Definition of Income

[Lawdog]

From one of the Supreme Court cases cited above, CIR v. Smith, 324 U.S. 177:

Mr. Chief Justice STONE delivered the opinion of the Court.

Respondent's employer gave to him, as compensation for his services, an option to purchase from the employer certain shares of stock of another corporation at a price not less than the then value of the stock. In two later tax years, when the market value of the stock was greater than the option price, respondent exercised the option, purchasing large amounts of the stock in each year. The question for decision is whether the difference between the market value and the option price of the stock was compensation for personal services of the employee, taxable as income in the years when he received the stock, under 22(a) of the Revenue Act of 1938, c. 289, 52 Stat. 447, and 22(a) of the Internal Revenue Code, 26 U. S.C. 22(a), 26 U.S.C.A. Int.Rev.Code, 22(a).

Are you getting it yet? Mr. Smith was an EMPLOYEE. The question for decision was whether this option purchase of stock was taxable income.

The Supreme Court went on to say:

Section 22(a) of the Revenue Act is broad enough to include in taxable income any economic or financial benefit conferred on the employee as compensation, whatever the form or mode by which it is effected.

"Any economic or financial benefit conferred on the EMPLOYEE." The corporation is the employer. The human being, in this case Mr. Smith, is the employee. Got it?

The Supreme Court went on to decide that yes, in this instance, the stock option purchase was taxable income to Mr. Smith in the difference between the price he paid and the market price, which was higher.

Maybe you should read some of these cases at findlaw.com before you shoot yourself in the foot again.

[farmer_giles_of_ham]

Lawdog:

Mr. Smith was an EMPLOYEE. The question for decision was whether this option purchase of stock was taxable income..."Any economic or financial benefit conferred on the EMPLOYEE." ...the stock option purchase was taxable income to Mr. Smith in the difference between the price he paid and the market price, which was higher.

Yep, EMPLOYEES who EARN, BENEFIT, and GAIN have
taxable income. So what? We already knew that!

question for decision is... the difference between the market value and the option price of the stock

And when the difference is ZERO...no GAIN, or BENEFIT, even for EMPLOYEES.

It is noteworthy that "capital gains tax" only applies to "U.S. persons"- it's the one kind of "income" that even within the special world of "Internal/Inland Revenue" needs a very particular hook to be invoked.

Because, mathematically, there is never any gain, anywhere- for every action there is an equal and opposite reaction, so the universe is always in balance. It takes a special regime to see it otherwise, from the point of a legal fiction. ("gross income")

[FreeFromContract]

Originally Posted by farmer_giles_of_ham

Yep, EMPLOYEES who EARN, BENEFIT, and GAIN have
taxable income. So what? We already knew that!



And when the difference is ZERO...no GAIN, or BENEFIT, even for EMPLOYEES.

It is noteworthy that "capital gains tax" only applies to "U.S. persons"- it's the one kind of "income" that even within the special world of "Internal/Inland Revenue" needs a very particular hook to be invoked.

Because, mathematically, there is never any gain, anywhere- for every action there is an equal and opposite reaction, so the universe is always in balance. It takes a special regime to see it otherwise, from the point of a legal fiction. ("gross income")

It should not surprise anyone the length to which a lapdog of the state will go to perpetuate a fraud f_g_o_h.

As another illustration of the fraud perpetuated by his type, examine the ponzi scheme called Social Security; agents for the state will tell you that one must have a social security number to work; they will perpetuate the fraud on companies and individuals wanting to hire someone, explaining that anyone wanting to earn a living must have a social security number. Still, there is no law mandating anyone to turn their God given right to earn a living into a privileged activity through the attachment of social[ist] security.

Pay close attention to lawdog and his misapplication and representation. It's telling of the tactics used by those in the so called legal profession.

[ThomPaine]

You guys were doing well in the first few posts and then got off track quickly, which I will attribute to the attorner.

It seems as if you are making this more complicated than it really is. There is no need to argue about wages being income or what is the definition of income, etc., as the tax at its very foundation does not apply to most american men and women.

A direct tax is subject to apportionment. An indirect tax is an excise tax, which is a tax on an activity, priviledge or thing. There is an excise tax on beer, if you buy beer, you pay it just like everyone else. There is no way to avoid it if you buy beer, pay more or less, etc. It is legally avoidable, however, just dont buy an beer (or cigarettes or gasoline or whatever the item is being taxed) The activity is taxed and the amount of the purchase, how much beer you buy, determines how much tax is paid.

The tax is on the item or the activity and this is the case in the income tax. The tax is NOT on the income, the income only determines the amount of tax due AFTER you have determined if you are subject to that tax based on the activities or priviledges that you participate in.

I had a face to face conversation with a DOJ representative in the recent past regarding a bogus NFTL and was asked, "Do you participate in any priviledged activity?" My reply of course was, "no, that I did not" at which time she smiled and said, well, then you are not a person of interest to us and do not have a tax liability as far as we are concerned and she turned and walked away.

I have never earned any taxable income (I know DM will say otherwise) but simply from a code standpoint, the income tax is very limited in its scope. If you dont do XY or Z, then the tax does not apply to you, end of story..

Thom

[farmer_giles_of_ham]

I hear you- and it's all over the world at this point. We have been educated to see everything from an assumption: being under administrative law. Basically, EVRYONE is presumed to be "attending school", and thru years of training and discipline, it gets to the point where you go to jail for not doing your homework (failure to file). We got used to that in back in grade school w/ detentions.

Heresy= "failure to appropriately opine".

My thing is just trying to communicate with folks out there- the catholic mind thinks that the government has somehow managed to tax and regulate breathing, or the weather, so they just assume that jurisdiction comes from doing something ordinary, like sitting, standing talking, holding tools, applying materials etc.

Yet 90% of all and any transactions that these same people engage in every day are never even remotely imagined to be "administrative", so there must be some psychological hook that gets implanted early on to start making these assumptions.

ASSUME= ASS out of U and ME

[FreeFromContract]

Originally Posted by ThomPaine

A direct tax is subject to apportionment. An indirect tax is an excise tax, which is a tax on an activity, priviledge or thing. There is an excise tax on beer, if you buy beer, you pay it just like everyone else. There is no way to avoid it, pay more or less, etc. It is legally avoidable: if you desire not to pay it, dont buy any beer or cigarettes or gasoline or whatever the item is.

The tax is on the item or the activity and this is the case in the income tax. The tax is NOT on the income, the income only determines the amount of tax due AFTER you have determined if you are subject to that tax based on the activities or priviledges that you participate in.

I had a face to face conversation with a DOJ representative in the recent past regarding a bogus NFTL and was asked, "Do you participate in any priviledged activity?" My reply of course was, "no, that I did not" at which time she smiled and said, well, then you are not a person of interest to us and do not have a tax liability as far as we are concerned and she turned and walked away.

I have never earned any taxable income (I know DM will say otherwise) but simply from a code standpoint, the income tax is very limited in its scope. If you dont do XY or Z, then the tax does not apply to you, end of story..

Thom

Yes! That was exactly my point when I countered lapdog's uninformed comments concerning the snippet he posted from a propaganda website with the facts concerning Stratton’s Independence, Ltd. v. Howbert, 231 U.S. 399, 415 (1913). It is an excise (privileged) activity.

The Social Security is relevant as it is one of many items used to create a privileged nexus.

Originally Posted by ThomPaine

You guys were doing well in the first few posts and then got off track quickly, which I will attribute to the attorner.

Yep. Going off on tangents is how they rack up the hours in their "practice". LOL

[joseph sugarman]

Good Morning Thom Paine,

Thank you for your concise and precise synopsis of the applicable--non applicable--law, as the case may be.

Could you please add the words to NFTL. I do not know what it is, and I would like to understand a bogus NFTL.

Additionally, would you please identify DM.

[Lawdog]

No, the income tax is not limited to "privileged" activities.

“But natural rights, so called, are as much subject to taxation as rights of lesser importance. An excise is not limited to vocations or activities that may be prohibited altogether. It is not limited to those that are the outcome of a franchise. It extends to vocations or activities pursued as of common right.”
Charles C. Steward Machine Co. v. Davis, 301 U.S. 548 (1937).

You're still all batting .000, guys.

[farmer_giles_of_ham]

At least you admit by the previous cite that it is an excise tax- which should tell us something.

There is no law anywhere taxing or regulating common, natural, normal doings. There will never be a law that says, "painting a wall is taxable", or "speaking with others is taxable" The context is always determinant.

Income from "vocations or activities pursued as of common right" under the umbrella of an excise become "sources derived"...

natural rights, so called, are as much subject to taxation as rights of lesser importance

SUBJECT to taxation, not the subject OF taxation, or the OBJECT of taxation.

[FreeFromContract]

Originally Posted by farmer_giles_of_ham

At least you admit by the previous cite that it is an excise tax- which should tell us something.

There is no law anywhere taxing or regulating common, natural, normal doings. There will never be a law that says, "painting a wall is taxable", or "speaking with others is taxable" The context is always determinant.

Income from "vocations or activities pursued as of common right" under the umbrella of an excise become "sources derived"...

SUBJECT to taxation, not the subject OF taxation, or the OBJECT of taxation.

If it weren't so pathetic, I'd say it's funny watching lapdog jump tracks when he realizes the argument he's on is taking him over a cliff.