|If the Government Owns a Third of Your Labor, Are You Free?|
If the Government Owns a Third of Your Labor, Are You Free?
What is the Definition of 'Income' and Did You Earn Any?
To be liable for an "income" tax, you must first derive 'income', in its constitutional sense, as defined by the Supreme Court. The good news is that the type of "income tax" Congress chose to impose is an excise tax which can only be imposed on certain privileges. Your 'right' to labor is not an excise taxable privilege.
Bowers V. Kerbaugh-Empire Co., 271 U.S. 170, 174, (1926). "...Income' has been taken to mean the same thing as used in the Corporation Excise Tax Act of 1909 (36 Stat. 112) in the 16th Amendment, and in the various revenue acts subsequently passed."
The Law of Taxation. §108, pg 247, by Thomas M. Cooley LL.D., 1924:
"The 1909 federal law known as "The Corporation Tax Law," so far as it imposed a "special excise" tax of one per cent of the net income of business corporations, is a tax upon the doing of business in a corporate capacity, so as to be an indirect rather than a direct tax..."
Flint V. Stone Tracy Co.. 220 U.S. 107, at 151, 152 (1911). "The tax under consideration, as we have construed the statute [Corporate Excise Tax of 1909], may be described as an excise upon the particular privilege of doing business in a corporate capacity... the requirement to pay such taxes involves the exercise of privileges, and the element of absolute and unavoidable demand is lacking. If business is not done in the manner described in the statute, no tax is payable..."
Because the apportionment clauses of the Constitution have never been repealed, it is not within the power of the federal government to impose a graduated, nonapportioned income tax directly upon the private earnings of an American Citizen. See the following Supreme Court rulings. The income tax is therefore an excise tax on corporate privileges.
Pollock Farmers' Loan & Trust Co. 158 U.S. 601, 39 L. ed. 1108, 15 Sup. Ct. Rep. 912. Pg 621. Pg 628: The constitution ...forbids all unapportioned direct taxes. Pg 637. "Our conclusions may therefore be summed up as follows: ... The tax imposed by the [Income Tax] Act of [Aug. 27] 1894, so far as it falls on the income of real estate, and of personal property, being a direct tax, within the meaning of the constitution, and therefore unconstitutional and void, because not apportioned according to representation, all those sections, constitute one entire scheme of taxation, are necessarily invalid."
Stratton's Independence v. Howbert. 231 U.S. 399, 414, 58 L. Ed. 285, 34 Sup. Ct. 136 (1913) "This court had decided in the Pollock Case that the income tax law of 1894 amounted in effect to a direct tax upon property, and was invalid because not apportioned according to populations, as prescribed by the Constitution. The act of 1909 avoided this difficulty by imposing not an income tax, but an excise tax upon the conduct of business in a corporate capacity, measuring, however, the amount of tax by the income of the corporation... Flint v. Stone Tracy Co. 220 U.S. 107, 55 L. ed. 389, 31 Sup. Ct. Rep. 342, Ann. Cas.
"The conclusion reached in the Pollock case...recognized the fact that taxation on income was, in its nature, an excise ..." Brushaber v Union Pacific Railroad Co. 240 U.S. 1, 16-17.
Southern Pacific Co. v. Lowe. 247 U.S. 330, 335, 38 S. Ct. 540;
"We must reject in this case, as we have rejected in cases arising under the Corporation Excise Tax Act of 1909 (Doyle, Collector, v. Mitchell Brothers Co., 247 U.S. 179 , 38 Sup. Ct. 467, 62 L. Ed. -), the broad contention submitted on behalf of the government that all receipts-everything that comes in-are income within the proper definition of the term 'gross income,' and that the entire proceeds of a conversion of capital assets, in whatever form and under whatever circumstances accomplished, should be treated as gross income. Certainly the term 'income' has no broader meaning in the 1913 Act than in that of 1909 (see Stratton's Independence v. Howbert, 231 U.S. 399, 416 , 417 S., 34 Sup. Ct. 136), and for the present purpose we assume there is no difference in its meaning as used in the two acts."
US v. Whitridge. 231 U.S. 144, 34 S. Sup. Ct. 24 (1913). "As repeatedly pointed out
by this court, the Corporation Tax Law of 1909... imposed an excise or privilege tax, and not in any sense, a tax upon property or upon income merely as income. It was enacted in view of the decision of this court in Pollock v. Farmers' Loan & T. Co.. 157 U.S. 429,39 L. ed. 759,15 Sup. St. Rep. 673,158 U.S. 601, 39 L. ed. 1108,15 Sup. Ct. Rep. 912, which held the income tax provisions of a previous law to be unconstitutional because amounting in effect to a direct tax upon property within the meaning of the Constitution, and because not apportioned in the manner required by that instrument."
Doyle v. Mitchell Brothers Co.. 247 U.S. 179, 185, 38 S. Ct. 467; (1918) "...Whatever difficulty there may be about a precise and scientific definition of 'income,' it imports, as used here, something entirely distinct from principal 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."
Eisner v. Macomber. 252 U.S. 189, 207, 40 S. Ct. 189, 9 A. L. R. 1570. "...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 and 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 whose 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)..."
Merchants Loan and Trust Company, v. Smietanka. 255 U.S. 509, 519, 41 S. Ct. 386, 15 A. L. R. 1305. (1921). "...the word 'income' has the same meaning in the Income Tax Act of 1913 that it had in the Corporation Excise Tax Act of 1909'...The word (income) must be given the same meaning in all of the Income Tax Acts of Congress that was given to it in the Corporation Excise Tax Act, and what that meaning is has now become definitely settled by decisions of this Court...In determining the definition of the word 'income' thus arrived at, this Court has consistently refused to enter into the refinements of lexicographers or economists, and has approved, in the definitions quoted, what it believed to be the commonly understood meaning of the term which must have been in the minds of the people when they adopted the 16th Amendment to the Constitution. Doyle v. Mitchell Brothers Co. 247 U.S. 179, 185, 38 S. Sup. Ct. 467; Eisner v. Macomber. 252 U.S. 189, 206, 207
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