Source: http://freedom-school.com/tax-matters/income-tax-brief-skinner.html
Timestamp: 2019-04-19 23:18:36+00:00

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The IRS appears (or otherwise is) misapplying the Revenue Statutes of the United States!
With that said, let's examine some of the issues surrounding what is commonly know as "The Income Tax". By the way, most of the material below is taken from a book (The Biggest Tax Loophole of All) by Otto Skinner, mainly because his book has the clearest and best explanation of the issues surrounding the so-called "Income Tax". Also, he has some other materials that you may obtain and study before you even think about fighting the IRS.
Also, there are various websites available and one is wise to discover as much information as may be available.
www.sedm.org and www.freedom-school.com are two of the best!
It can be concluded that in most individual cases, some agents of the Internal Revenue Service (IRS) are knowingly misapplying the revenue statutes of the United States in such a manner as to constitute fraudand extortion. The rest of this brief explains how that conclusion was arrived at.
There is much confusion surrounding the so-called "income" tax, both as to what is being taxed, i.e., the subject of the tax, and which individuals are liable for, i.e., subject to the tax. In this brief, we will explore both the United States Constitution and case law to show that the two areas of confusion are, in fact, clearly defined. This brief will show that it is well settled in case law that income is not the subject of the so-called "income" tax. Rather, the subject of the so-called "income" tax is certain revenue taxable activities, such as importing or distilling spirits or doing business as a corporation, and the income derived from these revenue taxable activities is used merely to measure the amount of tax due.
It has been established that governments have an inherent power of taxation. However, the US Constitution requires that Congress implement taxes in certain ways.
The original thirteen states did not give the limited confederate government under the Articles of Confederation any power to tax. Later, the national government was created under the United States Constitution. The United States Constitution provides a limited grant of power to the national government.
United States Constitution, Tenth Amendment.
The States possessed the inherent power of taxation. The people of the States, through their representatives, gave the national government (by way of the Constitution) a concurrent, but complete, power of taxation, with one exception. The United States Constitution expressly forbids the national government from taxing exports.
The power to tax was granted by Article I, § 8, cl. 1.
United States Constitution, Article I, § 8, cl. 1.
The provision expressly prohibiting the national government from taxing exports is found in Article I, § 9, cl. 5.
United States Constitution, Article I, § 9, cl. 1.
At the same time the founding fathers granted the national government the power to tax, they laid down two rules that govern the imposition of the two great classes of taxes. Direct taxes are subject to the rule of apportionment. Indirect taxes are subject to the rule of geographical uniformity.
The rule requiring indirect taxes (duties, imposts and excises) to be uniform throughout the United States is provided in Article I, § 8, cl. 1, supra.
There are two clauses in the Constitution that require all direct taxes imposed by Congress to be apportioned among the States according to population.
Representatives and direct taxes shall be apportioned among the several States which may be included within this Union, according to their respective numbers, which shall be determined by adding to the whole number of free persons, including those bound to service for a term of years, and excluding Indians not taxed, three-fifths of all other persons.
United States Constitution, Article I, § 9, cl. 4.
Black's Law Dictionary defines "Capitation tax" as follows.
Capitation tax. A poll tax (q.v.). A tax or imposition upon the person.
Congress has never imposed a capitation tax but has imposed direct taxes on property. A direct tax upon real estate has been imposed by Congress several times in the history of the United States, starting as far back as 1798. These direct taxes on real estate have always been apportioned among the States according to population. The last time a direct tax was successfully imposed by Congress was during the Civil War period. See Pollock v. Farmers' Loan & Trust Co., 157 U.S. 429, 573 (1895).
We have now seen that all direct taxes must be apportioned among the States according to population and all indirect taxes must be uniform. Now let's look at the difference between a direct tax and an indirect tax. For this information, we will turn to the courts, especially the United States Supreme Court.
We will first look at indirect taxes (duties, imposts and excises).
A tax laid upon the happening of an event, as distinguished from its tangible fruits, is an indirect tax.
Tyler v. United States, 281 U.S. 497, at 502 (1930).
Some people think that the excise taxes on cigarettes and whiskey, for example, are taxes on the cigarettes or whiskey as property, but this is not so. The subject of these taxes is the manufacturing, importing, or distilling of these products. A "sales" tax is not on the property sold but rather on the event, or activity, of the sale. The subject of an indirect tax (such as an excise tax) is never the property, but rather the event, activity, incident, or occasion, and these terms are used interchangeably when discussing indirect taxes.
Excises are "taxes laid upon the manufacture, sale or consumption of commodities within a country, upon licenses to pursue certain occupations, and upon corporate privileges."
Cooley, Const. Lim., 7th ed., 680.
Flint v. Stone Tracy Co., 220 U.S. 107, at 151 (1911).
Thus, when trying to decide whether the subject of a so-called "income" tax is people, property, or activities, we must keep in mind that the subject of indirect taxes (duties, imposts and excises) is never property, but rather some taxable activity.
The fact that a direct tax must be apportioned is again verified by the United States Supreme Court in 1937. In one of the "social security" tax cases, Steward Machine Company was arguing that the tax collected from the corporation under the name of "unemployment taxes" was, for various reasons, unconstitutional. The Supreme Court held that it was a valid excise tax. The Court further clarified the fact that taxes on property and capitation taxes were indeed direct taxes and did indeed require apportionment.
The subject matter of taxation open to the power of the Congress is as comprehensive as that open to the power of the states, though the method of apportionment may at times be different. "The Congress shall have power to lay and collect taxes, duties, imposts and excises. " Art I, § 8. If the tax is a direct one, it shall be apportioned according to the census or enumeration. If it is a duty, impost, or excise, it shall be uniform throughout the United States. Together, these classes include every form of tax appropriate to sovereignty. [citations omitted.] Whether the tax is to be classified as an "excise" is in truth not of critical importance. If not that, it is an "impost" [citations omitted], or a "duty" [citations omitted.] A capitation or other "direct" tax it certainly is not.
Steward Machine Co. v. Davis, 301 U.S. 548, at 581-582 (1937).
Also, in a 1960 case, the United States Court of Appeals, Third Circuit, confirms the fact that taxes on property must be apportioned. In an income tax case, Penn Mutual Indemnity Company challenged the tax as a direct tax on property and, therefore, unconstitutional because it was not apportioned among the States as the Constitution requires of direct taxes. Without going into many of the details of the case, certain excerpts are cited below.
Indeed, the requirement for apportionment is pretty strictly limited to taxes on real and personal property and capitation taxes.
It is not necessary to uphold the validity of the tax imposed by the United States that the tax itself bears an accurate label. Indeed, the tax upon the distillation of spirits, imposed very early by federal authority, now reads and has read in terms of a tax upon the spirits themselves, yet the validity of this imposition has been upheld for a very great many years.
We do not think it profitable, however, to make the label as precise as that required under the Food and Drug Act. Congress has the power to impose taxes generally, and if the particular imposition does not run afoul of any constitutional restrictions then the tax is lawful, call it what you will.
So once again it is confirmed that a tax on property is a direct tax and as such it must be apportioned among the States according to population.
Additionally, we see that the name of the tax does not determine the nature of the tax (capitation, property, duty, impost or excise), as well as the fact that the name of the tax does not determine the subject of the tax. So the fact that we have a tax called an "income" tax does not necessarily mean that "income" is the subject of the tax.
The United States Supreme Court agrees.
The name by which the tax is described in the statute is, of course, immaterial.
Dawson v. Kentucky, 255 U.S. 288, at 292 (1921).
We can now be certain that the so-called "income" tax cannot be considered tax on property since it is not apportioned among the States as would be required of direct taxes. We can also be certain that the so-called "income" tax cannot be considered direct tax of any sort. But if not "income", then what isthe subject of this tax?
A particular United States Supreme Court case which explains just how an indirect tax can be imposed on a revenue taxable activity (the lawful subject of the tax), and just how the income derived from that activity can be used merely to measure the amount of the tax, can be found in the United States Supreme Court Reports of 1911. Numerous corporations took their issues to court and the cases were consolidated in the landmark case of Flint v. Stone Tracy Co., 220 U.S. 107 (1911).
The corporations challenged the 1909 Act on numerous grounds. One of the grounds upon which the Act was challenged was that it was a direct tax on the corporate franchise. The corporations claimed that to tax the income from this form ofproperty (the franchise) would be the same as a direct tax on the property and thus unconstitutional. Additionally, the corporations claimed the national government could not tax a State granted privilege. The United States Supreme Court explains in Flint v. Stone Tracy Co., 220 U.S. 107 (1911), why it was not a direct tax and that the national government could indeed tax whatever the States could tax.
Flint v. Stone Tracy Co., 220 U.S. 107, at 146 (1911).
Duties and imposts are terms commonly applied to levies made by governments on the importation or exportation of commodities. Excises are "taxes laid upon the manufacture, sale or consumption of commodities within a country, upon licenses to pursue certain occupations, and upon corporate privileges." Cooley, Const. Lim., 7th ed., 680.
Flint v. Stone Tracey Co., supra, at 151.
The tax under consideration, as we have construed the statute, may be described as an excise upon the particular privilege of doing business in a corporate capacity, i.e., with advantages which arise from corporate or quasi-corporate organization; or, when applied to insurance companies, for doing the business of such companies. As was said in the Thomas Case, 192 U.S. 363 supra, the requirement to pay such taxes involves the exercise of privileges, and the element of absolute and unavoidable demand is lacking. If business is not done in the manner described in the statute, no tax is payable.
We must remember, too, that the revenues of the United States must be obtained in the same territory, from the same people, and excise taxes must be collected from the same activities, as are also reached by the States in order to support their local government.
Clearly, in 1911, the United States Supreme Court has stated that a tax on a revenue taxable activity can be measured by the income derived fromthat activity, which in this case was the exercise of a government granted privilege.
In equally clear language, the courts have stated that capitation taxes and taxes on property imposed by Congress must be apportioned among the States as is required by the United States Constitution. And of course, the so-called"income" tax is not apportioned among the States. Thus, it cannot be consideredas a capitation tax or a tax on property. To so consider it would make it unconstitutional on its face. But then what, if anything, is the subject of this tax?
Many people have been led to believe that the Sixteenth Amendment gave Congress some sort of new power to tax income. In many articles and publications, we find statements to the effect that "the Sixteenth Amendment eliminates the apportionment requirement of taxes on income", leading the reader to incorrectly believe that any so-called "income" tax is a direct tax. This section of thebrief will show that the following statements are well supported in case law.
The Sixteenth Amendment conferred no new power of taxation.
The Sixteenth Amendment did not extend the taxing power to new or excepted subjects.
The Sixteenth Amendment prohibited the power of income taxation, possessed by Congress from the beginning of our national government under the Constitution, from being taken out of the category of indirect taxation to which it inherently belonged.
The congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and withoutregard to any census or enumeration.
A cursory reading of the Sixteenth Amendment would certainly cause a personto adopt the "direct tax" theory. And the "direct tax" theory certainly is indirect contradiction to the statements made in items numbered 1, 2, and 3 above. The "direct tax" theory is also in direct contradiction to the rulings of the United States Supreme Court and other courts.
The Sixteenth Amendment was ratified in 1913. Immediately thereafter, Congress passed the Tariff Act of October 3, 1913, (Ch. 16, 38 Stat. 166). There werea number of challenges to this revenue act that was supposedly written underthe authority of the Sixteenth Amendment.
After the Sixteenth Amendment and the Tariff Act of October 3, 1913, two landmark cases were ruled on by the United States Supreme Court. The first was Brushaber v. Union Pacific R.R. Co., 240 U.S. 1 (1916). The next was Stanton v. Baltic Mining Co., 240 U.S. 103 (1916). Both of these cases were argued on October 14-15, 1915. The Brushaber Case was decided on January 24, 1916, and the Stanton Case was decided on February 21, 1916.
Chief Justice Edward Douglas White delivered the opinions in both cases. The Brushaber Case is quite difficult to read and comprehend and has led to much confusion and misunderstanding. But in the Stanton Case, Chief Justice White quite nicely tells us what was settled in the Brushaber Case and the real purpose of the Sixteenth Amendment. The Brushaber Case is the case most relied upon by the Internal Revenue Service (IRS) to show that the "income" tax and the Sixteenth Amendment are constitutional. The IRS is quite correct, but not because of the mistaken theory that the Sixteenth Amendment conferred to Congress some sort of new taxing power or that the Sixteenth Amendment authorized a direct tax without apportionment. Quite the contrary.
But it clearly results that the propositions and the contentions under it, if acceded to, would cause one provision of the Constitution to destroyanother; that is, they would result in bringing the provisions of the Amendmentexempting a direct tax from apportionment into irreconcilable conflictwith the general requirement that all direct taxes be apportioned. Moreover, the tax authorized by the Amendment, being direct, would not come under the rule of uniformity applicable under the Constitution to other than direct taxes, and thus it would come to pass that the result of the Amendment would be to authorize a particular direct tax not subject either to apportionment or to the rule of geographical uniformity, thus giving power to impose a different tax in one State or States than was levied in another State or States. This result instead of simplifying the situation and making clearthe limitation on the taxing power, which obviously the Amendment must have been intended to accomplish, would create radical and destructive changes in our constitutional system and multiply confusion.
In other words, the Court has said that if the tax authorized by the Sixteenth Amendment were considered a direct tax, as Mr. Bushaberhad erroneously assumed, it would cause one provision of the Constitutionto destroy another; bringing one part of the Constitution into irreconcilable conflict with the general requirement that all direct taxes be apportioned. Obviously, this could not be allowed. If the Sixteenth Amendment was in irreconcilable conflict with other parts of the Constitution, it would have been held to be unconstitutional.
Next, the Court lays out the constitutional principles and the rules relating to direct and indirect taxes applicable both before and after the Sixteenth Amendment.
In fact the two great subdivisions embracing the complete and perfect delegation of the power to tax and the two correlated limitations as to such power were thus aptly stated by Mr. Chief Justice Fuller in Pollock v. Farmer's Loan & Trust Company, supra, at page 557: "In the matter of taxation, the Constitution recognizes the two great classes of direct and indirect taxes, and lays down two rules by which their imposition must be governed, namely: The rule of apportionment as to direct taxes, and the rule of uniformity as to duties, imposts and excises." It is to be observed, however, as long ago pointed out in Veazie Bank v. Fenno, 8 Wall. 533, 541, that the requirement of apportionment as to one of the great classes and of uniformityas to the other class were not so much a limitation upon the complete andall embracing authority to tax, but in their essence were simply regulationsconcerning the mode in which the plenary power was to be exerted. In the wholehistory of the Government down to the time of the adoption of the Sixteenth Amendment, leaving aside some conjectures expressed of the possibility of a tax lying intermediate between the two great classes and embraced by neither, no question has been anywhere made as to the correctness of these propositions.
Moreover in addition the conclusion reached in the Pollock Case didnot in any degree involve holding that income taxes generically and necessarily came within the class of direct taxes on property, but on the contraryrecognized the fact that taxation on income was in its nature an excise entitled to be enforced as such unless and until it was concluded that to enforce it would amount to accomplishing the result which the requirement as to apportionment of direct taxation was adopted to prevent, in which case the duty [meaning the duty of the court] would arise to disregard form and consider substance alone and hence subject the tax to the regulation as to apportionment which otherwise as an excise would not apply to it.
Therefore, any statements made today by anyone claiming the Sixteenth Amendment authorized a direct tax are wholly without foundation.
Indeed, from another point of view, the Amendment demonstrates that no such purpose was intended and on the contrary shows that it was drawn with theobject of maintaining the limitations of the Constitution and harmonizingtheir operation.
We say this because it is to be observed that although from the date of the Hylton Case because of statements made in the opinions in that case it had come to be accepted that direct taxes in the constitutional sense wereconfined to taxes levied directly on real estate because of its ownership, the Amendment contains nothing repudiating or challenging theruling in the Pollock Case that the word direct had a broader significance since it embraced also taxes levied directly on personal property because of its ownership, and therefore the Amendment at least impliedly makessuch wider significance a part of the Constitution - a condition which clearlydemonstrates that the purpose was not to change the existing interpretationexcept to the extent necessary to accomplish the result intended, that is, the prevention of the resort to the sources from which a taxed incomewas derived in order to cause a direct tax on the income to be direct taxon the source itself and thereby to take an income tax out of the class of excises, duties and imposts and place it in the class of direct taxes.
The reason the above 191-word sentence has caused big problems for individuals is that government personnel, as well as others, have totally misinterpreted the latter part of the sentence by ignoring the word "prevention". Wherethe sentence shows that the purpose of the Sixteenth Amendment was not to change the interpretation of the Constitution or to change the distinction between direct taxes on property and indirect taxes (which are imposed on activities), but the purpose of the Amendment was to prevent the courts from considering the source of the income (such as the property from which income is derived) in order to cause a direct tax on the income to be a direct tax on the source. In other words, the purpose of the Amendment was for the courts to consider the activity and not the property to be the source of the income.
For example, if a corporation owned rental property, it would derive rental income from this property. In earlier cases, the corporations would argue that a tax "on" this income would be the same as a direct tax on the property andwould be unconstitutional if the tax was not apportioned; attempting to rely on the 1895 ruling in the Pollock Case cited below. For example, see Spreckels Sugar v. McClain, 192 U.S. 397 (1904). Another example is shown in the Flint Case (1911), cited above, wherein the corporations argued that a tax "on" the corporate franchise was a tax on the franchise as property. The command of the Amendment that "income" taxes shall not be subject to apportionment by considering the source from which the income may be derived, forbids the courts from treating an "income" tax as a direct tax on property. See Brushaber at pages 18-19 above. Thus, the courts can lawfully only consider the activity, event, incident, or occasion that is being taxed to keep an "income" tax in the class of an excise, duty, or impost.
In short, when the government, as well as others, misinterpret this sentence, they do so by simply ignoring the word "prevention" and falsely claim that the purpose was "to take an income tax out of the class of excises, dutiesand imposts and place it in the class of direct taxes".
Notice the words and phrases used by the Court, such as "forbids", "maintaining the limitations", "harmonizing their operation", "prevent", "prevention", and "simplifying the situation and making clear thelimitation".
In using the word "forbids", the Court is saying that the Sixteenth Amendment forbids the courts from applying the rule of apportionment to "income" taxes. Brushaber, supra, at 18-19.
In using the phrases "maintaining the limitations" and "harmonizing their operations", the Court is saying that the Sixteenth Amendment was drawn with the object of maintaining the rule of apportionment as to directtaxes and the rule of uniformity as to indirect taxes and to harmonize the operationsof these two rules by not considering the property source from which the income is derived when dealing with "income" taxes. Brushaber, supra, at 19.
In using the word "prevent", the Court is saying that the Constitutional rule of apportionment was adopted to prevent the imposition of direct taxes (including taxes on property) unless such taxes were apportioned among the Statesaccording to population. Brushaber, supra, at 16-17.
In using the word "prevention", the Court is saying that the Sixteenth Amendment was to prevent the resort to, or the consideration of, the property source from which the income was derived in regard to "income" taxes. This leaves the courts in a position of considering the activity (instead of the property)in regard to "income" taxes. Brushaber, supra, at 19.
The purpose of the Sixteenth Amendment was not to change an "income" tax from a direct tax into an indirect tax, as many people have erroneously concluded. This is an important point. Direct taxes are taxes on property and capitationtaxes. Indirect taxes are taxes on revenue taxable activities. Neither the Sixteenth Amendment nor the United States Supreme Court changed the natureof any tax.
In using the phrase "simplifying the situation and making clear the limitation", the Court is saying, in effect, that the Sixteenth Amendment eliminated the problem of determining each time whether a particular so-called "income" tax is a tax on property or a tax on an activity.
Previous to the Sixteenth Amendment, cases would be brought to court arguing that a tax measured by the income derived from an activity was direct tax on the property source of the income and, therefore, had to be apportioned in order to be constitutional. Each time, the courts would have to evaluate the statutesto determine whether the particular tax was a direct or indirect tax, and perhaps"disregard the form and consider the substance alone". Brushaber, supra, at 16-17. According to the Brushaber Court, the purpose of the Sixteenth Amendment was to relieve the courts from considering the source. Brushaber, supra, at 18.
Now, because of the Sixteenth Amendment, the courts simply cannot lawfully, without violating the Sixteenth Amendment, consider any so-called "income" tax as a property tax or any other kind of direct tax. The courts cannot lawfully consider the property or the property source as being the subject of a so-called "income" tax. But that leaves the courts in such a position thatthey can lawfully only consider the activity as the subject ofthe tax. Brushaber, supra, at 18.
Thus, when people in government and others falsely claim that the Sixteenth Amendment authorized a direct tax, they are directly contradicting the ruling of the United States Supreme Court as so clearly expressed in the Stanton Case.
Peck & Co. v. Lowe, 247 U.S. 165, at 172 (1918).
Some people have claimed that Chief Justice White was simply fabricating the statement when he said that the Pollock Court recognized the fact thattaxation on income was in its nature an excise entitled to be enforced as such. Brushaber, supra, at 16-17. It seems that the reason some people havecome to such an erroneous conclusion is that they do not see this particular wording in the Court's opinion in the Pollock Case. Another reason is probably because these people do not read the rest of that sentence. The latter part of that sentence explains that the courts (prior to the Sixteenth Amendment)would consider taxation on income as an excise tax unless to enforce it the tax would amount to a direct tax on the property. If this were the case, thecourt would disregard the form (the wording) of the act of Congress and consider the substance (the effect of the act), and if to enforce the act would amountto a direct tax on property without apportionment, the court would find theact of Congress unconstitutional. This is exactly what the Court did in Pollock in 1895.
Let's take a look at the ruling summarized in the Pollock Case.
First. We adhere to the opinion already announced, that, taxes on real estate being indisputably direct taxes, taxes on the rents or income of real estate are equally direct taxes.
Second. We are of opinion that taxes on personal property, or on the income of personal property, are likewise direct taxes.
Third. The tax imposed by sections twenty-seven to thirty-seven, inclusive, of the act of 1894, so far as it falls on the income of real estate and of personal property, being a direct tax within the meaning of the Constitution, and, therefore, unconstitutional and void because not apportioned according to representation, all those sections, consisting of one entire scheme of taxation, are necessarily invalid.
Pollock v. Farmer's Loan & Trust Co., 157 U.S. 429, and the rehearing, 158 U.S. 601.
Together they are referred to as the Income Tax Cases.
It is important to note that the Pollock Case has never been overruled. It was not overruled by either the Sixteenth Amendment nor the Brushaber decision.
So when the Brushaber Court uses the word "principle", it is saying that the Sixteenth Amendment was drawn for the purpose of doing away for the future with the principle upon which the Pollock Case was decided. Brushaber, supra, at 18. The principal was to disregard the form, if necessary, and consider the substance alone. Now, after the Sixteenth Amendment, the courts can lawfully consider only the activity.
Several times previously in this brief, it has been indicated that the purpose of the Sixteenth Amendment was to prohibit the courts from treating a tax on income as a direct tax on property. Up to this point, however, no concrete documentation to support this statement has been supplied. Such concrete documentation can be found in a Congressional Research Service report.
The Congressional Research Service does legal research for Congress. The particular report of interest here is Report No. 84-168 A, 784/725, titled Some Constitutional Questions Regarding The Federal Income Tax Laws, dated May 25, 1979, and updated September 26, 1984. This report is on record in the Library of Congress and will hereinafter be referred to as CRSR-84-168A.
CRSR-84-168A was written by Howard Zaritsky, Legislative Attorney of the American Law Division of the Congressional Research Service. It was updated by John R. Luckey, Legislative Research Assistant of the American Law Division of the Congressional Research Service.
The Supreme Court, in a decision written by Chief Justice White, first noted that the Sixteenth Amendment did not authorize any new type of tax, nor did it repeal or revoke the tax clauses of Article I of the Constitution, quoted above. Direct taxes were, notwithstanding the advent of the Sixteenth Amendment, still subject to the rule of apportionment and indirect taxes were still subjectto the rule of uniformity. Rather, the Court found that the Sixteenth Amendment sought to restrain the Court from viewing an income tax as a direct tax because of its close effect on the underlying property.
In plain English, the so-called "income" tax is and always has been an indirect tax meaning that the subject of the tax must be a revenue taxable activity and that the income arising from the revenue taxable activity isused simply to determine the amount of the tax.
What Does the Word "On" Mean?
How could Chief Justice White correctly say that taxation "on "income was in its nature an excise? Income is essentially profit or gain. Profitor gain always results in property (tangible or intangible) in one form or another. Income is not in the category of people, and it is not in the category of activities. Income can only be in the category of property. Property taxes are direct taxes, not excise taxes. So what does Chief Justice White mean when he talks about taxation "on" income being in its nature an excise?
Let's look at the word "on" to see what it possibly could mean as used in the Sixteenth Amendment. The word "on" has more thanone definition.
One of the definitions given in Webster's Seventh New Collegiate Dictionary (1971) shows that the word "on" means "with regardor respect to". The dictionary also shows that the word "regard" means "an aspect to be taken into consideration".
Congress shall have power to lay and collect taxes with regard to or with respect to or in consideration of or measured by the income, from whatever source derived, without apportionment among theseveral States, and without regard to any census or enumeration.
The above definitions reasonably and logically explain Chief Justice White's statement regarding taxation "on" income.
Cases cited previously show that taxes on property must be apportioned. The Flint Case (1911) tells us that indirect taxes are never upon any kindof property, money or otherwise, but rather on revenue taxable activities suchas the doing of business in a corporate capacity. The Brushaber Case(1916) reaffirms the fact that taxation "on" income is in its nature an excise and that excise taxes are in the class of indirect taxes. The Stanton Case (1916) tells us that the Sixteenth Amendment (1913) conferred no newpower of taxation and was to keep an income tax in the category of indirect taxation. The Peck & Co. Case (1918) tells us that the Sixteenth Amendmentdoes not extend the taxing power to new or excepted subjects. The Tyler Case (1930) tells us that indirect taxes are not on the tangible fruits (property) but on the happening of an event. The Steward Case (1937) and the Penn Mutual Case (1960) (well after the Sixteenth Amendment) tell us that taxes on property must be apportioned and that the so-called "income" tax is not apportioned so it cannot be a tax on property.
Based on the above information, the word "on" as used in the Sixteenth Amendment could not possibly relate to a property tax, but only to indirect taxes with regard to or with respect to or in consideration of or measured by income.
There are other sources of documentation to show that the income is not the subject of the so-called "income" tax. For example, the 1943 House Congressional Record reiterates these basic facts.
The income tax is, therefore, not a tax on income as such. It is an excise tax with respect to certain activities and privileges which is measured by reference to the income which they produce. The income is not the subjectof the tax: it is the basis for determining the amount of tax.
House Congressional Record, March 27, 1943, page 2580.
What activities are revenue taxable? A search of the United States Code reveals the following revenue taxable activities. Notice how specific persons are made liable for (subject to) the taxes imposed.
The distiller or importer of distilled spirits shall be liable for the taxes imposed there on by section 5001(a)(1).
The manufacturer or importer of tobacco products and cigarette papers and tubes shall be liable for the taxes imposed thereon by section 5701.
Each person who is engaged in the business of accepting wagers shall be liable for and shall pay the tax under this subchapter on all wagersplaced with him. Each person who conducts any wagering pool or lottery shall be liable for and shall pay the tax under this subchapter on all wagers placed in such pool or lottery. Any person required to register under section 4412 who receives wagers for or on behalf of another person without having registered under section 4412 the name and place of residenceof such other person shall be liable for and shall pay the taxunder this subchapter on all such wagers received by him.
There shall be imposed a special tax of $500 per year to be paid by each person who is liable for the tax imposed under section 4401 or whois engaged in receiving wagers for or on behalf of any person so liable.
Notice that the persons liable for a given tax are specifically defined in terms of the revenue taxable activities they are engaged in and that the revenue taxable activities are also specifically defined. Should we not then conclude that, if none of the activities engaged in by any given individual are defined in statute as revenue taxable, that such individuals are not liable for any revenue tax administered by the Internal Revenue Service?
This brief shows that it is well settled in case law that incomeis not the subject of the so-called "income" tax. Rather, the subjectof the so-called "income" tax is certain revenue taxable activities, such as distilling or importing spirits, and the income derived fromthese revenue taxable activities is used merely to measure the amount of tax due. It is also shown that activities that are revenue taxableare specifically defined in the revenue statutes of the United States and individuals engaged in activities not so defined are not liable for any revenue tax administered by the Internal Revenue Service.
It can be concluded that those agents are misapplying the revenue statutes of the United States.
It can be concluded that those agents are misapplying the revenue statutes with the full knowledge that they are, in fact, misapplying those statutes and, thus, operating under the color of law in such a manner as to constitute fraud.
Furthermore, since the aforesaid agents use coercion and threats of fines, penalties, interest, and incarceration to fraudulently enforce those misapplied revenue statutes of the United States, those agents are operating under the color of law in such a manner as to constitute extortion.
NOTICE: Unknown author and Otto Skinner are not affiliated with Freedom School.

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