Thought I'd sign up and pose a few of my thoughts after perusing your topic of choice -- tax.For disclosure, I am not a lawyer, but rather a software programmer with an undergrad degree in accounting. Reading this forum, I would agree with a post indicating direct vs. indirect taxation and apportionment is moot, considering the 16th amendment renders the end result of our current income taxation the same, either way. I also saw a post reminding TPs that they are obliged adherence to both written and adjudicated law, yet they are still free to argue that tax law is unfair in a proper venue; my opinion posits that there are some elements that might be unfair and I think it could be useful for our Congress to accept those elements as valid and address them. My points are relatively minor and elaborated a bit later. However, given the tendency of our system to act as a ratchet, never receding from greater purchase, I won’t be holding my breath. Another post presented the idea that accession of wealth obtained from labor warrants income taxation, and I agree with that point.
I think members of the TP crowd that rails against ‘taxing labor’ overlook some attributes, among other things, of our current system that, to an extent, aims to limit tax to a ‘wealth’ portion of wage income – there is an exemption and standard deduction, though I still see an unfairness that I will discuss. But, rather than mock them, I tend to look for the root of their issue with the U.S. tax system and I think I can agree with the assertion that income should not always equal 100% of the wage (which again, is a claim that can’t be true given exemption and the greater of standard/itemized deduction), though it shouldn’t necessarily be 0%, either. I see some merit in the idea that a purportedly ‘free’ individual should retain an ability to allocate some additional discretionary income, not subject to tax. There are elements allowing some discretionary spending for a business that eliminates that expenditure from their income subject to tax, whereas an individual doesn’t receive like consideration for that same level of discretion. I also think some of the animosity might extend from the unfathomable bloat of government programs and budgets, and the system could use a good, controlled burn to eliminate specious spending, but that’s entirely another topic. As for the TPs you track here…well, my only thought is that their plan, or perhaps lack thereof, is incredibly stupi…, well, unsound, we shall politely say.
But I’d also be careful not to laugh too hard at people like Hart’s insolvency predicament. Considering the U.S. can’t even accumulate enough funds from the income tax to reduce its mounting debt each year, and the hole continuously deepens, the case could be made that some form of creditor action will one day be warranted when the compounding interest blows ability to pay out of the water and further credit denied. I’m sure many of Hart’s squirming and feeble actions to ward off doom would be humorously replicated as our country’s leaders contort to escape obligation, a la default (though I’m beginning to think that debt number is some sort of virtual fantasy at this point).
I should add that while reading here, I do chuckle how some people on this forum can regurgitate dicta with fervor…it must be true that lawyers just like to argue and volley barrages with vengeance, LOL. I gather it might more be a case where some things have just grown tiresome and some dolts just aren’t listening carefully enough to your well-meaning admonitions? In any case, for me, your professions and law discussions are intriguing.
I think some of the frustration and angst directed the U.S. income tax stems from this discrepancy between business and the individual, and the question some people have is, “why the seemingly favored treatment toward allowable expenses for business/corporations?” Essentially, the tax rules allow a corporation an ability to decide, to a degree, its own tax-free extravagance vs. taxable profits; if it wants to forgo some (or even all) profit for non-growth, creature comforts (nice furnishings, property rental, leased luxury cars, sporting skyboxes, meals, sizeable portion of entertainment, etc.), to a large extent that money remains untaxed. But the individual is somewhat constrained with an ‘allowed’ measure of tax-free extravagance that is determined by the legislation in the form of a fairly miniscule exemption/standard deduction and all else is taxable. Again, I agree that the intent to tax accession to wealth is appropriate for our income tax, but our design is slightly flawed and inequitable toward that end. I think that a common worker should be allowed some latitude like afforded business, whereby some individual expenditure should be free from tax in a similar respect as corporate expenses. A possible solution could be fashioned by simply allowing deduction of full rent/mortgage of primary residence and perhaps a car payment per each individual represented on the return as an itemized deduction. While only a partial address, it is simpler to apply than trying to institute the exact same rules that would be near impossible to account/enforce. That simple, yet I think fairly significant, step might quell some protestation. It might somewhat reduce the government’s take, but a portion would eventually make it back to them via business income, and given that all the current tax proceeds apply insufficiently to the national debt, who really cares about a few bucks less when our fiscal policies never achieve principle debt reduction anyway (OK, a little condescending to our planners, but can’t argue it’s not true, eh? http://www.treasurydirect.gov/govt/repo ... histo5.htm )? Besides, maybe adding a couple decent allowances would mitigate some of that protestation, resulting in better compliance? Who knows…I think an approach that treats income and some expenses more similarly, from a general public perspective, might improve some attitude toward federal income taxation.
If you’ll bear with a few tangential asides from a new member, I have some further thoughts about a few other things...
I have read some of the TP diatribes, including their published works…for ‘fun’ I suppose (maybe I’m a masochist? LOL). Aside from some clear misunderstandings of how to conduct their business, I gather that some aspects that provoke TPs into misguided ‘action,’ is the perceived ‘lawlessness’ of the Congress, the judiciary, and the IRS and idea that our income tax system appears to have diverged from the intent of the Constitution’s crafters. Granted, TPs have either ignored or glossed over the ‘Necessary and Proper Clause’ and ensuing decisions that enabled furtherance of certain legality, but I can see how skepticism might foster. I have doubts that the framers would have ever envisioned a federal tax scheme whereby a common worker’s wage would be effectively owned by the federal government. Some may argue that it isn’t federally owned, but I contend that technically, it could be construed; if Congress enacted an 85% tax on wages, they can do so and I don’t see where anything could be done about it. Sure, we could elect a new group, but that tax regulation would still exist and I don’t see anything obligating a new representative to adhere to any sort of campaign promise to reduce/repeal. In essence, the government has decisive control over how much (or how little) a worker can keep from their wage. Also, given that the Constitution framers were highly sensitive to broad and potentially overbearing taxation rules, I can’t imagine they would be comfortable with the current scheme because there is no escape available a citizen within the country. A state could do the same thing with their tax rules, but there is some recourse in that a U.S. citizen can fairly easily relocate to another state that is deemed more fairly taxed, or in some cases, has no income tax; it is more difficult and more impractical to change citizenship.
As for the IRS, evidence does support they are prone to step out of bounds (demonstrated by the prompting of reform in the late 90s and current headlines) and apparently their procedures are not always conducive to obtaining optimal collection result, according to a reputable ex-IRS agent, Jack Wade (http://www.unclefed.com/TxprBoR/JWWade.html ). One particular statute has struck me as a possible breach, 6331. While I have read Evans’ explanation (http://evans-legal.com/dan/tpfaq.html#levysalaries ), I still have doubts about the wage facet for a couple reasons.
Evans presents a few cases to support that the courts have made no distinction between the property of any person, with any tax owed, is eligible for levy in the first paragraph, and the federal employee’s wage that is eligible for levy. One of the contentions is that the federal employee wage language was added to further clarify a potential misunderstanding from a prior case. However, when other elements are combined, I would interpret it differently. I see that the Sims case indeed refers to a Comp. Gen. bulletin to conclude that the language was added to the statute to rectify a potential misunderstanding. But, an Article in the Constitution negates any question that Congressional authority applies to D.C., so why bother adding it to statute? If I look at the regulation, 301.6331–1 Levy and distraint, I see:
(a) Authority to levy
(4) Certain types of compensation—
(i) Federal employees
(ii) State and municipal employees.
(iii) Seamen
(5) Noncompetent Indians.
The fact that (a) indicates any person owing tax may have property, right to property, compensation, and bank accounts levied, but then a further distinction is made for “Certain types of compensation,” I am led to believe perhaps the intent is that for property and bank accounts, anyone can be levied, but for accrued wages, only certain ones are eligible. Then, combine that with the fact that the notices sent by the IRS have 6331 (a) that mentions the federal employee wage bit, removed from the supporting statute printed on the reverse, then I start surmising that even the IRS is aware that the regulation does indeed mean that just for wages, there is an exception and they are obscuring that fact by not printing it on their form they send to employers. If an alleged crime were being tried, attempts to obscure become incriminating and I think this obfuscation and omission on part of the IRS similarly incriminates.
My debate of the framers’ intent and the 6331 statute is rhetorical. I am neither the law, nor am I versed enough to know intricacies that I may have overlooked or don’t entirely understand, and there is no doubt that my arguments would lose in a civil or criminal case because these issues are already considered settled by the courts. The proper venue for making any case is in Congress and if the argument is rejected there, then so be it until the next elections.
I pose the latter discussion only to promote some possibilities why someone like Banister or Peel may have converted their mindset, and why others might have as well. I saw that Evans poses some thoughts (in his protester FAQ) about possible emotional or psychological needs, or personal economics that might contribute to fixating on the federal income tax system as a symbol of dysfunction within the government. I think the couple ideas I mention, combined with questionable government spending and mounting debt that renders the income tax virtually useless, spurious justifications for assassinating certain people without trial, slippages of some other rights, recent disclosures that implicate other possible government improprieties, etc., might conspire in someone’s head to meet Evans’ conjecture.
It’s definitely an imperfect system, but disregarding it won’t solve anything, does not preclude lawful obligations or punishments for failure to abide, and one must accept that contrary arguments should be presented to the proper forum of Congress and they might not agree. That’s life.
