Here is why it is called a tax return
I decided to give it
another shot and put this on
www.atgpress.com for all to see again and
fall back to sleep, as did the previous generation. The below was at
the end of Billie's find and she deserves the credit.
"DECLASSIFIED"
"WITHHOLDING.TAX,
HEARING BEFORE A SUBCOMMITTEE OF THE COMMITTEE ON FINANCE, UNITED
STATES SENATE" and "LEGISLATIVE HISTORY OF THE CURRENT TAX PAYMENT ACT
OF 1943"
These two documents are a very small part of her many findings. As you
read statements, "mopping up purchasing power" and "siphoning off
purchasing power into the Treasury from a day to day", makes one take
notice how far public serpents will go to control our lives. You will
find how Social Security was used to condition people for withholding.
How it was decided to call withholding a "Victory Tax" to condition
the public for accepting the withholding tax system.
These documents have been transcribed from photo copies of micro fiche
for easier reading.
A true photo copy of the micro-fiche is available from Billie.
"An unconstitutional act is not law; it confers, no right; it imposes
no duties; affords no protection; .' it creates no office; it is in
legal contemplation, as inoperative as though it had never been
passed."
Norton vs. Shelby County 118 US 425 p. 442
SUMMARY
OF THE WITHHOLDING TAX HEARING BEFORE A SUBCOMMITTEE OF THE COMMITTEE ON FINANCE
UNITED STATES SENATE
SEVENTY-SEVENTH CONGRESS
SECOND SESSION ON
DATA RELATIVE TO WITHHOLDING PROVISIONS OF THE 1942 REVENUE ACT
AUGUST 21 AND 22, 1942
CONTENTS
Statement of
Friedman, Milton, Division of Tax Research, Treasury Department
Hardy, Charles 0., of Brookings Institution,
Jacobstein, Meyer, of Brookings Institution
Paul, Randolph E., Treasury Department
Overview
Because the war effort resulted in increased production and
employment, which caused a sudden large influx of money into
circulation, the Federal Government and Federal Reserve System had to
find a method of "mopping up excess purchasing power" thereby control
inflation and obtain immediate funds for the Treasury. Several plans
were put forth before the House ways and Means Committee and the
Senate Committee on Finance to accomplish this purpose.
The following points were made by the Senators and those testifying
before the committee:
1. The overall purpose was to obtain immediate money for the war
effort to control inflation and to get the income tax on a current
basis instead of being one year behind.
2. To accomplish this goal, it was recognized that a scheme was needed
to reach the largest number of people.
3. That the scheme, regardless of whether it was a "coupon," "stamp"
or "withholding of income tax at source," would constitute a "forced
loan" [page 101] to the Federal Government and it would apply to
taxpayers and nontaxpayers alike. [page 104].
4. Where an individual had money withheld and ultimately no tax
liability, the individual would file an income tax return and that
income tax return would constitute an automatic claim for refund [page
141].
5. The proposed plan was an emergency war time measure.
HEARING EXCERPTS
Beginning at Page 99
STATEMENT OF MEYER JACOB STEIN, OF BROOKINGS INSTITUTION
Mr. Jacobstein. We were called * * *.
It is obvious that it is necessary to mop up the excess
purchasing power of the community, not only because of its effect on
the price situation but because the Treasury needs the money and needs
it quickly. Obviously if the Treasury can collect from the consumers
as the purchases are made the Treasury has the use of those funds long
before it would obtain them by the income-tax method.
Now, there are many ways, of course, of mopping up this
surplus purchasing power.
* * * Page 100
Then, there is the withholding tax at the source based on pay rolls.
***
Senator Clark. Doctor, what this plan is, it is essentially a
compulsory savings plan based on sales tax methods, is it not?
Mr. .Jacobstein. I should say that is a fair description of it yes. It
is the use of a sales tax method without being a tax.
Senator Clark. So far as the impact on the public is concerned, it is
precisely the same as a sales tax, except you give the money back
sometimes.
Mr. .Jacobstein. That is right. That is a very fair statement I think.
Senator Danaher used the word "self-assessment." If I buy a dollar
necktie I pay $1.10 under his plan. '
***
* * * A withholding tax is usually withheld at the source.
Here you withhold it not at the manufacturer's end but at the
retailer's end. You are using the retailer instead of the manufacturer
to siphon off several billions of dollars, depending upon the rate of
the assessment of a tax.
Page 101
* * It may be that several systems can be used. Anyone of them might
be very useful to the Treasury in accomplishing this purpose. But...
for siphoning off purchasing power into the Treasury from day to day,
or week to week, or month to month; and it has that advantage.
Now, there is an aspect to this question which was not
brought out in the original memorandum which would make the scheme
perhaps a little more palatable if certain deductions were made by any
method either by the withholding tax method or direct sales tax method
or by Senator Danaher's proposal, . . ..
STATEMENT OF CHARLES O. HARDY, OF BROOKINGS INSTITUTION
Mr. Hardy. First,... mainly for the purpose of providing an
exemption from the tax or forced loan either one.
Now, as has been stated a moment ago, this is a forced loan * *
*. It should be pointed out, I think, that you can do the same thing
with the mechanics of any other tax, that is, under the income tax you
can give out bonds or coupons redeemable in bonds instead of giving
receipts for the income tax. You can do that, as far as I can see,
with any tax, for the whole schedule of taxes.
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