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Saturday, July 07, 2007

Logic Spoken Here

My conflict with the tax-denial movement has driven home the fact that some people don't know a rational argument when they encounter one and can't construct a counterargument in return. More than once I've been told that my insistence that there is an income tax on the books applicable to wage earners in the 50 states means either that:
  1. I am a statist, or
  2. I am willing to trust the government.
I don't feel any need to answer these charges. I'll stand on my body of work. All I want to do is point out the logical fallacies involved.

1. It is hard to see how one's own position on the state can be divined according to whether or not one thinks there is an income tax on the books. This is an empirical matter that is in principle subject to agreement regardless of one's political philosophy. The point is not whether the government can create an objective moral liability through the tax laws. I say it cannot. Rather the issue is simply this: has the state followed its own procedures and (in the narrow sense) legally imposed the tax? All this means is that the Congress passed some laws, the president signed them, the courts have upheld them, and the enforcement agencies are prepared to enforce them. There is no doubt that in that sense, the tax law exists. It seems patently obvious that one can acknowledge this and be a libertarian. To hold otherwise would be similar to arguing that a self-proclaimed anarchist who acknowledges the state's existence isn't really an anarchist. Being a libertarian or an anarchist lies in the "ought (not)" not in the "is (not)."

2. The second charge is similar to the first. Again, it's hard to see any basis for this argument. Concluding that an income tax exists (in the sense described above) requires no trust whatsoever in the state. The conclusion is based on nothing that cannot be confirmed for oneself. The statutes are available for anyone to read (Title 26--Internal Revenue Code). The court cases upholding both the statutes and the government's assertion of the blanket power to tax are also available. They are all in English (more or less). Any competent reader can learn the facts. He need not take anyone's word for it. Trust has nothing to do with it.

The tax-denial movement would do credit for itself by sticking to reason and logic and avoiding absurd accusations, emotional outbursts, and and pseudo-arguments.


Anonymous said...

Sheldon Richman, the statist... now THAT'S freakin' hysterical.

Adam Haman

Anonymous said...

SR I love your stuff One of your hot buttons may have been pushed by these guys. They are probably well-meaning and crazy after years living under statist rule. They are more on your side ( probably ) than against you.
Why not ignore them ?
( tuff to do , I know )


Sheldon Richman said...

Frankly, I am more amused than anything else. Thanks.

Anonymous said...

Let's think about this for a second. If they are the one's who are insistant that someone produce a law that shows that income taxes exist, doesn't that make them statist? Because they are the one's who are insistant that it is "legal" as long as their is written legislation. So surely, for providing them the "legal" foundation, you aren't saying that it is morally ok. It would seem that they are saying it's acceptable.

Thomas Bell said...

Reason and logic dictates if you can't show me the law, except for the tens of thousands of pages that make up Title 26--the entire Internal Revenue Code (and I will rebut your argument), I can assume that there is no law.

Take a look at the Cryer case. Tom Cryer is an attorney. Not only did he tell the jury what he read in the law, he told the jury what he failed to read in the law--the law that required him to file and pay taxes.

Now, that judge might be fairer than other judges, and that jury might be more attentive than other juries, but if you have a sound case, the odds might be in your favor.

Sheldon Richman said...

Thomas, re Cryer: despite the acquittal, does he still have to pay the taxes, interest, and late penalty? Of course he does. The jury question (criminal intent) is a separate question. For good or ill, juries are not the ultimate the judges of the law in the current system. The IRS will still get its money and the full force of the U.S. government will back it up. That's what it means for there to be at tax law. That and nothing else. And that's all I'm saying.

P.S.: Your blog post does not refute the facts, which are that there are words in a statute book that the law enforcement agencies are prepared to carry out--by force if necessary.

Sheldon Richman said...

Re Brushaber, show me where it puts a limit on the meaning of "income"? Quote it, please.

Thomas Bell said...

Brushaber is a long, long decision, and I don't have time to look at the case. Even if you are correct, that is irrelevant to my point. My point is within Title 26 (i.e., IRC), there is no law which requires the average American to file a tax form and pay income taxes. No law. Nothing. Nada. Cryer knows it. Becraft knows it. The tax honesty movement knows it. But apparently you don't know, or refuse to accept, the truth. You and I agree that the income tax is immoral (taxing is stealing, pure and simple). You and I agree that Title 26 is legal and constitutional. But you and I disagree that, within Title 26, whether or not that there is a law which requires the average American to file and pay.

Sheldon Richman said...

If this were a chess game, I would declare: Checkmate!

You quote Brushaber in your post:

"It is clear on the face of this text [16th Amendment] that it does not purport to confer power to levy income taxes in a generic sense, - an authority already possessed and never questioned, - or to limit and distinguish between one kind of income taxes and another, but that the whole purpose of the Amendment was to relieve all income taxes when imposed from apportionment from a consideration of the source whence the income was derived." (Emphasis added.)

Brushaber was the first Supreme Court ruling after the income tax was enacted in 1913. Here was the court, in response to a challenge to the income-tax law, saying Congress always had the power to tax incomes--it was "never questioned." The court put no limits on the meaning of "income." The 1913 law, which "impose[d]" the tax on wager earners, among others, has been amended many times over the years, but it all begins with that first law.

The Brushaber case is constantly cited by the tax-denial movement. (Why, I don't know. Like you, Thomas, they refuse to quote a section that supporters their cause.)

So how can it be irrelevant to your point, which is that there is no law taxing us wage earners? You can chant "no law, nothing, and nada" all you want, but that can't make the law vanish from the books. The Supreme Court is under the impression there is a law. In 1991 the court said it was "incredible" for anyone to think that wages are not taxed. That's that it means for there to be a law. Let's get rid of it, but let's not pretend it doesn't exist.


Thomas Bell said...

Not so fast; Brushaber is also interpreted here, and the Supreme Court also ruled in Gould 2 years later (which both cases have never been overturned), so my interpretation trumps your interpretation. Even your TGIF webside concludes income tax is an indirect tax, and you need sourses in order to be taxable (i.e., Section 861(b)), and the key phrase is "if any". So checkmate is on you.

Sheldon Richman said...

Well, you see, under the rules of chess, you can’t try to checkmate your opponent until you’ve moved out of check yourself. But as I said, Checkmate!

How is Gould relevant? It says, "In case of doubt they [tax statutes] are construed most strongly against the government, and in favor of the citizen." All this says is if there is doubt, the citizen wins. But the courts have had no doubt that the income-tax laws, from the start, constitutionally applied to wages earned domestically. Did you notice that this case never questions whether the tax act applies to wages? The only question was whether alimony came within the meaning of income. The court said no. The Congress later responded by specifically adding alimony to the list of examples of income. (See § 61 of Title 26, Internal Revenue Code: Gross income defined,

You write: "Even your TGIF webside concludes income tax is an indirect tax, and you need sourses in order to be taxable (i.e., Section 861(b)), and the key phrase is 'if any'. So checkmate is on you."

I have to be frank: I don’t know what the hell this is supposed to mean. All income has sources (duh!) and the income tax applies to income "from whatever source derived." What’s your point? The 861 argument is so ridiculous that many tax-deniers condemn it. See its debunking here: ("[F]or a typical U.S. citizen, section 861 is irrelevant. Anyone can go ahead and use it to characterize their income as from U.S. sources or foreign sources, but, because U.S. citizens are taxed on all income from all sources, the characterization simply won’t matter for most U.S. citizens.")

The website you link to re Brushaber is full of crap. It misunderstands Brushaber and Pollock, the preceding case that gives Brushaber its meaning. Outrageously, the site attributes material to Brushaber that appears nowhere in the opinion! (“Income has been taken to mean the same thing as used in the Corporation Excise tax of 19099 [sic] (36 Stat. 112). The worker does not receive a profit or gain from his/her labors--merely an equal exchange of funds for services.”) Search the opinion (here: and find me that quotation!

You won't -- because it's from Bowers v. Kerbaugh-Empire Co. (1926). Here's the full quote:

"It was not the purpose or the effect of that [Sixteenth] amendment to bring any new subject within the taxing power. Congress already had the power to tax all incomes. But taxes on incomes from some sources had been held to be 'direct taxes' within the meaning of the constitutional requirement as to apportionment. [cites omitted] The Amendment relieved from that requirement and obliterated the distinction in that respect between taxes on income that are direct taxes and those that are not, and so put on the same basis all incomes 'from whatever source derived'. [cites omitted] 'Income' has been taken to mean the same thing as used in the Corporation Excise Tax of 1909 (36 Stat. 112), in the Sixteenth Amendment, and in the various revenue acts subsequently passed. [cites omitted] After full consideration, this court declared that income may be defined as gain derived from capital, from labor, or from both combined, including profit gained through sale or conversion of capital." (Emphasis added.)

If you read Pollock you will see that the Sixteenth Amendment was considered necessary for one reason only: the tax on property income -- not wages -- was regarded as direct and in need of apportionment. The Amendment removed that requirement, a point affirmed in Brushaber. None of this had anything to do with the tax on wages, which was always regarded as constitutional, legal, and uncontroversial.

Where do people come up with this stuff?

As I said, Checkmate!

Thomas Bell said...

From your 4th paragraph, you said, "[T]he income tax applies to income 'from whatever source derived.'" Do you mean "gross income" (i.e., Section 61), not "income" (in general)? In Section 1, Subsections (a) through (e), it states, "There is hereby imposed on the TAXABLE income...a tax," not gross income. Gross income IS irrelevant to the tax imposed.

Now, we are headed on a tangent that gets away to our original, pivotal point: if there is a law requiring the average American to file and pay income tax, where is it? And Title 26 is not good enough. Just ask Tom Cryer and Larry BeCraft.

Sheldon Richman said...

Taxable income is gross income minus congressionally specified deductions. You know that; you're playing games now. You miss the point of the Cryer and similar cases, although I have pointed it out often. He was acquitted of a criminal charge because the jury didn't believe there was willful intent to violate the law. He has not beaten the civil liability, i.e., he still have to pay the tax. The Browns were criminally convicted in New Hampshire. Are you saying that in their case there is a tax law?

Sheldon Richman said...

I can't resist, Thomas. The quote that your website says comes from Brushaber is this, "Income has been taken to mean the same thing as used in the Corporation Excise tax of 1909 (36 Stat. 112). The worker does not receive a profit or gain from his/her labors-merely an equal exchange of funds for services".

I found this piece of disinformation here:

This site's author is either incredibly sloppy or dishonest. I'm betting the latter.

As noted, the first sentence quoted is an out-of-context fragment not from Brushaber but from Bowers. (See my comment above.) The sentence is incomplete because if the full sentence were quoted, everyone could see that it goes against the tax-deniers' case. The second sentence appears in neither Bowers nor Brushaber. I can't find it in a case. Was it made up?

I haven't checked the other quotes on the site, but I wouldn't bet a loaf of bread they are any more accurate.

Thomas Bell said...

I skimmed through my Brushaber piece, and what I found is Brushaber employees foreigners, and so, he had to tax them, not himself (an American); that's all I'm saying from the beginning (read my first sentence).

But you didn't answer my main question--where is the law? And be more specific than the entire IRC. I fact I know there is no law for the average American (not the average foreigner) to pay an income tax, which included Tom Cryer, Ed and Elaine Brown, Thomas Bell, and Sheldon Richman, and I will continue to know until someone proves the opposite. But, the vast majority of Americans (including the jury) mistakenly believe there is a law. You take your chances in front of the jury. Some jurors are more attentive than others, and Cryer had a more honest/attentive jury than the Browns.

Also, the Browns represent themselves at their trial. And the judge had a great deal to do with steering the jury (he gets paid by the taxpayers). But the facts are still the same, for everybody.

Sheldon Richman said...

Again wrong. Brushaber was a stockholder in the Union Pacific Railroad who objected to the railroad complying with the income-tax law. The case had nothing to do foreigners. Brushaber wasn't an employer. The word "foreign" doesn't even appear in the case.

Do you ever read the cases you cite? Or do you prefer to trust the con men who sell books on how not to pay taxes? By the way, other people are reading these comments. This is not private correspondence. Aren't you just a bit embarrassed by now?

See my latest post on jury acquittals and the law.

There's an old saying that applies here: when you're in a hole, for gosh sakes stop digging!

Thomas Bell said...

I admit I didn't read Brushaber, and I skimmed through it when I posted it. But I know Title 26 well enough, and within Title 26, there is no law, which is my main point (if there is, someone can prove it by now). If there is a law, the tax code will be simpler (Section 1 will read, "There is hereby imposed on all income...a tax"). If there is no law, that excuses the defendant both criminally and civilly (the state will still be the plaintiff). And if there is no law with Cryer, but there is a law with the Browns, now your playing games!

Sheldon Richman said...

Evidently you didn't skim very well. If you have not read the cases, you have no basis for making any judgment in this matter. You are out of your depth.

Your question has been answered a hundred times. But you were too busy chanting "no law, nothing, nada." In your view, what would constitute proof?

Sheldon Richman said...

"(a) Married individuals filing joint returns and surviving spouses
There is hereby imposed. on the taxable income of— ..." (Italics added.)

You mean like that, Thomas? That's from the tax law. It's followed by similar statements for other categories (heads of households, etc. TITLE 26 > Subtitle A > CHAPTER 1 > Subchapter A > PART I § 1. Tax imposed. Italics added.)

In other words, your demand has been satisfied. Will you now withdraw your unfounded assertion that there is no law in need of repeal?

Thomas Bell said...

You are correct on one part; that's what I mean when I say where is the law? But, in Section 1, the law imposes a tax on taxable income. The next question is, "What is taxable income?", and it gets the fire going. Read my post to be sure.

Sheldon Richman said...

The law and the courts define taxable income as "gross income minus the deductions allowed by this chapter (other than the standard deduction)" (§ 63 Taxable income defined). There's no fire, sorry.

Thomas Bell said...

If you understand that section, "this chapter" is Chapter 1 under Subtitle A (titled "Normal Taxes and Surtaxes"), which includes sections 1, 3, 61, 63, and 861; the whole entire Subtitle A (i.e., Income Taxes) in my blog. So "this chapter" is found in my blog. You really should read it!

Sheldon Richman said...

I read your blog. What's your point? By the way, 861 is not law; it's only a reg. I thought tax-deniers didn't care about regs but only about laws.

We are getting nowhere, and I'm tired of this. Good luck fighting the tax system. We've got a war to oppose.