Journey to 16A; Fed Reserve
Introduction and Ratification of the Sixteenth Amendment
At the turn of the 20th century, the industrial revolution took hold, leading to the need for higher taxes to build roads and infrastructure, which are expensive. There were also two world wars in Europe that were expensive to fight. As a method to pay for these expensive undertakings, then President Taft proposed the Sixteenth Amendment be added to the Constitution in the U.S. Senate. Here was his address to the Senate proposing it:
CONGRESSIONAL RECORD – SENATE – JUNE 16, 1909
[From Pages 3344 – 3345]The Secretary read as follows:
To the Senate and House of Representatives:
It is the constitutional duty of the President from time to time to recommend to the consideration of Congress such measures, as he shall judge necessary and expedient. In my inaugural address, immediately preceding this present extraordinary session of Congress, I invited attention to the necessity for a revision of the tariff at this session, and stated the principles upon which I thought the revision should be affected. I referred to the then rapidly increasing deficit and pointed out the obligation on the part of the framers of the tariff bill to arrange the duty so as to secure an adequate income, and suggested that if it was not possible to do so by import duties, new kinds of taxation must be adopted, and among them I recommended a graduated inheritance tax as correct in principle and as certain and easy of collection.
The House of Representatives has adopted the suggestion, and has provided in the bill it passed for the collection of such a tax. In the Senate the action of its Finance Committee and the course of the debate indicate that it may not agree to this provision, and it is now proposed to make up the deficit by the imposition of a general income tax, in form and substance of almost exactly the same character as, that which in the case of Pollock v. Farmer’s Loan and Trust Company (157 U.S., 429) was held by the Supreme Court to be a direct tax, and therefore not within the power of the Federal Government to Impose unless apportioned among the several States according to population. [Emphasis added] This new proposal, which I did not discuss in my inaugural address or in my message at the opening of the present session, makes it appropriate for me to submit to the Congress certain additional recommendations.
Again, it is clear that by the enactment of the proposed law the Congress will not be bringing money into the Treasury to meet the present deficiency. The decision of the Supreme Court in the income-tax cases deprived the National Government of a power which, by reason of previous decisions of the court, it was generally supposed that government had. It is undoubtedly a power the National Government ought to have. It might be indispensable to the Nation’s life in great crises. Although I have not considered a constitutional amendment as necessary to the exercise of certain phases of this power, a mature consideration has satisfied me that an amendment is the only proper course for its establishment to its full extent.
I therefore recommend to the Congress that both Houses, by a two-thirds vote, shall propose an amendment to the Constitution conferring the power to levy an income tax upon the National Government without apportionment among the States in proportion to population.
This course is much to be preferred to the one proposed of reenacting a law once judicially declared to be unconstitutional. For the Congress to assume that the court will reverse itself, and to enact legislation on such an assumption, will not strengthen popular confidence in the stability of judicial construction of the Constitution. It is much wiser policy to accept the decision and remedy the defect by amendment in due and regular course.
Again, it is clear that by the enactment of the proposed law the Congress will not be bringing money into the Treasury to meet the present deficiency, but by putting on the statute book a law already there and never repealed will simply be suggesting to the executive officers of the Government their possible duty to invoke litigation.
If the court should maintain its former view, no tax would be collected at all. If it should ultimately reverse itself, still no taxes would have been collected until after protracted delay.
It is said the difficulty and delay in securing the approval of three-fourths of the States will destroy all chance of adopting the amendment. Of course, no one can speak with certainty upon this point, but I have become convinced that a great majority of the people of this country are in favor of investing the National Government with power to levy an income tax, and that they will secure the adoption of the amendment in the States, if proposed to them.
Second, the decision in the Pollock case left power in the National Government to levy an excise tax, which accomplishes the same purpose as a corporation income tax and is free from certain objections urged to the proposed income tax measure.
I therefore recommend an amendment to the tariff bill Imposing upon all corporations and joint stock companies for profit, except national banks (otherwise taxed), savings banks, and building and loan associations, an excise tax measured by 2 per cent on the net income of such corporations. This is an excise tax upon the privilege of doing business as an artificial entity and of freedom from a general partnership liability enjoyed by those who own the stock. [Emphasis added] I am informed that a 2 per cent tax of this character would bring into the Treasury of the United States not less than $25,000,000.
The decision of the Supreme Court in the case of Spreckels Sugar Refining Company against McClain (192 U.S., 397), seems clearly to establish the principle that such a tax as this is an excise tax upon privilege and not a direct tax on property, and is within the federal power without apportionment according to population. The tax on net income is preferable to one proportionate to a percentage of the gross receipts, because it is a tax upon success and not failure. It imposes a burden at the source of the income at a time when the corporation is well able to pay and when collection is easy.
Another merit of this tax is the federal supervision, which must be exercised in order to make the law effective over the annual accounts and business transactions of all corporations. While the faculty of assuming a corporate form has been of the utmost utility in the business world, it is also true that substantially all of the abuses and all of the evils which have aroused the public to the necessity of reform were made possible by the use of this very faculty. If now, by a perfectly legitimate and effective system of taxation, we are incidentally able to possess the Government and the stockholders and the public of the knowledge of the real business transactions and the gains and profits of every corporation in the country, we have made a long step toward that supervisory control of corporations which may prevent a further abuse of power.
I recommend, then, first, the adoption of a joint resolution by two-thirds of both Houses, proposing to the States an amendment to the Constitution granting to the Federal Government the right to levy and collect an income tax without apportionment among the several States according to population; and, second, the enactment, as part of the pending revenue measure, either as a substitute for, or in addition to, the inheritance tax, of an excise tax upon all corporations, measured by 2 percent of their net income.
Wm. H. Taft
After the above proposal by then President Taft, debates on the Amendment ensued in the Senate. Below is the text of those debates from the Congressional Record:
Sixteenth Amendment Congressional Debates, Exhibit #02.007
https://sedm.org/Exhibits/EX02.007.pdf
The Proposed Amendment was a tax on THE GOVERNMENT, not Private Humans
Some people have asserted that it is deceptive to claim that the phrase above “shall propose an amendment to the Constitution conferring the power to levy an income tax upon the National Government” implies it is a tax upon the government. In retort, the following proves we are not only correct, but that the only real DECEPTIVE one was Taft Himself:
1. Taft could have said “shall propose an amendment to the Constitution conferring upon the national government the power to levy an income tax” but DID NOT state it more correctly this way.
2. The legislative implementation of what he proposed he described as an excise and a privilege tax ONLY upon corporations, which even after the Sixteenth Amendment was ratified, is EXACTLY and ONLY what the Sixteenth Amendment currently authorizes. These corporations are NATIONAL corporations, not STATE corporations, by the way.
“Income” has been taken to mean the same thing as used in the Corporation Excise Tax Act of 1909, in the Sixteenth Amendment, and in the various revenue acts subsequently passed. Southern Pacific Co. v. Lowe, 247 U.S. 330, 335; Merchants’ L. & T. Co. v. Smietanka, 255 U.S. 509, 219. After full consideration, this Court declared that income may be defined as gain derived from capital, from labor, or from both combined, including profit gained through sale or conversion of capital. Stratton’s Independence v. Howbert, 231 U.S. 399, 415; Doyle v. Mitchell Brothers Co., 247 U.S. 179, 185; Eisner v. Macomber, 252 U.S. 189, 207. And that definition has been adhered to and applied repeatedly. See, e.g., Merchants’ L. & T. Co. v. Smietanka, supra; 518; Goodrich v. Edwards, 255 U.S. 527, 535; United States v. Phellis, 257 U.S. 156, 169; Miles v. Safe Deposit Co., 259 U.S. 247, 252-253; United States v. Supplee-Biddle Co., 265 U.S. 189, 194; Irwin v. Gavit, 268 U.S. 161, 167; Edwards v. Cuba Railroad, 268 U.S. 628, 633. In determining what constitutes income, substance rather than form is to be given controlling weight. Eisner v. Macomber, supra, 206. [271 U.S. 175]”
[Bowers v. Kerbaugh-Empire Co., 271 U.S. 170, 174, (1926)]
3. The U.S. Supreme Court in Downes v. Bidwell agreed that the income tax extends wherever the GOVERNMENT extends, rather than where the GEOGRAPHY extends. Notice it says “without limitation as to place” and “places over which the GOVERNMENT extends”.
“Loughborough v. Blake, 18 U.S. 317, 5 Wheat. 317, 5 L.Ed. 98, was an action of trespass (or, as appears by the original record, replevin) brought in the Circuit Court for the District of Columbia to try the right of Congress to impose a direct tax for general purposes on that District. 3 Stat. 216, c. 60, Fed. 17, 1815. It was insisted that Congress could act in a double capacity: in [****32] one as legislating [*260] for the States; in the other as a local legislature for the District of Columbia. In the latter character, it was admitted that the power of levying direct taxes might be exercised, but for District purposes only, as a state legislature might tax for state purposes; but that it could not legislate for the District under Art. I, sec. 8, giving to Congress the power “to lay and collect taxes, imposts and excises,” which “shall be uniform throughout the United States,” inasmuch as the District was no part of the United States. It was held that the grant of this power was a general one without limitation as to place, and consequently extended to all places over which the government extends; and that it extended to the District of Columbia as a constituent part of the United States. The fact that Art. I, sec. 20 , declares that “representatives and direct taxes shall be apportioned among the several States . . . according to their respective numbers,” furnished a standard by which taxes were apportioned; but not to exempt any part of the country from their operation. “The words used do not mean, that direct taxes shall be imposed on States only which are [****33] represented, or shall be apportioned to representatives; but that direct taxation, in its application to States, shall be apportioned to numbers.” That Art. I, sec. 9, P4, declaring that direct taxes shall be laid in proportion to the census, was applicable to the District of Columbia, “and will enable Congress to apportion on it its just and equal share of the burden, with the same accuracy as on the respective States. If the tax be laid in this proportion, it is within the very words of the restriction. It is a tax in proportion to the census or enumeration referred to.” It was further held that the words of the ninth section did not “in terms require that the system of direct taxation, when resorted to, shall be extended to the territories, as the words of the second section require that it shall be extended to all the [**777] States. They therefore may, without violence, be understood to give a rule when the territories shall be taxed without imposing the necessity of taxing them.”
[Downes v. Bidwell, 182 U.S. 244 (1901)]
4. The fact that when former President and then Chief Justice Taft heard the FIRST case in the Supreme court after ratification, he stated that the liability for an income tax had NOTHING TO DO with one’s nationality or domicile! Cook, American national abroad in Mexico and domiciled there was outside the statutory geographical “United States”. Recall that the U.S. Supreme Court in Lawrence v. State Tax Commission, 286 U.S. 276 (1932) held that domicile was the SOLE basis for income tax so Cook technically could NOT owe an income tax. But his litigation related to a 1040 return he previously filed in which he INCORRECTLY declared his status as that of a “U.S individual”. Thus, he made an ELECTION (consent) to be treated as a statutory “U.S. person” and thus ELECTED himself into a voluntary “taxpayer” office to procure protection of the national government while abroad. Notice he calls “protection” a BENEFIT, and thus a VOLUNTARY EXCISE TAXABLE FRANCHISE! Notice he says the SOLE BASIS in this case was the STATUTORY STATUS under the Internal Revenue Code of “citizen”, and not “domicile”. That civil statutory status and NOT Constitutional or Fourteenth Amendment status, we prove in How American Nationals Volunteer to Pay Income Tax, Form #08.024, is an OFFICE within the Department of Treasury who works for the Secretary of the Treasury.
“The contention was rejected that a citizen’s property without the limits of the United States derives no benefit from the United States. The contention, it was said, came from the confusion of thought in “mistaking the scope and extent of the sovereign power of the United States as a nation and its relations to its citizens and their relations to it.” And that power in its scope and extent, it was decided, is based on the presumption that government by its very nature benefits the citizen and his property wherever found, and that opposition to it holds on to citizenship while it “belittles and destroys its advantages and blessings by denying the possession by government of an essential power required to make citizenship completely beneficial.” In other words, the principle was declared that the government, by its very nature, benefits the citizen and his property wherever found and, therefore, has the power to make the benefit complete. Or to express it another way, the basis of the power to tax was not and cannot be made dependent upon the situs of the property in all cases, it being in or out of the United States, and was not and cannot be made dependent upon the domicile of the citizen, that being in or out of the United States, but upon his relation as citizen to the United States and the relation of the latter to him as citizen. The consequence of the relations is that the native citizen who is taxed may have domicile, and the property from which his income is derived may have situs, in a foreign country and the tax be legal — the government having power to impose the tax.”
5. The definition of “person” in 26 U.S.C. §6671(b) and 26 U.S.C. §7343 for the purposes of penalty and criminal enforcement purposes limits itself to government employees and instrumentalities of the government. The rules of statutory construction and interpretation forbid adding anything to these definitions not expressly provided, such as PRIVATE constitutionally protected men and women. Thus, anyone who doesn’t fall within the ambit of these definitions is, by definition, a VOLUNTEER because not a proper target of enforcement.
TITLE 26 > Subtitle F>CHAPTER 68>Subchapter B>PART I>Sec. 6671
Sec. 6671. – Rules for application of assessable penalties
(b)Person defined
The term “person”, as used in this subchapter, includes an officer or employee of a corporation, or a member or employee of a partnership, who as such officer, employee, or member is under a duty to perform the act in respect of which the violation occurs.TITLE 26>Subtitle F>CHAPTER 75>Subchapter D> Sec. 7343.
Sec. 7343. – Definition of term ”person”
The term ”person” as used in this chapter [Chapter 75] includes an officer or employee of a corporation, or a member or employee of a partnership, who as such officer, employee, or member is under a duty to perform the act in respect of which the violation occurs
6. The following memorandum of law proves that the only proper target of IRS enforcement are public officers WITHIN the government.
Why Your Government is Either a Thief or You are a “Public Officer” for Income Tax Purposes, Form #05.008
https://sedm.org/Forms/05-MemLaw/WhyThiefOrPubOfficer.pdf
7. The fact that “United States” is geographically defined in 26 U.S.C. §7701(a)(9) and (a)(10) as the District of Columbia and the CONSTITUTIONAL states of the Union are never mentioned. That place is synonymous with the GOVERNMENT in 4 U.S.C. §72 and not any geography.
8. The fact that the ACTIVITY that is subject to excise taxation within the Internal Revenue Code is legally defined in 26 U.S.C. §7701(a)(26) as “the functions of a public office”, meaning an office WITHIN the national and not state government. For exhaustive details on this subject, see:
The “Trade or Business” Scam, Form #05.001
https://sedm.org/Forms/05-MemLaw/TradeOrBusScam.pdf
9. The fact that the Federal Register Act and the Administrative Procedures Act both limit the TARGET of direct STATUTORY enforcement to the following groups, none of which include most people in states of the Union and which primarily consist of government employees only:
9.1. A military or foreign affairs function of the United States. 5 U.S.C. §553(a)(1) .
9.2. A matter relating to agency management or personnel or to public property, loans, grants, benefits, or contracts. 5 U.S.C. §553(a)(2).
9.3 Federal agencies or persons in their capacity as officers, agents, or employees thereof. 44 U.S.C. §1505(a)(1).You can find more on the above in:
Challenge to Income Tax Enforcement Authority Within Constitutional States of the Union, Form #05.052
https://sedm.org/Forms/05-Memlaw/ChallengeToIRSEnforcementAuth.pdf
10. The fact that they can only tax legislatively created offices who work for them. See:
Hierarchy of Sovereignty: The Power to Create is the Power to Tax, Family Guardian Fellowship
https://famguardian.org/Subjects/Taxes/Remedies/PowerToCreate.htm
11. The idea that governments are created to PROTECT private property, not steal it, and that taxation involves the institutionalized process of converting PRIVATE property to PUBLIC property without the express consent of the owner. Thus, the process of PAYING for government protection involves the OPPOSITE purpose for which governments are created—converting PRIVATE property to PUBLIC property, often without the consent of the owner, for the purposes of delivering the OPPOSITE, which is PREVENTING PRIVATE property from being converted to PUBLIC property! The Declaration of Independence declares that all just powers derive from the consent of the governed, and yet we make an EXCEPTION to that requirement when it comes to taxation? Absurd. So they HAVE to procure your consent to occupy a civil statutory office BEFORE they can enforce against you or else they are violating the Thirteenth Amendment and engaging in criminal human trafficking. For a description of just how absurd it is to NOT require consent to this office and to convert (STEAL) private property without the consent of the owner, see:
Separation Between Public and Private Course, Form #12.025
https://sedm.org/LibertyU/SeparatingPublicPrivate.pdf
12. A query of the ChatGPT-4 AI Chatbot confirms our analysis is correct:
So what the President proposed was an excise tax on the government itself, and nothing more. This is important. More on the history of the Sixteenth Amendment at:
- Taxation Page, Section 13: 16th Amendment, Family Guardian Fellowship
https://famguardian.org/Subjects/Taxes/taxes.htm - Great IRS Hoax, Form #11.302, Sections 3.8.11 and 3.8.12
https://famguardian.org/Publications/GreatIRSHoax/GreatIRSHoax.htm - Great IRS Hoax, Form #11.302, Section 6.7.1: 1925: William H. Taft’s Certiori Act of 1925. President Taft’s SCAM to make the income tax INTERNATIONAL in scope by DENYING all appeals relating to it so the Supreme Court wouldn’t have to rule on the illegal enforcement of the income tax.
https://famguardian.org/Publications/GreatIRSHoax/GreatIRSHoax.htm - The Law that Never Was, William Benson. Book about the FRAUDULENT ratification of the Sixteenth Amendment.
- Congressional Debates on the Sixteenth Amendment, Family Guardian Fellowship
http://famguardian.org/TaxFreedom/History/Congress/1909-16thAmendCongrRecord.pdf
The Ratified Version of the Amendment
Below is the text of the Sixteenth Amendment ultimately approved:
U.S. Constitution
Sixteenth AmendmentThe Congress shall have 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.
[SOURCE: https://law.justia.com/constitution/us/amendment-16/]
The word “income” in the above means PROFIT, not ALL earnings or even “gross receipts”, and the Supreme Court has held that Congress can’t even DEFINE the word “income” in a constitutional sense:
“In order, therefore, that the [apportionment] clauses cited from article I [§2, cl. 3 and §9, cl. 4] of the Constitution may have proper force and effect …[I]t becomes essential to distinguish between what is an what is not ‘income,’…according to truth and substance, without regard to form. 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 those limitations alone that power can be lawfully exercised… [pg. 207]…After examining dictionaries in common use we find little to add to the succinct definition adopted in two cases arising under the Corporation Tax Act of 1909, Stratton’s Independence v. Howbert, 231 U.S. 399, 415, 34 S.Sup.Ct. 136, 140 [58 L.Ed. 285] and Doyle v. Mitchell Bros. Co., 247 U.S. 179, 185, 38 S.Sup.Ct. 467, 469, 62 L.Ed. 1054…”
[Eisner v. Macomber, 252 U.S. 189, 207, 40 S.Ct. 189, 9 A.L.R. 1570 (1920);
SOURCE: https://scholar.google.com/scholar_case?case=6666969430777270424 ]
The above amendment was worded deceptively. Allow us to explain. There are only two types of taxes in the constitution:
- Direct: A tax on PROPERTY that must be apportioned to each state on a capitation basis, meaning the same amount must be charged to each individual human.
- Indirect: A tax on PROFIT DERIVED from PUBLIC property, such as licenses and franchises. Also called an “excise” tax in Article 1, Section 8, Clause 1 of the Constitution.
The proposed Sixteenth Amendment was worded deceptively because:
- Apportionment only pertains to DIRECT taxes on PRIVATE property.
- Since the enactment of the Sixteenth Amendment in 1913, U.S. Supreme Court:
2.1. Has interpreted the Sixteenth Amendment as an INDIRECT tax.
2.2. Has held that the Sixteenth Amendment “conferred no new taxing powers”. Why then was it even enacted? Stanton v. Baltic Mining, 240 U.S. 103 (1916). - Therefore, the phrase “without apportionment” was superfluous.
- Because of this superfluous phrase “without apportionment” some lower courts have abused this phrase as an excuse to say the Sixteenth Amendment authorized a “direct unapportioned tax on property”. Thus, they are using it as an excuse to STEAL rather than merely PROTECT PRIVATE property in violation of the Fifth Amendment.
Based on how the courts have interpreted the amendment, the proper wording of the amendment should have been:
U.S. Constitution
Sixteenth AmendmentThe Congress shall have power to lay and collect indirect excise taxes on incomes, meaning profit, from licenses or privileges that are PUBLIC property used in connection with activities and without regard to any census or enumeration.
The above corrected version of the Sixteenth Amendment is how it has been currently implemented. The SSN, TIN, and EIN is the LICENSE that is actually being taxed. There is a LONG history of taxing such licenses as an indirect excise tax. The case of License Tax Cases, 72 U.S. 462, 18 L.Ed. 497, 5 Wall. 462, 2 A.F.T.R. 2224 (1866) is an example of such a license tax instituted to fund of the civil war. The fact that they don’t call an SSN, TIN, ATIN, or EIN a “license” doesn’t mean it isn’t one. If it acts like a duck, swims like a duck, and quacks like a duck, its a duck.
The Sixteenth Amendment constrains what Congress can tax WITHOUT your consent. The income tax we have now for the most part currently DOES NOT implement the Sixteenth Amendment. Anything that involves YOUR CONSENT can BYPASS the constraint of the Sixteenth Amendment that the tax must be upon PROFIT.
“Volunti non fit injuria.
He who consents cannot receive an injury. 2 Bouv. Inst. n. 2279, 2327; 4 T. R. 657; Shelf. on mar. & Div. 449.”[Bouvier’s Maxims of Law, 1856; SOURCE: https://famguardian.org/Publications/BouvierMaximsOfLaw/BouviersMaxims.htm]
Why Sixteenth Amendment Indirect Excise Taxes are Voluntary
As a human being, you must VOLUNTEER/CONSENT to the income tax as documented in:
How American Nationals Volunteer to Pay Income Tax, Form #08.024
https://sedm.org/Forms/08-PolicyDocs/HowYouVolForIncomeTax.pdf
Once you volunteer to be a public officer called a “person”, “taxpayer”, “citizen”, and “resident” there are NO LIMITS on what Congress can tax.
“The state’s power to tax is unlimited except as restricted by constitutional provisions. Radiofone, Inc. v. City of New Orleans, 93-0962, p. 2 (La. 1/14/94), 630 So.2d. 694, 696. In contrast, local governmental subdivisions have only the power to tax that has been granted to them by the state constitution or the statutes.
[Ocean Energy, Inc. v. Plaquemines Parish Got, 880 So.2d. 1 (2004)]
“In Foster & Creighton Co. v. Graham, 154 Tenn. 412, 429, 285 S.W. 570, 575, 47 A.L.R. 971, it was held that: ‘The Legislature has unlimited and unrestricted power to tax privileges, and this power may be exercised in any manner or mode in its discretion.’”
[Knoxtenn Theatres, inc. v. Dance, 186 Tenn. 114 (1948)]
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But the radical vice of this argument is, that the taxing power of the States, as it would exist, independent of the constitution, is in no respect limited or controlled [***74] by that supreme law, except in the single case of imposts and tonnage duties, which the States cannot lay, unless for the purpose of executing their inspection laws. But their power of taxation is absolutely unlimited in every other respect. Their power to tax the property of this corporation cannot be denied, without at the same time denying their right to tax any property of the United States. The property of the bank cannot be more highly privileged than that of the government. But they are not forbidden from taxing the property of the government, and therefore cannot be constructively prohibited from taxing that of the bank. Being prohibited from taxing exports and imports, and tonnage, and left free from any other prohibition, in this respect; they may tax every thing else but exports, imports, and tonnage. The authority of “the Federalist” is express, that the taxing power of Congress does not exclude that of the States over any other objects except these. If, then, the exercise of the taxing power of Congress does not exclude that of the States, why should the exercise of any other power by Congress, exclude the power of taxation by the States? If an express power will [***75] not exclude it, shall an implied power have that effect? If a power of the same kind will not exclude it, shall a power of a different kind? The unlimited power of taxation results from State sovereignty.
[. . .]
But it is said that a right to tax, in this case, implies a right to destroy; that it is impossible to draw the line of discrimination between a tax fairly laid for the purposes of revenue, and one imposed for the purpose of prohibition. We answer, that the same objection would equally apply to the right of Congress to tax the State banks; since the same difficulty of discriminating occurs in the exercise of that right. The whole of this subject of taxation is full of difficulties, which the Convention found it impossible to solve, in a manner entirely satisfactory. The first attempt was to divide the subjects of taxation between the State and the national government. This being found impracticable, or inconvenient, the State governments surrendered altogether their right to tax imports and exports, and tonnage; giving the authority to tax all other subjects to Congress, but reserving to the States a concurrent right to tax the same subjects to an unlimited extent. This was one of the anomalies of the government, the evils of which must be endured, or mitigated by discretion and mutual forbearance. The debates in the State conventions show that the [***84] power of State taxation was understood to be absolutely unlimited, except as to imposts and tonnage duties. The States would not have adopted the constitution upon any other understanding. As to the judicial proceedings, and the custom house papers of the United States, they are not property, by their very nature; they are not the subjects of taxation; they are the proper instruments of national sovereignty, essential to the exercise of its powers, and in legal contemplation altogether extra-territorial as to State authority.
[Mcculloch v. Maryland, 17 U.S. 316 (1819)]
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Congress has the exclusive power to regulate commerce. The power to regulate implies the power to preserve. An unlimited power to tax is a power to destroy. A State cannot have the power to impair or destroy that which Congress has the power to preserve and regulate: therefore, a State cannot tax the instruments whereby Congress exercises its constitutional powers. 4 Wheat. 428, 432.
[. . . .]
“The taxing power of a State is one of its attributes of sovereignty. And where there has been no compact with the Federal government, or cession of jurisdiction for the purposes specified in the Constitution, this power reaches all the property and business within the State, which are not properly denominated the means of the general government; and, as laid down by this court, it may be exercised at the discretion of the State. The only restraint is found in the responsibility of the members of the legislature to their constituents.”
[Nathan v. Louisiana, 49 U.S. 73 (1850)]
[EDITORIAL: Taxation power can destroy so states can’t tax the federal government. However, states can literally DESTROY their own citizens and residents with NO LIMITS, according to the above!]
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“That a State may tax callings and occupations as well as persons and property has long been recognized. “The power of taxation, however vast in its character and searching in its extent, is necessarily limited to subjects within the jurisdiction of the State. These subjects are persons, property, and business. . . . It [taxation] may touch business in the almost infinite forms in which it is conducted, in professions, in commerce, in manufactures, and in transportation. Unless restrained by provisions of the Federal Constitution, the power of the State as to the mode, form, and extent of taxation is unlimited, where the subjects to which it applies are within her jurisdiction.” State Tax on Foreign-Held Bonds, 15 Wall. 300, 319. See also Welton v. Missouri, 91 U.S. 275, 278; Armour & Co. v. Virginia, 246 U.S. 1, 6; American Mfg. Co. v. St. Louis, 250 U.S. 459, 463.
[Shaffer v. Carter, 252 U.S. 37 (1920)]
A discussion of the above can be found at:
Your Irresponsible, Lawless, and Anarchist Beast Government, Form #05.054, Section 11
https://sedm.org/Forms/05-MemLaw/YourIrresponsibleLawlessGov.pdf
Even the Sixteenth Amendment limit that the tax must be on PROFIT goes out the window beyond the point of consent, as documented in:
The Truth About “Effectively Connecting”, Form #05.056, Section 9
https://sedm.org/Forms/05-MemLaw/EffectivelyConnected.pdf
All forms of consent reduce to pursuing membership in some form of either you or your property in the collectivist group. Civil statuses and tax statuses merely IMPLEMENT and ENFORCE the RIGHTS surrendered in exchange for that VOLUNTARY membership and the OBLIGATES that CAUSE those loss of rights.. Membership, in turn, produces a WAIVER of your rights:
When one becomes a member of society, he necessarily parts with some rights or privileges which, as an individual not affected by his relations [consensual PRIVITIES] to others, he might retain. “A body politic,” as aptly defined in the preamble of the Constitution of Massachusetts, “is a social compact by which the whole people covenants with each citizen, and each citizen with the whole people, that all shall be governed by certain laws for the common good.” This does not confer power upon the whole people to control rights which are purely and exclusively private, Thorpe v. R. & B. Railroad Co., 27 Vt. 143; but it does authorize the establishment of laws requiring each citizen [voluntary “social compact” club member but not NON-member/non-resident] to so conduct himself, and so use his own property, as not unnecessarily to injure another. This is the very essence of government, and 125*125 has found expression in the maxim sic utere tuo ut alienum non lædas. From this source come the police powers, which, as was said by Mr. Chief Justice Taney in the License Cases, 5 How. 583, “are nothing more or less than the powers of government inherent in every sovereignty, . . . that is to say, . . . the power to govern men and things.”
[Munn v. Illinois, 94 U.S. 113 (1877); SOURCE: https://scholar.google.com/scholar_case?case=6419197193322400931]
What is currently taxed in the case of human beings who are VOLUNTARY MEMBERS called “U.S. persons” is GROSS RECEIPTS minus whatever privileged deductions Congress decides to grant the peons volunteering to service the national debt. PROFIT has NOTHING to do with it in the case of human beings, but businesses are much closer than human beings to paying tax only on profit. The income tax was originally engineered to apply to privileged corporations, but corporate lobbyists have shifted that burden to human beings with sophistry in the tax code, the “trade or business” scam, and the “effectively connected” scam.
Alleged Fraudulent Ratification of the Sixteenth Amendment
An entire book was written about the fraudulent ratification of the Sixteenth Amendment written by a former Illinois revenue collector, no less:
The Law That Never Was, William Benson, Constitutional Research Association
https://archive.org/details/lawthatneverwas0001bill
https://thelawthatneverwas.com/
For a commentary on the above book, see:
Wikipedia: The Law that Never Was
https://en.wikipedia.org/wiki/The_Law_that_Never_Was#Benson’s_non-ratification_argument_ruled_fraudulent
Later, that Amendment went out to the states for ratification, culminating in ratification on February 3, 1913. See:
Sixteenth Amendment Annotated, Justia
https://law.justia.com/constitution/us/amendment-16/
The Sixteenth Amendment authorized an indirect excise tax throughout the 50 states. Ultimately however, this was all political grandstanding because the U.S. Supreme Court declared that the Amendment conferred “no new taxing powers”.
But aside from the obvious error of the proposition intrinsically considered, it manifestly disregards the fact that by the previous ruling it was settled that the provisions of the Sixteenth Amendment conferred no new power of taxation but simply prohibited the previous complete and plenary power of income taxation possessed by Congress from the beginning from being taken out of the category of indirect taxation to which it inherently belonged and being placed 113*113 in the category of direct taxation subject to apportionment by a consideration of the sources from which the income was derived, that is by testing the tax not by what it was — a tax on income, but by a mistaken theory deduced from the origin or source of the income taxed.
[Stanton v. Baltic Mining, 240 U.S. 103 (1916);
SOURCE: https://scholar.google.com/scholar_case?case=726253341774342162]
In addition, the U.S. Supreme Court ruled that the Sixteenth Amendment merely EXPANDED the types of property that require apportionment, rather than authorizing a DIRECT tax on PRIVATE property. To say “without apportionment” therefore implied taxes on GAINS from ANY kind of property but not a tax on the PRIVATE property or its mere ownership.
Even when the Direct Tax Clause was written it was unclear what else, other than a capitation (also known as a “head tax” or a “poll tax”), might be a direct tax. See Springer v. United States, 102 U.S. 586, 596-598, 26 L.Ed. 253 (1881). Soon after the framing, Congress passed a tax on ownership of carriages, over James Madison’s objection that it was an unapportioned direct tax. Id., at 597. This Court upheld the tax, in part reasoning that apportioning such a tax would make little sense, because it would have required taxing carriage owners at dramatically different rates depending on how many carriages were in their home State. See Hylton v. United States, 3 Dall. 171, 174, 1 L.Ed. 556 (1796) (opinion of Chase, J.). The Court was unanimous, and those Justices who wrote opinions either directly asserted or strongly suggested that only two forms of taxation were direct: capitations and land taxes. See id., at 175; id., at 177 (opinion of Paterson, J.); id., at 183 (opinion of Iredell, J.).
“That narrow view of what a direct tax [on PROPERTY] might be persisted for a century. In 1880, for example, we explained that “direct taxes, within the meaning of the Constitution, are only capitation taxes, as expressed in that instrument, and taxes on real estate.” Springer, supra, at 602. In 1895, we expanded our interpretation [of DIRECT taxes] to include taxes on personal property and income from personal property, in the course of striking down aspects of the federal income tax. Pollock v. Farmers’ Loan & Trust Co., 158 U.S. 601, 618, 15 S.Ct. 912, 39 L.Ed. 1108 (1895). That result was overturned by the Sixteenth Amendment, although we continued to consider taxes on personal property to be direct taxes. See Eisner v. Macomber, 252 U.S. 189, 218–219, 40 S.Ct. 189, 64 L.Ed. 521 (1920).”
[Nat’l Fed’n of Indep. Bus. v. Sebelius, 567 U.S. 519, 571 (2012);
SOURCE: https://scholar.google.com/scholar_case?case=12815172896965834886]
“The very essence of taxable income, as that concept is used in Section 22(a), is the accrual of some gain, profit or benefit to the taxpayer. This requirement of gain, of course, must be read in its statutory context. Not every benefit received by a taxpayer from his labor or investment necessarily renders him taxable. Nor is mere dominion over money or property decisive in all cases. In fact, no single conclusive criterion has yet been found to determine in all situations what is a sufficient gain to support the imposition of an income tax. No more can be said in general than that all relevant facts and circumstances must be considered. See Magill, Taxable Income (1945). ”
[Commissioner v. Wilcox, 327 U.S. 404, 407 (1946);
SOURCE: https://scholar.google.com/scholar_case?case=12091298825335103420]
“The legislative history merely shows that the words “from whatever source derived” of the Sixteenth Amendment were not affirmatively intended to authorize Congress to tax state bond interest or to have any other effect on which incomes were subject to federal taxation, and that the sole purpose of the Sixteenth Amendment was to remove the apportionment requirement for whichever incomes were otherwise taxable. 45 Cong. Rec. 2245-2246 (1910); id., at 2539; see also Brushaber v. Union Pacific R. Co., 240 U.S. 1, 17-18 (1916). ”
[South Carolina v. Baker, 485 U.S. 505, 523 n.13 (1988);
SOURCE: https://scholar.google.com/scholar_case?case=2348693652139851544]
Direct taxes are taxes on PRIVATE PROPERTY. For instance, a tax on the gross value of real estate. Indirect taxes are always voluntary and avoidable excise taxes on PUBLIC/GOVERNMENT property and privileges granted to and voluntarily exercised by you. If you don’t want to pay an indirect excise tax such as the income tax, simply avoid receipt or benefit of the the PUBLIC PROPERTY that is the subject of the excise tax. Because governments don’t want you lawfully avoiding indirect taxes, they make the activity subject to tax rather nebulous. In the case of the current income tax, that activity is called a “trade or business“. That activity is a LICENSED activity connected to what the Federal Trade Commission calls a “franchise mark”. The SSN, TIN, ATIN, ITIN, and EIN serve that purpose:
“. . .a commercial business arrangement [e.g. a STATUTORY “trade or business” under 26 U.S.C. §7701(a)(26)] is a “franchise” if it satisfies three definitional elements. Specifically, the franchisor must:
(1) promise to provide a trademark or other commercial symbol [e.g. the STATUTORY Social Security Number or Taxpayer Identification Number];
(2) promise to exercise significant control or provide significant assistance in the operation of the business [e.g. enforcement of the franchise “code” such as the Internal Revenue Code Subtitles A and C]; and
(3) require a minimum payment of at least $500 during the first six months of operations [e.g. tax refunds annually, deductions most Americans DO NOT need because of EXCLUSIONS in 26 U.S.C. §872 because not from GEOGRAPHICAL “U.S.”, stimulus checks, etc].”
[FTC Franchise Rule Compliance Guide, May 2008, p. 1;
SOURCE: http://business.ftc.gov/documents/bus70-franchise-rule-compliance-guide]
“A franchise entails the right to operate a business [“trade or business”] that is “identified or associated with the franchisor’s trademark [SSN/TIN], or to offer, sell, or distribute goods, services [“personal services”], or commodities that are identified or associated with the franchisor’s trademark [SSN/TIN].” The term “trademark” is intended to be read broadly to cover not only trademarks, but any service mark, trade name, or other advertising or commercial symbol. This is generally referred to as the “trademark” or “mark” [SSN/TIN “mark of the beast”] element.
The franchisor [the government] need not own the mark itself, but at the very least must have the right to license the use of the mark to others. Indeed, the right to use the franchisor’s mark in the operation of the business – either by selling goods or performing services [personal services] identified with the mark [SSN/TIN] or by using the mark[SSN/TIN], in whole or in part, in the business’ [“trade or business”] name – is an integral part of franchising. In fact, a supplier can avoid Rule coverage of a particular distribution arrangement by expressly prohibiting the distributor from using its mark.”
[FTC Franchise Rule Compliance Guide, May 2008;
SOURCE: http://business.ftc.gov/documents/bus70-franchise-rule-compliance-guide]
More on the above at:
About SSNs and TINs on Government Forms and Correspondence, Form #05.012
https://sedm.org/Forms/05-MemLaw/AboutSSNsAndTINs.pdf
The Federal Reserve
Following the ratification of the Sixteenth Amendment on February 3, 1913, during the Christmas Recess in 1913 when all Congressmen had gone home, only six senators remained and they did not constitute a lawful quorum. They proposed and illegally ratified the Federal Reserve Act, giving birth to the fiat currency scam that plagues us today.
The Sixteenth Amendment had to be ratified first and eight months before the Federal Reserve Act, because when you are going to implement a fiat currency system, you need a way to regulate the supply of currency in the system. The income tax is the essential element for doing that so it had to come first with the ratification of the Sixteenth Amendment. That was the conclusion of a commission assembled by Ronald Reagan that published “The Grace Commission Report”.
An entire book has been written about the establishment of the Federal Reserve:
The Creature from Jekyl Island, G. Edward Griffin
https://archive.org/details/creaturefromjeky0000grif
Disestablishment of the Income Tax
In order to disestablish the income tax, the Federal Reserve system must therefore first be disestablished so that there is no more fiat currency supply to regulate. The current fiat currency system is described in:
The Money Scam, Form #05.041 (OFFSITE LINK)
https://sedm.org/Forms/05-MemLaw/MoneyScam.pdf