Not Intended
Courts have repeatedly ruled that wages are not taxable
by Robert Clarkson of the Patriot Network
“We require only a clear definition of the term "income" as used in common speech,
in order to determine its meaning in the Amendment” — US Supreme Court, 1920
"The intention of the lawmaker constitutes the law"
The
"The income tax is the most just because (it) takes from the backs of the masses of the people some of the burden of taxation and lays it upon the pockets of those who do not bear their just share of the burdens of the government (i.e., the very wealthy)." Congressional Record-House, July 12, 1909, page 4410
The court system when faced with an ambiguous, unclear statute of Constitutional provision, will examine the history of the act as it passed through the legislature. The judges recognize a law’s legislative history as a guide to proper interpretation via review of what the framers intended it to do.
A study of the legislative history of the Sixteenth Amendment reveals that it was not intended to give Congress the authority to tax wage-earners. Its intent was to "soak the rich,' i.e. to tax corporate officers, corporate stockholders, and the wealthy—like the Rockefellers.
Our current income tax law worked its way through Congress and the state assemblies in 1909-1913. The debate as to the intentions of the lawmakers are permanently recorded in the Congressional Record and similar publications of the various states, which are open to the people by law.
One can read these records and see as others that the framers of the Sixteenth Amendment and income tax law did NOT INTEND for the new tax to be applied to money returns from labor. It taxed only the return from capital, i.e. income, and was (in keeping with the contemporary meaning of these terms) applied only to the profits and gains from businesses, e.g. derived from investments and hiring labor.
Until World War II, the federal income tax only took from the very wealthy—those who had incomes from investments and business. It specifically did not apply to those who labored with their hands and minds.
The temporary Victory Tax Act, passed in the heat of global warfare, first applied the income tax to working people. Little objection was made because the money was used to pay for the helmets and flak jackets for everybody's son, brother or husband.
Then, six months after the war ended the temporary tax on wages and salaries expired. Millions of Americans then stopped filing tax returns but the Cold War, Korean War and Patriotism kept the tax on wages alive for most of us “voluntarily.”
The wealthy and powerful then clamored for reductions in their rates, which were seldom denied, and for loopholes which excepted large portions of their income. The rich received their capital gains exclusion, tax-free bonds, and tax breaks galore and the working people received higher and higher rates as inflation pushed us into higher brackets.
So over the years, the opposite of the intention of the lawmakers is now the effect of the income tax law, i.e. low or no tax on the super-rich and a crushing burden on the middle class. But the law as explained at its inception remains the same. Therefore, the true law means the working people legally do not owe the hated income tax, but the rich do, even though they have evaded most of it.
In any event, legally we do NOT owe the income tax on our wages and salaries and have no lawful duty to pay it.
Clarkson urges....
Do NOT income taxes you do not owe.
Do NOT file tax returns that are not required of you.
Congress passed an "income" tax law in 1894 which was subsequently declared unconstitutional by the Supreme Court because a tax on income derived from realty and invested personal property, stocks, bonds, etc. was considered to be a tax on the source, i.e. property itself, which is a direct tax. Article 1, Section 2 of the Constitution requires direct taxes to be “apportioned among the several states.” If the income tax law was allowed to remain with the above-mentioned part stricken out, it "would leave the burden of the tax to be borne by professions, trades, employment, 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 was not such an act..." Pollock V Farmers Loan & Trust Ca 158
A tax on income derived from other classes of property, such as professions, trades, employments, and vocations, was considered to be an excise tax prior to 1900, so the intent of the Amendment was not to give Congress the power to "lay and collect" a tax on "incomes derived from" these sources; it already has such power.
In 1909 members of Congress were looking for new ways to increase revenue, according to the Congressional Record. The Republicans wanted to increase or add tariffs on the necessities of life, and decrease or eliminate the tariffs on luxury items. They also want a corporation tax, which was a 1% "special excise tax', based on a corporation's net "income" above $5,000. It was a tax on the privilege of being allowed to operate as a corporation.
The Democrats disapproved of the tariff bills because they had increased the tax burden of workers in 1909, workers were already overburdened with taxation, and tariffs decreased the amount of taxes paid by the wealthy, who could afford a tax increase. In the words of Representative Adolph Sabath,"... there is nothing of any value that the people eat or wear that I can find that you have not taxed ... you have retained some 'real necessities of life' upon the free list for the sole benefit of the American wage-earner; you permit all rough diamonds and precious stones to come in free. Why, of course, diamonds and precious stones are necessary, and it is absolutely essential that the working man should have a diamond in his shin bosom and a diamond ring on his finger. How could he get along without these? And the poor working girl? How could she go to the shop or the factory where she earns $5 to $8 per week unless she would have nice diamond earrings and a few diamond pens? Therefore, you are putting upon the free list really some of the real 'necessities of life'" (Congressional Record, Vol. 44, Part 5, pg. 77).
The proponents of the 16th Amendment also disapproved of the corporation tax because it would tax the privilege of operating as incorporated businesses. In place of this, they favored an income tax; but because of the Supreme Court's decision in the Pollock case, they preferred an amendment to the Constitution rather than another statute. And such a tax would "confer on Congress the power to enact a law which will compel the wealthy of this country to bear its proportionate share of the burdens of the National Government" (ibid, pg. 126).
Representative Charles Lindbergh Senior’s sentiments reflected those of the majority of Congress: "The gifts of Rockefeller are a small part of his total wealth and even his total wealth is small compared with the aggregate wealth of the multi-millionaires who, through our predatory system, have become inordinately wealthy. It is not my purpose here to criticize the gifts of hundred of millions of dollars by the wealthy to colleges, churches and other good institutions; but I do criticize the system which makes it possible for these wealthy donors to exact such enormous sums from the sons and daughters, the young and old, of our land and distribute such amounts as they can not lavish in extravagance on themselves or otherwise spend to better their satisfaction for benevolent purposes, and to deserving institutions. I much prefer to see those who earned this wealth have the privilege of its use and distribution as they see fit, and not be forced by a system of favoritism to turn it over to the Rockefellers, Carnegies, Armours and others of their kind. I do not wish to be understood as opposed to wealth acquired by thrift, energy and economy, but the wealth should earn its own way by giving value received. Our protective (tariff) system had become so complicated in its application as an indirect tax upon the people to furnish money with which to operate the Government that I have not the least doubt that for every dollar that goes into our Treasury as revenue the people pay ten to twenty dollars to support such interest as those to which I have referred above" (ibid, pg. 91).
The 16th Amendment became part of the Constitution on Feb.25, 1913. It states "The Congress shall have the power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several states, and without regard to any census or enumeration." Contrary to the belief of many, it does not allow an unapportioned direct tax. What it does is "relieve all income taxes when imposed from apportionment from a consideration of the source whence the income was derived." Brushaber vs Union Pacific RR 240
The Internal Revenue Code (laws passed by Congress) does not define the word "income." Perhaps that is because the Supreme Court ruled that Congress does not have that authority. In fact, the Court ruled: "Congress cannot by any definition it may adopt, conclude the matter, since it cannot by legislation alter the Constitution, from which alone it derives its power to legislate, and within whose limitations alone that power can be lawfully exercised" (Eisner V Macomber 252 US 189, 405Cr 189 [1920]).
Congress does not have that authority. In fact, the Court ruled: "Congress cannot by any definition it may adopt, conclude the matter, since it cannot by legislation alter the Constitution, from which alone it derives its power to legislate, and within whose limitations alone that power can be lawfully exercised." Eisner V Macomber 252
Now we come to the crucial point at which the government affirms that law—in particular the income tax law in question—must ultimately mesh with the real world inhabited by real people like you and me. The Eisner ruling goes on to state “We require only a clear definition of the term "income" as used in common speech, in order to determine its meaning in the Amendment.”
Yet more from Eisner: “Income may be defined as the gain derived from capital, from labor, or from both combined, provided it to be understood to include profits gained through a sale or conversion of capital assets ... not a gain accruing to capital, not a growth or increment of value on the investment; but a gain, a profit, something of exchangeable value proceeding from the property, severed from the capital however invested or employed . . ." Eisner V Macomber 252 US 206,207.
If Congress does not have the authority to define the word "income" by legislation, the IRS certainly does not either. "All legislative powers herein granted shall be vested in a Congress of the
In conclusion, if anyone has a doubt of what the Income Tax Amendment means, one can examine the debates and congressional resolutions for themselves and determine what the men who passed the act meant. The legislative history is clear: the federal income tax was NOT INTENDED to apply to wages and salaries of working people.
DO NOT PAY TAXES YOU DO NOT OWE!
The information in this article is explained more in the classic Clarkson video, Introduction to the Constitution and Income Tax available from our bookstore. Click here to order.
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