Definition of Income

[FreeFromContract]

Originally Posted by mertensv16

So it seems pretty clear that the mere receipt of income is a sufficient basis for the imposition of an excise. No privileged activity is required.

mertensv16, you may want to actually read the full context of the decisions that you claim support your position...

http://supreme.justia.com/us/268/137/case.html

Originally Posted by USSC in Stebbins And Hurley V. Riley

Page 268 U. S. 138

2. There are too elements in the transfer of decedent's estate, exercise of the legal power to transmit at death and privilege of succession, and both may be made the basis of classification in a single state taxing statute, so that the amount of tax which a legatee shall pay may be made to depend both on the total net amount of the decedent's estate subject to the jurisdiction of the state and passing under its inheritance and testamentary laws and the amount of the legacy to which the legatee succeeds under those laws. P. 144.
....
Page 268 U. S. 140

from the application of the taxing statute to successions, there is a denial of the equal protection of the laws. On the other hand, it is urged that the so-called "right" of acquiring property by devise or descent is not a property right, but a mere privilege, the creature of state law, and the authority which confers it may impose conditions upon its exercise; that, in consequence, the state may tax the privilege, discriminating not only between the status of those who inherit and the amounts which they thus acquire, but discriminating likewise between inheritances or legacies of like amount which are transmitted from estates of varying size, if the discrimination is based upon or bears some reasonable relation to the size of the whole estate transmitted on the death of the decedent. In presenting this aspect of the case, it was argued by the appellant, on the one hand, that there was a natural right to inheritance entitled to the protection of the due process clause of the Fourteenth Amendment, and by the appellee, on the other, that the legislative authority could deny wholly the privilege of inheritance, and consequently could place unlimited burdens upon it.

There is much in judicial opinion to suggest that a state may impose any condition it chooses on the privilege of taking property by will or descent, or, indeed, that it may abolish that privilege altogether, and, for this reason, that a state is untrammeled in its power to tax the privilege. See Mager v. Grima, 8 How. 490; United States v. Perkins, 163 U. S. 625; Knowlton v. Moore, 178 U. S. 41, at page 178 U. S. 55; Campbell v. California, 200 U. S. 87, at page 200 U. S. 94.

It is perfectly clear that the case you claim supports your position in actuality yields the exact opposite result. I see no reason to address the other deficiencies of your arguments (i.e.: the tax is on the value of property value at transfer, not income).

....

[mertensv16]

I wan't relying on the Stebbins case; I was relying on the Fernandez case, which involved the estate taxation of Louisiana community property. Under the law at that time, the gross estate of a decedent included all of a married couple's community property, not merely the decedent's one-half (as under current law). The surviving spouse argued that since she already owned her half interest in the community property, this interest was not transferred to her as a result of her husband's death, and that therefore there was no taxable transaction as to her half interest.

The Supreme Court disagreed and noted that under Louisiana law, the deceased husband had the sole management authority over the entire community property while he was alive, but that on his death his wife received the power to magage her half of the community, and it was the creation of this managerial control in the wife that was a sufficient basis to sustain the tax. The case didn't involve the transmission of the wife's property, but only the creation of certain managerial rights, which I wouldn't call a privilege. Would you? Do you think that the ability to manage your own property is a privilege?

[FreeFromContract]

Originally Posted by mertensv16

I wan't relying on the Stebbins case; I was relying on the Fernandez case, which involved the estate taxation of Louisiana community property.

It seems you don't understand the cite, as the court in Fernandez quoted Stebbins as a matter of establishing upon what their ruling of law and precedence was based.

Originally Posted by mertensv16

the creation of certain managerial rights, which I wouldn't call a privilege. Would you?

It doesn't matter if I am of the opinion that it's a right. The supreme court, in their venue, has decided otherwise.

[mertensv16]

It seems you don't understand the purpose of the Court's cite to Stebbins, which was solely in support of its statement that the receipt of property by inheritance may be taxed. It doesn't follow that all receipts of property, whether occurring at death or otherwise, must involve "privileges" in order to be taxable as was the case in Stebbins. But maybe I'm wrong: do you really believe that the power to manage your property (which is what Mrs. Fernandez received) is a privilege?

[FreeFromContract]

Originally Posted by mertensv16

It seems you don't understand the purpose of the Court's cite to Stebbins, which was solely in support of its statement that the receipt of property by inheritance may be taxed. It doesn't follow that all receipts of property, whether occurring at death or otherwise, must involve "privileges" in order to be taxable as was the case in Stebbins. But maybe I'm wrong: do you really believe that the power to manage your property (which is what Mrs. Fernandez received) is a privilege?

Wow!

Clearly you don't comprehend the facts nor the basis of the decision here and in Fernandez. My only suggestion is for you to study the following until such point that you understand what is being said. Good luck.

http://supreme.justia.com/us/268/137/case.html

There are too elements in the transfer of decedent's estate, exercise of the legal power to transmit at death and privilege of succession, and both may be made the basis of classification in a single state taxing statute, so that the amount of tax which a legatee shall pay may be made to depend both on the total net amount of the decedent's estate subject to the jurisdiction of the state and passing under its inheritance and testamentary laws and the amount of the legacy to which the legatee succeeds under those laws. P. 144.

[mertensv16]

It's odd how you avoid discussing Fernandez and keep citing Stebbins. Yes, Stebbins involved what the Court called a privilege of succession. But did Fernandez? Nope. Here's the basis of the Court's decision in Fernandez:

As we have seen, the death of the husband of the Louisiana marital community not only operates to transfer his rights in his share of the community to his heirs or those taking under his will. It terminates his expansive and sometimes profitable control over the wife's share, and for the first time brings her half of the property into her full and exclusive possession, control and enjoyment. The cessation of these extensive powers of the husband, even though they were powers over property which he never 'owned', and the establishment in the wife of new powers [powers, not privileges] of control over her share, though it was always hers, furnish appropriate occasions for the imposition of an excise tax.

Similarly, with the death of the wife, her title or ownership in her share of the community property ends, and passes to her heirs or other appointees. More than this, her death, by ending the marital community, liberates her husband's share from the restrictions which the existence of the community had placed upon his control of it. He acquires by her death, the right to have his share of the community separated from hers by partition and to hold if free of all controls. He obtains, for the first time, the right [a right, not a privilege] to give away his immovables, and the right to give away his moveables as a whole or by a fraction of the whole. Here too, the wife's death brings into being a new set of relationships with respect to his share of the community as well as hers, among which are new powers of control and disposition which are proper subjects of an excise tax measured by the value of his share. And while we do not rest decision on the point, it is of some significance that this shift of legal relationships effects a shift in point of economic substance. The precept that the wife is equal co-owner with her husband of community property undoubtedly calls into play within the marital relationship personal and psychological forces which have great importance in the practical determination of how community property shall be managed by the husband. Though it may be impossible fully to translate these imponderables into legal rules, the death of the wife undoubtedly brings, in every practical aspect, greater freedom to the husband in his disposition of that share of community property which is technically his, than is to be gathered solely from a reading of statutes and case law.

This redistribution of powers and restrictions upon power is brought about by death notwithstanding that the rights in the property subject to these powers and restrictions were in every sense 'vested' from the moment the community began. It is enough that death brings about changes in the legal and economic relationships to the property taxed, and the earlier certainty that those changes would occur does not impair the legislative power to recognize them, and to levy a tax on the happening of the event which was their generating source.

None of this analysis is phrased in terms of a "privilege of succession". It's purely about the shifting and creation of powers, the creation of rights, and changes in economic relationships. Yes, there's language in Fernandez later on that refers in general terms to the "privileges" of an owner of property, but to what does this really refer? My God, if the power to manage or to give away one's own property is a privilege, then how can receiving income not be "privileged" in the same sense? (I won't get into the illegal activity issue, since you didn't respond to it in your posts)

Recall the definition of an excise in the Bromley case: "a tax imposed upon a particular use of property or the exercise of a single power over property incidental to ownership." How can the mere receipt of income not fall within this definiton, which in no way involves the concept of "privilege"? That is, unless that term means nothing more than the exercise of any right or power over one's property, in which case the objection that an income tax must involve "privileged activity" vanishes.

[ThomPaine]

My God, if the power to manage or to give away one's own property is a privilege, then how can receiving income not be "privileged" in the same sense?

In case you dont realise it, you dont own much of anything these days, especially the FRNs in your pocket, 'your' DL, 'your SSN Card', 'real estate', automobiles, land/property, etc. The gubmint has a vested interest in all of it. So as a 14th ammendment citizen you are receiving benefits and are a GOVERNMENT EMPLOYEE!!!!! This is what creates the tax liability. If you give me your house, that is a taxable event, if you earn wages as a government employee/14th ammendment citizen, that is a taxable event. If you cut my grass and I give you $20 for doing it, that is not a taxable event, it is simply private commerce. (sorry DM)

Taxable Income generally relates to proifts or income from a privileged activity. Since the 'income tax' is an INDIRECT TAX, can you provide some examples of other types of indirect or excises taxes for comparison? I bet you I can relate everyone of them back to commerce, ties to the government or excise or privileged activity. Sign a 1040 or W4 or I9 or 1099 or SS card or DL or mortgage docs or car tag docs....all contracts with the government....privileged activity...they LET you DRIVE 'your' car on their roads ALA you have a license, get a tag, pass emissions, have insurace, etc. If one of these things is missing, you have broken the rules of the contract. Privilege, Privilege, Privilege

almost anything to do with Alchohol, Tabacky or Firearms - taxed as excise activity

almost anything permitted or regulated by the government - taxed as excise activity (you pay taxes on 'your' house and 'your' car, but you dont pay taxes on a bicycle or a lawnmower, why not?? (other than sales tax)

government employees, foreign source income earned by Americans, domestic income earned by foreigners while they are here, Domestic, Foreign and International Sales corporations, all have a tax liability... do you see a pattern here? Taxable income is earnings and profits from a specific source or activity.

Read the 1950s CODE, not case law, read the code, NOWHERE does it say that joe blow (a NON government employee) living and working in one of the fifty states of the union, shall include his earnings in gross or taxable income. It is very plain in the statutes and regulations of old, and they are still in force today.

Thom

[BOBT12]

Originally Posted by mertensv16

This is not what the Court held. This statement is simply one of the arguments made by Mr. Brushaber that the Court rejected. This is what the Court really held:

Welcome to the forum, mertensv16. Also, thanks for straight answers; I tend to agree with your statement.

Originally Posted by mertensv16

Look, the Supreme Court held in 1880 (33 years before the 16th Amendment) that an income tax on personal earnings was an indirect tax and was constitutional. See Springer v. U.S., 102 U.S. 586 (1880). This case has never been overruled and is still good law.To think that the drafters of the 16th Amendment wanted to narrow Congress' power to tax is absurd. Not only does the Brushaber case make this clear, common sense does too. Do you honestly think that Congress would willingly give up a taxing power it already had?

Again, I tend to agree, mainly due to the fact that all governments tend toward tyranny!

And this is the tendency of all human governments.
A departure from principle in one instance becomes a precedent for a second, that second for a third, and so on till the bulk of the society is reduced to be mere automatons of misery, to have no sensibilities left but for sinning and suffering...

And the forehorse of this frightful team is public debt. Taxation follows that, and in its train wretchedness and oppression.
-Thomas Jefferson

Emphasis added.

Yet, this is the very issue that the people should be vigilant about, in my view.

"The price of freedom is eternal vigilance." -- Thomas Jefferson

The question is why would a free people want to be hunted down like dogs by the likes of the IRS?

Every mind is self owned, and , therefore, that first property; everything else in nature is unowned. Every action caused by a mind - the movement of an arm, the speaking of a word - is owned by that mind. Every liability and every benefit generated by an action accrues to the mind that gave rise to the action. This is the origin of all property, and all liability. -Locke

I guess the people knew nothing of natural law at that time?

Why should the people care about protecting their property, stock profits, (and gain from slave ownership), more than they want to keep a price off of their heads (Capitation)?

The defining characteristic of a tyrant is a belief that a power not expressly denied is granted by implication; that a right not expressly reserved is surrendered by implication -George Mason

Why would the founders, and the people, want a tax on their head, or an individual tax, without an apportionment? Shouldn't they want such a tax to be treated as a capitation or direct tax? Where did they clearly state they want this income tax we see today? Where did the people vote on such a proposal or amendment, you know "the consent of the governed"?

Objections to its renewal [the Civil War Income Tax] are long, loud, and general throughout the country. Those who pay are the exception, those who do not pay are millions; the whole moral force of the law is a dead letter. The honest man makes a true return; the dishonest hides and covers all he can to avoid this obnoxious tax. It has no moral force. This tax is unequal, perjury-provoking and crime encouraging, because it is at war with the right of a person to keep private and regulate his business affairs and financial matters. Deception, fraud, and falsehood mark its progress everywhere in the process of collection. It creates curiosity, jealousy, and prejudice among the people. It makes the taxgatherer a spy... The people demand that it shall not be renewed, but left to die a natural death and pass away into the future as pass away all the evils growing out of the Civil War. --Congressional Globe, 41st Congress, 2d Session, 3993 (1870)

Emphasis added.

All delegated power is trust, and all assumed power is usurpation. Time does not alter the nature and quality of either. –Paine

Why did the framers include this language, capitation or direct tax, in the Constitution three times, I believe, only to have nearly everything move out of this category, by crafty court decisions?

Originally Posted by Washington's Farewell Address 1796

However combinations or associations of the above description may now and then answer popular ends, they are likely, in the course of time and things, to become potent engines, by which cunning, ambitious, and unprincipled men will be enabled to subvert the power of the people and to usurp for themselves the reins of government, destroying afterwards the very engines which have lifted them to unjust dominion.

The Supreme Court is a creature of the Constitution, they have no lawful power to overrule the clear will of the document itself. The Supreme Court certainly cannot exceed the powers granted to the government by the Constitution.

"What is a Constitution? It is the form of government, delineated by the mighty hand of the people, in which certain first principles of fundamental laws are established. The Constitution is certain and fixed; it contains the permanent will of the people, and is the supreme law of the land; it is paramount to the power of the Legislature, and can be revoked or altered only by the authority that made it. The life-giving principle and the death-doing stroke must proceed from the same hand. What are Legislatures? Creatures of the Constitution; they owe their existence to the Constitution: they derive their powers from the Constitution: It is their commission; and, therefore, all their acts must be conformable to it, or else they will be void. The Constitution is the work or will of the People themselves, in their original, sovereign, and unlimited capacity. Law is the work or will of the Legislature in their derivative and subordinate capacity. The one is the work of the Creator, and the other of the Creature. The Constitution fixes limits to the exercise of legislative authority, and prescribes the orbit within which it must move. In short, gentlemen, the Constitution is the sun of the political system, around which all Legislative, Executive and Judicial bodies must revolve. Whatever may be the case in other countries, yet in this there can be no doubt, that every act of the Legislature, repugnant to the Constitution, as absolutely void." VanHorne's Lessee v. Dorrance, 2 U.S. 304, 2 Dall. 304 (1795):

The Constitution ought to be preferred to the statute, the intention of the people to the intention of their agents. -Hamilton, Federalist No. 78

What remains in the category of direct taxes, why?

Why should the people be dumped in jail by the servant government designed to protect them?

The End of Law is not to abolish or restrain, but to preserve and enlarge Freedom. –Locke

Good people like Irwin Shiff.

Even, if you don’t agree with the above statement. Where is it written that Shiff should be put in a cold cell naked for days? Or be made to where ill-fitting footwear until he lost a toe? I believe that Shiff was trying to warn the people about the out-of-control government, at all levels, that we see today with books like the “Federal Mafia”. Right or wrong, I feel that Irwin was trying to sound the alarm to what he called the “Federal Mafia”. Thus, he was acting, from his perspective, in the interest of freedom and liberty, and respect for the individual. In fact, he still is acting in this manner from his prison cell.

Every great robber styles as sedition and faction every utterance that subtracts from his admiration, that interrupts his wild and ravenous schemes or that attempts to preserve the rights of the people. –Cato

Isn’t forcing someone to sign a confession statement at war with their unalienable rights of liberty, such as the 4th, 5th, 13th Amendments, etc.. Wouldn’t a tax by apportionment better protect the rights of the people, as opposed to the current fearful arraignment? When did the people waive these rights in any overt fashion?

The safety of the people is the supreme law.... The safety of the people cannot be judged but by the safety of every individual.... Unjust is State power where the law is either uncertain or unknown. -- Maxims of Common Law

When congress, and the states, pass voluminous, incomprehensible statues, codes, regulations, which they do not bother to read or debate, the destruction of peaceful society is not far off. Who in Congress has read the full code, regulations and such. Why should the people go to jail for this nonsense?

"Frankly, it is too easy to pass bills. Bills flow through this body like water."-- Sen. Jeff Sessions

The past is prologue, as Thomas Hobbes (1588-1679) Leviathan observed, with previous nations, this sort of "rule-making" tends to make every man, woman, and child a criminal.

There are some who believe in unlimited government, no matter how ruthless it becomes, who feel everyone should just follow orders. This type of reasoning did not turn out well for Germany in two world wars. See the Nuremberg Trials for more information.

As for the people:

You have rights antecedent to all earthly governments; rights that cannot be repealed or restrained be human laws; rights derived from the Great Legislator of the Universe. -John Adams

Emphasis added.

I look forward to any reply you may wish to provide.

[mertensv16]

Since you seem to like Jefferson's thoughts, consider this one:

"I approved, from the first moment, of the great mass of what is in the new constitution, the consolidation of the government, the organization into Executive legislative & judiciary, the subdivision of the legislative, the happy compromise of interests between the great & little states by the different manner of voting in the different houses, the voting by persons instead of states, the qualified negative on laws given to the Executive which however I should have liked better if associated with the judiciary also as in New York, and the power of taxation. I thought at first that the latter might have been limited. A little reflection soon convinced me it ought not to be." Jefferon, in a letter to Francis Hopkinson, March 13, 1789 (emphasis added).

[BOBT12]

Originally Posted by mertensv16

Since you seem to like Jefferson's thoughts, consider this one:

"I approved, from the first moment, of the great mass of what is in the new constitution, the consolidation of the government, the organization into Executive legislative & judiciary, the subdivision of the legislative, the happy compromise of interests between the great & little states by the different manner of voting in the different houses, the voting by persons instead of states, the qualified negative on laws given to the Executive which however I should have liked better if associated with the judiciary also as in New York, and the power of taxation. I thought at first that the latter might have been limited. A little reflection soon convinced me it ought not to be." Jefferon, in a letter to Francis Hopkinson, March 13, 1789 (emphasis added).

This seems to suggest that when one accounts for the two "great" classes of taxation, "Apportionment" and "Uniformity", the government has full power to tax anything the Constitution supports. However, the Constitution has never supported losses in personal liberty. Indeed, a number of these protections are enumerated within the Constitution itself. Of course, these protections aren't limited to those that are enumerated.

See my previous post, #148, for more information.