I have read here and there that the federal reserve is a farce and that the mojority of our tax dollars go to pay the interest on the money we borrow from the federal reserve. When in fact there is no need for the federal reserve and they are no more "federal" than "federal express".

Anyone have input on this?

I feel that our money mainly goes to lining the pockets of the politicians. The president of the united states makes almost a half a million dollars every year, all the former presidents that are still living, make around $300,000 I believe, and their spouses make $20,000 a year I believe. Then just going down the line, with how much each person that works for the government makes, and then we have to take in to account aparently a toilet for the military runs a few thousand dollars, when we can get the same one from home depot for a couple hundred. Then there's the 9 trillion dollars in debt, and on the average we go further into debt I believe 1.9 billion dollars a day. We have schools to support, minorities to send to college, streets to fix, people on welfare and wic, and more politicians with their hands out, demanding more.

You are right its called a deficet.

The system was invented by the Dutch in the Colonial Age and then adopted by the British when the East India and the Dutch Indonesian company (whatever its name was) merged. The idea for it was that war is expensive so they created a source of imaginary money to pay for it, you would know it as 'cooking the books'. They then either pay what they used to 'rebalance the books' or just the interest if they want. Now adays they use it for funding anything they want.

The area where it all gets extremely dodgey is inflation. the brillance of the systems means the longer you owe the money the less you pay back in real terms as what you borrowed becomes worth less.

I'm reasonably certain at least some of my taxes go towards maintaining a police force and fire department, running the MTA, running Child Protective Service, maintaining prisons, maintaining hospitals and libraries, funding museums and theatres and running the postal service.
Of course, I'm a blind fool who doesn't understand the government is the worst thing in the universe after the daleks.

--Jaylemurph

no those services are provided by taxes payed By corporate America Not Personal tax
which is basically illegal any how....I suspect the reader Just got through watching
America Freedom to Fascism by arron Russo which really does an excellent Job of
showing us all how we have been duped by the Government and the IRS...

you should watch it and then also look into Irwinn Schiff and learn the realities of the
LIES perpatrated by the Government against its people....your Voters registration
card when signed is HOW they legally bind you into paying an illegal income tax

This is America 101

Tax is a necessity that is needed to support our infrastructure. I believe in a more of a flat tax with no deductions. That would be the only fair way.

sure its a neccessity BUT it is the responsibility of Corporations and Companies to pay the way with taxes from theyre profits
It was NEVER intended that the private citizens pay these taxes go look into it some youll see the truths that they hide from
us .Irwinn Schiff is one of the ONLY PEOPLE ever to have a book BANNED FOR SALE in the united States that speaks Volumes
Book Banning Is VERY Un-common.

It might have not been intended, but it is needed. You cant put the burden on just business. Everyone the uses governments services should have to pay for them as well. Fair is fair. I don't mind paying my share, but everyone should have an equal share. Right now I pay alot more than my share due the unfair stair step taxes with noce.

it is completly unbalanced we as citizens not only work until june to meet OUR tax Burden..... thats 6 months free labor
then on top of this we also pay taxes for EVERYTHING, we do, or purchase!!! we pay more taxes than we should be
The last time this became an issue we left, and Created a new Country, to avoid excessive taxation without representation...
which is EXACTY what we have NOW in todays world .....our taxes are NOT NEEDED nor is it LEGAL for them to demand us to pay


Corporations, and companies, have ALWAYS been responsible to pay these taxes on top of that these corporations and companies
are able to continually weasel out of paying theyre part .......and the government then wrongly takes our money to make up the difference
yes you can put the burden on Business, as the personal Income tax is ILLEGAL, and there is NO LAW to support it.....we are stealing
money from ourselves.plain and simple

of course you pay more than your share theyre stealing your Income which is NON TAXABLE...per the law............

If business had to pay all the taxes then they would just double there prices or go out of business. Either way is not good to the consumer. There is no free lunch is this world.

http://www.speakfreeamerica.net/forum/inde...?showtopic=6417




Who owns the Federal Reserve Bank?

A phone conversation about the unseen operations of the Federal Reserve System -- Andrew Winkler

The following is a conversation with Mr. Ron Supinski of the Public Information Department of the San Francisco Federal Reserve Bank.

This is an actual transcript of that conversation.

CALLER: Mr. Supinski, does my country own the Federal Reserve System?

MR. SUPINSKI: We are an agency of the government.

CALLER: That's not my question. Is it owned by my country?

MR. SUPINSKI: It is an agency of the government created by congress.

CALLER: Is the Federal Reserve a Corporation?

MR. SUPINSKI: Yes.

CALLER: Does my government own any of the stock in the Federal Reserve?

MR. SUPINSKI: No, it is owned by the member banks.

CALLER: Are the member banks private corporations?

MR. SUPINSKI: Yes.

CALLER: Are Federal Reserve Notes backed by anything?

MR. SUPINSKI: Yes, by the assets of the Federal Reserve but, primarily by the power of congress to lay tax on the people.

CALLER: Did you say, by the power to collect taxes is what backs Federal Reserve Notes?

MR. SUPINSKI: Yes.

CALLER: What are the total assets of the Federal Reserve?

MR. SUPINSKI: The San Francisco Bank has $36 Billion in assets.

CALLER: What are these assets composed of?

MR. SUPINSKI: Gold, the Federal Reserve Bank itself and government securities.

CALLER: What value does the Federal Reserve Bank carry gold per oz. on their books?

MR. SUPINSKI: I don't have that information but the San Francisco Bank has $1.6 billion in gold.

CALLER: Are you saying the Federal Reserve Bank of San Francisco has $1.6 billion in gold, the bank itself and the balance of the assets is government securities?

MR. SUPINSKI: Yes.

CALLER: Where does the Federal Reserve get Federal Reserve Notes from?

MR. SUPINSKI: They are authorized by the U.S. Treasury.

CALLER: How much does the Federal Reserve pay for a $10 Federal Reserve Note?

MR. SUPINSKI: Fifty to seventy cents (0.50¢ to 0.70¢).

CALLER: How much do they pay for a $100.00 Federal Reserve Note?

MR. SUPINSKI: The same fifty to seventy cents (0.50¢ to 0.70¢).

CALLER: To pay only 0.50¢ for a US $100.00 dollar bill is a tremendous gain, isn't it?

MR. SUPINSKI: Yes.

CALLER: According to the US Treasury, the Federal Reserve pays $20.60 per 1,000 denomination or a little over two cents for a $100.00 bill, is that correct?

MR. SUPINSKI: That is probably close.

CALLER: Doesn't the Federal Reserve use the Federal Reserve Notes that cost about two cents each to purchase U.S. Treasury Bonds from the government?

MR. SUPINSKI: Yes, but there is more to it than that.

CALLER: Basically, that is what happens?

MR. SUPINSKI: Yes, basically you are correct.

CALLER: How many Federal Reserve Notes are in circulation?

MR. SUPINSKI: $263 billion and we can only account for a small percentage.

CALLER: Where did they go?

MR. SUPINSKI: Peoples mattress, buried in their back yards and illegal drug money.

CALLER: Since the debt is payable in Federal Reserve Notes, how can the $4 trillion national debt be paid-off with the total Federal Reserve Notes in circulation?

MR. SUPINSKI: I don't know.

CALLER: If the Federal Government would collect every Federal Reserve Note in circulation would it be mathematically possible to pay the $4 trillion national debt?

MR. SUPINSKI: No.

CALLER: Am I correct when I say, $1 deposited in a member bank $8 can be lent out through Fractional Reserve Policy?

MR. SUPINSKI: About $7.

CALLER: Correct me if I am wrong but, $7 of additional Federal Reserve Notes were never put in circulation.

For lack of better words they were "created out of thin air" in the form of credits and the two cents per denomination were not paid either.

In other words, the Federal Reserve Notes were not physically printed but, in reality were created by a journal entry and lent at interest.

Is that correct?

MR. SUPINSKI: Yes.

CALLER: Is that the reason there are only $263 billion Federal Reserve Notes in circulation?

MR. SUPINSKI: That is part of the reason.

CALLER: Am I mistaking that when the Federal Reserve Act was passed (on Christmas Eve) in 1913, it transferred the power to coin and issue our nation's money and to regulate the value thereof from Congress to a Private corporation.

And my country now borrows what should be our own money from the Federal Reserve (a private corporation) plus interest.

Is that correct and if so, the debt can never be paid off under the current money system?

MR. SUPINSKI: Basically, yes.

CALLER: I smell a rat, do you?

MR. SUPINSKI: I am sorry, I can't answer that, I work here.

CALLER: Has the Federal Reserve ever been independently audited?

MR. SUPINSKI: We are audited.

CALLER: Why is there a current House Resolution 1486 calling for a complete audit of the Federal Reserve by the GAO and why is the Federal Reserve resisting?

MR. SUPINSKI: I don't know.

CALLER: Does the Federal Reserve regulate the value of Federal Reserve Notes and interest rates?

MR. SUPINSKI: Yes.

CALLER: Explain how the Federal Reserve System can be Constitutional if, only the Congress of the US, which comprises of the Senate and the House of representatives has the power to coin and issue our money supply and regulate the value thereof? (Article 1 Section 1 and Section

Nowhere, in the Constitution does it give Congress the power or authority to transfer any powers granted under the Constitution to a private corporation or, does it?

MR. SUPINSKI: I am not an expert on constitutional law. I can refer you to our legal department.

CALLER: I can tell you I have read the Constitution. It does NOT provide that any power granted can be transferred to a private corporation. Doesn't it specifically state, all other powers not granted are reserved to the States and to the citizens?

Does that mean to a private corporation?

MR. SUPINSKI: I don't think so, but we were created by Congress.

CALLER: Would you agree it is our country and it should be our money as provided by our Constitution?

MR. SUPINSKI: I understand what you are saying.

CALLER: Why should we borrow our own money from a private consortium of bankers?

Isn't this why we had a revolution, created a separate sovereign nation and a Bill of Rights?

MR. SUPINSKI: (Declined to answer).

CALLER: Has the Federal Reserve ever been declared constitutional by the Supreme Court?

MR. SUPINSKI: I believe there have been court cases on the matter.

CALLER: Have there been Supreme Court Cases?

MR. SUPINSKI: I think so, but I am not sure.

CALLER: Didn't the Supreme Court declare unanimously in A.L.A. Schechter Poultry Corp. vs. US and Carter vs. Carter Coal Co. the corporative-state arrangement an unconstitutional delegation of legislative power?

("The power conferred is the power to regulate. This is legislative delegation in its most obnoxious form; for it is not even delegation to an official or an official body, presumptively disinterested, but to private persons." Carter vs. Carter Coal Co...)

MR. SUPINSKI: I don't know, I can refer you to our legal department.

CALLER: Isn't the current money system a house of cards that must fall because, the debt can mathematically never be paid-off?

MR. SUPINSKI: It appears that way.

I can tell you have been looking into this matter and are very knowledgeable. However, we do have a solution.

CALLER: What is the solution?

MR. SUPINSKI: The Debit Card.

CALLER: Do you mean under the EFT Act (Electronic Funds Transfer)?

Isn't that very frightening, when one considers the capabilities of computers?

It would provide the government and all it's agencies, including the Federal Reserve such information as: You went to the gas station @ 2:30 and bought $10.00 of unleaded gas @ $1.41 per gallon and then you went to the grocery store @ 2:58 and bought bread, lunch meat and milk for $12.32 and then went to the drug store @ 3:30 and bought cold medicine for $5.62.

In other words, the government would know where we go, when we went, how much we paid, how much the merchant paid and how much profit he made.

Under the EFT they will literally know everything about us. Isn't that kind of scary?

MR. SUPINSKI: Yes, it makes you wonder.

CALLER: I smell a GIANT RAT that has overthrown my constitution. Aren't we paying tribute in the form of income taxes to a consortium of private bankers?

MR. SUPINSKI: I can't call it tribute, it is interest.

CALLER: Haven't all elected officials taken an oath of office to preserve and defend the Constitution from enemies both foreign and domestic? Isn't the Federal Reserve a domestic enemy?

MR. SUPINSKI: I can't say that.

CALLER: Our elected officials and members of the Federal Reserve are guilty of aiding and abetting the overthrowing of my Constitution and that is treason. Isn't the punishment of treason death?

MR. SUPINSKI: I believe so.

CALLER: Thank you for your time and information and if I may say so, I think you should take the necessary steps to protect you and your family and withdraw your money from the banks before the collapse. I am.

MR. SUPINSKI: It doesn't look good.

CALLER: May God have mercy on the souls who are behind this unconstitutional and criminal act called the Federal Reserve. When the ALMIGHTY MASS awakens to this giant hoax, they will not take it with a grain of salt. It has been a pleasure talking to you and I thank you for your time. I hope you will take my advice before it does collapse.

MR. SUPINSKI: Unfortunately, it does not look good.

CALLER: Have a good day and thanks for your time.

MR. SUPINSKI: Thanks for calling.

http://www.wikiprotest.com/index.php?title...Federal_Reserve

here is some more valuable information concerning the lie of personal taxes
there is a longe detailed thread at this link

http://politicalforum.com/viewtopic.php?t=20871




Debunking IRS Lies

The United States government is pretty much in the full-time business of lying. Most of the state governments have jumped on the "lying" bandwagon as well. We wish it were not so. In fact, the purpose of this site is to educate the American public in the hope that such actions will no longer be tolerated by our "public servants", and such egregious conduct will end.

When a small child lies to us, it's usually pretty easy to tell. When we see the empty cookie jar, and our child sitting in a circle of cookie crumbs, we know that he is lying when he tells us that he didn't eat any cookies. Unfortunately, when the government lies, it's a lot harder to pin down the lie. The government pays very good money, to some very skilled lawyers, to formulate very well structured lies, so we need to be very sharp to catch their lies. Fortunately, all their lies (at least about the law) rely on just a few readily discernable methods of misleading you.

The government does not tell you a direct lie to your face. That would be much too easy to catch. Instead the government relies on the deceptive use of "legal terms" that you don't understand the meaning of, nor are you even aware that the "words" you're reading are actually "legal terms" that have been defined by the government to mean something completely different than what you think they mean in plain English. [See The Language of Law within this site for more detail on this issue.]

Additionally, the government uses "jurisdictional context" as a means of confusing the average American. The vast majority of Americans believe that when they read a publication written by a government agency, it has been written with the intention of clarifying matters for the Citizen. The reality is just the opposite. Let's look at an example to illustrate the point:

The Federal Food and Drug Act is only applicable in matters involving interstate or foreign commerce. In other words, if you make a cosmetic cream and sell it only within your state, the FDA has no jurisdiction to regulate your product. However, a hypothetical section of the Federal Food and Drug Act might state, "Every cosmetic product manufactured in the United States must be..."[blah, blah, blah]. However, because the context of the Act is that it applies only to interstate and foreign commerce, the legislative draftsmen who wrote the law intentionally left that part out when selecting the specific language to be used. If they had been forthright, the statute would read as, "Every cosmetic product manufactured in the United States, and shipped in interstate or foreign commerce, must be...".

[Editor's Note: Many statutes passed in the 1930s, 40s, and 50s included such forthright language, but during the 70's and 80's most of that language was amended out of the law. We must now refer to the text of the original statutes to find the true limits of the government's authority]

More pertinent information on the subject of illegal taxation can be found here

http://www.speakfreeamerica.net/forum/inde...edom+to+fascism


THE INCOME TAX AT ISSUE IS NOT DIRECTLY TRACEABLE TO CONGRESS’
CONSTITUTIONAL POWER TO “LAY AND COLLECT TAXES”
As the Supreme Court stated in United States v. Hill, 123 U.S. 681, 8 S. Ct.308, 31 L.Ed.
275 (1887) “The term ‘revenue law’ when used in connection with the jurisdiction of the courts
of the United States, means …a law which is directly traceable to the power granted to Congress
by 8, Art. I of the Constitution, ‘to lay and collect taxes duties, imposts, and excises.’”1
(Emphasis added).
The Constitution confers on Congress the power to "lay and collect taxes" in three
clauses. Clauses 2 and 4 of Article 1, Sections 2 and 9 confer power on Congress to impose
direct taxes. While Section 8, Clause 1 of Article 1 mentions the “taxes” authorized in Sections 2
and 9, it goes on to confer power on Congress to impose indirect taxes, identified in that clause
1 This principle was also affirmed by the 9th Circuit in People v. Bruce, 129 F.2d 431 (1942) at page 434

as "duties, imposts and excises." However, the Constitution provides that all direct taxes must be
imposed pursuant to the rule of apportionment, while indirect taxes must be imposed pursuant to
the rule of geographic uniformity. In the bedrock decision, Brushaber v. Union Pacific RR, 240
U.S.1, which established the character and legality of the 16th Amendment, the Supreme Court
repeatedly emphasized that:
In the matter of taxation, the Constitution recognizes these 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. (Emphasis
added)
The Court went on to point out (at pages 11-12) that these provisions were not altered or
amended by the 16th Amendment because, it held that there cannot be a federal tax “lying
intermediate between these two great classes and embraced by neither”; therefore, any such
proposition:
If acceded to, would cause one provision of the Constitution to destroy
another: that is, they would result in bringing the provisions of the Amendment
exempting a direct tax from apportionment into irreconcilable conflict with 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
uniformity…This result …would create radical and destructive changes in our
constitutional system and multiply confusion. (Emphasis added)
And further, on page 17 the Supreme Court held:
The contention that the Amendment treats a tax on income as a direct tax
although it is relieved from apportionment and is necessarily therefore not subject
to the rule of uniformity as such rule only applies to taxes which are not direct,
thus destroying the two great classifications which have been recognized and
enforced from the beginning, is also wholly without foundation
Defendants allege that the income tax at issue is imposed neither as an apportioned
direct tax, nor as a geographically, uniform “duty, impost or excise,” in accordance with the
above holdings in Brushaber. Therefore, it is the position of defendants that the Federal income
tax as contained in Title 26 as that Tile is referred to in the indictment at issue, as well as the
income tax referred to in the counts involving 18 U.S.C 371, is not “directly traceable to the

Lol

As I said an imaginary source of money which amounts to 'cooking the books' although I didnt realisae it can never be paid off at all.

Even better than that in economics a bank lending money would count that imaginary money in its yearly turn over, company value and assets.
So effectively you have companies out there lending imaginary money and making an imaginary profit as well. Lol.

Mighty strange seeing as these companies pay their employees who buy their weekly shopping etc with money that doesnt exist.

here is some income tax history

History of the 16th Amendment

by W. Cleon Skousen

Strange as it may seem, the Sixteenth Amendment (which gave the American people the affliction of confiscatory income taxes) was never supposed to have passed. It was introduced by the Republicans as part of a political scheme to trick the Democrats, but it backfired.

Background

The Founding Fathers had rejected income taxes (or any other direct taxes) unless they were apportioned to each state according to population. Nevertheless, an income tax was levied during the Civil War and upheld by the Supreme Court on somewhat tenuous reasoning. When another income tax was enacted in 1893, the Supreme Court found it unconstitutional. In connection with the two Pollock cases reviewed in 1895, the Court declared that the act violated Article I, section 9 of the Constitution.

During the following decade, however, the complexion of the Court changed somewhat, and so did public sentiment. There was great social unrest and the idea of a tax to "soak the rich" began to take root among liberals in both major parties. Several times the Democrats introduced bills to provide a tax on higher incomes but each time the conservative branch of the Republican party killed it in the Senate. The Democrats used this as evidence that the Republicans were the "party of the rich" and should be thrown out of power, forcing President William Howard Taft to acknowledge in political speeches that income taxes might be all right "in principle", but it was well known among close associates that he was strongly opposed to such a tax.

The Bailey Bill

In April 1909, Senator Joseph W. Bailey, a conservative Democrat from Texas who was also opposed to income taxes, decided to further embarrass the Republicans by forcing them to openly oppose an income tax bill similar to those which had been introduced in the past. He introduced his bill expecting it to get the usual opposition. However, to his amazement, Teddy Roosevelt and a growing element of liberals in the Republican party came out in favor of the bill and it looked as though it was going to pass.

Not only was Bailey surprised, but Senator Nelson W. Aldrich of Rhode Island, the Republican floor leader, frantically met with Senator Henry Cabot Lodge of Massachusetts and President Taft to work out a strategy to demolish the Bailey tax bill. Their own party was split too widely to permit a direct confrontation, so the strategy was to pull a political end run. They announced that they favored an income tax but only if it were an amendment to the Constitution. Within their own circle, they discussed how it might get approval of the House and the Senate, but they were quite certain that it could be defeated in the more conservative states-three-fourths of which were required in order to ratify the amendment.

Thus, the Democrats were off guard when President Taft unexpectedly sent a message to Congress on June 16th, 1909, recommending the passage of a constitutional amendment to legalize federal income tax legislation.

The strategy threw the liberals into an uproar. At the very moment when their Bailey bill was about to pass, the Republicans were coming out for an amendment to the Constitution which would probably be defeated by the states.

Reaction to the Amendment

Congressman Cordell Hull (D-Tenn., and later Secretary of State under FDR) saw exactly what was happening. He took the floor to excoriate the Republican leaders. Said he:

"No person at all familiar with the present trend of national legislation will seriously insist that these same Republican leaders are over-anxious to see the country adopt an income tax...What powerful influence, what new light and deepseated motive suddenly moves these political veterans to 'about face' and pretend to warmly embrace this doctrine which they have heretofore uniformly denounced?" {1}

He went on to expose what he considered to be a political trick. He needn't have been so concerned. The slogan of "soak the rich" automatically aroused Pavlovian salivation among politicians both in Washington and the states. The Senate approved the Sixteenth Amendment with an astonishing unanimity of 77-0! The House approved it by a vote of 318-14.

When Republican Congressman Sereno E. Payne of New York, who had introduced the amendment in the House, saw that this end run was turning into a winning touchdown for the opposition, he was horrified. He went to the floor and openly denounced the bill he had sponsored. Said he:

"As to the general policy of an income tax, I am utterly opposed to it. I believe with Gladstone that it tends to make a nation of liars. I believe it is the most easily concealed of any tax that can be laid, the most difficult of enforcement, and the hardest to collect; that it is, in a word, a tax upon the income of honest men and an exemption, to a greater or lesser extent, of the income of rascals; and so I am opposed to any income tax in time of peace...I hope that if the Constitution is amended in this way the time will not come when the American people will ever want to enact an income tax except in time of war." {2}

The end run of the Republican leadership did indeed backfire. State after state ratified this "soak the rich" amendment until it went into full force and effect on February 12, 1913 (Ed.note: Mr. Bill Benson, in his book "The Law That Never Was" has since documented massive...and outcome changing...federal interference in the certification of the votes of the individual state legislatures. The votes for and against from Kentucky, for instance, were switched by then Secretary of State Philander Knox.)

Did it Soak the Rich?

Certain writers such as Alfred Hinsey Kelly and Winfred Audif Harbison (authors of "The American Constitution: Origins" [New York: Norton, 1970]) rejoiced that this amendment "shifted the growing burden of federal finance to the wealthy."{3} Nothing could be further from the truth!

The wealthy, especially the super-wealthy, had anticipated this development and had created a clever device to protect their riches. It was called a "charitable foundation". The idea was to co-sign the ownership of wealth, including stocks and securities, to a foundation and then get Congress and the state legislatures to declare all such charitable institutions exempt from taxes. By setting up boards which were under the control of these wealthy benefactors they could escape the tax and still maintain control over the disposition of these fabulous fortunes.

Long before the federal income tax was in place, multimillionaires such as John D. Rockefeller (who once said "I want to own nothing and control everything"), J.P. Morgan and Andrew Carnegie had their foundations set up and operating. The next step was to make certain that the new tax bill passed by Congress contained a provision specifically exempting their treasure houses from taxation.

The tax bill which the Sixteenth Amendment authorized was introduced as House Resolution 3321 on October 3, 1913. It turned out to be somewhat of a legislative potpourri for tax attorneys, accountants and the federal courts. In the ensuing years, untold millions of dollars have been spent trying to figure out exactly what this tax law, and those which followed it, were intended to provide. However, tucked away in its inward parts was that precious key which safely locked up the riches of the super wealthy. Here are the magic words under Section 2, paragraph G:

"Provided, however, that nothing in this section shall apply...to any corporation or association organized and operated exclusively for religious, charitable, scientific or educational purposes."

All of the foundations of the super-rich were designed to qualify under one or more of these categories.

How the Cute Little Monkey Grew into a Gorilla

When the first income tax was sent out to the people, the Congress chortled confidently that "all good citizen will willingly and cheerfully support and sustain this, the fairest and cheapest of all taxes." That was the cute little monkey part. After all, the first tax ranged from merely 1% on the first $20,000 of taxable income and was only 7% on incomes above $500,000. Who could complain?(Ed. note: In 1994 "dollars" that $20K is now over $250K and the $500K is today over $6 million!)

At first, scarcely anyone did. Little did they know that before the tinkering was done in Washington, this system would be described by many Americans as the most unfair and expensive tax in the history of the nation. Within a few years, it had become the principal source of income for the federal government.

In the beginning, hardly anyone had to file a tax return because the tax did not apply to the vast majority of America's work-a-day citizens. For example, in 1939, 26 years after the Sixteenth Amendment was adopted, only 5% of the population, counting both taxpayers and their dependents, was required to file returns. Today, more than 80% of the population is under the income tax.

Withholding Taxes

The collection process was greatly facilitated in 1943 by a device created by FDR to pay the costs of WWII. It was called "withholding from wages and salaries". In other words, the tax was collected at the payroll window before it was even due to be paid by the taxpayer. Economists point out that this device, more than any other single factor, shifted the tax from its original design as a tax on the wealthy to a tax on the masses--mostly the middle class.

Investigations disclosed that the truly wealthy pay relatively little or no income tax at all.

Some idea of how the cute little monkey grew into a gorilla is perceived from the fact that nearly half of all federal revenue is now raised by income taxes. Furthermore, the higher brackets are literally confiscatory--but by "due process", of course, under the Sixteenth Amendment. Rates have been as high as 94% in the upper brackets during wartime, and even in peacetime they are presently 50%. (Ed.note: This piece was apparently written when the top rates were higher than in 1992. Not to worry, however: Watch for higher rates coming soon to an IRS office near you!) Medium income people up through the upper middle class pay between 12 & 35%. Nevertheless, at all levels it has become sufficiently burdensome to discourage the attainment of basic economic advantage which most Americans seek.

Weaknesses of the System

The most damaging aspect of the Sixteenth Amendment is the fact that it vitiated the unalienable rights provided in the 4th Amendment. This is the amendment which protects privacy--privacy of the home, business, personal papers and personal affairs of the private citizen. None of these are disturbed by a poll (head or capitation) tax because it is so much per person regardless of the circumstances, but when the tax is based on income, the IRS is assigned the most unpleasant task of making certain that everyone pays his fair share. This task is physically impossible without prying into the private papers, private business and personal affairs of the individual citizens. By any standard, it is a miserable assignment. Furthermore, it is impossible to run audits and surveys of all taxpayers and so the audits seldom check more than 2% of them.

There are many things wrong with this approach. Worst of all, it puts the government tax collectors in the gorilla role and intimidates citizens who are unlucky enough to be audited with the feeling that they are "victims" of an unfair system.

The IRS also finds it difficult to avoid the attitude that each taxpayer is a cheat, even a criminal, who must somehow be cornered and caught. This has brought the structure of the entire income tax collection process into question.

For example, the underground economy of monetary transactions (which is conducted without records) is well known. It is estimated that losses in federal revenues from this underground economy are at least $100 billion per year. (Ed. note: Probably closer to $200-300 billion!) Obviously, this is not fair to those who are paying their share. Then there is an estimated $65 billion per year which is lost because it is not reported. This is considered unfair. There is a lot of padding on expense accounts, which is estimated to reduce the tax total by another $18 billion. Other operations, both legal and illegal, jumps the total up a few billion more.

There has also been extensive criticism of the prosecution of tax cases. The appeal is through a system of tax courts which are without juries. In order to get a tax case into a regular court where there is a jury, the citizen must pay the tax and then sue the government.

Thousands of complaints have also poured into the IRS concerning the tactics used by some of its agents. Citizens feel they are treated as criminals rather than suspects who are innocent until proven guilty.

Is there a better way? Here is one answer by a former head of the IRS.

A Former IRS Commissioner's Statement

T. Coleman Andrews served as commissioner of IRS for nearly 3 years during the early 1950s. Following his resignation, he made the following statement:

"Congress [in implementing the Sixteenth Amendment] went beyond merely enacting an income tax law and repealed Article IV of the Bill of Rights, by empowering the tax collector to do the very things from which that article says we were to be secure. It opened up our homes, our papers and our effects to the prying eyes of government agents and set the stage for searches of our books and vaults and for inquiries into our private affairs whenever the tax men might decide, even though there might not be any justification beyond mere cynical suspicion."

"The income tax is bad because it has robbed you and me of the guarantee of privacy and the respect for our property that were given to us in Article IV of the Bill of Rights. This invasion is absolute and complete as far as the amount of tax that can be assessed is concerned. Please remember that under the Sixteenth Amendment, Congress can take 100% of our income anytime it wants to. As a matter of fact, right now it is imposing a tax as high as 91%. This is downright confiscation and cannot be defended on any other grounds."

"The income tax is bad because it was conceived in class hatred, is an instrument of vengeance and plays right into the hands of the communists. It employs the vicious communist principle of taking from each according to his accumulation of the fruits of his labor and giving to others according to their needs, regardless of whether those needs are the result of indolence or lack of pride, self-respect, personal dignity or other attributes of men."

"The income tax is fulfilling the Marxist prophecy that the surest way to destroy a capitalist society is by steeply graduated taxes on income and heavy levies upon the estates of people when they die."

[As matters now stand, if our children make the most of their capabilities and training, they will have to give most of it to the tax collector and so become slaves of the government. People cannot pull themselves up by the bootstraps anymore because the tax collector gets the boots and the straps as well.]

"The income tax is bad because it is oppressive to all and discriminates particularly against those people who prove themselves most adept at keeping the wheels of business turning and creating maximum employment and a high standard of living for their fellow men."

"I believe that a better way to raise revenue not only can be found but must be found because I am convinced that the present system is leading us right back to the very tyranny from which those, who established this land of freedom, risked their lives, their fortunes and their sacred honor to forever free themselves..."{4}

REFERENCES:

Congressional Record-House, July 12, 1909, p.4404

Congressional Record-House, July 12, 1909, p.4390

Original edition, p.626

The Utah Independent, March 29, 1973

http://www.wealth4freedom.com/16thHistory.htm