Devvy Kidd
Originally published and copyrighted in June 2001
Changes in text (c) 2004
Edited 4.04
Can
this statement possibly be true? In order to answer this question,
Americans must first understand what is the source of the money that
funds the government and where it goes. Contrary to the sound bites
issued by the two mainstream political parties, the reality of how the
system actually works will not only open your eyes, but hopefully
stimulate the American people to demand that the thievery underway come
to an end.
Understanding
the income tax hoax.
This
informational tool is not for the purpose of educating Americans
on the voluntary federal "income" tax. We encourage each and every
individual to investigate this insidious Second Plank of the Communist
Manifesto so that they might understand the grievous wrong done by
Congress to The People over the past 88 years. For further study,
please go to: www.givemeliberty.org
Where do your
"income" tax dollars go?
The best place to look for an answer to this question would
be a government report, so let's take just one at random:
President's
Private Sector Survey On Cost Control
A Report to The President (Reagan)
January
15, 1984. Available from the Congressional Research Service.
The excerpt below can be found on page 12.
- "Importantly,
any meaningful increases in taxes from personal income would have to
come from lower and middle income families, as 90% of all personal
taxable income is generated below the taxable income level of $35,000.
- Further,
there isn't much more that can be extracted from high income brackets.
If the
Government took 100% of all taxable income beyond the $75,000 tax
bracket not already taxed, it would get only $17 billion, and this
confiscation, which would destroy productive enterprise, would only be
sufficient to run the Government for several days.
- Resistance
to additional income taxes would be even more widespread if people were
aware that:
- With
two-thirds of everyone's personal income taxes wasted or not collected,
100% of what is collected is absorbed solely by interest on the Federal
Government contributions to transfer payments.
- In
other words, all individual income tax revenues are gone before one
nickel is spent on the services which taxpayers expect from their
government."
How can that be? In order to answer this question, an
individual must learn how the privately owned "Federal" Reserve
(central bank) actually works. In a nutshell, this is how the scam
works:
This
excerpt from Debt Virus by Dr. Jacques Jaikraan,
page 216 is very revealing. The "Federal" Reserve Act of 1913, requires
the central bank to return a small portion of its unconstitutional
gains to the U.S. Treasury. Here is an example of the numbers:
"In 1988 the Federal Reserve has an income of 19.5 billion, and it
turned back $17.36 billion to the U.S. Treasury as provided under its
charter.
The Federal Reserve Act of 1913 provided that a substantial portion of
the Feds annual profits be turned over to the National Treasury. Does
this fact dilute the argument that there are vast profits built into
the commercial banking system? No. Consider for a moment that the total
debt (public debt plus private debt) at the end of 1988 was in excess
of $11 trillion. [Editorial note: Today it is in excess of $23
trillion.] Then, the discount rate, the rate at which banks can borrow
from the Federal Reserve, was about 9.4%. Assuming the debt carried the
same rate as the discount rate, there was an annual interest charge of
almost $1 trillion on the total debt owed to the banking system.
While
all of this interest payment does not go to commercial banks, an
overwhelmingly large part of it does. The $17.36 billion turned over to
the U.S. Treasury is thus much less than 2% of the total carrying
charge on the total debt….which they created out of thin air. Now can
you appreciate what is happening?" End of excerpt.
Our Founding Fathers, the ones our elected public servants are always
chirping they respect, warned the American people about usury and
unscrupulous bankers:
"If the American people ever allow the banks to
control the issuance of their currency, first by inflation, and then by
deflation, the banks and orporations that will grow up around them will
deprive the people of all property, until their children wake up
homeless on the continent their fathers conquered. The issuing power of
money should be taken from banks and restored to Congress and the
people to whom it belongs. I sincerely believe the banking institutions
having the issuing power of money, are more dangerous to liberty than
standing armies." ~ Thomas
Jefferson
So what we have is a central bank issuing worthless paper "money" that
controls our economy, our lives and our future. This private banking
cartel was unconstitutionally granted this power by a devious, scheming
group of senators back in 1913. In essence what they did was place the
American people into indentured servitude by forcing The People to pay
usury on worthless fiat currency (paper money created out of nothing),
not to fund the government, but to enrich the bankers and fund wars in
which America should never be involved. This system exists not to fund
the government, but to allow the U.S. Congress carte blanche power to
continue funding unconstitutional agencies and programs by providing
them with a bottomless source of worthless ink.
The National Debt and the Deficit
These
two little bookkeeping items are not the same thing. Few
Americans actually know the difference, but the difference is quite
important. We continually hear members of Congress, president after
president, and political pundits call for "reduction in the debt." But
what does that really mean? Here's how it works in the most simplified
way to fit into this document:
Let's
say that for 2002, Congress and the President decide they want $1.7
trillion dollars to fund this bloated pig called our government. We
know that 100% of all personal "income" taxes extorted by the IRS goes
to the "Federal" Reserve Banking System and does not fund a single
function of the government. So, let's take the people's blood and sweat
off the table.
What
other revenues does the government collect? Corporate taxes, social
security taxes, constitutional revenues such as excise taxes on
cigarettes, alcohol, tobacco, firearms, tires, etc., tariffs on trade,
military hardware sales, and some minor categories. Let's say that
those revenues will total $900 billion dollars. The politicians want
$1.7 trillion to spend on their favorite welfare programs, wars and
foreign welfare, but have a short fall of $800 billion dollars. This is
called the deficit and the deficit, created by the spending of
Congress, creates the "national debt."
How?
Because the politicians are $800 billion dollars short, they simply
call up Al Greenspan and borrow your children's and grand babies'
futures. The "Federal" Reserve Banks don't loan anything of value to
Congress. They aren't banks; they're really an overpaid, powerful,
private accounting service. When that $800 billion dollars worth of ink
is transferred to the Treasury, it gets piled on top of the existing
"national debt."
This
is how the magical money machine works. Congress overspends. It
borrows from this accounting firm called the "Fed" and then turns
around and tells you to pay for these crimes against the people. In
other words, Congress basically pays the bills with social security and
borrowed ink from the "Fed." Pretty slick scam, wouldn't you say?
The
people of America are also responsible to a large degree for this
out-of-control spending. Americans have been bred to a welfare
dependant mentality. Special interest groups who have no interest in
the U.S. Constitution, demand that billions of dollars be spent on
their pet interests. Billions upon billions of dollars have been
unconstitutionally thrown to foreign governments, some days our friend,
a week later our enemies. They are only our friend as long as the U.S.
throws money at their corrupt governments.
Billions
of dollars have unconstitutionally been spent on grants to colleges and
universities, which in turn sell their research to the highest bidder,
paid for by the sweat off the back of the little guy out in America.
No, they don't return any back to the little guy who funded these
studies and research programs.
As long as the American people themselves condone continued
unconstitutional spending by Congress, the longer they will violate
their oath of office, and continue to fund unconstitutional
expenditures, placing your children and grand babies in a state of
unpayable, massive debt.
Unless
The People demand an end to this insanity, our economy eventually will
collapse under the weight of this massive, unpayable debt, no matter
how much ink the "Fed" transfers into the coffers of the U.S. Treasury.
The pain of withdrawal from unlawful government hand-outs will be far
less now than it will be down the road.
America became the greatest, debt free nation on earth by a
resourceful, independent, self-reliant people. Sadly, today we have a
large percentage of our population who can't get through the day
without a government memo telling them how, step-by-step, with a
redistribution of average, ordinary Americans assets into the hands of
the unproductive. A very sad commentary to what made our nation great
and prosperous.
But I heard
the debt is being paid down?
What
you heard and reality are two separate issues altogether. The
politicians must continue to fool the American people lest they catch
on to this chicanery. Let's have a look at the numbers so you can see
that any utterance that the national debt has been paid down X billions
of dollars, is nothing more than bombastic gas, passed from one
administration to the next and the latest recycled Congress.
In the chart below, an R next to the amount indicates a Republican
President; a D is for a Democrat in the Oval Office. The Democrats had
control of Congress from 1954, until the illusion billed as the
"Republican Revolution" in 1994. Both houses of Congress were
Republican controlled until after the 2000 "election", but this ended
when in May 2001 James Jeffords 'fessed up to his real political
agenda.
Current Congressionally created debt:
08/08/2001 $5,720,324,946,092.23 (R)
04/30/2001 $5,661,347,798,002.65 (R)
02/28/2001 $5,735,859,380,573.98 (R)
01/31/2001 $5,716,070,587,057.36 (R)
12/29/2000 $5,662,216,013,697.37 (D)
09/30/1998 $5,526,193,008,897.62 (D)
09/30/1996 $5,224,810,939,135.73 (D)
09/30/1994 $4,692,749,910,013.32 (D)
09/30/1992 $4,064,620,655,521.66 (R)
09/28/1990 $3,233,313,451,777.25 (R)
09/30/1988 $2,602,337,712,041.16 (R)
09/30/1987 $2,350,276,890,953.00 (R)
Updated 7.9.03
09/28/1990 $3,233,313,451,777.25 (R)
09/30/1993 $4,411,488,883,139.38 (D)
09/30/1996 $5,224,810,939,135.73 (D)
09/30/1999 $5,656,270,901,615.43 (D)
09/28/2001 $5,807,463,412,200.06 (R)
09/30/2002 $6,228,235,965,597.16 (R)
06/30/2003 $6,670,121,155,027.26 (R)
The statistics above were obtained from the Bureau of The
Public Debt's web site:
http://www.publicdebt.treas.gov/opd/opdpenny.htm
As
you can see, it doesn't matter which party is in office, there is no
surplus and the debt cannot be paid down, it can only grow
exponentially as long as Congress and the President have the central
bank at their fingertips.
A
"balanced budget" is nothing more than good political rhetoric, but in
reality, it's a pipe dream strictly for public consumption. How can you
balance your budget if you have no money to spend and are trillions of
dollars in the hole? You can't. It's just another well crafted illusion
to keep the masses pacified.
You can fool some of the people some of the time, but the American
people have awakened to this monumental theft and are demanding the
only real solution that can be implemented: Abolishing the central
bank, and a return to a constitutional monetary system with no income
tax.
No "Fed," no
need for a direct tax
Without
the central bank siphoning off the wealth of our nation, there
would be no need for a personal income tax. Don't be fooled by this
chant around the country for a flat tax, a consumption tax, sales tax
or any other kind of personal income tax. There is absolutely no authority in the
U.S. Constitution to implement any of these forms of taxation without
apportionment. It is for this reason and this reason alone, that when
it became apparent that the 16th Amendment was not going to be ratified
by the states, fraud was committed and it was simply "proclaimed"
ratified by then Secretary of State Philander Knox.
We don't need any direct taxation and these popular mantras are just
new lies to replace old lies. Any one of these forms of taxation will
still feed the cancer: the central bank. Any one of these forms of
taxation is just another way to fleece the American people to enrich
the pockets of the international banking cartel. Please consider the
words of Congressman Ron Paul:
"Strictly speaking, it probably is not necessary for the federal
government to tax anyone directly; it could simply print the money it
needs. However, that would be too bold a stroke, for it would then be
obvious to all what kind of counterfeiting operation the government is
running. The present system combining taxation and inflation is akin to
watering the milk: too much water and the people catch on."
What
we need to do is take away the magical money machine called the
"Fed," which will force Congress to live within its means and fund only
those activities specifically enumerated by the supreme law of the land
in Art. 1, § 8 of the U.S. Constitution:
Lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts
and provide for the common Defence and general Welfare of the United
States, but all Duties, Imposts and Excises shall be uniform throughout
the United States, borrow Money on the credit of the United States,
regulate commerce (trade), naturalization, bankruptcy laws, coin money,
regulate the value thereof, and of foreign Coin, fix the Standard of
Weights and Measures, punishment regarding counterfeiting the
Securities and current Coin of the United States, establish Post
Offices and post Roads, Promote [Editorial note: "promote" does not
mean fund] the Progress of Science and useful Arts, by securing for
limited Times to Authors and Inventors the exclusive Right to their
respective Writings and Discoveries, constitute Tribunals inferior to
the supreme Court, define and punish Piracies and Felonies committed on
the high Seas, and Offences against the Law of Nations;
declare War, grant Letters of Marque and Reprisal, and make Rules
concerning Captures on Land and Water, Raise and support Armies, but no
Appropriation of Money to that Use shall be for a longer Term than two
Years, provide and maintain a Navy, make Rules for the Government and
Regulation of the land and naval Forces; provide for calling forth the
Militia to execute the Laws of the Union, suppress Insurrections and
repel Invasions, provide for organizing, arming, and disciplining, the
Militia, and for governing such Part of them as may be employed in the
Service of the United States, reserving to the States respectively, the
Appointment of the Officers, and the Authority of training the Militia
according to the discipline prescribed by Congress, Exercise exclusive
Legislation in all Cases whatsoever, over such District (not exceeding
ten miles square) as may, by Cession of particular States, and the
Acceptance of Congress, become the Seat of the Government of the United
States, and to exercise like Authority over all Places purchased
by the Consent of the Legislature of the State in which the Same shall
be, for the Erection of Forts, Magazines, Arsenals, dock-Yards, and
other needful Buildings, make all Laws which shall be necessary and
proper for carrying into Execution the foregoing Powers, and all other
Powers vested by this Constitution in the Government of the United
States, or in any Department or Officer thereof. **
There is absolutely no authority for the federal government to
legislate in areas of the environment, education, the NEA, the FDA and
many others. It may surprise you to find out that agencies such as FDA,
DEA and the EPA all derive their jurisdiction from international
treaties. When the powers that be wish to circumvent the U.S.
Constitution, they do it either through an executive order or
international treaties. We strongly encourage you to investigate this
issue thoroughly.
Prior to the Federal Department of Education, America had the finest
schools in the world. Since this disastrous and unconstitutional grab
for power, we can all see that a quadrillion dollars a year will not
fix our schools, and they continue to decline faster than the feds or
states can shovel money into them. Even if a direct tax were necessary,
only by keeping it at its lowest possible percentage would it ever
benefit this nation:
"The point now emphasized is that the evil effects of high surtaxes
fall not upon the individual whose income is seized and taken, but
ultimately almost entirely upon the mass of the people who are thereby
deprived of the benefits which would result from the free flow of
commercial transactions and the use of the additional capital which
would be available for productive enterprise.
"Freedom of business transactions essential.
"The
revenues to be obtained by the Government from this class of taxes
depends upon transactions in trade and commerce which bring about
income available for payment of taxes. It is highly desirable, in the
interest of the production of revenue, that the volume of business
transactions giving rise to gain shall be as great as possible, and to
this end it is essential that the natural laws of trade and commerce
and the free flow of business shall not be interfered with or prevented.
The excerpt below is from pgs 19-20, Annual Report of the
Secretary of the Treasury on the State of Finances for 1921:
"But the direct effect of these very high taxes is to hinder and
prevent business transactions which would otherwise take place. A man
may have property which he has held for years and which has greatly
increased in value, and he would like to sell it, but if he does a
large part of the gain would have to be paid out in taxes. He would
rather keep the property than sell it, pay the tax, and invest what is
left in something else. At the same time the party desiring to buy this
property, if he obtained it, would improve it with buildings.
What
is the result? The transaction does not take place, and the community
loses the advantage which would come in the stimulation that would
arise from the transactions resulting from the buyer's improvement of
the property, and it also loses the advantage of the seller's putting
his money into some other form of investment, which in turn would give
rise to business transactions. The same thing on a much greater scale
is true in manufacturing and mercantile lines. Men have built up
enterprises to the point where they are highly successful. They would
like to take their profit and turn the business over to younger men to
carry on.
These
transactions are highly desirable not only for the parties but for the
community, yet they are absolutely stopped, because if made the seller
would have to pay in one year a tax on a gain which has been the result
of perhaps the better part of a lifetime of effort. And in all such
cases the Government gets no tax, whereas if the rates were reasonable
the transactions would take place and the Government's revenues would
benefit accordingly.
The
free interchange of property in business transactions is essential to
the normal prosperity of the country, and each such transaction has a
direct tendency to bring about others of like character with the result
of increasing the amount of gain or income available for taxation; but
when the tax is so high as to act as a deterrent against usual and
desirable business transactions, and the volume of such transactions is
thereby lessened, the inevitable result is for the tax to become less
and less productive.
It
is for these reasons that, particularly in the higher brackets, a lower
tax rate will produce more revenue in the long run than excessive
rates. So long as the high rate stands in the way of accomplishing
bargains and sales, the Government receives no tax; but at a lower rate
the transactions proceed and the Government shares in the profits."
(End of excerpt.)
Today Americans are being fleeced to the tune of approximately 52% of
every dollar going for local, state and federal taxes. The day is
rapidly approaching when making even $1,000 per hour will not be enough
to survive. How much longer are the people of this nation going to put
up with this state of affairs? We say enough is enough!
A Pioneer on
the withholding issue
Vivien
Kellems was a woman before her time who knew the grand theft
taking place against the working man's paycheck. [For more information
on Ms. Kellems, see: www.vivienkellems.com].
The following excerpt from pages 41-46 of her book, Toil, Taxes and
Trouble, published in 1952 is legally right on point:
"Since a capitation means a tax of the same amount for every person,
this provision makes doubly sure that all federal taxes must be at the
same uniform rate for everybody. This limitation that direct taxes be
levied by the Federal Government must be in proportion to a census and
apportioned among the States in accordance with numbers, is the only
provision in the Constitution that is stated twice.
"The only reason that our Constitution required a census to be taken
every ten years was to count the people to determine how many
Representatives should go to Congress, and how direct taxes should be
levied. I wonder how many Americans thought of this in 1950 when those
little busybodies came knocking on their doors, asking ten thousand
impudent, silly questions which were none of their, or Washington's,
business.
"There is absolutely no power granted in the Constitution which enables
a top-heavy bureaucracy of empty-headed simpletons, and worse, to
invade the privacy of the American people in such a monstrous manner.
This census is just a preview of what is really in store for us if they
actually take over, which they most certainly will do unless we uproot
and vote them out.
"The census was to count the people - that was all. The number of
people determined the number of Representatives in Congress and the
apportionment of direct taxes among the states.
"For a long time I asked myself, 'Why were Representatives and direct
taxes linked together and apportioned among the States in accordance
with population?' It was understandable that Representatives should be
chosen in accordance with numbers but why should taxes be apportioned
the same way? And then one day, out of the blue, it came to me crystal
clear. All at once I understood the plan to safeguard the future
freedom of the nation, conceived and executed by those scholarly men.
"I read again: 'Representatives and direct taxes
shall be included within this Union, according to their respective
numbers...' 'No capitation, or other direct tax shall be laid, unless
in proportion to the Census of Enumeration hereinbefore directed to be
taken.' And in those two sentences our forefathers bound fast the hands
of Congress and secured the liberty and freedom of the American people.
How? By making it utterly impossible to levy an income tax.
"An income tax is certainly a direct tax, probably
the most direct tax of all since it cannot be shifted but must be paid
by the person receiving the income. By specifying that direct taxes
must be levied in accordance with the number of people, not upon what
they produced, as in the days of ancient Egypt, an income tax was
simply out of the question. It cannot be levied upon a man but must be
levied upon what he receives.
"Our forefathers designed and incorporated in the Constitution a new
system of government. It was built upon a revolutionary idea; the
conviction that the government belonged to the people and existed only
by their consent. Its genius lay in the careful system of checks and
balances among the three departments, the Legislative, the Executive,
and the Judicial. And it went further and maintained a balance between
the powers of the individual States and the Federal Government. In
addition it carefully reserved to the States and to the people all
rights and powers not specifically delegated, or prohibited to the
Federal Government and further stated that because certain rights were
enumerated in the Constitution it did not mean that others not
mentioned were still not the property of the people.
"However everything in the Constitution was arrived
at by compromise. The interests and concerns of the thirteen states
varied widely and each delegate was sent to Philadelphia to protect the
commerce, industry and agriculture of his particular state. It required
months of patient discussion, argument and forbearance to finally
produce the finished document, which when completed,
comprised a system of government to protect the people in the rights
and liberties set down in flaming words in the Declaration of
Independence. It is a wonderful document, the best system of government
ever devised for human beings, but it could have varied in some
respects and still have worked satisfactorily......
"The supreme achievement of the combined brains of
all those men were written into those two sentences and the freedom and
liberty of the American people were secured in them. For in those two
sentences the right of the free man to own something was made
inviolate. This was his distinguishing mark, the only criterion of
freedom in all the world, the right of the common man to retain for
himself the fruit of his labor.
Now
this is how it worked. Every man was given a vote with which he
could vote for his Representative. Originally only Representatives were
elected, Senators were appointed by the State Legislatures and it's too
bad we changed that provision."
(Editorial Note: We didn't. Like the 16th
Amendment, the 17th Amendment is a fraud--it was never ratified by the
states. Therefore, we have not had a lawfully seated senate since 1913.)
"That Representative having to stand for election every two years was
close to the people and responsive to their wishes. That is why he was
given the power to tax; all bills of revenue arise in the House. And
that is why he must come home every two years and give an accounting to
the people.
"But his power to levy direct taxes was limited by an ironbound
restriction: that tax must be apportioned among the States in
accordance with the population. Since all taxes were to be at a uniform
rate, Congress simply could not penalize one section of the country, or
one group of citizens for the unfair advantage of another.
"When Congress levied a tax, everybody had to pay and at the same rate.
The amount would vary with the wealth of an area, as it does today with
the different values of real estate, but the rate was the same for all
and the tax was distributed among the States according to population.
"The men who wrote our Constitution did not found a democracy. They
feared the so-called 'Democrats' of their day as much as we fear the
Communists today. They did not believe in mob rule, or government by
the unintelligent, irresponsible mass. They founded a republic and they
made certain that the right to vote should be curbed and controlled by
the necessity of paying taxes. Scheming politicians could not take
taxes from a helpless minority and buy themselves back into office with
the votes of the tax exempt majority. When a Representative voted a
tax, he voted to tax everybody because the tax was based upon numbers,
not upon dollars.
"This was the most brilliant plan ever conceived for guaranteeing the
freedom of a nation. It protected every person in his right to private
property, rich and poor alike, and under this protection we built the
richest, most powerful nation on earth. We achieved and maintained for
the majority of our people a standard of living undreamed of before,
the hope and the envy of the whole world.
"And we accomplished something even more important:
we developed a vigorous, self-reliant, self- respecting race of people.
An American citizen would have been ashamed to ask for a handout from
his Government. The Government belonged to him, he did not belong to
the government.
"And then what happened? We chucked our
carefully safeguarded right to own something out the window, and we
passed the income tax amendment. Gone was our apportionment among the
States in accordance with population, and also gone was our principle
of uniformity. Income 'from whatever source derived, without
apportionment among the several States, and without regard to any
census or enumeration' could be taxed and without limit. And when we
passed this income tax amendment the slow, distilled poison of tax
slavery dripped into our veins. We sowed the seeds of our national
decay which is rapidly coming to maturity before our eyes today. The
heritage of freedom so carefully insured for us by our forefathers is
gone; it has been taxed away." (End of excerpt.)
The "General
Welfare" Clause of the Constitution
The majority of unconstitutional spending is justified by the
"general welfare" clause of the constitution. Shawn O'Connor of the
Free Enterprise Society summed up this misconception in one of his
speeches, paraphrased below:
"Discussion
of the general welfare clause of the Constitution by the courts relies
upon the Federalist Papers. This term simply means: Taxation was to
protect the individuals' life, liberty and ownership of private
property. One can go to Art. 1, Sec. 8, Clause 1 of the constitution
and read the general welfare clause. Then one can do some history
research and see what the Anti-Federalists had to say about this clause:
"That
this clause conveys absolute power to the central government. Patrick
Henry was very vocal in his opposition to putting this kind of language
into the constitution. Madison, however, assured Henry and others that
all the general welfare clause represented was a preliminary
introduction prior to the enumerating the specific powers the delegates
were about to grant to this new federal government and that the general
welfare clause granted no new power to the government whatsoever. It
was simply an introductory statement.
The
Anti-Federalists still weren't satisfied. Hamilton and Madison came
back to re-state that if the general welfare clause conveyed absolute
power to the government, why would they go on to list the specific
powers they were going to grant the government? That wouldn't make any
sense at all if they were going to give absolute power to this
government. It was finally conceded by all at the convention that the
general welfare clause conveyed absolutely no power to the government."
[End of comment.]
The
general welfare clause of the constitution has been misused for
personal gain by special interest groups to enrich the pockets of the
banking cartel, by politicians hoping to "get that vote," and an all
out push to turn America into a socialist country, beginning with the
"New Deal" implemented by FDR and supported by a weak Congress. Lyndon
Johnson took the quest to turn America into a socialist nation to new
and grotesque heights.
How would you
fund the government without any direct taxation?
The powers that be know it's just a matter of time before the
truth reaches enough Americans about the voluntary income tax system.
Already trial balloons are being floated to once again fool the people
into some form of alternative tax in order to feed the central bank.
America
functioned very well without an income tax throughout the history of
this Republic. The answer to the question of funding without a direct
tax is found is Article 1, Section 9 of the Constitution since 1787. It
provides for Congress to pass a legislative bill for tax money to be
paid by each state in proportion to its population.
Proper,
constitutional funding will allow large amounts of money to fund a
limited form of Republican government. To continue on the path of this
massive and unconstitutional spending will bring a final and total
collapse of the economy. Make no mistake about it.
Has your
government been truthful?
Do you know why the "withholding tax" system was put into
place? Let me provide you with just one shocking example of how things
work behind the scenes:
Declassified
(Confidential Committee Print)
Withholding Tax
Hearing Before A Subcommittee of The Committee on Finance, United
States Senate, 77th Congress, Second Session on:
Data Relative to Withholding Provisions of the 1942 Revenue Act, August
21 and 22, 1942 (Printed for the use of the Committee on Finance)
United States Government Printing Office, Washington 1942
SUMMARY/Contents
Statement of:
Friedman, Milton, Division of Tax Research, Treasury Department
Hardy, Charles O., 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 & 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"
to the Federal Government and it would apply to taxpayers and
nontaxpayers alike, with exceptions.
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.
5.
The proposed plan was an emergency war time measure.
Hearing
Experts, Beginning Page 99
Statement of
Meyer Jacobstein of Brookings Institution
"It
is obvious that it is necessary to mop up the excess purchasing
power of the community, not only because of it's effect on the price
situation but because the Treasury needs the money and needs it
quickly.*
Obviously
the Treasury can collect from the consumers as the purchases are made
and 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...Now, there is the withholding tax at the source based on
payrolls."
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 billion dollars, depending on
the rate of the assessment of a tax.
It
may be that several systems can be used. Any one 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 the 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.
I
would like to say...that we have to bring about a readjustment of
consumption in the country to the amount of consumers goods and
services that we can spare the resources to produce under war
conditions. First, we have got to devote our productive energies to the
war.
Or,
you can use the mechanism of the sales tax, as far as I can see, by
mopping up the increased purchasing power that is created by the rising
amount they receive in their paychecks. On the other hand, if the money
is stored up, whether it is in the form of these stamps or in the form
where people haven't spent it because they have had no way to spend it,
in either case if it is too large a proportion you are going to have
the problem, whenever you do turn it loose, that you have now in the
other case, namely of having a lot more purchasing power than you have
goods and services to make it good with.
That
is the answer, I think, to the question that might be raised as to why
not carry this principle through and apply it to income tax,
corporation tax, and everything else. Obviously, this has the advantage
that this definitely sews up the purchasing power in such a way that it
cannot be released until we discover the proper way to release it.
I
think it has a great advantage over the deficient spending program.
This program just postpones the problem of administration, in deciding
how much purchasing power is available to release and to what extent it
will create the old wartime inflation over again."
Senator
Danaher: "Let me ask you this question: Considering the withholding
tax, simply the treasury withholds it currently and applies the
proceeds against the tax due in a given year..."
Mr.
Hardy: "The deduction from salaries and interest, and so on, at the
source?"
Senator
Danaher: "Yes."
Mr.
Hardy: "Yes."
Senator
Danaher: "That is a currently applied method of withholding so much of
the consumer purchasing power as is represented by the tax collected or
withheld."
Mr.
Hardy: "That is right."
Senator
Danaher: "And the applied as against the tax due."
Mr.
Hardy: "Yes. The withholding tax provision has the effect of
withholding purchasing power at the time the income is realized rather
than a year hence through the income tax structure."
Senator
Danaher: "And if it were in effect for 1 year it would apply only 1
year?"
Mr.
Hardy: "I assume so."
Senator
Danaher: "Yes. Whereas this proposal is a continuing thing."
Mr. Hardy: "It seems to me the essential difference is that the
withholding tax plan applies at the point of receipt of income, and
this applies at the point of expenditure of income."
Senator
Danaher: "Of course, you withhold not only from taxpayers but
nontaxpayers."
Mr.
Hardy: "Yes. Some people that I talked to about this plan, Federal
Reserve people, have been rather favorable to the idea."
Mr.
Jacobstein: "Don't you want to add that Mr. Selko pointed out that such
difficulties as are encountered in the States are, partially at least,
overcome when you have a uniform Federal tax? Where you have a uniform
tax all over the country by one administration, the Federal Government,
it is easier to administer than a sum total of 48 states. Now that was
Mr. Selko's conclusion."
Statement of
Milton Friedman, Division of Tax Research, Treasury Department
Senator
Danaher: "I have only one other thought on that point. In the event of
withholding from the owner of stock and no taxes due ultimately, where
does he get his refund?"
Mr.
Friedman: "You thinking of a corporation or an individual?"
Senator
Danaher: "I am talking about an individual."
Mr.
Friedman: "An individual will file an income tax return, and that
income tax return will constitute an automatic claim for refund." End
of document excerpts.
What bald faced lies. "Mop up purchasing power"? Fleecing
Americans dry is a more accurate way to describe this terrible
injustice against US. How about letting Americans decide to save the
fruits of their labor? No, the government wants it all.
*
Art. 1, Sec. 8 of the U.S. Constitution gives Congress the power to
issue money, not the private fed: "To coin money, regulate the value
thereof," Cut out the middle man ("Fed") and the Treasury wouldn't
"need the money." What a con game.
T. Coleman Andrews. Mr. Andrews (a Democrat) was Commissioner
for the first 33 months of the Eisenhower Administration, stated the
following in an article for U.S. News & Report, May 25, 1956:
"....We're
confiscating property now....That's socialism. It's written into the
Communist Manifesto. Maybe we ought to see that every person who gets a
tax return receives a copy of the Communist Manifesto with it so he can
see what's happening to him."
Beardsley Ruml, Chairman of the Federal Reserve Bank of New
York stated in one of his speeches in 1946:
"The second principal purpose of federal taxes is to attain
more
equality of wealth and of income than would result from economic forces
working alone. The taxes which are effective for this purpose are the
progressive individual income tax, the progressive estate tax, and the
gift tax. What these taxes should be depends on public policy with
respect to the distribution of wealth and of income.
It is important, here, to note that the estate and gift taxes
have little or no significance, as tax measures, for stabilizing the
value of the dollar. Their purpose is the social purpose of preventing
what otherwise would be high concentration of wealth and income at a
few points, as a result of investment and reinvestment of income not
expended in meeting day-to-day consumption requirements. These taxes
should be defended and attacked it terms of their effects on the
character of American life, not as revenue measures.
Taxes on corporation profits have three principal consequences --- all
of them bad."
Does the
average man or woman in America know this?
What do we mean when we say that the IRS is not a government
agency? Read this quote from an U.S. attorney submitted in court
documents in a tax case up in
Idaho:
Betty Richardson, United States Attorney, Box 32, Boise,
Idaho 83707. Civil No. 93-405-E-EJL, United States' Answer and Claim
re: Diversified Metal Products, Inc., Plaintiff v. T-Bow Company Trust,
Internal Revenue Service and Steve Morgan, Defendants, page 4,
paragraph #4:
"Denies (the U.S. government) that the Internal Revenue
Service is an
agency
of the United States government ..."
If the IRS is not an agency of the federal government, just what is it?
In a nutshell, the income tax is international in scope and not
incumbent upon domestic Americans. That is a provable fact. The IRS for
more than 80 years has been misapplying the IRCode against unsuspecting
Americans and back up their unlawful activities with brute force. This
must stop.
What can you do?
The federal government must generate revenues to operate what
our Founding Fathers created: A limited form of Republican government.
State constitutions are all guaranteed a limited form of Republican
government. America is not a democracy. We believe America is a nation
of laws, not lies. We can't have it both ways for political expediency
or to please any and every special interest group that bribes
politicians at all levels with the politically correct "PAC money."
Sometimes it's difficult to be the messenger of news that
people would rather not hear.
However, Americans can no longer remain in their comfort zones because
the message isn't what they want to hear. If your house is on fire, you
don't sit and continue to watch the television set, you call the fire
department. America: Our house is on fire and it is the obligation of
every American to safeguard the liberties and freedoms given to us by
those who paid the ultimate price. Please join the growing numbers of
millions who are ready to take back our country and stop the assault on
our rights.
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