Weekend Watching - America: Freedom to Fascism

I will neither encourage nor discourage the tax protesters. I don't think that's even the interesting part of the film. Although, where does our income taxes go? The real issue is the Federal Reserve system has turned the country into a fascist oligarchy. Smedley Butler recognized this after his tours of duty. The federal tax system is just an intended byproduct. Whether the tax section is well researched or not, I don't know. But, it seems like Russo used it to get people's attention. Most people barely understand their own daily finances, much less so high finances that make the world go 'round. But, everyone can relate to taxes. Bait them in with the taxes and switch it to why the Fed is inherently bad for the Republic.

What kind of income is under the Constitution not taxable by the Federal Government???

"under the Constitution,
not taxable by the Federal government" (26 CFR 39.22(b)-1 (1956)).

I started to write up a response to a letter I received, and
realized I might as well answer it here instead. As most of you
know, the older income tax regulations said, quite plainly, that
neither income exempted by the statutes of the tax code, NOR income
excluded because of "fundamental law," are to be included in the
computation of one's taxable income (e.g., 26 CFR 39.21-1 (1956)).

As many of us have learned first hand, if you ask an attorney or
CPA what that is talking about, you're unlikely to get much more
than a blank stare. (Occasionally one will at least make a guess,
usually involving municipal bonds or the income of state
governments, but those have always been exempted by STATUTE, so
that's not what those regulations were talking about.) Most of the
time, the supposed "experts" DON'T KNOW the regulations ever said
that, so they have no explanation for it, and don't take it into
account when determining what (if anything) people owe.

I like tormenting self-proclaimed "experts" with evidence which
reveals their ignorance, but now I'll give my answer to the
question (since someone just sent me a letter asking me to).

First of all, "fundamental law" means the Constitution. Though we
common folk don't usually hear the term, it's well known to refer
to the foundation upon which all legislative laws are based: the
Constitution. In fact, the older regulations, in addition to
mentioning "fundamental law," in another place explained that some
income is exempt from tax because it is, "under the Constitution,
not taxable by the Federal government" (26 CFR 39.22(b)-1 (1956)).

But WHAT income does the Constitution render non-taxable? It gives
rules about HOW "direct" and "indirect" taxes must be administered,
but as far as saying WHAT can be taxed, the only specific
prohibition has to do with state exports. The Supreme Court has
ruled (in Peck v. Lowe), however, that just because the income tax
might happen to be applied to income from state exports, that
doesn't make it an export tax per se. So state exports is NOT what
those regulations are talking about.

But if that's not it, what else could it be? There's nothing in the
Constitution which identifies anything else as being untaxable by
the federal government. Answering the question requires an
understanding of how the Constitution works.

The Constitution, except for the first ten amendments, is not a
list of what Congress CAN'T do. In fact, the anti-federalists were
right to complain about the proposed Bill of Rights (the first ten
amendments), because listing certain things the government CANNOT
do could be construed as meaning they CAN do anything not
specifically prohibited. (So the Ninth Amendment was included to
dispute such a notion.)

In short, the federal government is legally authorized to do
ABSOLUTELY NOTHING, except for carrying out the specific,
"enumerated powers" which the Constitution lists (mainly in Article
I, Section 8). So looking for the Constitution to spell out LIMITS
on the feds' power is looking at it backwards. The feds are to be
assume to have NO POWER AT ALL, unless the Constitution
specifically gives them that power.

Imagine you hired a plumber to fix your leaky sink, and then found
him eating stuff out of your refrigerator. If he said, "Well, you
didn't say I couldn't," would that be a good excuse? If he
complained that nothing in his contract specifically forbad him
from eating your food, would you accept that? Of course not. If you
hired him to do a SPECIFIC JOB, that doesn't give him the right to
do whatever he wants with your property.

The same is true of the federal government. It's a mistake to start
with the assumption that the feds are authorized to do anything
they please unless the Constitution forbids it. That's the exact
OPPOSITE of how it works. You should assume they have the power to
do NOTHING, unless the Constitution specifically AUTHORIZES it.

This principle affects the taxing power as well. The Supreme Court
has explained that there are "virtual limitations" upon the taxing
power, not from any specific prohibition in the Constitution, but
from the limits of what the Constitution says Congress IS allowed
to do. The way the Court put it, for Congress to “resort to the
taxing power to effectuate an end which is not legitimate, not
within the scope of the Constitution, is obviously inadmissible”
(United States v. Butler, 297 U.S. 1).

For example, Congress once tried to combat “child labor” in the
states (which is NOT a federal issue under the Constitution) by
trying to TAX it out of existence. The Supreme Court threw out the
tax, explaining it this way:

“Grant the validity of this law, and all that Congress would need
to do hereafter, in seeking to take over to its control any one of
the great number of subjects of public interest, jurisdiction of
which the states have never parted with, and which are reserved to
them by the 10th Amendment, would be to enact a detailed measure of
complete regulation of the subject and enforce it by a socalled tax
upon departures from it. To give such magic to the word ‘tax’ would
be to break down all constitutional limitation of the powers of
Congress and completely wipe out the sovereignty of the states”
(Child Labor Tax Cases, 259 U.S. 20).

In other words, Congress cannot circumvents the limits of the
Constitution just by passing a regulation in the form of a "tax,"
to control something NOT under their Constitution jurisdiction.

So how might that apply to limits upon an "income tax"? Well, the
Supreme Court has ruled that because Congress has the general
taxing power, AND specific power to "regulate commerce with foreign
nations," they can therefore "undoubtedly" apply an income tax to
income which American companies derive from INTERNATIONAL commerce
(Peck v. Lowe, 247 U.S. 165).

Now ask yourself, why is the tax code tens of thousands of pages
long? What on earth could all those pages be about? Almost all of
it is about BEHAVIORAL CONTROLS, rewarding this and punishing that.
Via tax credits, deductions, exemptions, incentives, tax
deferments, and so on, the tax code in effect REGULATES all sorts
of behaviors and economic choices relating to investment,
retirement planning, borrowing money, giving to charities, dealing
with insurance, and so on.

However, only those with TAXABLE income are subject to all of those
controls. If someone is engaged in "commerce with foreign nations,"
for example, the Constitution DOES allow Congress to regulate such
matters. And if they want to do it by way of a "tax," that's just
fine too, since “The power of taxation, which is expressly granted,
may, of course, be adopted as a means to carry into operation
ANOTHER power also expressly granted." On the other hand, “If, in
lieu of compulsory regulation of subjects within the states’
reserved jurisdiction, which is prohibited, the Congress could
invoke the taxing and spending power as a means to accomplish the
same end, clause 1, Section 8 of Article I [of the U.S.
Constitution] would become the instrument for total subversion of
the governmental powers reserved to the individual states” (United
States v. Butler, 299, U.S. 1).

It would absurd for anyone to deny that the tax code is an attempt
to CONTROL THE BEHAVIOR of those who receive taxable income. It
would also be absurd for anyone to claim that Congress has the
Constitutional power to regulate all such matters as they relate to
Americans living and working just in the 50 states. If the domestic
income of all Americans were taxable, how could those be
reconciled? They couldn't. But if only INTERNATIONAL trade is taxed-
- -as the law itself shows--then all the rewards and punishments
apply only to those engaged in "commerce with foreign nations,"
which the Constitution DOES authorize Congress to regulate.

In conclusion, when looking for the limits on the taxing power due
to "fundamental law," don't just look for what the Constitution
specifically prohibits; look for what it authorizes, and know that
EVERYTHING ELSE is assumed to be prohibited. Since the Tenth
Amendment says just that, if you want one particular thing in the
Constitution which exempts the income of the average American from
being subject to the federal income tax, that would be it.

1) I think that tax protestors miss the point. I agree that the IRS is a terrible institution and that the income tax is a disgrace to the idea of the American Republic, but arguing the letter of the law shouldn't be the focus. The focus should be on getting Americans to change their attitudes toward the income tax and the backhanded ways of the IRS.

2) Why the focus on avoiding personal debt in the second "half" of the commentary? Why would you ever want to show footage of Paul Krugman to prove your point about anything? I don't buy the "debt makes you a servant" type of argument - debt is a powerful tool that can help you smooth inter-temporal disparities in income.

Honestly, I didn't really like the video, even though I agreed with a lot of the points.

As for the $50,000 reward mentioned in the film, as we see here, that whole thing is BOGUS and will never be paid, because the guy who has to pay it (Bill Conklin) is the "sole arbitor" as to whether he has to pay it, or not.

below from
http://www.quatlosers.com/bill_conklin.htm

"Walder v. Conklin -- Conklin offered a $50,000 reward to anybody who could prove that his 5th Amendment defense was bogus. Walder proved that it was bogus, and sued when Conklin welched. The court ruled that Conklin has structured his argument so that he was the "sole arbitor" of whether he had to pay or not. Conklin, thus, decided to welch -- exactly like Irwin Schiff had welched in the case of Newman vs. Schiff (more pot-kettle-black). This opinion does not mention the Fifth Amendment except in the context of Conklin welching on his bet."

Most importantly, I would encourage the Dailypaul owners to not post items which cast Dr. Paul in a bad light by association with claims that are false, misleading, or outright fraud. Please!

Actually, if I remember correctly - Title 26 of the United States Code, is explicit that individuals ‘liable’ for income tax are ‘required’ to pay income tax… which of course is implicit that you are in fact liable to begin with. Ah yes, by all means jump into the code, the letter of the law, just be prepared to lose the spirit of the law.


Because it puts people to sleep anyway, same with sited court cases. The story itself, however, is important. It is a major building block to the machine we currently feed; it is equal to, and in no way subordinate to the fiat money issue.


In 1916, when the ‘income’ tax became law, it was common knowledge that wages were not income. Wages for labor, or any service for that matter, were understood essentially as barter; a zero sum trade. Over time, the definition of income changed – not unlike the term inflation; which was originally a three-dimensional description for the increase of currency, to the two-dimensional description of just one symptom, rising prices. The meaning of ‘income’ has been subverted over time; start with that. The purpose of the ‘income’ tax was to squeeze the wealthy by taxing gains on investments.


But it is also at the start that you lose your audience, because people instinctively know that taxes are necessary for the formation and maintenance of society; moreover, the constitution allows for it. The patriot must discern between ‘income tax’ and legitimate, constitutional taxes.


Taxes pay for government’s lawful functions, and of course were doing so well before the income tax. You could pay a tobacco tax, for example, and never need to submit private information. There are a variety of excise taxes or ‘use’ taxes. You would not calculate the amount of the tax yourself, this is the responsibility of the Treasury. Many legitimate taxes fund legitimate functions; property tax ~ police protection; fuel tax ~ road construction, ad nauseum to infinity.  


Forget the code for a minute, the Constitution states that a ‘direct’ tax can be levied per capita (per person) but within strict parameters. The amount of the tax has to be the exactly the same for all citizens. Because equal representation demands equal taxation and to do otherwise would also redistribute the nations’ wealth. America became a prosperous nation before the income tax.


As 1916 slipped into the past, the future came crashing in. Wars required funding and the pure fiat process we know today was not in place to do the job. Plus the split between country and government was less visible than today, so citizens were able and willing to contribute. They paid a voluntary ‘victory’ tax, and to figure out their ‘fair share’ they worked it out on the victory tax form. Constitutional in the beginning, or more correctly - not unconstitutional; it just never went away. Title 26 is essentially a labyrinth evolved to trap a basic understanding; and lawyers are the gate keepers of this malevolent maze. It is significant that Ron Paul is a doctor, and not a lawyer. Perhaps William’s ghost whispers in our ears.


Consider that there is no code for Income Tax Evasion, per se. If I remember right, the code sited for ‘income tax evasion’ is the Criminal Code (?261/262?) making it a crime to give false information to the government; it should be the reverse, eh?


The constitution never directed or intended that you figure out your own liability to a tax. They bill you, you pay them; simple. To figure your own tax and to maintain records, constitutes involuntary servitude. To divulge private information that the government can share with any country with which we share treaties are just more violations of constitutional rights.


What you subsidize you get more of, what you tax you get less of; economics 101. The ‘income tax’ taxes productivity. A bad idea on its face; but it gets worse. In the past, women earned less than men. On balance, that is still true today, and still unfair. A woman’s salary is often comparable to the couples’ income-tax-liability. Coincidence? Pulling labor from ‘the business of home’ is a destructive feature and a direct result of the income tax. As a side note, it has always puzzled me that running a household (typically women) is valued lower than working outside the home (typically men). Perhaps the ‘loss of rural living’ helped to obscure the obvious.


The US Constitution is just a few pages; read it. Taxes are covered, it was an important issue to the framers. Likewise, trial by jury. You would think once was enough, but the framers were redundant on the issue of trial by jury. ‘Tax Court’ provides no jury and that too is relevant because jury nullification could have overruled an unconstitutional law; even without jury nullification, one patriot is one hung jury. A court without a jury is like a day without sunshine; literally.


The ‘income tax’ feeds the Federal Reserve, the Military-industrial Complex, the Welfare State and the Redistribution of Wealth. Examine it from every conceivable angle; it is verifiably and unequivocally unconstitutional.


Aaron Russo is correct and commands your respect – but hell, forget the above. I pay all & beyond on my income taxes; to do otherwise at this point in time is martyrdom. Do not attack the machine, it's programmed to respond ruthlessly. Give to Cesar what is Cesar’s and drop out of the system entirely. 'Dei benedicant Terrae'

Hey guys!

I watched this video a few days ago myself, and highly recommend watching the second half of the film with its treatment of the Federal Reserve and the state of our monetary system (includes a great interview with Ron Paul), but I would caution your viewing of the first half's treatment of the income tax.

Even though the IRS agents and commissioners in the film were unable to show the law requiring individuals to file a 1040 and pay income tax, as a law student, I can assure you that the income tax (for individuals) is indeed the law in the United States. The Internal Revenue Code is codified in Title 26 of the United States Code, and it is explicit that individuals have to pay income tax, and that individual taxpayers must render such statements and returns as the Secretary of the Treasury "may from time to time prescribe." As early as 1916, the courts have consistently upheld the point that income received in exchange for labor or services, including wages, is income within the meaning of the 16th amendment. See Brushaber v. Union Pacific Railroad Co., 240 U.S. 1 (1916); see also United States v. Francisco, 614 F.2d 617 (8th Cir. 1980), cert. denied, 446 U.S. 992 (1980); Lonsdale v. C.I.R., 661 F.2d 72 (6th Cir. 1981); Commissioner v. Glenshaw Glass Co., 348 U.S. 426 (1955).

The whole purpose of the 16th Amendment of the United States Constitution, authorizing the income tax "from whatever source derived," was to exclude the source from which a taxed income was derived as the criterion by which to determine the applicability of constitutional requirement as to apportionment of direct taxes.

[Just a note to those who have checked out Dave Champion's Nontaxpayer.org or OriginalIntent.org - his analysis is disingenuous. Now I don't know if he honestly believes in his own research or not, but many of the cases he cites are either wholly inapplicable to the point he's trying to make or has been overturned. I've even noticed several case opinions that have been altered to say what he wants it to say. I believe in honest debate on issues. . . but this type of dishonesty is doing harm to a lot of folks]

Now, I wholly believe that the 16th Amendment should be repealed, and that the IRS should be dismantled, but it is a legal fact (with legal consequences) that individual American workers are required to pay income taxes. Whether or not you think it is good law is another thing.

Also...check out Murray Rothbard's "The Case Against the Fed" (for that matter, check out anything by Murray N. Rothbard.

Tu ne cede malis, sed contra audentior ito.

Not only is this THE film to watch about the income tax and the Fed, but also RFID. What really hits home is the commercial of the guy trying to order a pizza.

The simple act of ordering a pizza becomes a nightmare of government red tape, added targeted expenses, and an unbelievable breach of privacy.

I disliked the idea of RFID before watching that video, but now I utterly despise RFID.

I now understand why government bureaucrats are salivating over it.

I rented this film and after I viewed it, I watched it again several times over. Russo exposes the fraud of the Federal Reserve and many other disturbing things going on in this country. The phrase "invisible hand" is very much a real issue. When the government displays behavior that is inconsistant with having the citizens' best interests in mind, it is obvious that their intentions are totally self-serving. To them, we are merely food for their corporate machine. We all have to fight to take back our county. Bush is NOT an American. Bush is NOT the president. He is a treasonous enemy of the United States. Bush is the terrorist. We must elect Ron Paul for president!!

Those who sacrifice liberty for securtiy usually end up with neither.

-Benjamin Franklin

Don't for get the other movie Ron Paul is in, "Fiat Empire":
http://video.google.com/videoplay?docid=5232639329002339531