Black’s Law Dictionary defines excise as: “A tax imposed on the manufacture, sale, or use of goods (such as a cigarette tax), or on an occupation or activity (such as a license tax or an attorney occupation fee). – Also termed excise tax.
Also defined in Black’s Law Dictionary is the term indirect tax: “A tax on a right or privilege, such as an occupation tax or franchise tax.”
As you can see there is a great deal of connectivity between an “indirect tax” and the “excise tax” – they both relate to a privilege of some type. In the example used by Black’s we can clearly see that this tax is in relation to a privilege or activity we are engaged in that would garner a tax.
But first let’s define what a privilege is – (again from Black’s) a privilege is: “A special legal right, exemption, or immunity granted to a person or class of persons; an exception to a duty.”
A privilege, therefore, is the right to do something that would otherwise be ILLEGAL to do!
My question to you is – what is it that you, and 99% of Americans, do that is otherwise illegal to do that requires a tax to be levied upon you for the privilege of doing it? Is it perhaps the mere act of working, earning a living, perhaps just the privilege of being alive?
We have been told for years that the IRS gains it powers from 16th Amendment – coined the Income Tax Amendment.
On March 27, 1943 the House Congressional Record lists the following in relation to the Sixteenth Amendment:
The sixteenth amendment authorizes the taxation of income “from
whatever source derived” – thus taking in investment income
– “without apportionment among the several states.”
The Supreme Court has held that the sixteenth amendment did not extend
the taxing power of the United States to new or excepted subjects but
merely removed the necessity which might otherwise exist for an apportionment
among the States of taxes laid on income whether it be derived from
one source or another. So the amendment made it possible to bring investment
income within the scope of a general income-tax law, but did not change
the character of the tax. It is still fundamentally an excise or duty
with respect to the privilege of carrying on any activity or owning
any property which produces income.
The income tax is, therefore, not a tax on income 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.”
Even the House acknowledges that the income tax is only applicable to “certain activities and privileges” yet we are led to believe that ALL money earned (wages paid for work performed) falls under this narrow description.
An interesting contrast between a direct tax and an indirect tax (excise) is that a direct tax cannot be avoided, such as property tax, whereas and indirect tax CAN be avoided by not participating in the activity or privilege upon which the tax is based. A prime example is the consumption tax that is paid at a store at the time of purchase – if I decide to purchase used products from others in the local community I do not fall under the requirement to pay the tax on the sale. Another example is if I decide to work in a profession that requires governmental licensing, such as an attorney, I am subject to pay the fees (tax) associated with that occupation. To avoid paying those fees I would simply not participate in the profession.
So again I go back to the question above – What privilege (excise) are you participating in that makes you liable for the income tax?
Part of the problem is that even the IRS can’t/won’t help you answer the question and depending on how you ask the question you would be told you are making a frivolous argument. The problem stems from generations of creeping government statutes, expansion of power beyond the scope of Congress’ constitutional powers.
The court ruled in Helvering v. Edison Bros. Stores, 133 F.2D 575 (1943), that “The Treasury Department cannot, by interpretive regulations, make income out of that which is not income within the meaning of the revenue acts of Congress, nor can Congress, without apportionment, tax as income that which is not income within the meaning of the 16th Amendment."
This case was decided 30 years after the 16th Amendment was supposedly ratified, yet the courts acknowledge that not all apportionment was done away with and more specifically there is a specific meaning to the word income as used by Congress.
In Corn v. Fort, 95 S.W.2d 620 (1936), the court ruled: "The individual, unlike the corporation, cannot be taxed for the mere privilege of existing. The corporation is an artificial entity which owes its existence and charter powers to the state; but the individuals' Right to live and own property are natural rights for the enjoyment of which an excise cannot be imposed." Aha! This says there is a separation of incomes between corporate and individual. They cannot be lumped together because the individual has a right to property (your income is your property). The corporation owes its existence to the state, and therefore, is taxable. And the claim that what you earn for an exchange of your time and talent for property (money) cannot be imposed as an excise – your rights are not a privilege but I guess the federal government believes otherwise.
The constitution cannot have transient meanings. The Supreme Court has said the income determined in the Income Tax Acts must have the same meaning throughout all income tax acts as the meaning given in the Corporation Excise Tax Act. So what exactly did the court definitely settle this to be?
The supreme court told us in Doyle v. Mitchell Brother, Co., 247 US 179 (1918): "Whatever difficulty there may be about a precise and scientific definition of 'income,' it imports, as used here, something entirely distinct from principle or capital either as a subject of taxation or as a measure of the tax; conveying rather the idea of gain or increase arising from corporate activities." (Emphasis added.) Let me reiterate; “the idea of gain or increase arising from CORPORATE activities.” Even the names of these tax bills included the name “corporate.”
In reality, most people who otherwise would not be required to pay taxes, volunteer to pay. We are presumed to be taxpayers either by outright agreement or by our actions, we volunteer to pay taxes. When you fill out and sign a W-4 form, you are agreeing that you are a taxpayer, and you wish to have “taxes” withheld. Most people, of course, do not know that they do not need to submit a W-4 if they are a non-taxpayer.
Do you think the government would allow its’ citizens to ‘volunteer’ to be a taxpayer?
Do you think the government would let you assume that you’re a taxpayer even if you were not one?
And, don’t you think that even if you ‘volunteered,’ (or the government assumed you to be a taxpayer), and they suspected that you may have cheated on your taxes, that they would not come after you like a starving coyote on a hen house?
If you answered yes to all three questions; you would be right!
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The issue throughout this article has not been that Congress does not have the power to tax. The Constitution clearly provides that Congress does have such power. It is not that the laws are unconstitutional, but only the misapplication of the laws against Citizens who are not liable for those taxes. It is egregious that a government that has shown, by its own documents and reports, that it knows that the majority of Americans are not liable for this tax, and yet continues to support the misapplication of those laws. This is nothing short of criminal.
The bottom line is that the use of an excise tax against the American citizen has more to do with excising money from their bank accounts than it does with honest government.
© 2011 Michael LeMieux - All Rights Reserved
LeMieux was born in Midwest City, Oklahoma in 1956 and graduated from
Weber State University in Utah with a degree in Computer Science. He
served in both the US Navy and US Army (Active duty and National Guard)
and trained in multiple intelligence disciplines and was a qualified
paratrooper. He served with the 19th Special Forces Group, while in
the National Guard, as a Special Forces tactical intelligence team member.
He served tours to Kuwait and Afghanistan where he received the Purple
Heart for injuries received in combat.
Mr. LeMieux left military duty at the end of 2005 after being medically discharged with over 19 years of combined military experience. He currently works as an intelligence contractor to the US government.
Michael is a strict constitutionalist who believes in interpreting the constitution by the original intent of the founding fathers. His research has led him to the conclusion that the republic founded by the Constitution is no longer honored by our government. That those who rule America today are doing so with the interest of the federal government in mind and not the Citizens. Michael believes that all three branches of government have strayed far from the checks and balances built into the Constitution and they have failed the American people. A clear example is the Second Amendment, which the Supreme Court and the founders have all said was an individual right and could not be "infringed" upon, now has more than 20,000 state and federal laws regulating every aspect of the individuals right, a definite infringement. He has traveled around the world living in 14 States of the Union including Hawaii, and visited (for various lengths of time) in Spain, Afghanistan, Kuwait, Korea, Scotland, Pakistan, Mauritius, Somalia, Diego Garcia, Australia, Philippines, England, Italy, Germany, and Puerto Rico.
Michael now lives in Nebraska with his wife, two of his three children, Mother-in-Law and grandchild. His hobbies include shooting, wood-working, writing, amateur inventor and scuba diving when he can find the time.
Contact Michael through his Website: www.constitutiondenied.com