SteveSy wrote:
If someone pays for "Damages" are they offering to give you:
a) A reasonable profit or gain
b) Replacement for something lost
Did the Jury award:
a) Profit or gain to the recipient.
b) Damages
Let's make this real simple, Steve.
If someone pays you for damages, they are giving you replacement for something you lost. You, like the judges in the Murphy case, concentrated too much on the word "lost" and you missed the significance of the word "replacement."
The defendant in Murphy paid Ms. Murphy $70,000. That's MONEY. It's a REPLACEMENT for what she lost. What Murphy LOST was not MONEY. What she LOST was her mental well-being.
Had the defendant simply somehow "deleted" Murphy's emotional distress, with a magical ray gun or something, the defendant would have been restoring Murphy's mental well being. I guess you MIGHT be able to argue that doing that would not result in true economic INCOME to her.
However, as a point of basic economics (not law), the event that occurred when Murphy received $70,000 was an INCOME event - regardless of the mental contortion that judge Ginsburg, et al. went through to pretend otherwise, and regardless of the REASON the money was awarded.
Murphy LOST her mental well-being; Murphy GAINED $70,000 in MONEY. That's two different things. The first is a loss. The second is the replacement.
On your second question, the jury really awarded neither profit nor damages. The jury rendered a VERDICT, a finding of fact, that the MONEY that she should receive as a REPLACEMENT for her loss of mental well-being was the amount of $70,000. The court then rendered what is called a judgment (for that amount, presumably).
Oftentimes the way we use language on a day-to-day basis obscures, rather than illuminates, the economic substance. The fact is that before the award, Ms. Murphy did not have the $70,000, and after the award, she did have it. From the standpoint of an economist, that's an income event. And from the standpoint of the law, the Murphy court might be the first court that has ever stated that the receipt of money in that kind of circumstance would not be "income" within the meaning of the Sixteenth Amendment.
Unfortunately for tax protesters, the members of the court appear to have realized that they screwed up, and they "fixed" the problem in a creative way -- by not admitting they were wrong, and by citing the Penn Mutual case for an alternative basis for reversing the EFFECTS that the first Murphy decision would have had -- on Ms. Murphy, and on other litigants in other cases.
Ironically, the result is still another devastating blow for tax protesters. Government lawyers will now be able to cite the Murphy case when a protester argues that something is not "income" -- by pointing out that under the Constitution, something does not even need to be "income" (in the true economic sense) to be properly taxed as income.
--Famspear
"My greatest fear is that the audience will beat me to the punch line." -- David Mamet