alpert@chovax.DEC (03/01/86)
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Note: Although I have highly condensed this material (hopefully without
butchering it too much), this article is approx. 375 lines long.
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Excerpted from the book "The Great Income Tax Hoax" by Irwin Schiff.
(C) 1985 by Irwin Schiff
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DIRECT VS. INDIRECT TAXES
In an 1819 decision Chief Justice John Marshall wrote, "The power
to tax involves the power to destroy." History agrees. From the
beginning of organized government, kings and ruling castes used
taxation as an instrument and a weapon. It was the very issue
of taxes that sparked the American Revolution, and today the tax
system in America is as violative of the rule of law and the
Constitution as the "judges" who administer it.
In ancient times, kings and emperors needed taxes for the support
of their courts and armies. Men-at-arms and the nobility produced
no wealth so they had to be supported by those who did. Historically,
governments have been run by non-producers and non-producers generally
gravitate to government service. But to the extent that government
performs its limited social function -- that of protecting society
from external enemies and maintaining internal peace and order by
eliminating social predators -- the cost of supporting government
workers can be born out of the increased productivity that a limited,
well-run government will generate.
The first 150 years of America bears excellent testimony to this
principle. Unfortunately, history demonstrates the accuracy of
Lord Acton's observation that "power corrupts and absolute power
corrupts absolutely." As government acquires more power it becomes
more arbitrary and corrupt. Taxes are increasingly raised for the
support of entrenched government, not for the benefit of society.
ONLY PEOPLE PAY TAXES
How should a government extract taxes? Citizens could be required
to pay a certain sum to the "royal" tax collector -- but how much?
Since some citizens can afford to pay more than others, governments
devised methods for taxing citizens according to their supposed
ability to pay, or in simpler terms, according to their wealth, which
became on of the earliest forms of taxation. However, while such
taxes *appear* to tax wealth, it is the citizen who is being taxed,
not his wealth. He is being taxed *according to his wealth*. It is
important to keep this distinction in mind. As you will see, the
government seeks to fool the public on this simple issue. For
example, property taxes are not really taxes on property, but taxes
on individuals based on the property that they own. All such taxes
fall within the Constitutional category of "direct taxes."
The Constitution recognizes two classes of taxes and imposes
different restrictions on the Federal government's right and ability
to impose either. It is important, therefore, that the taxpayer be
able to identify both classes in order to determine whether they
are being levied constitutionally.
The first category of taxes taken up by the Constitution were
"capitation and direct taxes." There is no question that an income
tax is clearly a capitation tax whereby the government seeks to
tax individuals directly according to their income. It is important
to remember, however, that in all capitation taxes it is not wealth,
but the *individual* that is being taxed -- and he is being taxed
according to some arbitrary yardstick the government believes
measures his ability to pay. An "income" tax is not a tax on "income",
it is a tax on the individual measured by his "income."
TAXING PEOPLE DIRECTLY
If a government decides to tax people directly according to their wealth,
there remains the problem of how to determine that wealth. Will citizens
be compelled to disclose the amount and nature of what they posess to
the tax collector so they can be properly taxed? Under the Constitution,
citizens cannot be compelled to provide information that can be used
against them and they are further presumed to have a right to privacy.
Yet all information on a tax return can be used against taxpayers -- and
can even be given to other Federal agencies as well as to state and
foreign governments to be used against them. Exactly how much privacy
does a citizen have after giving all the information required on a 1040?
Requiring Americans to file income tax returns violates the First and
Ninth Amendments which is why (though few people seem to know this)
*no such filing requirement is contained in the law*.
In 18th century England, the fact that tax collectors could enter
one's home to count the hearths was considered such an "odious visit"
that the tax was abolished as a "badge of slavery." If such a visit
was a "badge of slavery," how much more odious is a visit today from
the IRS to search a taxpayer's books, papers, and private records --
in clear violation of the Fourth Amendment -- and to make him prove
every expenditure?
In the final analysis, for any government to tax *directly*, it must
first find the individual in order to tax him/her -- regardless of
what yardstick is used. Governments, however, have discovered another
way to tax individuals, without having to catch them, or without even
knowing they exist, which leads us to the other category of taxes
provided for in the Constitution.
INDIRECT TAXES
Since individuals use a variety of products, governments have discovered
another, easier way to levy taxes -- by putting taxes on the products
they buy. The more a person buys, the more tax he pays. Such taxes are
not paid directly to the government, they are paid indirectly through
the merchants who sell the products. Indirect taxes are relatively
easy to levy and collect and are placed on products as they are produced
within a country or imported. The manufacturer or importer pays such
"exises" or "duties" and then adds the them to the price of the product,
thus passing the tax on to the consumer.
An important distinction between direct and indirect taxes is that
indirect taxes are avoidable. If the individual does not buy the
taxed products, he avoids paying the taxes imposed. Capitation (direct)
taxes, on the other hand, are not avoidable since they are levied
*directly* on the individual. Since direct taxes are not avoidable,
they are subject to far greater tyrannical abuse than indirect taxes --
which is why the Constitution makes them subject to special conditions
not applicable to indirect taxes.
The following passage from the "Wealth of Nations" will provide a clear
understanding of the meaning of indirect taxes as understood by those
who wrote our Constitution:
The impossiblility of taxing the people, in proportion to
their revenue, by any capitation, seems to have given occasion
to the invention of taxes upon consumable commodities. The
state not knowing how to tax, directly and proportionably, the
revenue of its subjects, endeavours to tax it indirectly by
taxing their expence, which, it is supposed, will in most cases
be nearly in proportion to their revenue. There expence is taxed
by taxing the consumable commodities upon which it is laid out.
Note that a clear distinction is made that taxing people "in proportion
to their revenue" is clearly a type of capitation tax as opposed to
taxes on "consumable commodities" which obviously fall in the category
of indirect (exise) taxes. This statement clearly proves that the
numerous claims by U.S. judges that "income" taxes are not capitation
taxes (falling, rather, within the category of exise taxes) have
been a cynical perversion of logic and law.
It is crucial that the American people rediscover the distinction between
direct and indirect taxes because the Constitution lays down different
provisions regarding how each is to be lawfully levied. The federal
government (with the help of a perfidious Federal judiciary) now
completely disregards these constitutional distinctions and is, therefore,
able to collect taxes in a blatantly illegal manner.
CONSTITUTIONAL RESTRICTIONS REGARDING DIRECT
AND INDIRECT TAXES
The Constitutional provision regarding how indirect taxes are to be levied
is found in Article 1, section 8, clause 1 of the Constitution and also
defines the Federal government's general taxing powers:
...Congress shall have the power to lay and collect taxes,
duties, imposts, and excises, to pay the debts and provide
for the common defense and general welfare of the United
States, but all duties, imposts, and exises shall be uniform
throughout the United States...
Note that in the first portion of this paragraph Congress is given the
power to lay a) taxes, b) duties, c) imposts, and d) excises but the
word "taxes" is later deliberately omitted from the requirement that
all such listed taxes be "uniform throughout the United States." Why?
The reason the word "taxes" was specificall omitted from the latter
phrase, is because the Constitution already provided (in Article 1,
Section 2) for a different method of leving "taxes" which, in colonial
times, generally meant *direct* taxes. So Article 1, Section 8 only
sought to establish a constitutional method for leving "duties,"
"imposts," and "exises," all of which are indirect taxes, since other
sections of the Constitution provided the legal basis by which direct
taxes were to be levied.
Though not dealing directly with taxation, the Bill of Rights further
protected citizens from the arbitrary use of taxing power. For
example, the Fourth Amendment guaranteed that the right of the people
to be "secure in their persons, houses, papers and effects ... shall
not be violated" and tat any searches and seizures must be supported
by "oath or affirmation" and be court ordered only "upon probable
cause." And the Fifth Amendment guaranteed that "...no person shall
be held to answer" for an infamous crime (punishable by imprisonment)
"unless on a presentment or indictment of a Grand Jury...nor shall
he be compelled in any criminal case to be a witness against himself,
nor be deprived of life, liberty, or property without due process of
law, nor shall private property be taken for public use without just
compensation." Today these constitutional guarantees are totally ignored
by the "courts" and the IRS. Individuals are put to trial for tax
"crimes" without indictments and without *any* probable cause being
established; are jailed for refusing to turn over "papers and effects"
to the IRS and for refusing (in tax matters) to be "witnesses against
themselves"; and are routinely deprived of property without "due process
of law."
APPORTIONMENT
The requirement of apportionment of direct taxes is the only provison
in the Constitution stated *twice*. It was written into the Constitution
only after extensive debate and probably represents the most important
compromise of the entire Constitutional Convention. No less than five
states recommended in their ratifying statements that these two provisions
should be removed and the Federal government's direct taxing power be
eliminated entirely. Yet today these two provisions are totally ignored
by the U.S. government -- as if the limitations imposed upon the government
by them did not exist at all! <Note: Schiff has an entire chapter devoted
to an analysis of the 16th Amendment and why it did not in fact remove the
requirement for apportionment. This is in addition to a large body of evidence
that the amendment was never properly ratified.>
THE FEDERAL GOVERNMENT'S GENERAL TAXING POWERS
Let us now examine the Federal government's overall, legitimate
taxing powers.
The people turned over general taxing power to the new government
so it could achieve certain specific national objectives spelled
out in Article 1, Section 8, Clause 1 of the Constitution which
limits the U.S. government's use of taxes to three specific areas.
The U.S. government can levy taxes:
1) to pay the debts of the United States
2) to provide for the common defense of the United States
3) to provide for the general welfare of the United States
Note that the first limitation of the government's taxing powers is
that it can only tax Americans to pay "the debts of the United States".
It obviously has no constitutional authority to tax Americans to
pay anyone else's debts, such as those of U.S. Corporations (i.e. Chrysler),
or of individuals (i.e., FHA mortgage or college loan guarantees), or
the debts of individual states, and certainly not those of foreign
countries (i.e., the interest on Polish Bonds owed to U.S. banks which
was paid by the U.S. Government). Government can only *lawfully* tax
to pay *the debts of the United States*.
The U.S. Constitution simply does not authorize the U.S. government
to tax Americans for anything and everything that vote-seeking
politicians and free-spending Washington lobbyists want them to pay
for. The debts of private citizens and corporations as well as the
debts of individual states and foreign governments are not the debts
of the United States, and the U.S. Constitution does not give the
U.S. Government any authority to tax working Americans to pay for
such things. All such payments are illegal and a blatant abuse
by the U.S. Government of its taxing powers.
The Constitution also does not allow the U.S. Government to tax working
Americans for funds to give to a World Bank or an Export-Import Bank
to use to finance private, commercial transactions and the grandiose
schemes of foreign governments. The U.S. Constitution provides no such
grant of power (either express or implied) so all Federal taxes levied
for such "banking" purposes obviously represent a clear-cut usurpation
of power by the Federal government and are totally illegal and Americans
need not submit to it according to Marbury vs. Madison 1 Cr. 137.
The Constitution next grants the Federal government the power to
tax Americans "to provide for the common defense of the United States."
Those, therefore, who refuse to pay income taxes because they object
to this or that war or because they believe that too much of the nation's
budget goes for armaments are on untenable ground. One might object
to such expenditures as wasteful or even stupid and ill-advised but,
at least, they are constitutional! Whether such expeditures are proper
is a political question that should be decided at the ballot box.
Americans, however, have no lawful basis for not paying income taxes
because they do not like political decisions. It is one thing to
not pay income taxes because the law itself does not require it or
because the levy is unconstitutional. It is another thing to not
pay income taxes because one simply disapproves of the nature or amount
of constitutional expenditures.
It is, however, a total perversion of the last provision ("General Welfare")
that has enabled the U.S. Government to escape every restraint placed on
it by the Constitution. The government -- and supporters of more government --
have completely misled the public concerning the meaning of the "general
welfare" clause of the Constitution. This has enabled the government to
invade all areas it wishes to, regardless of what the Constitution has
to say about it.
This provision should make clear, however, that the "welfare" intended
is the "general welfare" of the *nation as a whole* and not the "welfare"
of specific individuals, specific companies, or specific segments of
society no matter how deserving those individuals, companies, or segments
of society might be.
When the U.S. Government (through taxation) takes money away from some and
hands it over to others (disguised as "subsidies", "grants", "rent
supplements", etc.) such activities are not to "promote the general
welfare of the United States" but rather for the *specific* welfare
of some at the expense of others. Of course, such expenditures do
promote the welfare of many politicians (and the U.S. bureaucracy)
who gain public office by promising to provide benefits (literally
stealing the property of some to buy votes from others) under the
guise of promoting the "general welfare." Not only are such
payments not authorized by the Constitution, they also obviously
violate the equal protection clause of that document.
Sadly, our nation has arrived at a situation where (despite
Constitutional safeguards to the contrary) working Americans
are held in a form of fuedal bondage by the U.S. Government
for the benefit of an illegal, parasitic, Washington-based,
bureaucratic complex. (Note that a serf typically handed over
25% of his productivity to his masters -- the typical overall
tax take on an American citizen is 50-60%, mostly in Federal taxes.)
Where did the U.S. government get most of the power it now wields
if not from the Constitution? It usurped it. Apart from merely
ignoring the law and clear intent of the interstate commerce clause,
the U.S. Government "acquired" much of its illegal power by never
relinquishing "temporary" emergency powers acquired during times of
war.
For example, the U.S. government only issued gold and silver coin until
1862 (persuant to clauses in Sections 8 and 10 of Article 1 of the
Constitution) when, for the first time, the government issued a limited
amount of paper currency as a "temporary" war-time measure to finance
the Civil War. From that moment on, the nation got paper currency on a
permanent basis, even though the U.S. Constitution not only did not give
the government any power to issue it, but it was specifically designed
to eliminate such instruments from ever circulating. A provision allowing
the Federal government to issue note currency (paper money) was actually
included in the first two drafts of the Constitution, but it was stricken
by a vote of ten to two. Commenting on this aspect of the Constitution,
Robert Bancroft wrote:
So the adoption of the Constitution is to be the end
forever of paper money, whether issued by the several
States or by the United States, if the Constitution
shall be rightly interpreted and obeyed.
Obviously, the Constitution is neither being "rightly interpreted"
or "obeyed." And because of it, the U.S. government is able to
use fiat paper money to loot billions from the savings of an
unsuspecting American public. Our Founding Fathers had first-hand
experience with the financial tragedies that stem from the use
of such money. They had seen it become totally worthless. Fully
knowlegeable of the dangers of issuing paper currency, the framers
of the Constitution sought to forever ban its use in America. Despite
their precautions (and the monetary restrictions written into the
Constitution), however, the nation is flooded with "Federal Reserve
Notes." Franklin Roosevelt also illegally nationalized gold in 1934
by resurrecting an "emergency" power created in 1918 in connection
with World War 1.
Witholding taxes were first imposed in 1942 as a temporary, World War II
"Victory Tax." Subsequently it, too, became permanent and gave the U.S.
government far more peacetime influence than it ever had before.
This gradual but relentless usurpation of power by the U.S. government
(and with it the erosion of both state and individual rights) was
accomplished with the help of U.S. judges who were far more interested
in accomodating their employers (the U.S. government) than they were
in enforcing the Constitution, so they continually bent the Constitution
out of shape to help them do it. In the past, U.S. judges merely *bent*
the Constitution out of shape, today, however, (especially in tax matters)
they have made it a dead letter.
Since our Founding Fathers never intended to give the Federal government
more power than it needed to achieve its limited purpose, the American
people are not bound by "laws" that obviously exceed the Federal government's
"few and defined" legitimate powers. Regardless of what self-serving
Federal Judges say, Americans must now, en masse, heed the advice from
James Madison as expressed in Federal Paper #33:
If the Federal Government should overpass the just bounds
of its authority and make a tyrannical use of its powers,
the people whose creature it is, must appeal to the standard
they have formed, and take such measures to redress the injury
done to the Constitution as the exigency may suggest and prudence
justify...it will not follow from this doctrine that acts of
a larger society which are not pursuant to its constitutional
powers, but which are invasions of the residuary authorities
of the smaller societies will become the supreme law of the
land. There will be merely acts of usurpation and will deserve
to be treated as such.
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Bob Alpert
...decwrl!dec-rhea!dec-chovax!alpert
Standard Disclaimer: Opinions expressed in this article are my
own (and those of the original author).mrgofor@mmm.UUCP (MKR) (03/10/86)
Hey! Bob's back! I assumed that he had disappeared because he didn't respond to my requests for explanations regarding taxes and the 5th amendment. Maybe there's an apology in here... In article <1444@decwrl.DEC.COM> alpert@chovax.DEC writes: > >=================================================================== >Excerpted from the book "The Great Income Tax Hoax" by Irwin Schiff. >(C) 1985 by Irwin Schiff >=================================================================== > >ONLY PEOPLE PAY TAXES As opposed to what? Should we tax family pets? Automobiles? > >However, while such >taxes *appear* to tax wealth, it is the citizen who is being taxed, >not his wealth. He is being taxed *according to his wealth*. It is >important to keep this distinction in mind. As you will see, the >government seeks to fool the public on this simple issue. For >example, property taxes are not really taxes on property, but taxes >on individuals based on the property that they own. > >It is important >to remember, however, that in all capitation taxes it is not wealth, >but the *individual* that is being taxed -- and he is being taxed >according to some arbitrary yardstick the government believes >measures his ability to pay. An "income" tax is not a tax on "income", >it is a tax on the individual measured by his "income." > I don't understand the fine-line distinctions being made here - what's your point? How is "a tax on income" different than "a tax on the individual measured by his income"? Please explain, they seem the same to my simplistic brain. >TAXING PEOPLE DIRECTLY > >? Under the Constitution, >citizens cannot be compelled to provide information that can be used >against them and they are further presumed to have a right to privacy. Really? Hey, Bob, which amendment to the constitution does this fall under? > > > Bob Alpert > ...decwrl!dec-rhea!dec-chovax!alpert > Again I see a posting practically devoid of sense. Once again I ask: Hey, Bob, what do you propose? What better ways do you have to obtain the money needed to run the government? Come on, it's easy to point out all the faults with the present system, but LET'S HEAR SOME SUGGESTIONS FOR IMPROVEMENT. The government has to get its money somehow, and I have yet to hear any proposals from anybody (Bob Alpert included) regarding the right ways to do it. Long article, Bob. And no apology for your previous distasteful behavior. C'mon, 'fess up - you're a member of the Posse Comitatus, huh? Maybe in your next posting you'll have something to say. If not, could you at least try to keep it down to <100 lines? Question: how come Ken Arndt, Don Black and Bob Alpert all post from DEC sites? :-) -- --MKR If Man were meant to use the metric system, Jesus would have had 10 disciples.