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The real Tax Freedom Day

Today is the anniversary of the U.S. Supreme Court’s ruling in 1916 that income tax is a violation of the Constitution.

So the politicians had to change to Constitution.

15 comments to The real Tax Freedom Day

  • (Cue the “Imperial March” from The Empire Strikes Back.)

  • dearieme

    If “the politicians” changed the constitution, they violated it. That won’t do: it is well known that only the Supreme Court is allowed to violate the constitution.

  • It was truly a sad day in American constitutional history.

  • speedwell

    My company’s nanny software won’t allow me to access the site in question.

    The Websense category “Militancy and Extremist” is filtered.

    I guess y’all are next. Right?


  • Stehpinkeln

    The US Constitution cannot be ammended by Politicians. It requires a national plebiscite. Somebody is blowing smoke up somebody else’s ….

  • Tim Haas

    What are you talking about? Potential amendments must pass both the House and the Senate with a two-thirds majority, then be approved by three-fourths of the state legislatures — politicians all.

  • National plebiscite Stepinkeln?

    Article V(Link) of the United States Consitution clearly outlines the amendment process.

    An amendment can be proposed by two methods. It either has either to pass both houses of Congress with a two-thirds majority, or it has to be requested by the legislatures of two-thirds of the States (34 of the 50 states at present).

    Either way the amendment has to be ratified by three-quarters of the states (38 of the 50 states at present).

    Technically (though not from a practical political point of view) it would be easy to do this with minority support among the population of the USA as a whole. For ratification purposes, California, Florida, Texas and New York are worth less than Alaska, North Dakota, South Dakota, Vermont and Wyoming. So the 38 states with the smallest population could fix it, and it would only take fixing the local legislature (two-thirds of members present perhaps?), or a statewide poll with the lowest possible turn-out to do this.

    On paper, politicians could rip apart the Constitution if the general population was largely apathetic. One could argue that’s exactly how it was done.

    The only parts of the Constitution that cannot be amended are 1) no state can lose its equal share in the number of Senators, and 2) BEFORE 1808 the Constitution could not be amended to i) scrap Congress or ii) introduce any direct taxation that di not collect proportionately from each state.

    That last clause is what kept income tax out until 1916, because it would mean that the IRS would have to base the tax threshold according to the poorest state, according to average income. A person living in California could conceivably have contested the federal income tax levy on the grounds that the people of Louisiana and Arkansas had not paid as much.

    So on January 24 1916, the Supreme Court did its bit for freedom, and the politicians then fixed the Constitution.

  • Ted Schuerzinger

    Are you sure that Supreme Court decision was in 1916? I thought the 16th Amendment was ratified in 1913 after the Court ruled the Civil War-era income tax unconstitution in the 1880s or 1890s.

  • “If it can be written down, it can be erased.”

    (WJB III)

  • Ted’s right; the 16th Amendment was ratified in 1913 so somebody’s timeline is a bit off here.

  • 1) Yes, the XVIth Amendment was carried in 1913, so apportionment could no longer be used (unless the Supreme Court Justices chose to ignore it).

    Despite this, the U.S. Supreme Court did throw out Income Tax in 1916, in the Brushaber v Union Pacific Railroad Company ruling(Link). The case was argued on October 14th and 15th 1915. The Court’s decision was issued on January 24 1916.

    2) What can be written down can be erased. But at least there is an audit trail. I can catalogue the entire infamy by thumbing through my paper copy of the US Constitution that is small enough to fit in my shirt pocket.

    Try getting any sense of the multitude of violations of our freedom in the United Kingdom, where we don’t have a written Constitution, and where we might as well not have one at all. You want to know where our First, Second, Fifth and Tenth Amendment Rights went? Good question.

    I have said this elsewhere(The Case for Written Constitutions): even broken or bad promises are better in writing. [Apologies for the moronic Libertarian Alliance website layout.]

  • Joe Kristan

    This thread is delusional.

    Brushaber actually upheld the income tax. Go to the decision here to see for yourself (it’s a bit turgid). The 16th amendment had already been enacted under the usual constitutional processes – the same amendment process used for the bill of rights and all of the other twenty-some amendments.

    To get your bearings on this subject, here’s a good place to start.

  • Paul Marks

    The debate over the 16th Amendment is (which did indeed lead to the Income Tax of 1913) is as follows.

    Did each State (of the three quarters of the States that passed something like the Amendment) actually pass the SAME Amendment, and did they NEED to?

    It has long been argued that some States passed a different wording than exists in the text of what is called the 16th Amendment and that this makes the 16th Amendment invalid.

    However, the needed three quarters of the States did pass something with the words “Income Tax” in it, and the text of the 16th Amendment is what the two thirds of the House and Senate passed.

    Of course I would say that all three quarters of the States had to pass exactly the same words (or the Amendment is void) – but then I would, I am a libertarian.

    It was an interesting time. Before the First World War neither Switzerland or Germany had a federal income tax and France was only just introducing one (having no States, France had no State income taxes). I believe that in Australia the federal government did not finally take over the income tax till World War II, but I am not sure about that. There were certainly years in the interwar period when Switzerland did not have a federal income tax (although it did have federal “insurance” schemes).

    Before the First World War very few States in the United States had income taxes (let alone “Progressive” ones – Prussia 1891, Britain soon after) – no surprise that New York was one of these States.

    Indeed one of the major deals done to get the Federal Income tax through was to accept that State bonds would not be subject to it. So the rich “liberals” of places like New York have a place to put their money (of course Federal Income Tax only taxes “after tax income” – so people avoid paying Federal income tax on money they have already paid in State income tax).

    The super rich (like Kerry family) are not hit by the Federal income tax (they claim to have paid 12% for the last year they have given stats for) as they know how to play the system. The Federal income tax (like so many things) is designed to prevent new people becomming rich.

  • Mordechai Zember

    Income tax is a cancer. The concept of income tax allows corrupt and wicked government officials to enslave the people. Corrupt government officials in Washington, D.C. have used income tax as their means to suppress dissent, deprive we the people of our liberty, and to confiscate our property.

    Corrupt individuals in the federal government are also using income tax as an excuse to lead America to bankruptcy and corruption. Income tax is the source of today’s corruption in our federal government. The purpose of income tax is to give government officials unlimited power over the people and to give government the unlimited power to spend on anything they please.

    Income tax must be abolished now. If we the people do not abolish the income tax soon, we Americans will living in a state of tyranny and our society will be destroyed forever.

  • Dear Readers,

    In reading some of your articles about taxes, I thought that you might consider some of my research:


    A.) Our Founding Fathers created a constitutional REPUBLIC as our form of government. The Constitution gives the federal/national
    government LIMITED powers. All powers not delegated to the United States, are reserved to the States respectively or to the People.
    The Union was created to be the servant of the People! The United States Constitution is the Supreme Law of the land. (Article 6, Clause 2).

    B.) The Constitution gives the Congress the power to lay and collect taxes to pay the debts of the government, provide for the common defense
    and general welfare of the United States, subject to the following rules, pertaining to the only two classifications of taxes permitted by the
    Constitution: Direct Taxes, which are subject to the rule of apportionment (to the states for collection), and Indirect Taxes — imposts, duties
    and excises, subject to the rule of uniformity.

    C.) The government is NOT ALLOWED, by either one of the two classifications, TO TAX DIRECTLY American Citizens or permanent
    resident aliens of the United States, in the United States. The intent of the founders was to keep the government the servant of the People,
    and to prevent it from becoming the master. (Article 1, Section 2, Clause 3).

    D.) The census is taken every 10 years to determine the number of representatives to be allotted to each state and the amount of a DIRECT TAX
    that may be apportioned to each state determined by the percentage its number of representatives bears to the total membership in the House of
    Representatives. (Article 1, Section 2, Clause 3 and Article 1, Section 9, Clause 4).

    E.) It was established in the Constitutional convention of 1787 that the Supreme Court of the United States would have the power of “judicial review,”
    i.e., the power to declare laws passed by the United States Congress to be null and void if such a law or laws were in violation of the Constitution, to be
    determined from the original intent as found in Madison’s Notes recorded during the Convention, the Federalist Papers, and the ratifying conventions
    found in Elliott’s Debates.

    F.) Due to the characteristics of the second classification of taxation authorized in the Constitution, the Supreme Court called it an Indirect Tax, and it
    is divided into three distinct categories of taxes: IMPOSTS, DUTIES and EXCISES. These taxes were intended to provide for the operating expense
    of the federal U.S. government.

    G.) Duties and Imposts are taxes laid to the government on things imported into the country from abroad, and are paid at the ports of entry.

    H.) The Supreme Court says that: “EXCISES are: …taxes laid upon the manufacture, sale and consumption of commodities within the country,
    upon licenses to pursue certain occupations and upon corporate privileges.” (See: Flint v. Stone Tracy Co. 220 U.S. 107 (1911)).

    I.) In 1862, Congress passed an Act (law) to create an “Income Duty” to help pay for the war between the states. A duty is an indirect tax which
    the federal government cannot impose on citizens or residents of a state having sources of income within a State of the Union.

    J.) Congress passed an Act in 1894 to impose a tax on the incomes of citizens and resident aliens of the United States. The constitutionality of the
    Act was challenged in 1895 and the Supreme Court said the law was: “UNCONSTITUTIONAL BECAUSE IT WAS A DIRECT TAX THAT WAS
    NOT APPORTIONED as the Constitution required.” (See: Pollock v. Farmer’s Loan & Trust Co., 157 U.S. 429 (1895)).

    K.) In another Supreme Court decision in 1916, the Court, in CLEAR LANGUAGE, settled the application of the 16th AMENDMENT: by the
    previous ruling (Brushaber) it was settled that the provisions of the 16th AMENDMENT: “CONFERRED NO NEW POWER OF TAXATION
    but simply prohibited the previous complete and plenary (full) power of INCOME TAXATION possessed by Congress from the beginning from
    being taken out of the category of indirect taxation to which it inherently belonged.” (Stanton v. Baltic Mining Co., 249 US 112 (1916)).

    L.) The United States Constitution gives the national government the exclusive authority to handle foreign affairs. Congress has the power to pass
    laws concerning the DIRECT OR INDIRECT TAXATION of FOREIGNERS doing business in the United States of America. It has possessed this
    power from the beginning, needing no amendment (change) to the U.S. Constitution to authorize the exercise of it.

    M.) The DIRECT classification of taxation was intended for use when unforeseen expenses or emergencies arise. Congress, needing funds to meet the
    emergency, can borrow money on the credit of the United States. (Constitution: Article 1, Section 8 Clause 2). The founding fathers intended that the budget
    of the United States be balanced and a deficit be paid off quickly and in an orderly fashion, through a DIRECT TAX. The tax bill is given to the Senate of the
    Union. The bill is “apportioned” by the number of representatives of each State in Congress; therefore, each State is billed its apportioned share of the
    DIRECT TAX equal to the number of votes its Representatives could employ to pass the tax. How the states raise the money to pay the bill is not a federal
    concern. (Constitution: Article 1, Section 2, Clause 3).

    N.) In the Brushaber and Stanton cases, the Supreme Court said: “The 16th AMENDMENT did not change income taxes to another classification.” So, if the
    INCOME TAX is an INDIRECT EXCISE, then how is it applied and collected? According to the Supreme Court: “Excises are taxes laid on the manufacture,
    sale or consumption of commodities within the country, upon licenses to pursue certain occupations and upon corporate privileges; the requirement to pay such
    taxes involves the exercise of the privilege and if business is not done in the manner described no tax is payable…it is the privilege which is the subject of the
    tax and not the mere buying, selling or handling of goods.” (See: Flint vs Stone Tracy Co. 220 U.S. 107 (1911)).

    O.) In 1909 Congress passed the 16th AMENDMENT to the Constitution that was allegedly ratified by (3/4) of the states; it is known as the “INCOME TAX

    P.) Some officials within the I.R.S., along with professors, politicians, teachers and some judges have said, and are saying, that the 16th Amendment changed
    the Constitution to allow a direct tax without apportionment. The aforementioned persons are NOT EMPOWERED to interpret the meaning of the United States
    Constitution! As I’ve stated this power is granted by the Constitution to the Supreme Court, but is limited to original intent. The Supreme Court is NOT EMPOWERED
    to function as a “social engineer”, to amend or alter the Constitution as they have been doing. A change or “Amendment” can only be lawfully done according to the
    provisions of Article 5 of the Constitution.

    Q.) The U.S. Supreme Court said in 1916 that the 16th AMENDMENT DID NOT change the Constitution because of the fact that Article I, Section 2, Clause 3, and
    Article I, Section 9, Clause 4, were not repealed or altered; the U.S. Constitution cannot conflict with itself. The Court also said: “The 16th AMENDMENT MERELY
    240 U.S. 1 (page 16) (1916)).

    There are some things many have missed:

    1.) The Federal Reserve Corp. doesn’t pay any taxes except on real estate: Per SECTION 7 of the
    Federal Reserve Act Approved, December 23, 1913: Tax Exemption: “Federal Reserve Banks, including
    the capital stock and surplus therein, and the income derived there from shall be exempt from Federal,
    State, and local taxation, except taxes upon real estate.”
    (12 U.S.C. 3019)

    2.) “The Internal Revenue Service was never authorized by Congress.” “An unconstitutional act is enforced
    by an unauthorized agency.” “INCOME TAXES pay only FEDERAL RESERVE debt and I.R.S. expenses.”
    “INCOME TAXES do not fund any government function.” (Page 12, President’s Private Sector Survey on
    Cost Control, January 15, 1984 — Library of Congress), (Public Notice — Media Bypass, March, 1997).

    3.) There are some fraudulent things which have transpired with respect to THE BANKRUPTCY OF THE UNITED STATES
    United States Congressional Record, March 17, 1993 Vol. 33, page H-1303, Speaker-Rep. James
    Traficant, Jr. (Ohio) addressing the House:

    a.) “The FEDERAL RESERVE SYSTEM is a sovereign power structure separate and distinct from the
    federal United States government. The FEDERAL RESERVE is a maritime lender, and/or maritime
    insurance underwriter to the federal United States Government operating exclusively under Admiralty/Maritime
    law. The lender or underwriter bears the risks, and the Maritime law compelling specific performance in paying
    the interest, or premiums are the same.”

    b.) “Assets of the debtor can also be hypothecated (to pledge something as a security without taking possession of it)
    as security by the lender or underwriter. The FEDERAL RESERVE ACT stipulated that the interest on the debt was
    to be paid in gold. There was no stipulation in the FEDERAL RESERVE ACT for ever paying the principle.”

    c.) “Prior to 1913, most Americans owned clear, allodial title to property, free and clear of any liens or mortgages until
    the FEDERAL RESERVE ACT (1913) “Hypothecated” all property within the federal United States to the BOARD OF
    GOVERNORS of the FEDERAL RESERVE, in which the Trustees (stockholders) held legal title. The “U.S. citizen”
    (tenant, franchisee) was registered as a “beneficiary” of the trust via his/her birth certificate. In 1933, the federal United
    States government hypothecated all of the present and future properties, assets and labor of their “subjects,” the 14th
    AMENDMENT “U.S. CITIZEN” (“federal citizen”), to the FEDERAL RESERVE SYSTEM.”

    d.) “In return, the FEDERAL RESERVE SYSTEM agreed to extend the federal United States corporation all the credit
    “money substitute” it needed. Like any other debtor, the federal United States government had to assign collateral and
    security to their creditors as a condition of the loan. Since the federal United States didn’t have any assets, they assigned
    the private property of their “economic slaves,” the American citizens as collateral against the unpaid federal debt. They
    also pledged the unincorporated federal territories, national parks, forests, birth certificates and nonprofit organizations as
    collateral against the federal debt. All has already been transferred as payment to the international bankers.”


    Now let’s define exactly what a withholding agent is. Remember that the third paragraph of TREASURY DECISION 2313 essentially says that (withholding) “agents”
    or “representatives” are going to withhold tax (from nonresident aliens). But, what is the legal definition of a “Withholding Agent,” who appears to be the legal entity
    that is responsible for the withholding and payment of INCOME TAXES? Chapter 79, from Subtitle F — Procedure and Administration, contains many of the legal
    definitions for the terms used in Title 26 – Internal Revenue Code.

    Section 7701 — Definitions.

    (a). When used in this Title, where not otherwise distinctly expressed or manifestly incompatible with
    the intent thereof–

    (1). Person — The term “person” shall be construed to mean and include an individual, a trust, estate,
    partnership, association, company or corporation.

    (16). Withholding Agent. — The term “Withholding Agent” means any person required to deduct and withhold any tax under
    the provisions of Sections 1441, 1442, 1443, or 1461.

    First note that the word “person” is not restricted to meaning just people. For purposes of the application of the tax laws, “person”
    means any entity subject to the tax laws. But, nevertheless, it appears as though a WITHHOLDING AGENT can definitely withhold tax,
    can’t he? Well, let us look at what is truly authorized by these Code Sections referenced here in the definition. The first thing to point out is
    that ALL of the Code Sections that start with ‘14’ are in Chapter 3 of Title 26 – Internal Revenue Code. Chapter 3 is titled: WITHHOLDING
    OF TAX ON NON-RESIDENT ALIENS AND FOREIGN CORPORATIONS. Sections 1441, 1442, 1443, and 1461 of Chapter 3 of Title 26 are
    interlocked with 26 CFR 1.861-8 and TREASURY DECISION 2313 which explain the entire scope of the federal INCOME TAX.

    These sections, 1441, 1442, 1443, and 1461, cited in the definition of a WITHHOLDING AGENT, state:

    Section 1441 — Withholding of Tax on Nonresident Aliens.

    (a) General rule. Except as otherwise provided in subsection (c) all persons, in whatever capacity acting having the control, receipt, custody, disposal or
    payment of any of the items of income specified in subsection (b) (to the extent that any of such items constitutes gross income from SOURCES within
    the United States), of any nonresident alien individual, or of any foreign partnership shall deduct and withhold from such items a tax equal to 30 percent thereof,
    except that in the case of any items of income specified in the second sentence of subsection (b), the tax shall be equal to 14 percent of such item.

    (b) Income items. …


    Section 1442 — Withholding of tax on foreign corporations.

    (a) General rule. In the case of foreign corporations subject to taxation under this subtitle, there shall be deducted and withheld at the SOURCE in the
    same manner and on the same items of income as is provided in Section 1441 a tax equal to 30% thereof. ….

    (b) Exemption. Subject to such terms and conditions as may be provided by regulations prescribed by the Secretary, subsection (a) shall not apply in the case of
    a foreign corporations engaged in trade of business in the United States if the Secretary determines that the requirements of subsection (a) impose an undue
    administrative burden and that the collection of the tax imposed by section 881 on such corporation will not be jeopardized by the exemption.

    (c) Exception for certain possessions corporations. For purposes of this section, the term “foreign corporation” does not include a corporation created or
    organized in Guam, American Samoa, the Northern Marianna Islands, or the Virgin Islands or under the law of any such possession if the requirements of
    subparagraphs (A),(B), and (C) of section 881(b)(1) are met with respect to such corporation.


    Section 1443 — Foreign Tax Exempt Organizations

    (a) income subject to section 511. In the case of income of a foreign organization subject to the tax imposed by section 511, this chapter shall apply to income
    includible under section 512 in computing its unrelated business taxable income, but only to the extent and subject to such conditions as may be provided under
    regulations prescribed by the Secretary.

    (b) Income subject to section 4948. In the case of income of a foreign organization subject to the tax imposed by section 4948(a), this chapter shall apply, except
    that the deduction and withholding shall be at the rate of 4 percent and shall be subject to such conditions as may be provided under regulations prescribed by the


    The last section referenced in the definition of a Withholding Agent, 1461, states:

    Section 1461 — Liability for withheld tax. Every person required to deduct and withhold any tax under this chapter is hereby made liable for such tax and is hereby
    indemnified against the claims and demands of any person for the amount of any payments made in accordance with the provisions of this chapter.

    SECTION 1461 says withholding agents are made liable for the payment of taxes they withhold from individuals (foreigners). Well, what do you know? Here is a
    Code Section where someone is made liable for such tax. And who is made liable? The withholding agents are made liable for the tax, and that triggers the filing
    requirements of 6012. Remember 6012 in Section 602.101. OMB Control numbers, we were looking for someone who was made liable for payment of the tax, and
    here it is. Section 6012 is the filing requirement for WITHHOLDING AGENTS, not citizens, or even individuals. WITHHOLDING AGENTS are made liable in Section 1461 for the payment of taxes withheld, and that liability triggers the filing requirements associated with and under Section 6012 found in Section 602.101. OMB Control numbers and TREASURY DECISION 2313. And who are WITHHOLDING AGENTS by law authorized to withhold INCOME TAXES from? FOREIGNERS, and FOREIGNERS ONLY. And what else does SECTION 1461 also say, that they are: “indemnified against the claims and demands of any person for the amount of any payment made in accordance with the provisions of this CHAPTER.”

    Let me know your viewpoint about these disturbing facts.


    David McIlwain