State and Nation Explained
State & Nation Explained
Before you can understand, what happened to you, there are fundamental legal realities you must understand. The income tax confusion begins with what may seem to be a straightforward definition. But to the untrained, it is anything but straightforward. Consider carefully the following definition:
26 U.S.C. § 7701 – Definitions
(a) When used in this title, where not otherwise distinctly expressed or manifestly incompatible with the intent thereof—
(9) United States
The term “United States” when used in a geographical sense includes only the States and the District of Columbia.
There’s a lot more going on in this definition than meets the eye. To begin with, and most importantly, the definition states, “when used in a geographical sense.” Which begs the question: What sense is the term “United States” used in when it’s not used in a geographical sense? Furthermore, if you knew what the other sense was, do you know when to regard that sense over the geographical sense, and vice versa? If you find yourself unsure, then you are certainly among the ill-informed who has made an election (albeit unknowingly), and subjected yourself, your business, or both, to taxation on worldwide income and a tax status with a vigorous duty to perform under the law.
To understand what is going on with the definition of “United States” in sec. 7701(a)(9), and the income tax at large, we have to understand our incorrect perceptions and be willing to correct them. For example, when presented with the following image and asked to identify what it is, most people claim, “That’s the State of Texas.”
Figure D.1. What most believe to be “The State of Texas.”
Likewise, when presented with the following image and asked to identify what it is, most people claim, “That’s the United States.”
Figure D.2. What most believe to be “The United States.”
However, legally speaking, such statements are inaccurate. Let’s turn to the authority on the matter.
In the Constitution the term state most frequently expresses the combined idea just noticed, of people, territory, and government. A state, in the ordinary sense of the Constitution, is a political community of free citizens, occupying a territory of defined boundaries, and organized under a government sanctioned and limited by a written constitution, and established by the consent of the governed.
Texas v. White, 74 U.S. 700, 721 (1868) (Overruled on other grounds)(emphasis added)
If we were to present the foregoing graphically, it would appear as follows:
Figure D.3. The State of Texas—a body politic
Notice that the state, as regarded in the U.S. Constitution comprises three components, which together form a political community, or body politic. The circle encapsulating the three components of people, territory, and government, represents the political jurisdiction of the State of Texas. The court goes onto say:
But [the term state] is also used in its geographical sense, as in the clauses which require that a representative in Congress shall be an inhabitant of the State in which he shall be chosen . . . .
Id. at 721 (emphasis added)
This statement draws the distinction between the state in its political sense and its geographical sense. And take special notice of the word ‘inhabitant’ and its usage in the context of the state in its geographical sense. This corresponding principle will be exhaustively addressed going forward.