Continuing with Famspear

[SteveSy]

Now, Steve, read the next sentence, where the Court states:

We find it more appropriate to analyze this case based upon the precedents and therefore to ask whether the tax laid upon Murphy's award is more akin, on the one hand, to a capitation or a tax upon one's ownership of property, or, on the other hand, more like a tax upon a use of property, a privilege, an activity, or a transaction, see Thomas, 192 U.S. at 370. Even if we assume one's human capital should be treated as personal property, it does not appear that this tax is upon ownership; rather, as the Government points out, Murphy is taxed only after she receives a compensatory award, which makes the tax seem to be laid upon a transaction. See Tyler v. United States, 281 U.S. 497, 502 (1930) ("A tax laid upon the happening of an event, as distinguished from its tangible fruits, is an indirect tax which Congress, in respect of some events ... undoubtedly may impose"); Simmons v. United States, 308 F.2d 160, 166 (4th Cir. 1962) (tax upon receipt of money is not a direct tax); cf. Penn Mut., 277 F.2d at 20. Murphy's situation seems akin to an involuntary conversion of assets; she was forced to surrender some part of her mental health and reputation in return for monetary damages. Cf. 26 U.S.C. §1033 (property involuntarily converted into money is taxed to extent of gain recognized).

First, I would like to clarify what I said in the other thread where you attempted to make fun of me.

We adopted our basic principles of law from other countries, namely England. To most that would seem like a logical conclusion. However, we have people like you that dismiss this common sense fact so you can pretend your position is reasonable. The term "Direct tax" is not something the founders invented or thought of on their own. They obviously adopted the term from somewhere else. That type of tax includes the earnings of a working man in every single country we could have adopted that term from. Now, you may claim that we are not every other country and I would agree. However, considering taxes were hotly contested by the anti federalists it's a little unreasonable to assume the founders slipped in a well known term in to the constitution that no longer puts a general income tax under the guise of a direct tax but instead under a perpetual tax that isn't tied directly to representation, in other words not apportioned throughout the States..

Why didn't anyone mention this modification to the term direct tax when direct taxes we so despised back then. Why didn't anyone speak up when the people who were there at that time stated it was a direct tax? What you are implying is the founders were involved in some conspiracy to deceive the people in to accepting a constitution with a bogus protection in it. All direct taxes were to be apportioned throughout the states to insure such taxes were equal to representation. They were so secret about it they never documented this change, nor even mentioned it to anyone and the only people capable of discovering this modified term are modern day Federal Jurists which, through osmoses I presume, incorporate it into their knowledge base because they aren't relying on anything known to exist. I mean come ooooon... You see the quotes from people who where there who said it was a direct tax and you know you can't find anyone who said it wasn't. You know that every other country identifies it and has identified it as a direct tax for centuries..to most people that would be an indication something is amiss. Ohh, but not you, facts will not stand in your way, no sir! Your facts are solid, you have something written by some guy who was appointed by the people demanding the money to rely on. Who, remarkably, never supports his/her theories with anything verifiable.

Now, the the case above.....
I will not challenge it based on court cases or historical facts because that would presume its worthy of such a challenge.

The theory that a mere transaction of any sort is taxable by an indirect tax is, shall we say laughable. Do you honestly believe the people who wrote the constitution or who finally gave in to compromise (the anti federalists), accepted all transactions of any sort fell under the guise of an indirect tax? That defies common sense on its face. Nothing whatsoever supports this nonsense in any document written by anyone involved in the creation of the constitution. Such a tax destroys all the reasons to apportion direct taxes. Everyone is and was involved in some sort of monetary transaction even back then. Such a power would put the federal government in the pockets of every citizen in the U.S. from the beginning on a perpetual basis.The direct tax clause could always be avoided by taxing a transaction instead of the property or the person via a capitation tax. To argue the government had this power from the beginning is absurd on its face, no one would have ratified the constitution had that been known. The government was to be very limited, with limited powers....what the court speaks of turns the intent on its head.

Show me as many cases as you like.....they are just people, they have no special magical powers nor are they touched by god. They are obviously out to help the government take money from the people and it doesn't matter if their reasoning is logical, sensible, laughable or even factual. I'm waiting for a case that tires to reason the moon is made of green cheese so you can proudly show me how I'm wrong about the moon in some future argument.

Oh and btw, the court got it wrong about the death tax. It's not passed along nor is it any of the other nonsense they used to try and shoot down Murphy...they need to reread some older SC cases. The reason the federal government can even tax it is because the transfer of property on death is a creature of State law, its not a tax on the "event" of death. It's a privilege granted by the State created under State law.

[ASITStands]

We adopted our basic principles of law from other countries, namely England. To most that would seem like a logical conclusion. However, we have people like you that dismiss this common sense fact so you can pretend your position is reasonable. The term "Direct tax" is not something the founders invented or thought of on their own. They obviously adopted the term from somewhere else. That type of tax includes the earnings of a working man in every single country we could have adopted that term from.

What is your source for the conclusion other countries included the earnings of working people in the definition of 'direct tax?'

Both Springer and Pollock show 'incomes' were always considered 'excises' under English tax law. Where am I mistaken?

[Investor]

More importantly, why does it matter?

It is clear that the power to tax under Article I includes the power, vested in Congress, to impose a direct tax. If this is not the case, why does Article I, Section 9 say that a direct tax is subject to apportionment?

The 16th Amendment clearly states that an income tax is not subject to the apportionment requirement of Article I, Section 9, meaning that it is completely irrelevant if you call the income tax a direct tax, an excise, etc. it is within Congress' power and it is not subject to apportionment.

I don't know how there can even be any more conversation about direct v. indirect.

EDIT: I would say, however, that you have a much more colorable (but not necessarily correct) angle in saying that the estate tax is an unapportioned direct tax - which is not authorized by the 16th Amendment.

[Joey Smith]

More importantly, why does it matter?

It is clear that the power to tax under Article I includes the power, vested in Congress, to impose a direct tax. If this is not the case, why does Article I, Section 9 say that a direct tax is subject to apportionment?

The 16th Amendment clearly states that an income tax is not subject to the apportionment requirement of Article I, Section 9, meaning that it is completely irrelevant if you call the income tax a direct tax, an excise, etc. it is within Congress' power and it is not subject to apportionment.

I don't know how there can even be any more conversation about direct v. indirect.

Exactly, and we've been through this issue time after nauseating time with Stevie: He doesn't know either.

Stevie best argument is "The income tax has gone far past what was originally intended when it was sold to the American people." With this, I agree, but (1) this is a policy issue and not a legal issue, and (2) each generation effectively ratifies the income tax by not taking steps to change it.

One can define "tax protestors" (and IRS complainers such as Stevie, even if they are paying their taxes) as those who have not figured out that the issue of the income tax is a political issue and not a legal one, and that the legal issues relating to the income tax have long, long, long, long been resolved by the courts at all levels in its favor. By making false arguments against the legality of the income tax, they are misdirecting their energies awy from the political issue. Perhaps this is because they feel that there is no chance for reasonable change of the income tax at the political level (I note that it has totally dropped out of the McCain/Romney or Obama/Clinton debates), but they need to understand that legally the issue of the income tax is a brick wall for them -- the courts are not going to suddenly wake up some day and shout "Goshers, we were wrong about the income tax".

[Evil Squirrel Overlord]

Show me as many cases as you like.....they are just people, they have no special magical powers nor are they touched by god.

No judges are appointed by the Illuminati in secret star courts...
Seriously Steve I sprayed my screen with coffee when I read this and then the next line:

They are obviously out to help the government take money from the people and it doesn't matter if their reasoning is logical, sensible, laughable or even factual.

You are seeing a 250 year conspiracy. Judges are people, so being people they automatically actively conspire to defraud the people over the couse of the history of our nation? Plus when there is actually an Constitutional amendment passed to clarify, it is still invalid?

Oh and btw, the court got it wrong about the death tax.

There is no such thing as a death tax. It was a rebranding by a wealthy Republican special interest group to reduce estate taxes.

[Cpt Banjo]

There is no such thing as a death tax. It was a rebranding by a wealthy Republican special interest group to reduce estate taxes.

To the contrary, Congress itself has used the term "death tax" to refer to estate, inheritance, legacy, succession, and other taxes imposed by reason of death. See, for example, Sections 2011 ("Credit for State Death Taxes"), 2014 ("Credit for Foreign Death Taxes"), and 2015 ("Credit for Death Taxes on Remainders").

And I would bet that any Quatloosian who does estate planning routinely uses the term "death tax" in drafting wills and trusts, since it's simply a handy all-inclusive term. But ESO is correct in that those who were pushing to repeal the federal estate tax used the term to refer solely to that particular tax. But this is nothing out of the ordinary; all people with a legislative agenda will tailor their rhetoric to make their position appeal to the voters.

[Famspear]

SteveSy wrote:

We adopted our basic principles of law from other countries, namely England. To most that would seem like a logical conclusion. However, we have people like you that dismiss this common sense fact so you can pretend your position is reasonable.

You have it backwards, Steve. I and other people have pointed out, probably here in Quatloos, that our legal system came to us from English common law. English common law is for the most part "judge-made law." You're the one who has been rejected the decisions of the judges. You're the one who says things like:

Show me as many cases as you like.....they [the judges] are just people, they have no special magical powers[,] nor are they touched by god.

Regardless of the fact that judges are "just people," and regardless of the fact that judges have no "special magical powers" (which non-existent magical powers you brought up, not I), and regardless of whether judges are "touched by god" (again, your terminology, not mine), we adopted our basic principles of law from the legal system of England, Steve. And under our basic principles, the law is what the judge rules the law to be in the context of an actual case or controversy.

SteveSy wrote:

Why didn't anyone mention this modification to the term direct tax when direct taxes we so despised back then. Why didn't anyone speak up when the people who were there at that time stated it was a direct tax? What you are implying is the founders were involved in some conspiracy to deceive the people in to accepting a constitution with a bogus protection in it.

No, Steve, I am not implying that there was some sort of conspiracy by the founding fathers. And the Constitutional provisions regarding direct and indirect taxes, as interpreted by the courts, do not result in what you obviously believe is "bogus protection." You're the one who is essentially arguing that the legal definition of a "direct tax" is bogus.

I understand that you feel that the rulings of the courts -- the rulings that essentially define "direct taxes" as capitations and taxes on property by reason of ownership, and that define indirect taxes as just about everything else (including income taxes) -- result in "bogus protection." Your use of the term "bogus protection" highlights the motivation behind your argument and the reason your argument is flaccid.

What you really desperately want, Steve, is for the Federal income tax on the wages of an ordinary worker to be "illegal" or "unconstitutional." You want to argue to other people that the Federal income tax on the wages of an ordinary worker is legally invalid.

You, like many other tax protesters or people who espouse tax protester arguments, have obviously been trying for years to persuade others. You view a Constitution that does not really prohibit an income tax on the wages of an ordinary worker as affording "bogus protection." And that is your problem. You are starting from the assumption that the ordinary worker's wages should not be taxable, and then struggling and straining to come up with a variety of theories under which the taxation of the ordinary worker's wages would be unconstitutional. You are trying to use your own "logic" to reason it through, and you simply reject the rulings in the courts that do not conform to your view. You then leap to the completely erroneous conclusion that because you believe so strongly that it SHOULD be so, it MUST be so.

The question of whether the ordinary worker's wages should or should not be taxable is a tax policy question. It's a reasonable question. Reasonable people could argue about it and disagree.

The separate question of whether the Congress has the legally valid power, under Article I of the Constitution (whether with or without the Sixteenth Amendment), to impose an income tax on the ordinary worker's wages is not a "policy question." It's a legal question, and the answer cannot be determined by using the methods of "reasoning" you use. Your methods are flawed.

Further, the question of whether the Congress has the legally valid power, under Article I of the Constitution (whether with or without the Sixteenth Amendment), to impose an income tax on the ordinary worker's wages has already been decided. The answer is that Congress does have that power.

The separate question of whether "gross income" under section 61 of the Internal Revenue Code includes the entire amount of wages received or constructively received (and not some lower amount, based on some goofy argument about the meaning of the word "derived" or any other argument) is also a legal question, not a tax policy question. And that question has already been decided. The answer is that gross income under section 61 includes the entire amount of wages received or constructively received, and not some lower amount, etc.

There is almost nothing you or I can do to change any of this, Steve. Sorry, but there it is. If you want, write your Congressman if you want the law changed.

[The Observer]

They are obviously out to help the government take money from the people and it doesn't matter if their reasoning is logical, sensible, laughable or even factual.

You are seeing a 250 year conspiracy. Judges are people, so being people they automatically actively conspire to defraud the people over the couse of the history of our nation? Plus when there is actually an Constitutional amendment passed to clarify, it is still invalid?

Steve's reasoning is more simplistic than that. He would tell you that no judge will rule against the income tax because they have an interest in ensuring that the money will continue to roll in to fund their salaries. Of course we have pointed out that if the income tax was declared unconstitutional, a new taxation system would be put into place and judges would still receive salaries. At this point Steve goes silent.

[grammarian44]

Suppose the Supreme Court held tomorrow that the income tax is unconstitutional.

By Monday morning, a constitutional amendment would be proposed that would alter the Constitution so as to permit the current income tax. It would be passed by the necessary majorities in both houses. A sufficient number of states would ratify it soon afterward. We would still have to submit our 1040s by April 15.

All of these arguments about what the founders believed, what the Constitution "really means," and whether judges are impartial are really irrelevant. What matters is that in the end, there is public support for the income tax. If there were no such support, the income tax could be done away with in no time flat.

If you really think the income tax is a bad idea, then persuade people to get rid of it. If your persuasion is unsuccessful, then admit that your opposition to the income tax is a minority opinion that you will have to learn to live with.

Welcome to democracy.

[Famspear]

When I wrote my comments above, I had not yet read what Joey Smith had already written:

One can define "tax protestors" (and IRS complainers such as Stevie, even if they are paying their taxes) as those who have not figured out that the issue of the income tax is a political issue and not a legal one, and that the legal issues relating to the income tax have long, long, long, long been resolved by the courts at all levels in its favor. By making false arguments against the legality of the income tax, they are misdirecting their energies awy from the political issue.

Joey said what I was trying to say, and made the same point very effectively.

[The Observer]

When I wrote my comments above, I had not yet read what Joey Smith had already written:

One can define "tax protestors" (and IRS complainers such as Stevie, even if they are paying their taxes) as those who have not figured out that the issue of the income tax is a political issue and not a legal one, and that the legal issues relating to the income tax have long, long, long, long been resolved by the courts at all levels in its favor. By making false arguments against the legality of the income tax, they are misdirecting their energies awy from the political issue.

Joey said what I was trying to say, and made the same point very effectively.

I can sum up it even better: TPs are looking for the equivalent of a lottery win by pursuing this issue in the courts.

[Quixote]

There is no such thing as a death tax. It was a rebranding by a wealthy Republican special interest group to reduce estate taxes.

To the contrary, Congress itself has used the term "death tax" to refer to estate, inheritance, legacy, succession, and other taxes imposed by reason of death. See, for example, Sections 2011 ("Credit for State Death Taxes"), 2014 ("Credit for Foreign Death Taxes"), and 2015 ("Credit for Death Taxes on Remainders").

And I would bet that any Quatloosian who does estate planning routinely uses the term "death tax" in drafting wills and trusts, since it's simply a handy all-inclusive term. But ESO is correct in that those who were pushing to repeal the federal estate tax used the term to refer solely to that particular tax. But this is nothing out of the ordinary; all people with a legislative agenda will tailor their rhetoric to make their position appeal to the voters.

The phrase "death tax" does not appear in sections 2011, 2014, 2015 or anywhere else in the IRC. It does appear in the captions to those sections, but as everyone knows, the captions are not part of the statute. I doubt that any attorney uses the phrase "death tax" in any legal document.

[Quixote]

The term "Direct tax" is not something the founders invented or thought of on their own. They obviously adopted the term from somewhere else. That type of tax includes the earnings of a working man in every single country we could have adopted that term from. Now, you may claim that we are not every other country and I would agree. However, considering taxes were hotly contested by the anti federalists it's a little unreasonable to assume the founders slipped in a well known term in to the constitution that no longer puts a general income tax under the guise of a direct tax but instead under a perpetual tax that isn't tied directly to representation, in other words not apportioned throughout the States.

Cite? Every court that has had to deal with apportionment has first had to determine what the founders meant by "direct tax". Contrary to your baseless assertion, the term "direct tax" was apparently not a well known term.

[Imalawman]

whereas all we hear from you is the same incessant droning and whining - not unlike a bagpipe stuck on one note...

btw - technically, the pipes are not "stuck" on one note, they only are registered for one note. The canter is the only part of the bagpipe that changes pitches. I deeply resent you comparing Steve's whining to the sound of a bagpipe, which I happen to like.

[Cpt Banjo]

There is no such thing as a death tax. It was a rebranding by a wealthy Republican special interest group to reduce estate taxes.

To the contrary, Congress itself has used the term "death tax" to refer to estate, inheritance, legacy, succession, and other taxes imposed by reason of death. See, for example, Sections 2011 ("Credit for State Death Taxes"), 2014 ("Credit for Foreign Death Taxes"), and 2015 ("Credit for Death Taxes on Remainders").

And I would bet that any Quatloosian who does estate planning routinely uses the term "death tax" in drafting wills and trusts, since it's simply a handy all-inclusive term. But ESO is correct in that those who were pushing to repeal the federal estate tax used the term to refer solely to that particular tax. But this is nothing out of the ordinary; all people with a legislative agenda will tailor their rhetoric to make their position appeal to the voters.

The phrase "death tax" does not appear in sections 2011, 2014, 2015 or anywhere else in the IRC. It does appear in the captions to those sections, but as everyone knows, the captions are not part of the statute. I doubt that any attorney uses the phrase "death tax" in any legal document.

I never said that the term "death tax" was part of the statutes; all I said was that Congress has used the term in referring to estate, inheritance, legacy, and succession taxes, which it clearly has by its use of the term in the captions. I was simply tring to dispel the suggestion that the term "death tax" was invented by the Rich Republicans Who Want to Repeal the Estate Tax. The term has been around for years.

And you would be incorrect in thinking that estate planning attorneys don't use the term. For example, I have used it for over 30 years in the tax allocation clauses in the wills I draft, which might typically begin, "I direct that all estate, inheritance, or other death taxes imposed on property passing under this will shall be payable as follows:", followed by a listing of the property that is to bear the taxes.

Now, this isn't to say that a tax allocation clause has to be drafted this way; an alternative version might read, "I direct that all estate, inheritance, or other taxes imposed by reason of my death upon the property passing under this will shall be payable as follows". But I prefer the former.

[Famspear]

In a now-closed thread ("Rehash Part II"), SteveSy wrote:

No, see, you don't get to assume your premise is correct in order to prove your premise. Your premise has been challenged, wages were not taxed. Income derived from wages was taxed. You can't for the love of Pete derive "A" from "A". The thing derived can not be the same as the thing its [sic] derived from, learn basic English and grammar. In fact go check an online dictionary and look up the word "derive" and its proper usage.

(bolding added).

My response: Thank you, Steve, but learned I have English to speak and grammar know I well very, thank you. Sometimes syntax perhaps have I with a problem, though. [insert drum roll or other desired sound effects here]

Now, getting back to the income tax for the year 1913:

I had made the point in the now-closed thread that "[t]he 1913 act imposed the Federal income tax on the total amount derived from salaries, wages or compensation for personal service of whatever kind and in whatever form paid." I am further saying, Steve, that your nonsense about the meaning of the word "derive" as used there is just that -- nonsense.

Dropping the legal point for just a moment, ask yourself this practical question: How would a wage earner for the year 1913 (or, more specifically, for the period March 1 - December 31, 1913, which was the period covered by the 1913 income tax) whose total wage amounts happened to far exceed the amounts of exemptions, deductions, etc. for the year (and I am gonna go out on a limb here and assume that there must have been at least a few such individuals) have known how to apply your argument -- that some or all of his "wages" were not "income," based on the word "derived"? I mean, how would that have actually worked, when he or she was reading the instructions and filling out the form?

In a nation of millions of people (even back in early 1914, when people would have been completing the forms) how would people have known to "take out" the part of the "wage" that was supposedly not "income"?

Picture it, Steve: An individual is sitting there at the kitchen table, in early 1914, pencil in hand, and he is one of the few fortunate people who had $100,000 of gross wages for 1913. He's not an accountant or a tax lawyer. How did he figure out how much of that wage was "income" and how much was not "income." Let's assume that the tax form just said "total amount derived from salaries, wages or compensation for personal service of whatever kind and in whatever form paid". What instructions or other documents did he use to come up with the idea that the word "derive" had this special "SteveSy meaning," so that only part (or none) of his wage was "income"? And don't tell us that the population in 1913 just somehow got this from the word "derived," or that they believed that the phrase "income derived from wages" meant that "income" had to be a lower amount that "wage." We want some hard evidence.

[silversopp]

Here's a hint SteveSy, the political solution will get you to your goal quicker. And why not put your money where your mouth is, work for a political campaign. John J. Bulten (at last word) was working for the Ron Paul campaign. JJB is at least being proactive, whereas all we hear from you is the same incessant droning and whining - not unlike a bagpipe stuck on one note...

Hmmm...do those volunteers and supporters help or hurt a political candidate?

Compare Ron Paul with Jeff Flake. Both share the same views on income taxes, but Flake isn't thought of as a nutjob like Paul is. Then again, I don't think Jeff Flake ever goes on Alex Jones show.

I think that a candidate with similiar goals as TP are doomed once the TP crowd hears about them.

[natty]

The term "Direct tax" is not something the founders invented or thought of on their own.

Regardless, the founders were the first to require all direct taxes to be apportioned. A "direct tax" in Great Britain or even in some antiquated commentaries could mean something totally different in American law. If you continue to define terms in a vacuum, you will continue to be baffled by the law.

[Evil Squirrel Overlord]

To the contrary, Congress itself has used the term "death tax" to refer to estate, inheritance, legacy, succession, and other taxes imposed by reason of death. See, for example, Sections 2011 ("Credit for State Death Taxes"), 2014 ("Credit for Foreign Death Taxes"), and 2015 ("Credit for Death Taxes on Remainders").

And I would bet that any Quatloosian who does estate planning routinely uses the term "death tax" in drafting wills and trusts, since it's simply a handy all-inclusive term. But ESO is correct in that those who were pushing to repeal the federal estate tax used the term to refer solely to that particular tax. But this is nothing out of the ordinary; all people with a legislative agenda will tailor their rhetoric to make their position appeal to the voters.

The phrase "death tax" does not appear in sections 2011, 2014, 2015 or anywhere else in the IRC. It does appear in the captions to those sections, but as everyone knows, the captions are not part of the statute. I doubt that any attorney uses the phrase "death tax" in any legal document.

I never said that the term "death tax" was part of the statutes; all I said was that Congress has used the term in referring to estate, inheritance, legacy, and succession taxes, which it clearly has by its use of the term in the captions. I was simply tring to dispel the suggestion that the term "death tax" was invented by the Rich Republicans Who Want to Repeal the Estate Tax. The term has been around for years.

http://en.wikipedia.org/wiki/Death_tax

The term was popularized by a famous memorandum written by Republican pollster Frank Luntz. He recommended that the party use the term death tax when referring to the estate tax, writing that the term death tax "kindled voter resentment in a way that inheritance tax and estate tax do not"

I'm getting it from interviews with Frank Luntz who explicitly states that the term was developed to rebrand estate taxes to make them appear more unpaletable for the average voter. The average middle-class American will not pay one dime of estate taxes, but they will all die. This was done conciously by the Republican party to change opinion. It is a common marketing ploy akin to "pre-owned" vs. "used" and "solutions" to "costly products".

[Cpt Banjo]

It’s obvious that the GOP used the term “death tax” to describe the federal estate tax and that it did so for political purposes. I’m not arguing that. What I am saying is that the GOP didn’t invent the term; it was already out there and had been (in various forms) for a long time as a generic description for estate, inheritance, succession, and legacy taxes. In this sense it is unlike “pre-owned”, which is of recent vintage.

Congress’ use of the term goes back at least to the adoption of the 1954 Code. The Supreme Court first used the term in a 1932 opinion, First National Bank of Boston v. State of Maine, 284 U.S. 312 (1932). Before that, in Knowlton v. Moore, 178 U.S. 41 (1900), the Court reviewed the history of the various forms of “death duties”. IRS Form 706, the federal estate tax return, has had a line item for "credit for foreign death taxes" and (before its phased-out repeal) had a line item for "credit for state death taxes" for as long as I can remember. If I had the time and inclination, I could probably find law review articles referring to "death taxes" going back to the early 20th centiry or perhaps even the late 19th century, but I think this horse has been beaten way too much.