Debts Public And Private/income Tax

[REDCLOUD]

One of the primary causes of the American Revolution were disagreements over taxation and money, more specifically, what constitutes money and what is the government's role in the creation and regulation of money. These issues were well addressed in the pre-revolutionary common-law, the Articles of Confederation, and the Constitution. This era is when the distinction between public debts and private debts was developed, the government's right to tax its citizens was set, and what constituted "Money." The Constitution contains seven major provisions dealing with the referring to money:

Article 1, Section 8, Clause 2. "The Congress shall have power to borrow money on the credit of the United States”;

Article 1, Section 8 , Clause 5. "The Congress shall have power to coin money, regulate the value thereof, and a foreign coin, and fix the standard of weights and measures”;

Article 1, Section 8, Clause 6. "The Congress shall have power to provide for the punishment of counterfeiting the securities and current coin of the United States”;

Article 1, Section 9, Clause 1. "The migration or importation of such persons as any of the states now existing shall think proper to admit, shall not be prohibited by the Congress prior to the year 1808, but a tax or duty may be imposed on such importation, not exceeding $10 for each person”;

Article 1, Section 9, Clause Seven. "No money shall be drawn from the treasury, but in consequence of appropriations made by law”;

Article 1, Section 10, Clause 1. "No State shall coin money; emit bills of credit; make anything but gold and silver coin a tender in payment of debts;

Amendment 7. In suits at common law, or the value in controversy shall exceed $20, the right of trial by jury shall be preserved.

In order to understand why these provisions are in the Constitution you need to relate back to Blackstone's commentaries which was the standard legal treaties among Americans. Blackstone elaborated five monetary principles of the common-law:

“First, the precious metals are most proper for money, the universal medium, or common standard. Second, the coin of the kingdom must consist of gold or silver of the true standard, in terms of weights and finance. (Or, under English common law prayer to 1776, the only true money was in the-based gold and silver coin) third, the common-law power to coin money by impression or stamping, and to fix the value or denomination thereof, was an executive or crown, not a parliamentary power. Fourth, to fix the value of domestic or foreign money meant to establish its intrinsic value by comparing the weight and the fineness of the precious metal and according with the true standard, which was known as Sterling metal. (Thus the origination of Pounds Sterling). This procedure precluded debasing or inhancing the value of the coin below or above the sterling value. (Specifically, from 1603 through 1816, England followed a bimetallic monetary policy, or by the law made no change in the silver coinage, but alter the weight and denomination the goal to secure concurrent circulation.) Fifth, common-law denied the executive any power to levy compulsive loans extorted without a real and voluntary consent by the people.

Although Blackstone did not discuss "bills of credit" as part of the money of England, in its continuing oversight of the American colonies Parliament dealt with the subject on several occasions from an early date, do a scarcity of coin in the colonies each colony claimed authority to declare as commodities of exchange such items as want them, corn, the Lutz, tobacco, pitch and tar, livestock, and country produce. He served as simple substitutes for money that the colonies and private creditors accepted at their market value in real money, as an accommodation to debtor strapped for gold and silver coins, sometimes, these commodity standings for silver and gold coin circulate in the form of warehouse receipts and exchanged title to varying amounts of the underlying goods, especially tobacco. During the 1700s, the colonies medium of exchange consisted of coins, crude commodity money substitutes such as tobacco, "book credit", and various types of paper currency. The unit of account for colonial money was the British pound although in 1766 Marilyn became the first call it issued currency denominated in Spanish silver dollars. But credit was credit merchants extended to other merchants, artisans, and farmers. In some areas, but credit may inform the largest part of the practical medium of exchange. The most commonly traded gold and silver coins came from Spanish and Portuguese colonies that were referred to as "dollars" or "pieces of eight". Those there was a mixed system of paper currency, commodity trading, and gold and silver coins. Gold and silver coins were referred to as money or "real money". Part and parcel to all of this was the inherent understanding of the Crown's ability to tax which was also considered a fundamental purpose of each colonial government, that is the right to tax. Colonial paper was generally known as "bills of credit", as distinguished from "money" proper, because the paper was only an instrument of debt ("credit") which promised to pay, or to be redeemed in, gold and silver coin (the real money). On December 10, 1690, Massachusetts admitted $7000 pounds and "indented (meaning official order)" bills of credit and "value equal to money" and "accordingly to be excepted in all public payments, but without a general legal tender character".

Apparently, this is the origin of paper money in the colonies and the general British Empire. (See . E. Channing, History of United States, 1908, page 500). Various following statutes empowered the Treasurer to apply such bills to pay for wages, grants, stipends, counties and premiums, and all other matters and things which the Legislature have or shall either by law orders provide for the payment of the public treasury. This is the root of the distinction between public debts and private debts.
The colonies developed two basic methods for omission of these bills. One was a governmental loan office or land Bank, which issued paper currency loans secured by mortgages on people's land. The land banks usually set interest on or loans below the free market rate. The other technique for generating bills of credit was to pay the bills into circulation for ongoing government or expenses not meant by current taxes, pledging future taxes to redeem the money, in effect monetizing expected public receipts. The currency might or might not be legal tender for private debts, was generally authorizes a medium for the payment of taxes, fees and other dues to the government. Because the currency could be used to pay taxes, the system could largely dispense with gold and silver coins as a medium of exchange between the colonial governments and their citizens. Corneal currency always constituted true bills of credit, rather than Fiat money, because the paper was back either by mortgages or by anticipated tax receipts. These taxes were of various kinds and specifically included what would today be considered income taxes derived from the buying and selling of goods. This principle of taxation was carried over into the Constitution as follows:
Article 1 Section 8 Says ,
“The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States”; In addition “ No Capitation, or other direct, Tax shall be laid, unless in proportion to the Census or Enumeration herein before directed to be taken’.

Article 1 Section 2 says, “Representatives and direct Taxes shall be apportioned among the several States which may be included within this Union, according to their respective Numbers, which shall be determined by adding to the whole Number of free Persons, including those bound to Service for a Term of Years, and excluding Indians not taxed, three fifths of all other Persons”.

Parliament did not like the practice of issuing bills of credit and beginning in 1720, colonial governors were instructed not to allow passage of laws authorizing omission of such bills of credit unless the statutes contained a suspending clause enabling the home government to nullify them. In 1741 Parliament issued another statute that said in part "all and every person in persons whatsoever, who shall be possessed of entitled to any promised note or notes, Bill or bills which shall have been issued in America, shall and are hereby empowered to commence an action or suit against any one or more of the persons who have been engaged in an inning such unlawful undertakings or who shall have signed such note or notes, bill or bills, in order to recover present payment in lawful money of the whole sum mentioned or expressed in such note or bill, to which payment every such person is hereby declared to be personally liable; and in such actions are suits, the plaintiff shall recover and have judgment for immediate payment by the defendant in lawful money, of the full sum mentioned in such note or bill".

[REDCLOUD]

(continued)

This begins the distinction of the difference between "lawful money", "legal tender", and payment of private, bargains, contract. Debts, and other obligations. In subsequent acts, Parliament did grant the limited use of bills of credit in paying "public debts" in "bills of credit". All of this was very much on the minds of those the draft of the Constitution. At the time, there was a distinction between public debts and private debts and there were different ways that these obligations could be discharged. The principle of taxation was also very much an accepted practice, including income taxation, provided it was properly apportioned among the states. During the first 100 years or so of the country's operation there were sufficient taxes from tariffs and excise taxes to run the country except during the Civil War when income tax was enacted and Congress resorted to unbacked and unsecured US notes or greenbacks to finance the war.

The power to impose taxes (whether deemed direct or indirect taxes) is granted by Article I, section 8, clause 1. Indirect taxes (or "excises," in the parlance of the text of the Constitution) are required to be geographically uniform, according to Article I, section 8, clause 1 and the court decisions interpreting that provision (see Knowlton v. Moore here:

http://caselaw.lp.findlaw.com/cgi-bi...l=178&invol=41

and Flint v. Stone Tracy Co.)

http://caselaw.lp.findlaw.com/cgi-bi...=220&invol=107

Until the ratification of the Sixteenth Amendment, all direct taxes were required to be apportioned among the states according to each state's population, per Article I, section 2, clause 3 and Article I, section 9, clause 4. This essentially meant that the dollar amount of direct taxes imposed on the taxpayers in any given state was required to bear a relationship to the total dollar amount of direct taxes imposed in the entire nation that was equal to the ratio of that state's population to the total population of the nation. In the case of Pollock v. Farmers' Loan & Trust Co., the Supreme Court declared taxes on income from property under the 1894 Act to be unconstitutional unapportioned direct taxes. The Court reasoned that a tax on income from property should be treated as a tax on "property by reason of its ownership," and should therefore be required to be apportioned. The reasoning was that taxes on the rents from land, the dividends from stocks and so on burdened the property generating the income in the same way that a tax on "property by reason of its ownership" burdened that property.

This meant that, after Pollock, while income taxes on income from labor (as indirect taxes) were still not required to be apportioned by population, taxes on interest, dividends and rent income were required to be apportioned by population. The Pollock ruling made the source of the income (e.g., property versus labor, etc.) relevant in determining whether the tax imposed on that income was deemed to be "direct" (and thus required to be apportioned among the states according to population) or, alternatively, "indirect" (and thus required only to be imposed with geographical uniformity).

During this period from 1895 to 1913 when the Sixteenth Amendment was ratified, while Congress could have re-imposed taxes on income from labor and other non-property sources without apportionment by population, imposing taxes on interest, dividends and rent income would not have been practical (as the income from property in each state would virtually never correspond to the population of that state in relation to the population of the entire nation). The Congress was unwilling to impose an income tax on labor and other non-property sources without also imposing a tax on income from property -- and taxes on income from property were no longer realistic. The Pollock ruling made imposition of an income tax politically unfeasible from 1895 until the ratification of the Sixteenth Amendment. At the same time, Congress was reflecting the growing concern among many elements of society that the wealthiest Americans had consolidated too much economic power.

In response to these developments, the Sixteenth Amendment was passed by the Sixty-first Congress and submitted to legislatures of the several states on July 12th, 1909. The amendment was the crowning feature of a larger trend of legislative action meant to curb the power of the wealthy. The famous Pujo Committee Hearings, which aired the ******uous relationship between banks and corporate interests, were held during ratification, and the Clayton Antitrust Act was enacted shortly thereafter. Although the Sixteenth Amendment is often cited as the "source" of the Congressional power to tax incomes, at least one court has reiterated the point made in Brushaber and other cases that the Sixteenth Amendment itself did not grant the U.S. Congress the power to tax incomes (a power Congress has had since the late 1700s), but only removed the requirement, if any, that any income tax be apportioned among the states according to population:

It was not the purpose or the effect of that 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. 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". "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. 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.
In dealing with the scope of the taxing power the question has sometimes been framed in terms of whether something can be taxed as income under the Sixteenth Amendment. This is an inaccurate formulation and has led to much loose thinking on the subject. The source of the taxing power is not the Sixteenth Amendment; it is Article I, Section 8, of the Constitution.


In Commissioner v. Glenshaw Glass Co., the Supreme Court laid out what has become the modern understanding of what constitutes 'income' to which the Sixteenth Amendment applies, declaring that income taxes could be levied on "accessions to wealth, clearly realized, and over which the taxpayers have complete dominion." Under this definition, any increase in wealth—whether through wages, benefits, bonuses, sale of stock or other property at a profit, bets won, lucky finds, awards of punitive damages in a lawsuit, qui tam actions—are all within the definition of income, unless Congress makes a specific exemption (as it has for things like gifts, bequests, and certain scholarships).

What is amazing about this discussion is that any monetary powers enumerated in the Constitution reflect a hard money policy based on distinguishing or limiting the pre-existing authority of the states to "coin money", "emit bills of credit", and clear what shall be "tender in payment of debts", while rendering exclusive the bill in Congress to coin precious metals as "money". The end an object of this restriction on the power of the states was to exclude everything from use, as a circulating medium comics of gold and silver. That the real dollar may represent property, not the shadow of it. To this and an object, the monetary provisions in the Constitution not only explicitly define congresses authority, but also implicitly establish its trust in duty of creating and maintaining a uniform and pure metallic standard of value throughout union. Given the enormous attention given to the income tax, which is explicitly allowed by the Constitution, it is amazing and almost no attention has been given, and the press, the universities, or even the Internet, to the simple fact that the Federal Reserve act of 1913, the banking act of 1933, the government's confiscation of private gold in 1933 and 34, in the present money system and as a whole does not meet even the briefest of constitutional standards. Supreme Court has failed to touch any of these issues and steadfastly refused to hear any cases concerning the constitutionality of the present money system. It leaves Congress have been good sense to amend the Constitution to allow direct taxes to include specifically income taxes without regard to apportionment. No such thing can be said about the Federal Reserve system. Money in the United States has evolved from gold and silver coin as mandated by the Constitution to Federal Reserve notes that are declared to be legal tender for all debts public and private as determined by legislative acts in even rules and regulations set by the Federal Reserve system itself, which is a quasi private cartel mostly controlled by private industry. Money has evolved through these actions into something other than that provided in the Constitution. And, like it or not gone money is what defense says it is, which includes electronic credits, and which in fact may eliminate the need for Federal Reserve notes altogether. When this is coupled with credit reports, eye scans, mandatory federal IDs, and debit cards, it is hard to imagine what will be left of the Constitution and all its rights.

[REDCLOUD]

(continued)

There has no successful attack in any legal sense upon Federal Reserve. The courts back it, endorsing checks with DEPOSITED FOR CREDIT ON ACCOUNT OR EXCHANGED FOR NON-NEGOTIABLE FEDERAL RESERVE NOTES OF FACE VALUE does nothing, because as shown above there is no such thing as public money, there's public debt, and the historical distinctions between lawful money, legal tender, public debt, private credit, and the like have been legally erased. And once the need for Federal Reserve Notes is then converted to debit cards this distinction will be when further erased.

[David Merrill]

I prepared the audio file to listen to while reading the article:

http://friends-n-family-research.inf...rve_System.mp3
http://www.suijuris.net/forum/articl...lic-money.html

The author is convinced you can trade FRNs for USNs at the nearest Federal Reserve Bank - convinced on a literal reading of the law in 1984; possibly there were still some old UN Notes laying around the bank too. Whatever it took to convince the author of the article.

http://www.ustreas.gov/education/faq...al-tender.html

Look carefully at the last paragraph. I have spoken with people who have gone into the Fed Banks to exchange FRNs for USNs and they told me that they were cheerfully given FRNs back in equal value.

http://friends-n-family-research.inf...blic_money.jpg

A suitor in California got his full Refund from the State and he is a State employee.

Originally Posted by REDCLOUD

....Given the enormous attention given to the income tax, which is explicitly allowed by the Constitution, it is amazing and almost no attention has been given, and the press, the universities, or even the Internet, to the simple fact that the Federal Reserve act of 1913, the banking act of 1933, the government's confiscation of private gold in 1933 and 34, in the present money system and as a whole does not meet even the briefest of constitutional standards.

Well said. However that does not make Congress and everybody endorsing FRNs (private credit) criminals. That is because we can engage our finances without endorsement of private credit from the Federal Reserve by handling USNs (public money in the form of FRNs).

http://www.wealth4freedom.com/money/nod.htm

"The irs has never tried to collect, it has been over 25 years since I was audited, and then I got a refund. I have a stamp that prints [DEPOSITED FOR CREDIT ON ACCOUNT OR EXCHANGED FOR NON-NEGOTIABLE FEDERAL RESERVE NOTES OF FACE VALUE] when I was audited, I produced the front and back copies of my paychecks to the irs man. He took a break and came back and told me that those checks endorsed that way were not taxable income. I got in a hurry and open signed 3 of my checks, those were the only ones I had that they said they could tax that is the last I heard from them."

Regards,

David Merrill.


P.S. REDCLOUD has exposed the other side of that sword:

THE CREDIT RIVER DECISION

INTRODUCTION

A Minnesota Trial Court's decision holding the Federal Reserve Act unconstitutional and VOID; holding the National Banking Act unconstitutional and VOID; declaring a mortgage acquired by the First National Bank of Montgomery, Minnesota in the regular course of its business, along with the foreclosure and the sheriff's sale, to be VOID.

I agree that the Federal Reserve Act is void but only so far as banking policy goes... There is always recourse to the law, like the article indicates. For the Income Tax to seem so much about income instead of the action of endorsement there has to be something bonding the man or woman - Government bonds - see attachment, right side, second paragraph. [FDR March 6, 1933] In other words the bank note called Birth Certificate doubles as a warehouse receipt.

[David Merrill]

If you are beginning to believe that non-negotiable Federal Reserve Notes are anything other than US Notes - non-taxable event/public money then read this.

Under Act Cong. May 31, 1878, c. 146, 20 Stat. 87, 31 U.S.C.A. § 404, which enacts that notes of the United States, issued during the war of the Rebellion, under acts of congress declaring them to be legal tender in payment of private debts*, and since the close of the war redeemed and paid in gold coin at the treasury, shall be reissued and kept in circulation, is consitutional, and notes so reissued are a legal tender.

It is so obvious at the time of writing that US Notes are public money - government currency, that it is not mentioned in the verbiage. [Note the verbiage on the PUBLIC AND PRIVATE US Note $5 attached.] What the Requisite and Sufficiency is expressing is that US Notes will also be viable currency for settling (paying at the time because of gold backing them) private debts too. Private credit like from the Federal Reserve System.

US Notes are still in circulation by law, they simply are not printed because Federal Reserve Notes serve all the functions of legal tender in US Notes. Read the last paragraph on the Treasury page linked:

http://www.ustreas.gov/education/faq...al-tender.html

United States notes serve no function that is not already adequately served by Federal Reserve notes. As a result, the Treasury Department stopped issuing United States notes, and none have been placed into circulation since January 21, 1971.

In both theory and practice exercising your right to cash paychecks for non-negotiable FRNs (US Notes/domestic emergency currency) will render the event non-taxable. Any IRS agent tracking the transaction will see that the event was non-taxable.



Regards,

David Merrill.

[REDCLOUD]

As pointed out the income tax is Constitutionally derived. The tax law taxes all income, whatever the source or origin. It therefore makes NO difference how you endorse your checks, it is all taxable.


You don't give us enough data about your tax audit. It may be you got a pass because the other issues in your tax return yielded no income in any event. Also, non-filing for 25 years does not prove non-taxablity, it simply means you commited 25 years of tax crimes by failing to report, unless you are below the taxablity limits.

What you are advocating is criminal tax evasion. Your enorsement does not change the taxablity of the reciept of the check.

What your are advocating is a marginal theory, that will penalize you if caught. While you may have a justification of you position were you arguing it in 1790, it is groundless and baseless today, even though you may be able to make some theoretic arguments to support your position in 1790. There are many things in the law that are not exactly the way they were in 1790. But that is the way the common law works, it changes and evolves, in this case, it is also supported by statute. The US has evolved to a common law/statutory law system, which kills most of your arguments.

[David Merrill]

REDCLOUD misrepresents the nature of the income tax. It is not on income. The amount of income decides the amount of the tax however the tax is paying back private credit from the Federal Reserve.

I am not advocating anything criminal. It is never criminal to exercise any right. More people should enjoy their right to public money instead of supporting the Federal Reserve System.



Regards,

David Merrill.

[REDCLOUD]

Commissioner v. Glenshaw Glass Co., the Supreme Court laid out what has become the modern understanding of what constitutes 'income' to which the Sixteenth Amendment applies, declaring that income taxes could be levied on "accessions to wealth, clearly realized, and over which the taxpayers have complete dominion." Under this definition, any increase in wealth—whether through wages, benefits, bonuses, sale of stock or other property at a profit, bets won, lucky finds, awards of punitive damages in a lawsuit, qui tam actions—are all within the definition of income, unless Congress makes a specific exemption (as it has for things like gifts, bequests, and certain scholarships).


{Under This definition "income" includes checks endorsed with DEPOSITED FOR CREDIT ON ACCOUNT OR EXCHANGED FOR NON-NEGOTIABLE FEDERAL RESERVE NOTES OF FACE VALUE. It also includes Federal Reserve Notes, US Notes, seashells, bushells of wheat, baseball trading cards, and gold pulled from the earth. }

[David Merrill]

Originally Posted by REDCLOUD

Commissioner v. Glenshaw Glass Co., the Supreme Court laid out what has become the modern understanding of what constitutes 'income' to which the Sixteenth Amendment applies, declaring that income taxes could be levied on "accessions to wealth, clearly realized, and over which the taxpayers have complete dominion." Under this definition, any increase in wealth—whether through wages, benefits, bonuses, sale of stock or other property at a profit, bets won, lucky finds, awards of punitive damages in a lawsuit, qui tam actions—are all within the definition of income, unless Congress makes a specific exemption (as it has for things like gifts, bequests, and certain scholarships).


{Under This definition "income" includes checks endorsed with DEPOSITED FOR CREDIT ON ACCOUNT OR EXCHANGED FOR NON-NEGOTIABLE FEDERAL RESERVE NOTES OF FACE VALUE. It also includes Federal Reserve Notes, US Notes, seashells, bushells of wheat, baseball trading cards, and gold pulled from the earth. }

Agreed. It is still the event of applying for (endorsement) and accepting private credit with the Federal Reserve that creates the taxable event/taxable income.

The scenario you describe eliminates the right to execute financial affairs with public money. One has to be involved with private credit to create the irrecusable obligation to file a Return for instance.

http://www.brillig.com/debt_clock/

Understand? The Congress cannot pay off the national debt but as long as the Congress will pay some of the debt (interest) and continue raising the debt ceiling, they stave off default. The same is allowed private credit to individuals. The Federal Reserve again just emulates a loan by honoring the paycheck in FRNs drawn against the bonding on the birth certificate of the taxpayer. Then the Fed makes the taxpayer pay back part of the FRNs loaned private credit. I am tired of posting the links. If the Reader is reading here, then look a couple posts above.


Regards,

David Merrill.

[REDCLOUD]

The scenario you describe eliminates the right to execute financial affairs with public money. One has to be involved with private credit to create the irrecusable obligation to file a Return for instance.

This could be true if the Constitution had been followed and Congress did not emit bills of credit. However, Federal Reserve Notes are legal tender and there is no gold standard.

The reciept of a note for the sale of goods or service is non taxable. If you got non-negotiable Federal Reserve Notes, there may be no taxable event. But I have never seen non-negotiable FRN's. What are these? If I buy your horse by giving you a note for $25,000, you have no income, no taxable event, you also have no horse and I do. And where is the benefit to you? If you could demonstrate that you got non-negotiable, non-legal tender notes, you might have a point, but where is the benefit to you? If you trade your horse to me for 1000 bushels of wheat, we both have taxable income and we both benefited.