Bulten on how to earn statutor wages

[John J. Bulten]

Natty, thanks for making my point: 'We should expand the term "employee" to not exclude other things otherwise within the meaning of "employee"'. And, of course, that meaning is given at 3401(c) in this case.

Quixote, I'm going to exert my option not to address each of your errors individually, nor to ask you leading questions. However, I will note a few points for others:

There are at least two important planks to the basic CtC defense: my earnings were not statutory wages; and my earnings did not derive any other kind of nonzero income, such as "income derived from compensation". Usually only the first is needed in court, but we fully expect to need the second soon also, and to defend against anything else thrown at us.

Also, an important 4852 subtlety should be explained, which any tax accountant can verify. The line which says (something like) "withheld income tax" is not proof that the money withheld actually constituted a tax, because that line is routinely used for overpayment as well. Hypothetically, if a person earns wages and has federal withholding above the tax owed, the remainder of the withholding is not a true tax but is an overpayment of tax, often called for short "withholding tax". Since it is to be returned to the taxpayer, it is not actually tax. So, continuing the hypothetical, if this person receives a W-2 with a typo, it would be appropriate use a 4852 and to enter as "withheld income tax" the total amount paid to the government for withholding, even though part of it constituted an overpayment and was not literally "withheld income tax". Since this point is easily verifiable (though it might take you two readings to get it), it cannot be used to demonstrate that the filer believes that money to be "tax" or necessarily withheld from "wages". The laws also make explicit that overpayment is not tax.

Nikki, I don't know what you mean by "component". All 3121/3401 wages are compensation, but not all compensation derives nonzero income. To the extent that compensation is 3121/3401 wages or another taxable category, it derives income equal to its value, and can also be said to "be" income. But as recognized by the 1862 Act (and taking "salary" as a synonym of "compensation"), some salaries do not derive income equal to their value (if they did, the 1862 Act would have created double taxation). Since no relevant change has occurred since then, some compensation today derives zero income.

Dan argues that no Court has held Congress can't tax labor in itself. Since no Court has held Congress CAN tax labor in itself, this argument from silence merely underscores the necessity of the written statute.

[LPC]

Dan argues that no Court has held Congress can't tax labor in itself.

No, that's not what I said.

I said that no court has ever held that Congress can't tax *PAYMENT* for labor.

[Nikki]

Nikki, I don't know what you mean by "component". All 3121/3401 wages are compensation, but not all compensation derives nonzero income. To the extent that compensation is 3121/3401 wages or another taxable category, it derives income equal to its value, and can also be said to "be" income. But as recognized by the 1862 Act (and taking "salary" as a synonym of "compensation"), some salaries do not derive income equal to their value (if they did, the 1862 Act would have created double taxation). Since no relevant change has occurred since then, some compensation today derives zero income.

I apologize for using words that are too big for you. If you actually had a problem understanding "component," you could have looked it up in a dictionary.

First, why are you restricting your answer to 3121/3401 wages?

Is there some legal basis for your answer?

What do you mean by "derives income equal to its value?" Is that just another way to avoid answering two simple questions. Or are you attempting to redefine compensation to mean salary just to bolster the planks on your sinking ship.

The questions were excruciatingly simple and I'll repeat them to refresh your memory.

1 - Are wages one of the things which are generally considered to be compensation for services? Yes or No.

2 - According to explicit wording in the tax code, is compensation for services considered income? Yes or No.

You are really weasel-wording and misdirecting when you attempt to steer the discussion toward compensation which does not constitute income. Clearly, when my employer compensates me for my expenses on a business trip, it is not income to me. There are countless other examples of compensation which does not constitute income.

But, to get back to the real question, how is it possible for compensation for services, in the form of wages, to be anything other than income? You allude to the possibility of some salaries not deriving income equivalent to their value, but you don't explain it.

Do you mean cases where a person is underpaid or overpaid in comparison to their skills or the value of the job on the competitive market? Are you talking about a non-union worker earning a lower rate than his unionized counterpart?

Please explain your allusions before you start basing arguments on them.

In closing:

1 - Are wages one of the things which are generally considered to be compensation for services? Yes or No.

2 - According to explicit wording in the tax code, is compensation for services considered income? Yes or No.

[natty]

Natty, thanks for making my point: 'We should expand the term "employee" to not exclude other things otherwise within the meaning of "employee"'. And, of course, that meaning is given at 3401(c) in this case.

Sorry, but 3401(c) does not state any meaning for "employee". Therefore, pursuant to 7701(c), you can not exclude a thing otherwise within the meaning of "employee".

For instance, 3121(d) states a meaning of "employee". Therefore, you can not exclude that meaning. That certainly blows CtC all to hell.

[Cpt Banjo]

(I predicted correctly: you did try and weasel out by changing the subject).

I'm sorry you think so, my perception was that you changed the subject and I was trying to bat you away with a weak reed so we could get back to the subject. I do believe I said I was here to have fun. Oh, do you subscribe to any norms of debate?

I know Congress can tax any accession to wealth they can tax. And Constitutional income necessarily means "any accession to wealth they can tax". Just observing that something is an accession to wealth does not prove Congress can tax it. Sorry.

It's entirely self-evident that they can tax that that they can tax, that they can tax profits that they can tax, and that they can't tax profits that they can't tax. That was the subject you seized on.

To this entirely axiomatic observation, you apparently imported the proposition that "all accessions are taxable".

No, what I did was to invite you to (a) give an example of an accession to wealth that can't be constitutionally taxed, (b) cite the provision of the Constitution that says so, and (c) cite juduicial authority supporting your claims for (a) and (b). You failed to do so.

You bear the burden of proof, and Glenshaw and Kowalski don't carry it, as already adverted. But you threw the burden of proof to me for the negation of your proposition, and I'll admit I fell for it.

And in doing so you contradicted your claim that there is no law addressing what Congress can't tax. The constitutional prohibition on taxing exports and the doctrine of intergovernmental tax immunity (discussed below) are obvious examples of law addressing what Congress can't tax.

Since you wanted the Constitution on taxation, everyone knows the Constitution only makes one prohibition and two qualifications about taxation, so I spit that out, and maybe it wasn't on point.

No, it's very much on point. But you seem to want to add prohibitions to the Constitution other than the one that's specifically mentioned (exports).

The only place the Constitution otherwise talks somewhat explicitly about what Congress can't tax is the 10th Amendment, but other amendments implicitly restrict Congressional power to tax as well.

Hogwash. The 10th Amendment doesn't talk explicitly about taxation at all. In fact, it refers to "the powers not delegated to the United States by the Constitution nor prohibited by it to the States" as being reserved to the States or the people. But since the power to tax has been delegated to Congress under I.8.1, the 10th is beside the point.

And, there was and remains heated disagreement about what is within Congressional jurisdiction to tax.

With one exception, I know of little disagreement among educated people regarding what Congress can and can't tax. The only disagreement comes from illucid TP's who spew their crackpot theories around. The exception, btw, relates to the issue of intergovernmental tax immunity, a doctrine created by the Supreme Court to limit Congress' power to tax state and local governmental entities that is based upon the concept of federalism that is implicit in the Constitution. While there may be some room for debate regarding how far this immunity does or should extend, it should be noted that there is a recognized body of case law that explicitly acknowledges the existence of the doctrine. On the other hand, there is no case that hasn't been overruled that says that there's a type of income earned by an individual that can't be constitutionally taxed. If you think there is, please cite it.

Certain objects cannot be taxed by Congress without apportionment, such as land and people and stock dividends and exercise of Constitutional rights.

There is no case that holds that Congress can never tax the exercise of a constitutional right. While there are cases dealing with certain specific rights (such as the Opelika and Murdock cases, dealing with state taxation of First Amendment rights), no case has ever generalized this to cover all possible constitutional rights. Moreover, property rights (rightly or wrongly) have never enjoyed the same protected status in constitutional law as have First Amendment rights. See the famous (or infamous, depending on your viewpoint) footnote 4 to the 1938 Carolene Products case.

-Certain objects can be taxed without apportionment, such as privileges associated with exercise of Constitutional rights (for example, licenses or charters).

- The activity of working for pay in itself, if not associated with any privileges or federal nexus, is a Constitutional right and cannot be taxed without apportionment.

Of course, a privilege is not a condition precedent to taxation without apportionment. Nor is there any authority whatsoever for the proposition that working for pay absent a federal nexus can't be taxed without apportionment. More specifically, of course, is that there's no authority for the proposition that the compensation received for working for pay in a nonfederal context can't be taxed without apportionment.

First see the inalienable rights in the Declaration and their reference in the 5th and 14th Amendments, as well as the restrictions of the 10th.

What you still don't get is that (a) the Declaration is not and never has been the law, and that (b) the 5th and the 14th Amendments don't bar the government from ever depriving people of their rights. In fact, the concept of the inalienability of property rights is flatly contradicted by the 5th Amendment's recognition of the power of eminent domain. The 5th and the 14th prohibit the deprivation of rights without due process of law; they don't impose a blanket prohibition.

[irrelevant dicta from cases that never dealt with the income tax are omitted]

So right to work is a 5th, 10th, and 14th Constitutional right (1, 2, 6);

Wrong. I have no constitutional right, for example, to work as a hit man for the Sopranos or to practice medicine or law without a license (and considering last Sunday's episode, Tony may need a doctor before long).

and such Constitutional rights are inalienable by tax (3, 4, 5, 6, 7). They cannot be taxed indirectly, and due to apportionment they can only alienate the state, not the individual, when taxed directly.

Wrong again. The citations have no bearing upon the taxation of economic transactions. For example, my right to property clearly includes the right to transfer it gratuitously to someone else. But if I do so, there is no question whatsoever that Congress can tax the transaction without apportionment, and no privilege or federal nexus is required for it to be able to do so.

[rachel]

Natty, thanks for making my point: 'We should expand the term "employee" to not exclude other things otherwise within the meaning of "employee"'. And, of course, that meaning is given at 3401(c) in this case.

Quixote, I'm going to exert my option not to address each of your errors individually, nor to ask you leading questions. However, I will note a few points for others:

There are at least two important planks to the basic CtC defense: my earnings were not statutory wages; and my earnings did not derive any other kind of nonzero income, such as "income derived from compensation". Usually only the first is needed in court, but we fully expect to need the second soon also, and to defend against anything else thrown at us.

Also, an important 4852 subtlety should be explained, which any tax accountant can verify. The line which says (something like) "withheld income tax" is not proof that the money withheld actually constituted a tax, because that line is routinely used for overpayment as well. Hypothetically, if a person earns wages and has federal withholding above the tax owed, the remainder of the withholding is not a true tax but is an overpayment of tax, often called for short "withholding tax". Since it is to be returned to the taxpayer, it is not actually tax. So, continuing the hypothetical, if this person receives a W-2 with a typo, it would be appropriate use a 4852 and to enter as "withheld income tax" the total amount paid to the government for withholding, even though part of it constituted an overpayment and was not literally "withheld income tax". Since this point is easily verifiable (though it might take you two readings to get it), it cannot be used to demonstrate that the filer believes that money to be "tax" or necessarily withheld from "wages". The laws also make explicit that overpayment is not tax.

Nikki, I don't know what you mean by "component". All 3121/3401 wages are compensation, but not all compensation derives nonzero income. To the extent that compensation is 3121/3401 wages or another taxable category, it derives income equal to its value, and can also be said to "be" income. But as recognized by the 1862 Act (and taking "salary" as a synonym of "compensation"), some salaries do not derive income equal to their value (if they did, the 1862 Act would have created double taxation). Since no relevant change has occurred since then, some compensation today derives zero income.

Dan argues that no Court has held Congress can't tax labor in itself. Since no Court has held Congress CAN tax labor in itself, this argument from silence merely underscores the necessity of the written statute.

John,
I have to intercede here. Pete especially and you are totally wrong by thinking that 3401(c) is restricted to federal and state individuals.

Natty, thanks for making my point: 'We should expand the term "employee" to not exclude other things otherwise within the meaning of "employee"'. And, of course, that meaning is given at 3401(c) in this case.

John! Pete Hendrickson has left you completely brainwashed and mentally naked.
In the 1862 or the 1913 revenue act, for that matter, do see any exceptions like the underage paperboy, the church minister or the college sorority worker like that found in the 1939 through the 1986 code?
No you dont do you!
It wasnt until Social Security was enacted did you see those exceptions found in section 3401(a) for the deductions of 3402.
Those exceptions originate from 3121(b) "employment".
So what does that tell you John?
Do you now understand why the judge ordered Pete to pay back the refund.
Its because those who are signing a w4 with the ssn on it are working for Social Security benefits which are included in 3401(a).
All 3401(c) does is add in the federal and state individual back into 3401(a) which 3121(b) has excluded.
You want to know what else John?
There was a very small percentage of the American population taxed under the 1862 and 1913 acts.
There wasnt an influx of taxpayers until American's applied for ssn's.
And how ironic is it that? Because hortly after 1936 which was the year Social Security was enacted did the 1939 tax code come into existence with all the definitions to all those never seen before terms.
Therefore John, whether you like it or not. 3401(a) consists of those who are in 3121(b) "employment", except of course, those who are excepted from 3121(b) or those without a ssn.

[Famspear]

Upswell of orchestra music... chirping birds, an indistinct chorus of voices, fading in....

---"All 3121/3401 wages are compensation, but not all compensation derives nonzero income. To the extent that compensation is 3121/3401 wages or another taxable category, it derives income equal to its value, and can also be said to 'be' income. But as recognized by the 1862 Act (and taking 'salary' as a synonym of 'compensation'), some salaries do not derive income equal to their value (if they did, the 1862 Act would have created double taxation). Since no relevant change has occurred since then, some compensation today derives zero income.

...number nine ... number nine ... number nine ... number nine ... (slowly fading out, restful, meditative) . . . number nine ... number nine .....

[Quixote]

There are at least two important planks to the basic CtC defense: my earnings were not statutory wages; and my earnings did not derive any other kind of nonzero income, such as "income derived from compensation". Usually only the first is needed in court, but we fully expect to need the second soon also, and to defend against anything else thrown at us.

Right. You rely on the naked assertion that you derive no income from the compensation you receive. Despite numerous requests, you refuse to even attempt to prove that absurd notion. You prefer to discuss the completely irrelvant question as to if your compensation is wages.

Also, an important 4852 subtlety should be explained, which any tax accountant can verify. The line which says (something like) "withheld income tax" is not proof that the money withheld actually constituted a tax, because that line is routinely used for overpayment as well. Hypothetically, if a person earns wages and has federal withholding above the tax owed, the remainder of the withholding is not a true tax but is an overpayment of tax, often called for short "withholding tax". Since it is to be returned to the taxpayer, it is not actually tax. So, continuing the hypothetical, if this person receives a W-2 with a typo, it would be appropriate use a 4852 and to enter as "withheld income tax" the total amount paid to the government for withholding, even though part of it constituted an overpayment and was not literally "withheld income tax". Since this point is easily verifiable (though it might take you two readings to get it), it cannot be used to demonstrate that the filer believes that money to be "tax" or necessarily withheld from "wages". The laws also make explicit that overpayment is not tax.

I neither stated nor implied that having withholding tax withheld implied the existence of a tax liability. I stated that having withholding tax withheld from WAGES implies the receipt of wages. The only valid entry on line 7f of Form 4852 is the amount of withholding tax withheld from one's wages.

The instructions for line 7f of Form 4852 are reasonably clear.

Federal income tax withheld. Enter the amount of federal
income taxes withheld from your wages for the year

Even if you were unfamiliar with the instructions to the form, and the line captions on the form itself, I find it hard to believe that anyone who spends so much time on IRC §3401 is completely ignorant of IRC §3402, which imposes the withholding tax on wages.

If the money you received in exchange for labor was not wages, then the person who paid it erred in withholding tax from it. The IRC provides no credit for amounts stolen by your payer. You have no claim against the government for that money, only against the theif.

[John J. Bulten]

Hi all, just checking in.

Nikki's questions, like most IRS questions, are in fact ambiguous. Nikki's distractions, like most IRS distractions, misdirect one to categories which she can seize on more easily, and she'd probably prefer I was talking about one of those simple categories, but I'm not. But for fun I'll answer:

1: Probably yes, but it depends. By "wages", does Nikki mean "pay for work", or "either 3121 or 3401 statutory wages", or something else? By "compensation for services", does Nikki mean "pay for work", or "pay for services as an official", or something else?

2: No. There is no explicit wording in the code considering compensation for services to be income. CFS is an "item", and the word "item" may have as its antecedent either "source" or "income", which is ambiguous. The regs use the similarly ambiguous phrase "item of income", which may again refer either to "source" or "income". I do not have immediate access to the 1940s law on which the code language is based, so cannot resolve the ambiguity on those grounds. But based on other statutory history, it appears that CFS is a source.

gross income means all income from whatever source derived, including (but not limited to) the following items: (1) Compensation for services, including fees, commissions, fringe benefits, and similar items;

Natty, I will repeat how silly it is to admit there is no meaning and then try and find things otherwise within that (or "the") meaning. And how silly it is to use a definition for purposes only of Chapter 21 as if it has relevance to a definition of the same word for purposes only of Chapter 24.

But more specifically, we should not exclude other things otherwise within the meaning of the term defined. The term defined is "employee for purposes of Chapter 24", or 3401-employee, which is a different term from "employee for purposes of Chapter 21", or "22", or "23", and is a different term from "employee for use in general conversation", if such can even be called a term. The evidence that these terms are all different is all throughout the Code, whenever any clause uses language like "wages as defined in section 3121(a)", which expressly distinguishes that item from 3401-wages, or wages in general conversation.

This being indisputable, there are only two ways to be "within the meaning of 3401-employee": explicit mention (government worker or corporate officer), and "otherwise" (which several courts and regulations have interpreted as "being within the same class as the explicit mentions"). Your view amounts to a lift by the bootstraps, by saying that ordinary workers are "otherwise" 3401-employees because they're within the same class as ordinary workers, which are "otherwise" 3401-employees because they're in the same class as, uh, ordinary workers, which are ....

Banjo, I declined your invitation because of my preceding request for authoritative norms of debate, which I repeated to you and you continued to ignore. But for fun I will note the implications of Opelika: if "a state may not impose a charge for the enjoyment of a right granted by the federal constitution," and the state's prohibitions are taken from Congress's, then Congress may not impose a tax for the enjoyment of any Constitutional right. Given this, it is also clear that the antecedent of "those freedoms" (on which tax would be unconstitutional) is both 1st and 14th Amendment freedoms and includes the right to property. Also I have no idea how you intend to use the Carolene footnote, which you failed to cite or link, which begins, "There may be narrower scope for operation of the presumption of constitutionality when legislation appears on its face to be within a specific prohibition of the Constitution, such as those of the first ten Amendments, which are deemed equally specific when held to be embraced within the Fourteenth" (304 US 144, 152), seeming to support my position without further comment. Most everything else you say is as irrelevant as if Dan was writing your cut-and-paste stimulus-and-response for you.

http://caselaw.lp.findlaw.com/scripts/g ... 9&page=105
http://caselaw.lp.findlaw.com/scripts/g ... &invol=144

Quixote, the W-2 line 2 also says "Federal income tax withheld", but millions of people fill that box with an amount that includes overpayment as well. But your idea of suing the presumable "employer" is certainly on the cutting edge.

Now, the topic of this thread is my summary of the statutory definition of "wages" in 3121 and 3401. Did ANYONE want to dispute my summary, or to admit authoritative standards for doing so? Since you all (except for a swipe from Natty) so easily jump to fighting the other plank ("my earnings did not derive income in any other way"), have you totally abandoned this one ("my earnings are not wages")?

[Quixote]

Now, the topic of this thread is my summary of the statutory definition of "wages" in 3121 and 3401. Did ANYONE want to dispute my summary, or to admit authoritative standards for doing so? Since you all (except for a swipe from Natty) so easily jump to fighting the other plank ("my earnings did not derive income in any other way"), have you totally abandoned this one ("my earnings are not wages")?

John, when you can explain why it matters, for the purpose of IRC §61, that your wages are not wages, I'll join the discussion of that subject. Until then, I'll treat it as the red herring it is.

[Cpt Banjo]

Banjo, I declined your invitation because of my preceding request for authoritative norms of debate, which I repeated to you and you continued to ignore.

No, you attempted to give an example of an accession to wealth that couldn't be taxed and failed miserably.

But for fun I will note the implications of Opelika: if "a state may not impose a charge for the enjoyment of a right granted by the federal constitution," and the state's prohibitions are taken from Congress's, then Congress may not impose a tax for the enjoyment of any Constitutional right. Given this, it is also clear that the antecedent of "those freedoms" (on which tax would be unconstitutional) is both 1st and 14th Amendment freedoms and includes the right to property.

Hmm, guess you missed this part of the opinion:

We do not mean to say that religious groups and the press are free from all financial burdens of government. See Grosjean v. American Press Co., 297 U.S. 233, 250 , 56 S.Ct. 444, 449. We have here something quite different, for example, from a tax on the income of one who engages in religious activities or a tax on property used or employed in connection with those activities. It is one thing to impose a tax on the income or property of a preacher. It is quite another thing to exact a tax from him for the privilege of delivering a sermon. The tax imposed by the City of Jeannette is a flat license tax, the payment of which is a condition of the exercise of these constitutional privileges…A state may not impose a charge for the enjoyment of a right granted by the federal constitution. Thus, it may not exact a license tax for the privilege of carrying on interstate commerce ( McGoldrick v. Berwind-White Co., 309 U.S. 33 , 56-58, 60 S.Ct. 388, 397, 398, 128 A.L.R. 876), although it may tax the property used in, or the income derived from, that commerce, so long as those taxes are not discriminatory. Id., 309 U.S. at page 47, 60 S.Ct. at page 392, 128 A.L.R. 876 and cases cited. Opelika, 319 U.S. at 112-113

Also I have no idea how you intend to use the Carolene footnote, which you failed to cite or link, which begins, "There may be narrower scope for operation of the presumption of constitutionality when legislation appears on its face to be within a specific prohibition of the Constitution, such as those of the first ten Amendments, which are deemed equally specific when held to be embraced within the Fourteenth" (304 US 144, 152), seeming to support my position without further comment.

My reference to the Carolene Products footnote was an attempt to illustrate how the Court treats property rights differently from other rights. It's not my fault if you couldn't understand it. Heck, even Opelika acknowledged the distinction between commercial rights and First Amendment rights:

The alleged justification for the exaction of this license tax is the fact that the religious literature is distributed with a solicitation of funds. Thus it was stated in Jones v. Opelika, supra, 316 U.S. at page 597, 62 S.Ct. at page 1239, 141 A.L.R. 514, that when a religious sect uses 'ordinary commercial methods of sales of articles to raise propaganda funds', it is proper for the state to charge 'reasonable fees for the privilege of canvassing'. Situations will arise where it will be difficult to determine whether a particular activity is religious or purely commercial. The distinction at times is vital. As we stated only the other day in Jamison v. Texas, 318 U.S. 413 , 63 S.Ct. 669, 672, 87 L. Ed. --, 'The state can prohibit the use of the street for [319 U.S. 105, 111] the distribution of purely commercial leaflets, even though such leaflets may have 'a civil appeal, or a moral platitude' appended. Valentine v. Chrestensen, 316 U.S. 52, 55 , 62 S.Ct. 920, 922. They may not prohibit the distribution of handbills in the pursuit of a clearly religious activity merely because the handbills invite the purchase of books for the improved understanding of the religion or because the handbills seek in a lawful fashion to promote the raising of funds for religious purposes.' ...As we have said, the problem of drawing the line between a purely commercial activity and a religious one will at times be difficult. On this record it plainly cannot be said that petitioners were engaged in a commercial rather than a religious venture. Opelika , 319 U.S. at 110

[natty]

Natty, I will repeat how silly it is to admit there is no meaning and then try and find things otherwise within that (or "the") meaning. And how silly it is to use a definition for purposes only of Chapter 21 as if it has relevance to a definition of the same word for purposes only of Chapter 24.

But more specifically, we should not exclude other things otherwise within the meaning of the term defined. The term defined is "employee for purposes of Chapter 24", or 3401-employee, which is a different term from "employee for purposes of Chapter 21", or "22", or "23", and is a different term from "employee for use in general conversation", if such can even be called a term. The evidence that these terms are all different is all throughout the Code, whenever any clause uses language like "wages as defined in section 3121(a)", which expressly distinguishes that item from 3401-wages, or wages in general conversation.

This being indisputable, there are only two ways to be "within the meaning of 3401-employee": explicit mention (government worker or corporate officer), and "otherwise" (which several courts and regulations have interpreted as "being within the same class as the explicit mentions"). Your view amounts to a lift by the bootstraps, by saying that ordinary workers are "otherwise" 3401-employees because they're within the same class as ordinary workers, which are "otherwise" 3401-employees because they're in the same class as, uh, ordinary workers, which are ....

You have conveniently ignored the explicit words of 7701(c) and created this nonsense about "class" which just so happens to assume the conclusion that a tax imposed on the earnings of an ordinary worker would require apportionment- all in error.

It is not that "employee" has no meaning. It is 3401 does not limit its meaning by using the term MEANS. 'To include' does not mean and can not mean 'means'. The evidence is how Congress has used the terms in the Code itself. Therefore, the meaning of 3401-employees can be anything normally within its meaning (ie., dictionary or even Ch. 21.)

Besides, Ch. 24 is a COLLECTION statute. No tax is imposed there. So what is the withholding tax applied to if it isn't the tax imposed by Ch. 1? See Sec. 31.

[Imalawman]

Besides, Ch. 24 is a COLLECTION statute. No tax is imposed there. So what is the withholding tax applied to if it isn't the tax imposed by Ch. 1? See Sec. 31.

Exactly, this is what I want to know! How does 3401 negate section 61? Where does 3401 specifically negate any taxes imposed? I just don't get it. Ok, let's say I grant you that withholding doesn't apply to a private sector employee. Fine. Now, 61 still says that you have pay taxes, though, now you'll have to find that money at the end of the year since you didn't pay throughout the year.

[John J. Bulten]

I will answer your questions when you answer whether my nonfederally-connected earnings are 3121(a) wages, and whether they are 3401(a) wages, and why or why not.

To Natty, my "nonsense about 'class'" is taken from several courts and regulations which I have frequently cited. From what cite do you get your "sense" that 7701(c) defines "includes" as "includes but is not limited to", when those words are not used?

To Banjo, I will agree that income taxes and property taxes are different from speech taxes. Near as I can tell, federal taxes on voluntary activities associated with earning or owning property can be imposed by excise. But I don't believe there is any activity directly associated with free speech that can be taxed by excise. If, however, I'm misreading, it is about six degrees removed from the question above. Now would you answer the question above please?

[natty]

To Natty, my "nonsense about 'class'" is taken from several courts and regulations which I have frequently cited. From what cite do you get your "sense" that 7701(c) defines "includes" as "includes but is not limited to", when those words are not used?

You have misread the "several courts and regulations" from which you have cited. You continually enter this problem with the erroroneous assumption that Congress can only tax the earnings of the ordinary worker if it is apportioned.

The "class" does not refer to the items within the "includes" clause. The "class" refers to the term defined which in this case is "employee". Anything that would come within the meaning of "employee" can not be excluded because of 7701(c).

Ch. 24 does not specify a meaning to "employee", so by default, the meaning is its ordinary common meaning. That is just common sense. Therefore, the ordinary worker falls within the meaning of "employee".

This is even more evident by 3121(e). To conclude that "State" does not mean a union State is simply stupid.

btw, Congress can tax the earnings of the ordinary worker without apportionment. So having failed your assumption, your reasoning fails also.

[Quixote]

I will answer your questions when you answer whether my nonfederally-connected earnings are 3121(a) wages, and whether they are 3401(a) wages, and why or why not.

Who cares? It has no bearing on your income tax liability.

[LPC]

I will answer your questions when you answer whether my nonfederally-connected earnings are 3121(a) wages, and whether they are 3401(a) wages, and why or why not.

Okay, here are your answers:

1. Yes, your "nonfederally-connected earnings" are 3121(a) wages;

2. Yes, your "nonfederally-connected earnings" 3121(a) wages; and

3. Why? Because there is nothing in the statutes requiring that earnings be "federally-connected" in order to be "wages" as defined by the statutes.

Found any case yet in the history of the United States in which the judge suggested that Congress cannot tax PAYMENTS for labor?

[Imalawman]

I will answer your questions when you answer whether my nonfederally-connected earnings are 3121(a) wages, and whether they are 3401(a) wages, and why or why not.

Ok, suppose I say, yes, they are 3121(a) and yes they are 3401(a). Now, how would your answer change if I said, No and No? Or what would the difference be if I said, Yes and No or vice versa?

Further, I'm giving you all your assumptions about 3401(a) and 3121(a) wages to be correct. (very generous of me) So there's no need for my opinion. All I want to know is, given your belief in "nonfederally connected wages", how does that relate to the liability imposed in sec. 1 and 61?

[John J. Bulten]

I could argue that Lawman didn't give a why and Dan wasn't the antecedent of "your", but, for fun, I'll have a go.

First, Dan, "federally-connected" is a summary of my quote at the head of this thread, which is a summary of the law. You have never found a way to import nonfederally-connected work into this law. Would you like to try again like Natty?

And have you found anything which says the judge CAN tax payments for labor in themselves? I presume you have and I've already batted it away.

Natty, you still haven't given any cites for your "common sense" proposition that "by default, the [Chapter 24] meaning is its ordinary common meaning", or your bald assertion that "Congress can tax the earnings of the ordinary worker without apportionment". I have the cites, but I'm bored, especially if you've seen them before.

Lawman, right, I apologize for not noticing that you were yielding the first plank to me for the sake of argument, though I hope you will later realize the consequences of that choice. Now as to the other plank, Section 61 liability, you have the burden of proof: if I did not earn 3121/3041 wages, the W-2 is wrong and inadmissible, and no other law or evidence suggests the payments were Section 61 gross income (or compensation for that matter).

But I will help you by repeating the CtC observations explicitly and off-the-cuff, without rechecking the original sources for exact wording. Section 86 of the Revenue Act of 1862 imposed a percentage tax on government "salaries". Section 90 imposed a percentage tax on income derived from "salaries" (and any other source). The enforcement of these two taxes did not collect twice from government workers by adding the Section 86 and Section 90 taxes together; nor were the two propositions considered a single tax (which would make 86 a redundant subset of 90). Therefore income derived from salaries in 1862 was not the same as salaries. (Over time the words "wages" and "compensation" were used synonymously with "salaries", so I am treating all three as identical for this derivation.) What was "income derived from salaries" in those days? It could have meant income derived from reselling labor, or income derived from investing salaries, or similar vague, unspecified concepts.

At some point these two provisions were combined, and by 1921, the tax was on (paraphrase) "income derived from compensation (including, for government compensation, the compensation received as such)". Clearly by that time "income derived from compensation" had come to mean government compensation as such. There was no provision that nongovernment compensation derived income equal to its value like government compensation did: this would be the primary place to seek a provision such as I request, and it's just not there. Also, this was before the "including" definition was added around 1928, so "including" must be taken as limiting.

Eventually, the proposition was well-established that government salaries always derived income equal to their value (because the personal service was regarded as a chivalrous gift, and the compensation regarded as gain), so this derivation was dropped from the law. However, "income derived from nongovernment compensation" has continued as an undefined field for 145 years (except for court attempts to snipe at its heels by reference to laborers' misguided stipulations of income). I conclude that it has had the same meaning for all 145 years.

Since I observe that there was no general taxation of all laborers until the 1935-1944 period, I conclude that laborers do not derive "income" from "compensation" (if they even have compensation).

What I do observe in 1935-1944 is a highly politicized series of laws and highly labyrinthine amendments, culminating in a two-year unapportioned "Victory" tax which mandated withholding on labor pay in 1943, followed by a rollover of "Victory" taxpayers into net-income provisions which had been previously only for business and federal types. The Victory Tax was never ruled direct or indirect due to war.

If the Victory Tax was indirect, it could have been challenged as optional, and if direct, as unapportioned. But the Supremes were providentially spared such an embarrassing question. Ever since then, its successor ("withholding tax", accompanied by SS/Medicare taxes) was firmly entrenched as if just as mandatory as the Victory Tax. Challengers found themselves swept away by the labyrinth because they could not extricate themselves from one or another presumptive inclusions, and, oddly, no major tax structure changes occurred after 1944, until at least the IRC of 1954.

Given this brief history of the origin of an apparent labor tax, and its conflict with no income being derived from nonfederal labor or compensation, I research the law, and lo and behold it depends utterly on limited expansion being presumed to be generic expansion. And only in every place where the Constitutional border is challenged, and nowhere else. Significant! As Lawman backhandedly acknowledges.

So, no law derives income from nonfederal compensation, and no law includes nonfederal pay in wages. Back to you.

[natty]

Natty, you still haven't given any cites for your "common sense" proposition that "by default, the [Chapter 24] meaning is its ordinary common meaning", or your bald assertion that "Congress can tax the earnings of the ordinary worker without apportionment". I have the cites, but I'm bored, especially if you've seen them before.

Common sense says that if you can't use the common ordinary meaning of the word IF no other meaning is provided, then logic says you must define every word as to its meaning.

Why provide the cites? You couldn't correctly report what the court said if your life depended on it. You have proven that over and over again. You just reinterpret the court's opinion to fit your preconceived conclusions.

The Constitution says nothing about "unalienable rights" and no federal court has ever held that a tax on ANY kind of income was a Direct Tax that required apportionment. You can claim all you want that you will be the one who "presents the argument properly" but you are just a deluded fool. Your arguments never rise above the level of semantics. That is the lowest form of debate.