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What Social Animals Owe to Each Other

Monday, July 02, 2007

The Flimflam of Income-Tax Denial

My latest blast at the tax-denial movement is now posted at The Future of Freedom Foundation website. It's called "The Flimflam of Income-Tax Denial," and it's already getting me angry e-mail.

I hope no one will take me to be saying the income tax is moral and proper. On the contrary, I'm saying something very different: that it is legal (i.e., the government followed its regular procedures) and constitutional.

The tax-deniers often say things like: There is no law that obligates wage earners in the 50 states to pay income taxes. This is plain nonsense because it misconstrues what it means for a (positive) law to exist. For many years there has been a duly enacted section of the federal legal code that Congress, the executive branch, and the courts all interpret as requiring wage earners to pay taxes.

Now I doubt anyone will deny that. If it weren't true, no one would be penalized for not filing and paying taxes, and there'd be no tax-denial movement. You may disagree with that interpretation, but unfortunately those with constitutional power say you're wrong.

But that is what it means for there to be such a law. Thus the statement that there is "no law" is patently wrong. Law, in the positive (not natural) sense, is what Congress and the Executive, ratified by the courts, say it is. What else could it possibly be?


Anonymous said...

Hi Sheldon,

I'm not trying to deny that there is a law, but wondering how come some people do pose the question, as Aaron Russo did in his recent film, "Show me the law", when it's so easy to verify as you demonstrated in your article: go to google.com, type "tax code" and one of the first entries will be the Cornell University Law School U.S. Code Collection.

However, it seems that is not the same as the actual text of the laws, as passed by Congress, as can be seen at thomas.loc.gov. For example, if you search google.com for "military commissions act", one of the first entries will take you to a Wikipedia page that under External Links has a link to "Military Commissions Act of 2006 (as passed by Congress), S.3930, September 22, 2006". If you follow the link, you'll be able to see the text of the law as actually voted on by the House and the Senate (and presumably that same text is what the President signed to make it into law [plus a signing statement?]).

However, the Cornell Code Collection isn't the same as what's available on thomas.loc.gov. If you click on the "How Current is This?" link at law.cornell.edu, it tells you the information has been "subjected to extensive review and codification edits". I don't know much about how that codification takes place but perhaps the tax deniers would be quieted if someone showed them the actual text of the House and Senate bills, including bill numbers if those existed and dates on which they were voted on or signed by whoever was President then (1913?).

I haven't done the research, but it would be interesting to know how and when did some congressmen approve the wording for "gross income" (even if it's not relevant in a court of law, where presumably the U.S. Tax Code is taken as "the bible").


Anonymous said...

Who cares whether or not their is a law in Congress? You can do a search of US Supreme Court hearings on income tax. All of which give the court the oportunity to say whether or not the government can tax, but they don't take that opportunity. Therefore it's law. The court hasn't ruled against it, therefore it's law. That's the problem with GOVERNMENT. You have a bureaucracy that makes rules and regulations, none of which are "laws" under this argument, but the US Supreme Court backs them up. That makes them law. We can argue util we are blue in the face whether or not there is a written law, but if the government and you can pick a branch; it's law.

A law is a law (not in the Hayekian meaning of law). "Thou doth protest too much."

That's why I saw scrap the whole damn thing.

Sheldon Richman said...

See my latest post.

Anonymous said...

Matt, I'm not arguing whether there is a law or not. For practical purposes, there is a law because people have been paying taxes on their income (or suffering the consequences of trying not to). I agree with Sheldon that it's immoral and with you that is should be scrapped.

My point is that perhaps tax deniers would be convinced there is a law if someone would quote, say, bill H.R. 1234/S.567 approved by Congress on July 3rd, 1913, signed into law by President Woodrow Wilson on July 10, 1913, established a tax rate of 1% on salaries and wages of U.S. residents (I'm making all this up as an example), even if such law was amended 50 times after that. At least that would answer the question "Show me the law" and we could move on to more substantive issues.


Sheldon Richman said...

Thhe explanation is here: http://tinyurl.com/2qoeqe

"The Internal Revenue Code wasn't passed all at once. Congress is constantly tinkering with and amending it. The last comprehensive overhaul of the Code occurred on October 22, 1986, when Congress passed Public Law 99-514, entitled "A bill to reform the internal revenue laws of the United States."

"There have been many amendments since then, but each amendment was passed by Congress. The current Internal Revenue Code is the result of the original law plus all the amendments over time. But the Code is still made up of laws passed by the Congress. It was not written by the IRS."

Anonymous said...

My point is; that it doesn't matter. I could pull up a million different cases that don't strike down the income tax. They are in themselves law. One shouldn't have to point to a congressional bill, because you can just point to a court case.

Anonymous said...

Matt, IMHO most people don't understand a single court case (or even a succession of court cases) to be "the law".

Thanks Sheldon. Not to drag this on, but why do you think that none of the public officials in Aaron Russo's film (I think he even talked to an ex-IRS commissioner or Treasury Secretary) were able to refer him to Public Law 99-514 when he asked "Show me the tax law"?


Sheldon Richman said...

I can't explain why someone won't name the law. As I note, the IRS site directs you to Title 26. That's inconsistent with the claim that no official will cite the law. Why doesn't the search at the site come up empty? I have trouble believing that when people are indicted for failure to file or pay federal taxes, the specific section of the law allegedly violated is not cited in the bill of indictment. (E.g., TITLE 26 > Subtitle F > CHAPTER 68 > Subchapter A > PART I > § 6651. Failure to file tax return or to pay tax.) That would be grounds for throwing out the indictment. Such a charge would never get to a jury. See http://tinyurl.com/2feq5c

Sheldon Richman said...

Beware of claims that people have been acquitted by juries in federal tax cases. Such claims are usually misstated. It is true that juries have acquitted people charged with willful failure to file returns and pay taxes. But that refers to criminal charges only. If a defendant can persuade a jury that his failure to file was based on a sincere belief that the income in question was not taxable under the law, he can be acquitted. But the Supreme Court has ruled that a defendant may not argue to a jury that he did not file because he believed the income tax is unconstitutional.

Keep in mind, also, that even when a defendant is acquitted of criminal charges, the tax liability still exists and the IRS goes after those folks for tax, penalty, and interest. That's what it means for there to be a law.

jomama said...

All this discussion of The Law is a
distraction from the gun in the
which always eats itself.

When that happens, They win at
first while losing in the end.

Auto Accident Attorney Houston, Texas said...

I totally agree with you. You have chosen the right word that it is constitutional. All the countries have income tax. It is necessary for the economic growth of the country.