[farmer_giles_of_ham]

heres a fallacy from a website supposedly debunking fallacies:

If you go into your back yard and work for a week taking clay and making pots, there is no income and no tax. However, if you sell your pots, you have income because you have taken in money, and have more money than you had before. Similarly, if you “sell your labor” by agreeing to work in someone else’s factory (or farm) for a week, you have sold your labor and the compensation you receive is taxable.

If I sell my pots as in the above example, I also lose the pots, and the associated value. If they were damaged by someone I could sue for their value, if they were stolen criminal charges based on that value would be in order.

So the statement:

if you sell your pots, you have income because you have taken in money, and have more money than you had before

is utterly false. I have no more value, or money, than I had before- I have both gained AND lost the price of the pots- I haven't got my pots now, have I? All I have now is something that replaced them, the selling price. An even exchange.

Now a different story would be where I somehow operated a franchise, and had to report all sales ("gross income") to my partner, and then talk about deductions for expenses, and finally pay a % to that person. That would be a calculation device, not a natural logic based on value.

But that takes a prior understanding, and just goes to show that "all sources derived" must have some special character to be included.

Which we are openly told over and again- "income from a trade or business within the United States". Which by nature excludes the even exchange, or payment for loss, or loans, credits, debits and re-payment.

There has to be something special about the activity for it count this way, "gross income"