Should you pay an income tax?

[siccmadeinc]

Are you aware the Supreme Court has ruled that the government has no authority to impose a direct unapportioned tax on the labor of the American people, and the 16th Amendment does not give the government that power?

Try to find the law that imposes it.

[Karma Police]

Are you aware of how many people have been financially ruined, because they believed that ridiculous argument?

If the argument had any validity, it would be used by the highest income earners, who pay the most income taxes and can afford the best lawyers, rather than internet scam artists and pro se tax protesters. It's really irresponsible to promote that nonsense.

[Steve Pavlina]

People who've tried to make the argument that there's no U.S. law saying they have to pay income taxes have been overruled by U.S. courts and sent to prison. No matter what argument was tried, the courts dismissed such cases as frivolous. To date I've never heard of anyone who succeeded with this argument in the long run. So whether there is a legitimate law or not, the courts certainly behave as if there is.

Here's an extensive FAQ about the "Tax Protester" arguments, how the courts have officially responded, and who ended up being sent to jail:
Tax Protester FAQ

For some general background, check out these Wikipedia entries:
Tax protester arguments - Wikipedia, the free encyclopedia

Tax protester - Wikipedia, the free encyclopedia

Tax avoidance and tax evasion - Wikipedia, the free encyclopedia

And here's a nice entry on Irwin Schiff, a prominent tax protester who repeatedly claimed there was no law compelling him to pay income taxes. Schiff won't be out of prison until 2016:
Irwin Schiff - Wikipedia, the free encyclopedia

[Karma Police]

Steve,

Thanks for posting those links!

For another great resource on fraudulent tax schemes and financial scams, see: Quatloos! -- Cyber-Museum of Scams and Frauds...

[Baltar]

It's pretty amusing that the Tax Protester argument is essentially that income tax is unconstitutional. Maybe they haven't read the 16th amendment to the constitution? If it's in the constitution it obviously can't be unconstitutional.

The 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.

And one of Irwin Schiff's arguments was that "the United States Tax Court is not a court." That ought to go over well with the judges.

[MartialDev]

Originally Posted by Baltar

And one of Irwin Schiff's arguments was that "the United States Tax Court is not a court." That ought to go over well with the judges.

That is his subjective reality.

[KevinG]

It is not unconstitutional.

However, it is fundamentally dishonest.

If you know anything about withholding you know exactly why it exists. It has nothing to do with what the government tries to lead you to believe it is for.

The current tax code is the worst thing that has ever happened to this country.

[Karma Police]

Originally Posted by KevinG

It is not unconstitutional.

The current tax code is the worst thing that has ever happened to this country.

The tax code is worse than slavery, civil war, WWI, WWII and Vietnam? I think not.

[birger]

Originally Posted by KevinG

The current tax code is the worst thing that has ever happened to this country.

Moaning! The average taxation in USA is amongst the lowest in the world!

Taxes are what makes the western world able to keep the high living standards that we have. Taxes is the basis for the welfare society we have in most western democratic countries, and probably the most important factor in giving everyone an equal opportunity (regardless of family, inheritance, race et.c.).

Arguing that you shouldn't pay income tax is just stupid, regardless of what some ancient laws might say. It would effectively eradicte government funded education, health services, daycare subsidiaries, and the list goes on...

[ReallyGoodIdeas]

I'm with birger on this one. I'm happy to pay taxes - they are the price we pay to live in a civil society, and I for one, am grateful that I do. I may not always approve of how the government apportions it, but I have the right (and in Australia, the obligation) to vote agaisn them if I don't. I'm happy with that version of democracy.

And the bonus, if I'm paying a lot of income tax, I must be earning a lot of income! Joy and prosperity is shared! :-)

Joy to you all
Hazel

[Doku]

Originally Posted by birger

Moaning! The average taxation in USA is amongst the lowest in the world!

Re-read that article. "In 2003, total federal state and local taxes in the United States were 24.2% of our gross domestic product, ranking among the lowest in the world, with only Mexico at 19.5% with a lower tax rate. " What the hell do I care what the GDP is? GDP, by the way, INCLUDES government spending... It also includes "exports minus imports" and it's well known that the US imports are almost double our exports, which screws with the GDP. As I have stated in another thread... Lies, Damn Lies, and Statistics.

Wikipedia's list of tax rates

[Still Growing]

Wesley Snipes is fighting this now.... Lets see what happens.

But do you think Wesley thought that nobody needs to pay taxes or just HE could get around them. The later I'm sure....

I think that the US tax system should be revised. Can you imagine the time wasted and how much is spent by businesses, individuals and the government on tax consultants, attorneys and the IRS payroll??

There should be a flat income tax of 10% for lower income, 15% for medium and 20% for high. If you think 20% is too low for upper income then you are assuming they are paying 20%. Don't forget about the deductions and write offs.

If all businesses and individuals were really being taxed the amount I proposed I believe that it would be a much more efficient and fair system.

[Colin]

The whole federal income tax and 16th amendment certainly make for an interesting discussion, and the validity of whether the 16th amendment was ever correctly ratified is certainly part of the debate.

I'll give my views on it before I get to the real heart of the matter.

The original constitution stated that the only taxes that were allowed were a direct apportioned tax (i.e. every person pays the same amount) and indirect taxes.

The rational of the direct apportioned tax is that the government is beholden to each American citizen equally, so no one person should have to pay more than any other to their government for its upkeep. The government is the slave of the people not the other way around.

Indirect taxes are everything from tax on cigarettes to tax on gasoline. You don't have to pay them if you don't want to. If you don't smoke you don't pay the cigarette tax. If you ride a bike and never use a car you don't have to pay the tax on gasoline. A person can decide which of these taxes they pay by what they spend their money on.

The 16th amendment introduced a direct unapproportioned tax (i.e. each person pays a different amount depending on what their income is). The Supreme Court in numerous rules from 1913 to 1923 repeatedly states that the 16th amendment adds no new powers of taxation. A direct unapproportioned tax is the opposite of a direct approptioned tax. You can't have both at the same time. The Supreme Court ruled that the direct approportioned tax stands and the unapproptioned is not allowed.

Lower court rulings have repeatedly contradicted these Supreme Court rulings and this is what gets most tax protestors in hot water.

Instead of asking if the federal income tax is law or not, what you really need to ask is why goes the government need to collect income tax in the first place?

How did the country get by without an income tax from 1776 to 1913? Quite well it seems.

Why the need for an income tax?

The same year the 16th amendment was being introduced, congress handed over the government's right to create currency to a private institution called the Federal Reserve System, which is owned and operated by the world's largest private banks.

The Fed lends money to the government, and the government must pay back interest on the money that it has borrowed.

Before 1913 the government could create its own money and didn't have to pay interest to anyone.

How does the government pay the interest on the money it borrows from the Fed? Income tax.

And if you think that your income tax is being used to fund schools, build roads, and all the other things you expect your tax money to be paying for you would be sorely mistaken.

Local property taxes are used primarily to fund local education. Gasoline tax pays for road infastructure.

Your income tax pays for the interest on the debt the government owes to a private corporation, of which the real owners are never know.

The Federal Reserve is the United State's fourth central bank. You can probably already guess that things did not go well for the first three versions.

The current and on-going devaluation of the US dollar, primarily due to its nature as a fiat currency, and the fractional reserve banking system, will lead to an inevitable conclusion.

If you are looking for an historical precedent then the rise and fall of the Roman empire is a good place to start. It took the Roman empire 500 years to destroy its currency. The US dollar has achieved half of the fall the Roman currency went through in only 100 years.

[stephencp]

Great post! I assume you like Hayek and von Mises?

Stephen
Power-Book Library: Free personal development, success, inspiration and motivational classics

[Karma Police]

Originally Posted by Colin

The same year the 16th amendment was being introduced, congress handed over the government's right to create currency to a private institution called the Federal Reserve System, which is owned and operated by the world's largest private banks.

Are you saying the following information on the Federal Reserve Website is incorrect?

"Who owns the Federal Reserve?

The Federal Reserve System is not "owned" by anyone and is not a private, profit-making institution. Instead, it is an independent entity within the government, having both public purposes and private aspects.

As the nation's central bank, the Federal Reserve derives its authority from the U.S. Congress. It is considered an independent central bank because its decisions do not have to be ratified by the President or anyone else in the executive or legislative branch of government, it does not receive funding appropriated by Congress, and the terms of the members of the Board of Governors span multiple presidential and congressional terms. However, the Federal Reserve is subject to oversight by Congress, which periodically reviews its activities and can alter its responsibilities by statute. Also, the Federal Reserve must work within the framework of the overall objectives of economic and financial policy established by the government. Therefore, the Federal Reserve can be more accurately described as "independent within the government."

The twelve regional Federal Reserve Banks, which were established by Congress as the operating arms of the nation's central banking system, are organized much like private corporations--possibly leading to some confusion about "ownership." For example, the Reserve Banks issue shares of stock to member banks. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year."

[Colin]

The quote from the Fed site makes for some great reading. Really read it and try to undestand what it is saying.

"it is an independent entity within the government, having both public purposes and private aspects."

What exactly is an 'independent entity'? They say they're not private. But they're not part of the government so they're not public either. They're just 'within' the government. They're not private. They're not public. Is there a third option?

Also, look at the misdirection in the final paragraph you quote. This deals with the 'ownership' issue of the individual banks, which is different than the ownership of the Federal Reserve System itself.

The Federal Reserve Banks of each region are owned by (issue their stock exclusively to) the member banks of that same region. The member banks are privately owned corporations. You can't trade their stock on the stock market, so what? It doesn't stop them from being privately owned. There are lots of companies out there that are privately owned and not publicly listed on the stock exchange. Thus the Federal Reserve Banks are privately owned.

These 12 regional Fed Reserve Banks make up the Fed Reserve System. Do 12 private banks that make up the System result in a System that is 'indepedent within government'?

A quote from this website about this so-called independence:

"A little independence is a good thing, unless that independence is in reality virtually total and the entity involved controls the nation’s money and economy. Think about it: if the Fed is independent from the government that created it, then who controls it – it has no brain of its own – it is not a person. If it is not controlled by our government, then by whom?"

[Karma Police]

The Federal Reserve Banks and the Federal Reserve System are ultimately controlled by the Federal Government and are not operated as private, for-profit institutions. How do we know this?

Those who run the Fed are appointed by the Federal Government, and Congress can amend the statutes governing the Federal Reserve System at any time. The so-called stockholders of the member banks receive a fixed 6% return on the shares, cannot sell the shares, etc. Holding stock in one of the Federal Reserve Banks is more like a club membership than ownership. The stockholders of the Federal Reserve Banks do not control the banks.

[Brutha]

and it's well known that the US imports are almost double our exports, which screws with the GDP.

Why shouldn't Imports/Exports count into the GDP?

[Baltar]

Originally Posted by Colin

How did the country get by without an income tax from 1776 to 1913? Quite well it seems. Why the need for an income tax?

Actually it didn't get by without an income tax during that time. Income tax was established for a brief period during the Civil War (Revenue Act of 1861). The tax was repealed in 1872. During the rest of the time, government relied heavily on tariffs and taxes on commodities (alcohol, tobacco) which had their limits. After the 16th amendment was ratified, income tax was raised during World War I, and then lowered again in the 20's. World War II saw another big raise in income tax, and again taxes dropped after it ended. Then there was the Korean War.. So historically most of the income tax was necessary for funding the military. In the last 50 years things have changed a lot (though I think the military is still responsible for a good chunk of the tax), and I'm going to have to read about all this stuff.. But this at least partially answers your question.

Originally Posted by Colin

And if you think that your income tax is being used to fund schools, build roads, and all the other things you expect your tax money to be paying for you would be sorely mistaken.

Local property taxes are used primarily to fund local education. Gasoline tax pays for road infastructure.

Your income tax pays for the interest on the debt the government owes to a private corporation, of which the real owners are never know.

Got any appropriation data to back that up? I think a fairly large portion of income tax goes to fund the military, just as happened in the past. Check out the Cost of War site -- the Iraq war has so far cost around $347.5 billion.* I have to look at some appropriation reports to see where the rest is going. You've piqued my interest.

* "Spending only includes incremental costs, additional funds that are expended due to the war. For example, soldiers' regular pay is not included, but combat pay is included. Potential future costs, such as future medical care for soldiers and veterans wounded in the war, are not included. It is also not clear whether the current funding will cover all military wear and tear. It also does not account for the Iraq War being deficit-financed and that taxpayers will need to make additional interest payments on the national debt due to those deficits"

So the actual combined cost of our military being in Iraq is even more than that..

[Colin]

Originally Posted by Karma Police

The Federal Reserve Banks and the Federal Reserve System are ultimately controlled by the Federal Government and are not operated as private, for-profit institutions. How do we know this?

Those who run the Fed are appointed by the Federal Government, and Congress can amend the statutes governing the Federal Reserve System at any time. The so-called stockholders of the member banks receive a fixed 6% return on the shares, cannot sell the shares, etc. Holding stock in one of the Federal Reserve Banks is more like a club membership than ownership. The stockholders of the Federal Reserve Banks do not control the banks.

What do you mean by 'ultimately controlled'? The government has little if no say in the day to day running of the Fed. Does the government tell the FOMC what their interest rate policy should be? Does the government tell them what the overnight loan rate should be?

Congress does have the power to modify or annul the Fed as it sees fit. Unfortunately, Congress continues to be quite happy to hand over billions in interest payments to the Fed when it has the power to issue its own currency.

Who can get appointed to the Fed board is another interesting twist on how the Fed does things differently.

The President gets to pick a new board member from a pre-approved list. Who makes up the list that the President gets to pick from?

[Colin]

Originally Posted by Baltar

Actually it didn't get by without an income tax during that time. Income tax was established for a brief period during the Civil War (Revenue Act of 1861). The tax was repealed in 1872.

This is quite true. Damn my aging brain cells. The fact that it got repealed so quickly shows just how unpopular it was at the time.

Originally Posted by Baltar

Got any appropriation data to back that up?

It's been a while since I came across the data, and I don't have it to hand. I'll hunt around and see if I can find it again.

The huge industrial complex that is the defense industry in the States sucks down a vast quantity of tax dollars. It's probably also worth pointing out that the debt that is being created by this expenditure (for things like the Iraq War) is unlikely to be repaid fully in our lifetimes. It's a debt that Congress seems quite willing to pass onto future generations, burdening them before they've ever been born.

The Pentagon can also seemingly misplace billions of dollars each year without knowing what happened to it.

[jamestl2]

The only way to get around paying it is if the 16th amendment is somehow repealed.

The only real chance of that happening is if Ron Paul gets elected president. He wants to abolish the Federal Reserve, Income tax, and IRS.

If you want to know more, I wrote a post about it:
Top 10 Reasons to Vote for Ron Paul

[Doku]

And reason #11: He's almost as old as this zombied thread.

[jamestl2]

Actually, he's much older (he's currently at 72 years of age )

[songwriter]

Well, I've been in the Spanish Tax Authorities helping people to made their Income Tax last year. Well, you know, the government has taken tax from the people since... ever... to spent it on several things that are different depending on the country as the Income Tax is different in every country.

When someone tells me he has to pay a huge lot of money due to the Income tax I say that I will wish I would have to pay milions in the Income Tax, cause that would mean I would have an income a lot of milions every year. I would like to complain too.

[RiverFlows]

Originally Posted by Steve Pavlina

People who've tried to make the argument that there's no U.S. law saying they have to pay income taxes have been overruled by U.S. courts and sent to prison. No matter what argument was tried, the courts dismissed such cases as frivolous. To date I've never heard of anyone who succeeded with this argument in the long run.

Well, there have been some interesting developments recently:

The Kahre Tax Trial

Tom Cryer NOT guilty

Originally Posted by Steve Pavlina

So whether there is a legitimate law or not, the courts certainly behave as if there is.

Yes, unfortunately, in most cases they do.

That's why Aaron Russo said the following:

Originally Posted by Aaron Russo

I do file - I tell everybody to file because I don't want to see them in jail. I don't want to see people going to jail. My issue is a much bigger issue. My issue is to shut down the Federal Reserve System. 'cause to me the Federal Reserve System is the head of the beast.

Source: Aaron Russo Interview by Peter Boyles

Hey Steve, do you like paying taxes, money that goes into the pockets of a 'select few' rather than serving the general public?