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 Copyright © 2004, Jim Carter

PART 3: 


        Belated apologies must be made at this point to the reader who is not familiar with the nuances of legal jargon.  Legalese can often turn on the legal definition of one word to convey a completely different meaning, and the splitting of hairs is the essence of adjudication.  Familiarity with income tax history/adjudication is assumed in Part 3.  A neophyte would do well to read the Springer, the Boyd, and the two Pollock cases that can be found on the internet.  Be prepared to spend several days, or months. Be wary of government and even esteemed textbook analysis. Textbooks/articles frequently find it easy to say Pollock held the income tax unconstitutional, but it takes paragraphs to convey why the over-simplification is erroneous, and more important, why the distinction is crucial.  The impact of the 16th. Amendment is similarly contorted; the amendment is widely believed to apply to an issue of wages/salary.  It is of necessity to see how the courts read these items rather than the government propaganda mills.  There is no substitute for your own education; the truth will set you free. The legal encyclopedias, American Jurisprudence and Corpus Juris, can be located in the nearest law library. Our freedom is in your hands. Hopefully the message in Part 3 will come through to the uninitiated without being too boring.

    Various government publications and internet sites will lead a person to believe that every possible defense to the income tax has been previously adjudicated. When an issue of wages/salary is made, they invariably rely upon the cases of Springer v US, 102 US 586  and on Pollock, or claim that it is authorized by the 16th. Amendment. Let us review those items to be sure we are not being mislead.

        Springer claimed the Civil War tax that was not apportioned by population to be collected by the states was a direct tax and therefore unconstitutional and additionally claimed the seizure and selling of his real estate without adjudication was a violation of due process. The court observed the procedures to collect taxes included seizure by warrant without oath which constituted conclusive evidence of the facts recited in it. The indifference of the court is apparent: If the procedure "involved any wrong or unnecessary harshness, it was for Congress, or the people who make Congresses to see that the evil was corrected. The remedy does not lie with the judicial branch of the government." id 594. It appears the court was ready to trammel, without objection, the Fourth Amendment right to be free of General Warrants/Writs of Assistance that had been a major factor in the Revolutionary War---to expedite tax collection. The constitutional prohibition against Bills of Attainder, a punishment without benefit of adjudication, was also ignored.  Fortunately for the public, the tax had expired many years before the seizure and adjudication had worked its way to the Supreme Court.

    The opinion takes the bulk of discussion (eleven pages) to detail the history and relevant points of what constitutes a direct tax, including the observation: "It will thus be seen that whenever the government has imposed a tax which it recognized as a DIRECT TAX, it has never been applied to any objects but real estate and slaves." id 599, emphasis in original. The court then held the tax was not a direct tax.

    In a concluding half-sentence, the court writes "the tax of which (Springer) complains is within the category of an excise or duty." id 602. There is an absolute void of discussion on the nature of an excise or of a duty. The half-sentence is not a holding; it is a mere observation of constitutional requirements for the tax to be valid---an escape clause. A holding relates only to questions of law ruled upon in trial court that are appealed, briefed and scrutinized in the appellate court and establishes a precedent that is to be followed in future adjudication. The issue of the tax being an excise or a duty was not raised in trial or appellate court nor was it briefed on appeal.  In legal terms, the statement is orbiter dicta of no precedential value. The words will be of weight in future adjudication (even as a guise), but they do not set a precedent that must be followed. Reliance on this case as holding an income tax is an excise or a duty has been a scam  for decades.

    The income tax was rescinded after the Civil War, was reintroduced in the 1890's, and was challenged in Pollock v Farmers Loan, 157 US 429, 158 US 601. The Pollock challenge involved income derived from dividends from bonds and income from rental property. The court distinguished the issues as being a tax levied upon the income from capital investments that the court considered different from a tax levied on "business, privileges, or employment." id 579. The court held the tax levied on income from capital investments was a direct tax and unconstitutional.  Since this action would place the bulk of the remaining tax on salaries and wages which was not the intent of congress, the entire tax scheme on rehearing was declared invalid. id 637 (do not read unconstitutional). Pollock did not adjudicate any issue relating to wages or salary, the issue did not have representation before the court, it was not defended and it was not discussed in any brief. Salaries/wages (employment) was mentioned by the Pollock court to have previously "assumed the guise of an excise tax and been sustained as such." id 157 US 579; 158 US 635. No authoritative citation is given nor should we confuse a reference to a guise with a holding.  Congress could have reinstated an income tax on wages/salaries without an amendment to the constitution, but not upon dividends or rental income.

    Congress had realized the tremendous economic bonanza of an income tax and submitted the 16th Amendment to the states for ratification in 1909. Subsequent adjudication declared that the purpose of the 16th Amendment was to reverse, by legislation, the judicial action of the Pollock court. Brushaber v Union Pacific, 240 US 1, 18-19. Since the holding of the Pollock court related to income from capital investments, it is submitted the 16th Amendment is irrelevant to an issue of wages/salaries. Agreement is found in Bower v Kerbaugh-Empire, 271 US 170, 174 and  Eisner v Macomber, 252 US 189, 206.

    Concurrence of this point can also be found in Congressional Research Service Report #84-168A, SOME CONSTITUTIONAL QUESTIONS REGARDING THE FEDERAL INCOME TAX LAWS, updated 9/26/84, at page 8: "The fallacy of this argument (that wages are not taxable as income) is that the taxation of wages had never been found unconstitutional and therefore the (16th) amendment to the Constitution was not necessary to permit this type of taxation (on wages)." The statement is true but misleading. The reason taxation of an individual's wages has never been found unconstitutional is that the court has never adjudicated the issue as subtly implied. [The report unwittingly confirms that Pollock did not adjudicate an issue of wages. Since the report acknowledges "taxation of wages had never been found unconstitutional," and history identifies Pollock for its "unconstitutional" ruling which is the only case discussed in the report, Pollock obviously did not adjudicate an issue of wages. That leaves only Springer which simply held the income tax was not a direct tax.]  Pollock, by convoluted phraseology, is also implied to hold "income taxes are generally indirect taxes in the nature of excises..." on page 3. Pollock mentions that statement as a 'guise' from previous adjudication---without citation---but definitely did not make such a holding. Again, by the court's own statements, the issue of wages/salary was not before the court; it was not represented, defended, or briefed. Discussion of an issue of wages/salary is mere dicta with no precedential value.. The report's reliance on Pollock as relevant to a tax on wages or salary is poorly placed.

    The Congressional Research Report was updated and revised with release dated November 17, 1989 and titled FREQUENTLY ASKED QUESTIONS CONCERNING THE FEDERAL INCOME TAX and again declares the 16th Amendment is not relevant to an income tax levied on wages at page 10 and also relies on Springer and Pollock as adjudicating an issue of wages/salary. This deliberate misrepresentation of Springer and Pollock to members of congress, and to the Department of Justice, by government lawyers influenced (intimidated?) by the IRS, borders on fraud. Which side of the border is undetermined.  Fraud or collusion can render a judgment void.  League v DeYoung, 52 US 185.

    The Congressional Research Report has been updated to May 7, 2001, or February 6, 2002, and repeatedly suggests Pollock "held the tax valid on gains from salaries" etc.  At the risk of appearing repetitive and redundant, Pollock, by its own words, declared that these objects of the tax were not being adjudicated; they were not briefed, represented, or defended. How the Report has the effrontery to suggest Pollock "held the tax valid on gains from salaries" while history remembers the case for its unconstitutional ruling is beyond comprehension. Desperation distorts logic.

    Sometimes the underlying consistency and simplicity of Springer and Pollock is missed.  The Springer court declared a direct tax was relevant only to real estate or to slaves.  The Pollock court, in examining the rent derived from real estate, concluded the tax on rent was in effect a tax on real estate and therefore a direct tax.

    Congress passed the Corporate Tax Act in 1909 that was merged with the income tax provisions of the Underwood Tariff Act in 1914. Adjudication of an individual's constitutional rights relevant to the income tax is sparse; most income tax litigation involve corporations and corporate privileges. Subsequent adjudication has served to blur the distinction between the two taxes. Numerous adjudication hold corporations are subject to an excise tax. American Manufacturing v St. Louis, 250 US 459; Flint v Stone Tracy, 220 US 107. Corporations, as creations of the states, receive their existence from government as a privilege, but we are here concerned with sovereign citizens that are exercising a constitutional right. Hale v Henkel, 201 US 43; Lehnhauser v Lake Shore Auto Parts, 410 US 336. It is also recognized that select specific businesses of a public nature have been deemed suitable objects of an excise tax. But this is still far short of declaring that occupations in general are suitable objects for a privilege tax. Such a declaration would have profound constitutional reverberations.

    An employee "of an instrumentality of the U.S." was held subject to an excise (privilege) tax. Graves v New York, 306 US 466, 478, 480. Taxation of recipients of government funds, either as their employer or by another government entity (state or federal), resulted in several cases and some taxation on intergovernmental employment was struck down. After much adjudication over sovereignty, the issue resulted in the Public Salary Act of 1939 that appears to basically be an acceptance of reciprocal taxation. If governments wish their employees to consider employment a privilege upon which a kickback (return) can be demanded, they may jolly well do so, but this is far short of declaring that common citizens are to consider employment a privilege from the government upon which an income tax can be levied. Adjudication involving government employment or a beneficiary of government privileges (i.e., a corporation) is irrelevant to claims presented by this paper.

    Some sources suggest Steward Machine Company v Davis, 301 US 548, has ruled employment is subject to a tax. The second line of the opinion identifies the company as "an Alabama corporation." The petitioner had no standing to present a constitutional right to Liberty nor are an individual's constitutional rights addressed in the opinion. The court ruled the corporation was subject to an excise tax.  Brushaber v Union Pacific, 240 US 1, also adjudicated a corporate privilege tax.

    Can an individual be properly required to purchase that which is already his? The concept is inane. The court has declared that the levying of excise taxes turns on the "controlling question of whether the (government) has given anything for which it can ask return." Wisconsin v J.C. Penny, 311 US 435, 444. The government has not given anything when an individual pursues a livelihood. The occasion to pursue a livelihood existed long before government was created; it will continue long after this government is gone; it is not a creation of the government for which the government can ask a return. The government does not grant or give a constitutional right; the government exists to protect constitutional rights. Declaration of Independence, Weeks v US, 232 US 383, 392. A sovereign citizen cannot properly be required to purchase as a mere privilege from government that which he already possesses as a sacred right secured by the constitution.

    Perhaps it may be suggested the income tax is levied upon those who are privileged to enjoy the benefits of government. The suggestion witnesses a gross misunderstanding of the evolution of our government. It is not a privilege to enjoy government; government enjoys a privilege to have been created by our forefathers. The suggestion is a complete reversal of the role that government is the (civil) servant of the people and suggests that government is the master bestowing its gifts and privileges upon the citizenry. Government has absolutely nothing to bestow, either finances or privileges, except what it has already received or taken from the people and the pursuit of a livelihood has never been knowingly acquiesced by the people. The income tax does not fulfill adjudicated characteristics of an excise tax. Agreement can be found in Internal Revenue Manual 9781, Section 452.1.

    Can the income tax be constitutionally recognized as a duty? A "duty" has been adjudicated to be a tax levied on imports. McGoldrick v Gulf Oil, 309 US 414. Perhaps a much broader, non technical meaning of duty is suggested, i.e., a responsibility. Does a citizen have a responsibility to yield to government all that government requests and can consume? Reflection on the voracious economic appetite of elected and appointed officials, even when government spending currently accounts for 50% of the GNP, makes a person apprehensive, but the courts have stated it succinctly. A person has no responsibility to make contributions to government in the form of taxes if government has no right to them. Gregory v Helvering, 293 US 465. And again, "(an individual) is entitled to carry on his private business in his own way. His power to contract is unlimited. He owes no duty to the state or to his neighbors to divulge his business..." Hale v Henkel, 201 US 43, 74. Payment of taxes allegedly owed to the government under threat of prosecution when no tax is properly due is to submit to a form of extortion under color of law.

    Can the income tax be sustained as an impost? Considering the consistent adjudication of imposts as a tax on import merchandise (ref. Hadden v Collector, 72 US 107), it is believed that to mention the possibility is to negate its potential.

    If not an indirect tax (i.e., an excise, impost, or duty), can the income tax be recognized as a direct tax ? As previously noted, Springer v U.S., 102 US 586 went to considerable length to hold the income tax was not a direct tax. The court noted: "It will thus be seen that whenever the government has imposed a tax which it recognized as a DIRECT TAX, it has never been applied to any objects but real estate or slaves." emphasis in original.  Please note the current income tax does not apply to real estate. Recent adjudication starting with U.S. v Francisco, 614 F2d 617, has declared the income tax is a direct tax relieved of the constitutional requirement of apportionment by the 16th. Amendment. Interestingly enough, they usually cite Brushaber v Union Pacific, 240 US 1, which appears incongruous. Are such inconsistencies what take appeals to the Supreme Court?

    If we assume, for analysis, that the 16th amendment was properly ratified, can it negate a constitutional safeguard or nullify a fundamental constitutional right? Of course not. The purpose for the constitution was to put certain rights of the people beyond the grasp of government tampering. West Virginia v Barnett, 319 US 624. If the government can impose a tax on a constitutional right because of the 16th amendment, then the right to trial by jury, the freedom of the press, and each and every constitutional protection can similarly be taxed or destroyed tomorrow by amendment; the constitution can be totally emasculated by the mischief of congress and the state legislators. "Where rights secured by the constitution are involved, there can be no rule-making or legislation which would abrogate them." Miranda v Arizona, 384 US 436.

    The issue of the amendment conflicting with constitutional provisions of apportionment was pressed upon the Brushaber court. If the amendment authorized a direct tax that was not apportioned, as argued by counsel, the constitution would then conflict with itself. The court declared the amendment did not alter or negate any constitutional provision, nor did it conflict with itself; it only reclassified a tax laid on income earned from capital investments as an indirect tax which, by Pollock alone, had been declared a direct tax. id p 11-19.   The constitution has provisions for being amended; it has no provisions for repudiation.

    Later courts confirmed Brushaber.   In Evans v Gore, 253 US 245, the court declared:  We have previously held the amendment “did not extend the taxing power to new subjects, but merely removed the necessity which otherwise might exist for an apportionment among the states of taxes laid on income.  [i.e., what was considered a direct tax and required apportionment before the amendment is now considered an indirect tax and does not require apportionment.] (citations omitted).  After further consideration, we adhere to that view and accordingly hold that the Sixteenth Amendment does not authorize or support the tax  (on the judge's salary.)” id 263.  Overruled on other grounds. The court declared the amendment merely reversed the case law established by Pollock; it did not alter any constitutional provisions.

     But consideration of the 16th. Amendment itself is undoubtedly irrelevant. Pollock was explicitly overruled in South Carolina v Baker, 485 US 505 (1988) which has been suggested to make the amendment redundant. We should note South Carolina adjudicated an issue of taxes on bonds---not an issue of wages/salaries. The 16th amendment leaves a legacy of a non- apportioned tax on capital investments. To avoid a constitutional conflict over apportionment, the income tax must fall within the parameters of an indirect tax, i.e., an excise, impost, or duty, but it would still violate the constitutional right to liberty.

    In summary, the amendment was passed to reverse the holding of the Pollock court, but the court had specifically excluded wages and salaries from the issues being considered.  Hence, the amendment is not relevant to an income tax on wages or salaries. The Congressional Research Reports are in agreement with this conclusion.  However, since wages and salaries were not an issue appealed and being litigated by Pollock or Springer, all statements in the opinions relating to such items are dicta; they are not precedent setting holdings as asserted by the Research Reports. With the recognition that Pollock or Springer did not make a holding relevant to wages or salary, there is no supreme court adjudication that validates an income tax on a citizen's constitutional right to pursue a livelihood as protected by the clause of Liberty. (In fact, no federal or state court has held Liberty is not improperly infringed by the income tax.)  In addition, an amendment cannot be used to negate a fundamental constitutional right.

    It appears that sometime before the 1954 rewriting of the IRS code, the defense of liberty was made to the courts by some knowledgeable lawyer.  The unknown case was quietly buried by the courts to perpetuate the tax. Vivian Kellums might be an interesting case to research. The rewriting of the code removed all declarations that the defendant must be shown liable by law.  Lawyers for the IRS, grasping for adjudication to uphold the tax on an individual's wage or salary, misrepresent dicta in Springer and Pollock. The courts, as Thomas Carley found out, assist by accepting pleadings without an averment of legal responsibility that would allow a challenge to the tax, and will do anything necessary to prevent an adjudication on the merits.  Of all the attributes of a representative society, greed, manifested by taxation, is the most destructive but must somehow be controlled when given to government.

    The paradox poised by our idealistic forefathers who established government to protect posterity from government oppression can only be understood in light of their unequivocal faith in a supreme being and an awareness of the reality that only slightly less government during the preceding eleven years offered no assurance of individual security or economic prosperity. The question of whether government has abused the faith of our forefathers has been repeatedly brought before the courts over the span of 200 years; it must be again.

    The groundswell of public resentment to government inflicted burdens and abuses has resulted in numerous paramilitary organizations and pro se activists with a willingness to risk great trauma, incarceration, and loss of possessions in a desperate effort to determine if the citizens have any voice in how much can be confiscated by Caesar. The IRS now identifies more than 1,000,000 individuals as tax protesters. An increasing number of litigants have abandoned professional counsel whom they distrust and consider ineffective and are venting their frustrations with government via nonprofessional defenses to prosecutions and unusual actions against public officials. Their frustration, borne of contempt of government officials who piously assert that they know better how to spend the earnings of the common man than does the individual who knew enough to earn the money have led many to become martyrs within federal confinement. They conclude it is their taxes that are financing the government projects they find wasteful/ reprehensible/ self-destructive and nothing will change as long as congress receives docile compliance.  They concur with William Simon that federal spending funds a corrupt middle-class welfare ponzi scheme of government dependent blood-sucking leeches that exhibit the characteristic frenzy of a parasite being separated from its host when talk turns to reducing taxation, which is the same scenario that drove New York City into bankruptcy. Many return home unrepentant, and tempered. And they aspire to leave their children something besides oppressive debt, bondage, and serfdom.  "The government that makes evolution impossible makes revolution inevitable." President John F. Kennedy. The small voice of the people wanting freedom from government should be heeded; it is but a harbinger.



This article is not to be considered as legal advice. The case analysis is considered to be accurate but the writer is not responsible for any use made of the information.

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