CtC's Weston White: Fake quotes & other problems

[Famspear]

At losthorizons.com, Weston White has taken the bait regarding his use of fake quotations:

. . . . by the use of the phrase "fake quotations" the folks at Quackloss have absolutely no idea what the hell they are talking about and to date have failed to show even one shred of evidence that that is the case.

EDIT: Here's the link:

http://www.losthorizons.com/phpBB/viewt ... 3231#13231

Weston White displays a web site that asks the question:

What Does SCOTUS Have to Say About 'incomes'?

http://defendindependence.org/scotuscases.html

I'd like to address the cases that Weston cites -- with a specific view to looking at how those case interface with what I perceive as a central tenet of Peter Hendrickson's Cracking the Code: the legally frivolous argument that the private-sector compensation received by an individual for personal services in an activity unconnected with a federal privilege is non-taxable under the Internal Revenue Code of 1986, as amended.

Here are the cases Weston White cites, with my brief descriptions of the cases. Where Weston White uses fake quotes, that is also mentioned. The fakery by Weston White is in the Burk-Waggoner case, and in Lucas v. Earl. I haven't yet had a chance to re-check every other quote Weston may have made here, so there may or may not be others as well.

STRATTON'S INDEPENDENCE

In Stratton's Independence, Limited v. Howbert, 231 U.S. 399 (1913), a mining corporation argued that the 1909 corporation tax act did not apply to that corporation. The U.S. Supreme Court ruled that the 1909 corporation tax act did apply to mining corporations, and that the proceeds of ores mined by the corporation from its own premises were income within the meaning of the 1909 tax act. The Court also ruled that the corporation was not entitled to deduct "the value of such ore in place and before it is mined" as depreciation within the meaning the 1909 act.

The Cracking the Code issue -- of whether the private-sector compensation received by an individual for personal services in an activity unconnected with a federal privilege is non-taxable -- was neither presented to nor decided by the Court.

COPPAGE V. KANSAS

Coppage v. Kansas, 236 U.S. 1 (1915), was a criminal case involving a defendant convicted, under a Kansas statute, of firing an employee for refusing to resign as a member of a labor union. No issues of taxation were presented to or decided by the Court. The Cracking the Code issue -- of whether the private-sector compensation received by an individual for personal services in an activity unconnected with a federal privilege is non-taxable -- was neither presented to nor decided by the Court.

BRUSHABER

In Brushaber v. Union Pacific Railroad, 240 U.S. 1 (1916), the Supreme Court held (I'm summarizing here, not quoting):

1. The Revenue Act of 1913, imposing income taxes that are not apportioned among the states according to each state's population, is not unconstitutional under the Sixteenth Amendment, which removes the requirement that income taxes be apportioned among the states according to population.

2. The Federal income tax statute does not violate the Fifth Amendment's prohibition against the government taking of property without due process of law.

3. The Federal income tax statute does not violate the uniformity clause of Article I, section 8 of the U.S. Constitution.

The Cracking the Code issue -- of whether the private-sector compensation received by an individual for personal services in an activity unconnected with a federal privilege is non-taxable -- was neither presented to nor decided by the Court.

STANTON V. BALTIC MINING CO.

In Stanton v. Baltic Mining Co., 240 U.S. 103 (1916), the U.S. Supreme Court rejected the argument that the income tax imposed by the Revenue Act of 1913 violated the Sixteenth Amendment. The Court upheld the constitutionality of the income tax under the 1913 Act. The issue of whether the private-sector compensation received by an individual for personal services in an activity unconnected with a federal privilege is non-taxable was neither presented to nor decided by the Court.

The Cracking the Code issue -- of whether the private-sector compensation received by an individual for personal services in an activity unconnected with a federal privilege is non-taxable -- was neither presented to nor decided by the Court.

GOULD V. GOULD

Gould v. Gould, 245 U.S. 151 (1917), is another case that tax protesters like Weston White love to quote -- with respect to the following language from the text:

In the interpretation of statutes levying taxes it is the established rule not to extend their provisions, by implication, beyond the clear import of the language used, or to enlarge their operations so as to embrace matters not specifically pointed out. In case of doubt they [the tax statutes] are construed most strongly against the government, and in favor of the citizen.

Unfortunately, that principle has been weakened by later Supreme Court decisions, such as Glenshaw Glass. Further, in Gould v. Gould, as in many Federal tax cases, the Court was engaging in statutory construction -- about the taxation of alimony received by an individual under a particular statute; the Court was not interpreting the U.S. Constitution.
The statute interpreted in Gould was supplanted by later tax statutes, including the Internal Revenue Code of 1939 and the Internal Revenue Code of 1954. The current statute regarding Federal income taxation of alimony received is section 71 of the Internal Revenue Code of 1986. In 2009, the law now is: Income under the income tax statutes encompasses all income that could be taxed under the Constitution, subject to whatever statutory exclusions the Congress has chosen to provide. Deductions, on the other hand, are a matter of legislative grace. And of course, the Cracking the Code issue -- of whether the private-sector compensation received by an individual for personal services in an activity unconnected with a federal privilege is non-taxable -- was neither presented to nor decided by the Court.

DOYLE V. MITCHELL BROS. CO.

In Doyle v. Mitchell Bros. Co., 247 U.S. 179 (1918), the taxpayer was a corporation engaged in the manufacture of lumber. In 1903, the taxpayer purchased certain timber land at a cost of about $20 per acre. As of December 31, 1908, the value of the land had increased to about $40 per acre.

The Corporation Excise Tax Act of 1909 was enacted on August 5, 1909, and was effective retroactively to January 1, 1909.

For the years 1909 through 1912, the taxpayer filed tax returns under the 1909 Act, showing gross receipts from the sale of manufactured lumber and, in arriving at the amount of net income subject to tax under the 1909 Act, deducted an amount based on the $40 per acre value, rather than the actual cost of about $20 per acre.

The Commissioner of Internal Revenue argued that the taxpayer should be able to deduct only an amount based on the taxpayer’s historical cost basis of $20, rather than the $40 fair market value at the time the 1909 Act became effective. (Essentially, if the taxpayer were allowed to use the $40 per acre value as its basis rather than the actual $20 historical cost basis, a portion of the taxpayer’s gain -- the increase in value from 1903 to December 31, 1908 -- would go untaxed.)

The U.S. Supreme Court ruled, however, that under the 1909 Act – which had become effective January 1, 1909 -- the taxpayer should be taxed only on the increase in value after 1908. Increases in value prior to the effective date of the statute were not to be taxed under the terms of that statute. Thus, the taxpayer was entitled to deduct, from its gross receipts from the sale of finished lumber, a basis amount computed with reference to the $40 per acre value as of December 31, 1908.

A key point missed by some tax protesters is that this case -- again -- involved what is known as '''statutory construction''', not constitutional interpretation. In this case, the Court was interpreting '''the 1909 statute'''. No issues involving the '''constitutional''' definition of income, or of '''income under any other tax statutes''', were presented to or decided by the Court.

The Cracking the Code issue -- of whether the private-sector compensation received by an individual for personal services in an activity unconnected with a federal privilege is non-taxable -- was neither presented to nor decided by the Court.

SOUTHERN PAC. CO. V. LOWE

In Southern Pac. Co. v. Lowe, 247 U.S. 330 (1918), the Supreme Court ruled that where a shareholder receives a dividend representing earnings of a corporation realized by the corporation prior to January 1, 1913, the dividend is not includible in the gross income of the shareholder for purposes of the Revenue Act of 1913. No issues regarding the constitutionality of the Federal income tax were presented to or decided by the Court. The Cracking the Code issue -- of whether the private-sector compensation received by an individual for personal services in an activity unconnected with a federal privilege is non-taxable -- was neither presented to nor decided by the Court.

EISNER V. MACOMBER

The case of Eisner v. Macomber, 252 U.S. 189 (1920), dealt with a stock dividend on stock that was essentially equivalent to a stock split, as opposed to an ordinary cash dividend. In the case of this kind of "dividend" the stockholder does not actually receive anything, or realize any additional value. For example, if a stockholder owns 100 shares of stock having a value of $4 per share, the total value is $400. If the corporation declares, say, a "two for one" stock dividend that is essentially similar to a stock split (and the corporation distributes no money or other property), the stockholder now has 200 shares with a value of $2 each, which is still $400 in value - i.e., no increase in value and no income. The pie is still the same size -- but it's sliced into more pieces, each piece being proportionately smaller.

More directly to the point, in this situation there has been no "sale or other disposition" of the stock. The taxpayer still owns the same asset (i.e., the same interest in the corporation) he owned prior to the stock dividend. So, even if his basis amount (generally, the amount he originally paid for the stock) is less than the $400 value (i.e., even if he has an unrealized or potential gain), he still has not yet "realized" the gain. The Court ruled that this kind of "dividend" is not treated as "income" to a shareholder. The Court did not rule on any issue involving the taxability of ordinary "cash" dividends -- where the stockholder actually receives a check from the company, etc. Additionally, the Cracking the Code issue -- of whether the private-sector compensation received by an individual for personal services in an activity unconnected with a federal privilege is non-taxable -- was neither presented to nor decided by the Court.

MERCHANTS' LOAN

Merchants' Loan. In terms of providing pleasure to me at being able to zap tax protesters for citing a case, Merchants' Loan stands with Lucas v. Earl as pretty close to the top on my list of favorites, because these cases illustrate both the stupidity and the dishonesty of tax protesters.

One argument repeatedly made by tax protesters is that the income of individuals is not taxable because income should mean only "corporate profits" or "corporate gain". This is the Merchants' Loan argument, named after the case of -- and here I'll cite the full name for a specific reason which may become apparent -- Merchants’ Loan & Trust Company, as Trustee of the Estate of Arthur Ryerson, Deceased, Plaintiff in Error v. Julius F. Smietanka, formerly United States Collector of Internal Revenue for the First District of the State of Illinois, 255 U.S. 509 (1921). The frivolous argument is essentially that "income" for federal income tax purposes means ''only'' the income of a corporation -- not the income of a non-corporate taxpayer -- because the United States Supreme Court in that case, in discussing the meaning of income, happened to mention a statute enacted in 1909 that taxed the income of corporations.

Now, Weston White himself may not be making that specific mistake here. Nevertheless, the taxpayer in Merchants' Loan was ''not a corporation'' but was the "Estate of Arthur Ryerson, Deceased". The Supreme Court ruled that under the Sixteenth Amendment to the United States Constitution and the 1916 tax statute applicable at the time, a gain on a sale of stock by the estate of a deceased person is included in the income of that estate, and is therefore taxable to that estate for federal income tax purposes.

The corporate profits argument has been litigated seemingly endlessly by tax protesters who embarrassingly cite the Merchants' Loan case APPARENTLY WITHOUT READING THE TEXT OR REALIZING WHAT THE COURT RULED, OR EVEN REALIZING WHO THE TAXPAYER WAS, and the courts have of course uniformly rejected the ridiculous argument that "income" consists only of "corporate profits." See, for example: Cameron v. Internal Revenue Serv., 593 F. Supp. 1540, 84-2 U.S. Tax Cas. (CCH) paragr. 9845 (N.D. Ind. 1984), aff’d, 773 F.2d 126, 85-2 U.S. Tax Cas. (CCH) paragr. 9661 (7th Cir. 1985); Stoewer v. Commissioner, 84 T.C.M. (CCH) 13, T.C. Memo 2002-167, CCH Dec. 54,805(M) (2002); Reinhart v. United States, 2003-2 U.S. Tax Cas. (CCH) paragr. 50,658 (W.D. Tex. 2003); Fink v. Commissioner, 85 T.C.M. (CCH) 976, T.C. Memo 2003-61, CCH Dec. 55,068(M) (2003); Flathers v. Commissioner, 85 T.C.M. (CCH) 969, T.C. Memo 2003-60, CCH Dec. 55,067(M) (2003); Schroeder v. Commissioner, 84 T.C.M. (CCH) 220, T.C. Memo 2002-211, CCH Dec. 54,851(M) (2002), aff'd, 2003-1 U.S. Tax Cas. (CCH) paragr. 50,511 (9th Cir. 2003), cert. denied, 540 U.S. 1220 (2004); Sherwood v. Commissioner, T.C. Memo 2005-268, CCH Dec. 56,200(M) (2005); and Ho v. Commissioner, T.C. Memo 2006-41, CCH Dec. 56,447(M) (2006).

Again, Weston White may not be making the mistake of expressly presenting the "corporate profits" argument, but in any case Merchants' Loan does not help him or Pete Hendrickson. And, of course, you know what's coming next: The Cracking the Code issue -- of whether the private-sector compensation received by an individual for personal services in an activity unconnected with a federal privilege is non-taxable -- was neither presented to nor decided by the Court.

BURK-WAGGONER

OK, regarding Burk-Waggoner Oil Ass'n v. Hopkins, 269 U.S. 110 (1925), here's the "quote" from Weston White:

The Sixteenth Amendment simply does not authorize the Congress to tax as 'incomes' every sort of revenue a taxpayer may receive. As the Supreme Court noted long ago, the 'Congress cannot make a thing income which is not so in fact.

The first sentence of the "quote" is not found in the text. The second sentence is more or less from the case, but is taken out of context. This is dishonesty on the part of Weston White.

The taxpayer in this case, an entity treated as a partnership under Texas law but as a corporation under the federal income tax law, argued (among other things) that the Tax act violated the Constitution. The details of the legal niceties are not that important for purposes of our discussion.

Suffice to say that the Court rejected that argument. Here is the actual quote:

It is true that Congress cannot make a thing income which is not so in fact. But the thing to which the tax was here applied is confessedly income earned in the name of the association.

Notice the word "confessedly". The company did not dispute the assertion that the "thing" to which the tax was being applied was "income." What that means, in terms of formal legal analysis, is that the immediately preceding sentence, while it may be a correct statement about the law, is not a ruling, but instead consists of what legal analysts call "words said in passing," or obiter dicta. This means that those words, even if a correct statement of the law, are not binding -- not a ruling by the Court IN THIS PARTICULAR CASE.

The Court went on:

It is true that Congress cannot convert into a corporation an organization which by the law of its state is deemed to be a partnership. But nothing in the Constitution precludes Congress from taxing[,] as a corporation[,] an association which, although unincorporated, transacts its business as if it were incorporated. The power of Congress so to tax associations is not affected by the fact that, under the law of a particular state, the association cannot hold title to property, or that its shareholders are individually liable for the association's debts, or that it is not recognized as a legal entity. Neither the conception of unincorporated associations prevailing under the local law, nor the relation under that law of the association to its shareholders, nor their relation to each other and to outsiders is of legal significance as bearing upon the power of Congress to determine how and at what rate the income of the joint enterprise shall be taxed.

What does all this have to do with Cracking the Code? Virtually nothing, of course. The Cracking the Code issue -- of whether the private-sector compensation received by an individual for personal services in an activity unconnected with a federal privilege is non-taxable -- was neither presented to nor decided by the Court.

LUCAS V. EARL

For the argument that wages are not taxable, some tax protesters—including convicted tax offender Irwin Schiff—falsely claim that the Supreme Court made the following statement in Lucas v. Earl:

The claim that salaries, wages, and compensation for personal services are to be taxed as an entirety and therefore must be returned [i.e., reported on an income tax return] by the individual who has performed the services which produce the gain is without support, either in the language of the Act or in the decisions of the courts construing it. Not only this, but it is directly opposed to provisions of the Act and to regulations of the U.S. Treasury Department, which either prescribed or permits that compensations for personal services not be taxed as an entirety and not be returned by the individual performing the services. It is to be noted that, by the language of the Act, it is not salaries, wages, or compensation for personal services that are to be included in gains, profits, and income derived from salaries, wages, or compensation for personal services.

In a sense, this quoted language is both "fake" and "real." It is "real" in that it actually is found somewhere and, as explained below, this is very unfortunate for Weston White and the many other tax protesters who continue to be caught quoting it because they don't do their homework and, indeed, do not know how to do their homework when it comes to legal analysis.

Weston White's fakery here is that the quoted words are not the words of the U.S. Supreme Court. Instead, this language is an almost direct quote from page 17 of the taxpayer's brief filed in that case. Guy C. Earl was the taxpayer, and the brief was written by Mr. Earl’s attorneys: Warren Olney, Jr., J.M. Mannon, Jr., and Henry D. Costigan. In some printed versions of the case, this statement and other quotes and paraphrases from pages 8, 10, 14, 15, 17, and 18 of the taxpayer's brief are re-printed ABOVE the opinion of the Court. The Respondent's (taxpayer's) brief is available in PDF format at the web site for the College of Law of the University of Cincinnati. See the file

http://www.law.uc.edu/taxstories/chap09/earl07.pdf earl07.pdf

In the case reprints that include this language (and many of them do not even show it), these excerpts are not identified as being from the taxpayer's brief in a way that non-lawyers would be able to tell. And 99.9% of all tax protesters are NOT lawyers. Tax protesters like Weston White are doomed and they don't even know it, because they lack the skills to be able to analyze legal materials, and this is a classic example. As illustrated below, the quoted words that the protesters claims are part of the ruling of the Court ARE ACTUALLY THE TAXPAYER'S LOSING ARGUMENT IN THE CASE. Tax protesters like Weston White continue to make fools of themselves by copying and pasting these materials blindly from tax protester web sites.

Another point that sails right over the heads of tax protesters is that Lucas v. Earl IS A LEADING CASE. EVERY LAW STUDENT WHO TAKES FEDERAL INCOME TAX STUDIES THIS CASE. When a tax protester cites this case for a proposition which is the VERY OPPOSITE of the Court's ruling, it's all the more hilarious.

Yes, Lucas v. Earl is a leading case in the area of U.S. income taxation, and stands for the ''Anticipatory Assignment of Income Doctrine''. In the case, Mr. Earl was arguing that because he and his wife, in the year 1901, had made a legally valid assignment agreement (for state law purposes) to have his then-current ''and after-acquired income'' (which was earned solely by him) be treated as the income of both him and his wife as joint tenants with right of survivorship, the legally valid assignment agreement should also determine the federal income tax effect of the income he earned (i.e., only half the income should be taxed to him).

The U.S. Supreme Court rejected that argument, essentially ruling that under federal income tax law all the future income earned by Mr. Earl was taxable to him at the time he earned the income, even though he had already assigned part of the income to his wife, and regardless of the validity of the assignment agreement under state law. And obviously, the Cracking the Code issue -- of whether the private-sector compensation received by an individual for personal services in an activity unconnected with a federal privilege is non-taxable -- was neither presented to nor decided by the Court.

Weston appeared to be so proud of his web site -- with his fake quotations and his quotations taken out of context......

[Famspear]

Post-script: My comments above were adapted in part from something I wrote elsewhere on the internet.

[LPC]

Post-script: My comments above were adapted in part from something I wrote elsewhere on the internet.

Plagarist.

Although one of the reasons I started putting together my FAQ is that I wanted something that I could copy-and-paste from in order to respond to the same old arguments.

[LPC]

As I've pointed out before, there is language in the Stratton's Independence opinion that tax protesters never seem to find:

“As to the alleged inequality of operation between mining corporations and others, it is of course true that the revenues derived from the working of mines result to some extent in the exhaustion of the capital. But the same is true of the earnings of the human brain and hand when unaided by capital, yet such earnings are commonly dealt with in legislation as income.”

Stratton’s Independence, Ltd. v. Howbert, 231 U.S. 399, 415 (1913).

I wish that the government had used that quote in the Murphy case.

[mutter]

I wonder why Hendrickson wrote this?
Cheap Deceptions, The Undeniable Truth, And Setting Brushfires Of Freedom In The Minds Of Men
"What does it mean when one party in a debate persistently "fails to recognize" the other party's position?
I'm not talking about a party responding to a position and dismissing it, mind you, but a party which carefully and repeatedly misstates the position, and then carefully dismisses or disputes only the misstatement. What does that signify?
Does it mean that the position actually taken is wrong?
Nope. What is happening in the scenario described above provides no support for that conclusion.
Does it mean that the "misunderstanding" party isn't bright enough to understand what is being said?
This might theoretically be the case, of course, if the position taken is complicated. But if the position is as simple as, for instance, "Not all earnings paid to a worker by a company qualify as "wages" as that term is defined in the tax law", it's not very credible to suggest that anyone could find it hard to understand or follow.
Consequently, when a party which is presented with an assertion such as that "Not all earnings paid to a worker by a company qualify as "wages" as that term is defined in the tax law" repeatedly and invariably "responds" with a deliberate non sequitur such as, "Mr. Jones insists that wages are not income!", what must be recognized is that the position actually taken is true (because it is left to stand undisputed), but the respondent finds that acknowledging the truth of the position is highly inconvenient, and wishes to be allowed to behave as though it has not been asserted...
That is to say, when a party carefully and repeatedly misstates a position, and then carefully dismisses or disputes only the misstatement it has substituted for the position actually taken, it is evidence that the position actually taken is true; that the position actually taken is known to be true by the dissembling party; and, further, that the position actually taken is recognized by the dissembling party as being fatal to the outcome which that dissembling party is seeking"

I am sure you all will have some fun with this

[LPC]

GOULD V. GOULD

Gould v. Gould, 245 U.S. 151 (1917), is another case that tax protesters like Weston White love to quote -- with respect to the following language from the text:

In the interpretation of statutes levying taxes it is the established rule not to extend their provisions, by implication, beyond the clear import of the language used, or to enlarge their operations so as to embrace matters not specifically pointed out. In case of doubt they [the tax statutes] are construed most strongly against the government, and in favor of the citizen.

The "quotation" on WW's web page is somewhat different:

Gould v. Gould, 245 U.S. 151, 153 (1917); United States v. Merriam, 263 U.S. 179, 187-188 (1923)

"...it is the established rule not to extend taxing statutes beyond the clear import of the language used or to enlarge their operations so as to embrace matters not specifically pointed out. The Court further stated that in case of doubt the taxing statutes are construed most strongly against the Government, and in favor of those upon who the tax is sought to be laid."

The words "The Court further stated that" are an editorial change that does not (of course) appear in the actual decision.

It is also interesting to note that the words "most strongly" were omitted from the Merriam decision, the court there stating that:

If the words are doubtful, the doubt must be resolved against the government and in favor of the taxpayer.

Of course, there must still be doubt in order to even apply the Gould rule, and there is no doubt that "compensation for services" is included in gross income under section 61(a).

The actual issue in the Gould case was the taxation of alimony, which is now specifically included by section 61(a). I wonder if WW has ever wondered what "federal privilege" is found in the receipt of alimony?

The actual issue in the Merriam case was whether a bequest under a will was subject to income tax. So neither opinion had anything to do with compensation for labor.

[The Operative]

I wonder why Hendrickson wrote this?
Cheap Deceptions, The Undeniable Truth, And Setting Brushfires Of Freedom In The Minds Of Men
"What does it mean when one party in a debate persistently "fails to recognize" the other party's position?
I'm not talking about a party responding to a position and dismissing it, mind you, but a party which carefully and repeatedly misstates the position, and then carefully dismisses or disputes only the misstatement. What does that signify?
Does it mean that the position actually taken is wrong?
Nope. What is happening in the scenario described above provides no support for that conclusion.
Does it mean that the "misunderstanding" party isn't bright enough to understand what is being said?
This might theoretically be the case, of course, if the position taken is complicated. But if the position is as simple as, for instance, "Not all earnings paid to a worker by a company qualify as "wages" as that term is defined in the tax law", it's not very credible to suggest that anyone could find it hard to understand or follow.
Consequently, when a party which is presented with an assertion such as that "Not all earnings paid to a worker by a company qualify as "wages" as that term is defined in the tax law" repeatedly and invariably "responds" with a deliberate non sequitur such as, "Mr. Jones insists that wages are not income!", what must be recognized is that the position actually taken is true (because it is left to stand undisputed), but the respondent finds that acknowledging the truth of the position is highly inconvenient, and wishes to be allowed to behave as though it has not been asserted...
That is to say, when a party carefully and repeatedly misstates a position, and then carefully dismisses or disputes only the misstatement it has substituted for the position actually taken, it is evidence that the position actually taken is true; that the position actually taken is known to be true by the dissembling party; and, further, that the position actually taken is recognized by the dissembling party as being fatal to the outcome which that dissembling party is seeking"

I am sure you all will have some fun with this

Mutter,

That blather from Pete is practically not worth responding to. He claims that we misunderstand his concept or his reasoning. We do not misunderstand him. We know exactly what he is attempting to do. He is playing a game of semantics and he is losing.

His contention that "not all earnings paid to a worker by a company qualify as wages under the tax law" is somewhat correct. There may be a tiny number of instances where some money paid by an employer is not considered income or a wage. However, his contention that 100% of his earnings are not a part of gross income is wrong. In general terms, when a person is employed by someone and is paid a paycheck on a regular period as compensation for his or her labor, that is a wage. There is no way, no how, under the current tax laws that most people who receive that type of compensation do not have at least most of that amount to be gross income. His stance that the amount shown on a W-2 is not 'wages' and is therefore not income is wrong. If he received money or anything else of value in exchange for his time spent under the direction of an employer, then he received a wage and it is a part of gross income.

To put it simply, Pete is "an extremist who reserved the right to interpret the decisions of the Supreme Court as he read them from his layman's point of view regardless of and oblivious to the interpretations of the judiciary." see U.S. v. Schiff 612 F.2d 73 (1979)

[Famspear]

That blather from Pete is practically not worth responding to. He claims that we misunderstand his concept or his reasoning. We do not misunderstand him. We know exactly what he is attempting to do. He is playing a game of semantics and he is losing.

Yes, and my impression is that one of Pete's ineffectual tactics - a tactic that some of his followers mimic - goes roughly as follows. When a court rejects Pete's arguments, Pete will try to argue that the defeat really isn't a defeat because the court did not use exactly the right "words" in the text of its opinion.

For example, I have seen Pete's followers make reference to statements in court cases that "wages are taxable." Pete's people will say "Oh that doesn't mean Pete is wrong. We know that wages are taxable." wink, wink. "We just don't have wages as Pete defines wages", they will say.

Of course, they are correct that they don't have "wages" as Pete defines them. The problem for them is that the law does not care about that, and the courts don't care about that, either.

The term "wage" is often simply a shorthand term used by the courts, etc., to mean compensation for personal services, including wages, salaries or anything else that would normally be considered compensation (and whether in connection with "employment" or not) whether received in the form of cash, money, checks, Federal Reserve notes, widgets, gold plated ping pong balls, or anything else you can think of.

It matters not whether the courts specifically quote directly from Pete's book or web site or, alternatively, use a term like "wage."

Wishful thinking by Pete's followers regarding the use of terminology in the texts of court decisions will not stop the court losses, and will not prevent the court losses from having the effects those losses are having on Pete, his followers, and their often innocent family members.

[Joe Dirt]

I just picked this off of LH by Westy:

Posted: Fri Feb 13, 2009 6:10 am Post subject:

--------------------------------------------------------------------------------

I absolutely love this quote it completely sums it all up for myself:

Quote:

Be careful "Woodone." Otherwise, Weston ("jack squat") White will jump in and condemn you as (and I'm paraphrasing here) someone who "got scared and showed cowardice to the Feds". Weston ("Einstein") White will accuse you of "obviously not fully understanding where you were standing". You'll be accused of "failing to become well versed in such matters, failing to do your own footwork and research." You'll be denigrated by Legal Scholar Weston White for "showing your back to the enemy." Weston ("fake quotations") White will think that it is "quite sad that you did not bother to first fully comprehend what to expect".


[NOTE: by the use of the phrase "fake quotations" the folks at Quackloss have absolutely no idea what the hell they are talking about and to date have failed to show even one shred of evidence that that is the case.]

Perhaps you should simply egister as a "stowaway" member at http://quatloos.com and they could thereafter direct you in the 'correct' direction. TIA.

BTW, notice how they oh so utterly idolize me... well it would feel good if at least I could at least half-honestly believe that they were have way knowledgeable in such subject matter... quite honestly though the fact of the matter is that they are so damn weak it is not worth my time; though it does say much on their part that they are considered the front line against the battle against the THM, heh. Weaksauce X2!

I have a quarter left to pay for a clue... what the hell does this mean?

[The Operative]

I just picked this off of LH by Westy:

they are considered the front line against the battle against the THM, heh. Weaksauce X2!

I have a quarter left to pay for a clue... what the hell does this mean?

I assume that THM is short for "Tax Honesty Movement".

[Famspear]

Yeah, "THM" probably was intended to stand for "tax honesty movement" -- the tax protesters' term for "crooks who don't want to pay federal income tax and who therefore embrace dumber-than-dirt theories about taxes as a way of rationalizing their related immoral, criminal behavior."

[Famspear]

Notice this blather from Weston White:

BTW, notice how they oh so utterly idolize me... well it would feel good if at least I could at least half-honestly believe that they were have [sic] way knowledgeable in such subject matter...

Weston we're just heart-broken that you can't at least half-honestly believe we're knowledgeable about the law -- but at least we know how to read and analyze legal materials, and we don't make the hilariously stupid, false claim that a losing argument by the losing taxpayer in Lucas v. Earl -- an argument rejected by the Court -- somehow represents a ruling by the Court. At least we don't humiliate ourselves in public by setting up a web site and posting the fakery on that site.

Weston, why don't you have your Tyrannical Response Team spring into action?

[webhick]

Weston, why don't you have your Tyrannical Response Team spring into action?

They're too busy squirting each other with "weaksauce." Take that as you will.

[Joe Dirt]

Weston, why don't you have your Tyrannical Response Team spring into action?

They're too busy squirting each other with "weaksauce." Take that as you will.

Like this??????

You are closing in on the good Captain for my number one humorist spot.....

[Famspear]

Oh, and Weston White.... Regarding your statement here:

by the use of the phrase "fake quotations" the folks at Quackloss have absolutely no idea what the hell they are talking about and to date have failed to show even one shred of evidence that that is the case.

Because:

1. you thereby admitted that you actually believed that we at Quatloos had no idea what the hell we were talking about, and

2. you fell for the trap I set for you, as I repeatedly referred to your fakery on Lucas v. Earl for about three days -- without mentioning that case, and without saying what the fakery was, thereby luring you into making a comment about it,

We conclude that, when it comes to analyzing legal texts, it is now even more obvious that you are the one who has no idea what you are talking about.

You humiliated yourself yet again, Weston White.

So, Weston, what's your answer? Are you gonna send your "Tyrannical Response Team" after us now? Weaksauce, Weston.

Weston, I just hope you never receive a not-so-friendly visit from a deputy United States marshal -- or from a Special Agent of the Internal Revenue Service.

[Famspear]

Weston, I just hope you never receive a not-so-friendly visit from a deputy United States marshal -- or from a Special Agent of the Internal Revenue Service.

Digression: I met with a Special Agent of the FBI and a Special Agent of the IRS just the other day -- both very nice guys. Fortunately, the target of their interest is not a client of mine.

[SteveSy]

As I've pointed out before, there is language in the Stratton's Independence opinion that tax protesters never seem to find:

“As to the alleged inequality of operation between mining corporations and others, it is of course true that the revenues derived from the working of mines result to some extent in the exhaustion of the capital. But the same is true of the earnings of the human brain and hand when unaided by capital, yet such earnings are commonly dealt with in legislation as income.”

Stratton’s Independence, Ltd. v. Howbert, 231 U.S. 399, 415 (1913).

I wish that the government had used that quote in the Murphy case.

One little problem with assuming they were talking about taxing the earnings of the average person. Here it is, such earnings were not commonly dealt with in legislation as income at the time. In fact no person paid a tax on their earnings in 1909, the case was concerning this period, and there was absolutely no federal legislation on the books to do so in that period. The only other act even close was in 1890's, a decade prior, and it was quickly struck down as unconstitutional. Prior to that is was 40+ yrs ago and only 1% of the top incomes in the country were even liable for the tax. Even if we assume we're talking about the 1913 act, which is absurd because it was premised on the newly enacted 16th amendment, it was just placed on the books and not a penny was even collected yet. Is that what they meant by commonly dealt with in legislation? Furthermore, reading that paragraph in context you would have to assume they went on detailing the 1909 corporate excise tax and then out of the blue for no apparent reason started talking about taxing working folk and then right back to the 1909 act again that ONLY concerned corporations. For one, in light of the subject matter before the court what possible reason would there be to even say that. It would have had absolutely no bearing on the issue at hand. If you were reading that back in 1913 and they really meant that you would be saying to yourself "So what, what are you guys smoking up there!".

The truth is a lot of corporations made money by using human labor and their brains unaided by capital back then and it was commonly dealt with in legislation as income. Remember a lot of people didn't get paid back then unless they produced something. There was no minimum wage requirement.

But....it looks good though doesn't it, it just happens to be a perfect fit to support your opinion. Hmmm, kind of ironic this happens to show up in a thread about quoting out of context. lol

Here's the whole thing in context:

The very process of mining is, in a sense, equivalent in its results to a manufacturing process. And, however the operation shall be described, the transaction is indubitably 'business' within the fair meaning of the act of 1909; and the gains derived from it are properly and strictly the income from that business; for 'income' may be defined as the gain derived from capital, from labor, or from both combined, and here we have combined operations of capital and labor. As to the alleged inequality of operation between mining corporations and others, it is of course true that the revenues derived from the working of mines result to some extent in the exhaustion of the capital. But the same is true of the earnings of the human brain and hand when unaided by capital, yet such earnings are commonly dealt with in legislation as income. So it may be said of many manufacturing corporations that are clearly subject to the act of 1909, especially of those that have to do with the production of patented articles; although it may be foretold from the beginning that the manufacture will be profitable only for a limited time, at the end of which the capital value of the plant must be subject to material depletion, the annual gains of such corporations are certainly to be taken as income for the purpose of measuring the amount of the tax.

Emphasis mine of course

[Cpt Banjo]

One little problem with assuming they were talking about taxing the earnings of the average person. Here it is, such earnings were not commonly dealt with in legislation as income at the time. In fact no person paid a tax on their earnings in 1909, the case was concerning this period, and there was absolutely no federal legislation on the books to do so in that period. The only other act even close was in 1890's, a decade prior, and it was struck down as unconstitutional. Prior to that is was 40+ yrs ago and only 1% of the top incomes in the country were even liable for the tax.

There is nothing in the Constitution to support a distinction between a tax on "the earnings of the average person" and a tax on the top 1% of incomes. Both are indirect taxes, and both are constitutional. True, Congress chose to set the exemption amounts very high (in constant dollars) in 1862 and in 1894, but it had the constitutional power to set them at any level it wished.

Moreover, as Stevie well knows, the tax on earnings that was declared unconstitutional in Pollock suffered that fate only because the Court held it couldn't be severed from the tax on investment income, which was the rotten apple that caused the entire act to be declared void. Had the tax on earnings been the sole issue in Pollock, there is language with which Stevie is very familiar that indicates the Court would have upheld the tax.

[SteveSy]

One little problem with assuming they were talking about taxing the earnings of the average person. Here it is, such earnings were not commonly dealt with in legislation as income at the time. In fact no person paid a tax on their earnings in 1909, the case was concerning this period, and there was absolutely no federal legislation on the books to do so in that period. The only other act even close was in 1890's, a decade prior, and it was struck down as unconstitutional. Prior to that is was 40+ yrs ago and only 1% of the top incomes in the country were even liable for the tax.

There is nothing in the Constitution to support a distinction between a tax on "the earnings of the average person" and a tax on the top 1% of incomes. Both are indirect taxes, and both are constitutional. True, Congress chose to set the exemption amounts very high (in constant dollars) in 1862 and in 1894, but it had the constitutional power to set them at any level it wished.

Moreover, as Stevie well knows, the tax on earnings that was declared unconstitutional in Pollock suffered that fate only because the Court held it couldn't be severed from the tax on investment income, which was the rotten apple that caused the entire act to be declared void. Had the tax on earnings been the sole issue in Pollock, there is language with which Stevie is very familiar that indicates the Court would have upheld the tax.

Regardless its absolutely clear, except to those indulging heavily in the kool-aid, they were not talking about taxing working folk.

[grixit]

Ah Westy, did you get weak sauce all over your liberty tool again?