September 21, 2005

The Motive

Federal Judge Says Tyranny Changes The Constitution


We have identified the motive behind the government’s arrogant refusal to respond to our Petitions for Redress of Grievances (including our Petition relating to the illegal operation and enforcement of the federal income tax), and the motive behind Judge Sullivan’s oppressive declaration that the government does not have to listen or respond to our Petitions.

Today, more than 82% of all the money the federal government collects in revenue each year comes from the (unlawful) imposition of direct, non-apportioned taxes on the labor of all working men, women and children of America.

In 1913 it was zero

Here are the numbers:

Annual Federal Revenue
 (in Billions)

FY 2005

 

FY 1913

 

 

 

 

 

 

 

 

 

Individual Income Taxes

874

43%

 

0

0%

 

 

Social Security Income Taxes

794

39%

 

0

0%

 

 

Labor Taxes 

1668

82%

 

0

0%

 

 

               

Corporation Income Taxes

230

11%

 

0.035

10%

 

a

Excise Taxes, Customs, Duties

95

4%

 

0.309

90%

 

b

Estate and Gift Taxes

21

1%

 

0

0%

 

c

Miscellaneous

37

2%

 

0

0%

 

 

Corporate, Customs & Misc. Taxes 

383

18%

 

0.344

100%

 

 

 

 

 

 

 

 

 

 

TOTAL REVENUE (Billions)

2,051

100%

 

0.344

100%

 

d

 

 

 

 

 

 

 

 

Notes:

 

 

 

 

 

 

 

a)  1913 corp. income tax was an excise tax

 

 

 

 

 

 

 

b)  1913, primarily alcohol, tobacco, etc.

 

Source: White House OMB 2005 Budget

c)  Estate tax started in 1916, Gift in 1924

 

Source: 1913 Annual Commissioner's Report

d) 2005 revenue is 5,962 times higher than 1913  

 

 

 

 

 

 


In other words, although the Constitution strictly forbids peonage and slavery, the government of the United States has now become dependent upon the forced labor of every working man, woman and child in America to pay for nearly everything it does.
 

 

 

 

Taxes, By Percent

 

 

 

2005

Of Federal Revenue

 

1913

 

 

 

82 %

Taxes on
Wages & Labor

0 %

 

 

 

18 %

Corporate, Customs
 & Misc. Taxes

100 %

                     


We believe this is the motive behind the unwillingness of the Executive Branch and the Congress to answer legitimate questions from Petitioners about the legal authority behind the direct, un-apportioned taxes on labor. As the saying goes, “You don’t bite the hand that feeds you.” 

We believe this also explains the fierce invocation by federal Judges in their reverence and extreme devotion to the individual income tax and its enforcers, that is, their repetition of the government’s sacred word “frivolous.” 

We believe this explains why the government is willing to railroad so many modern day abolitionists into prison. 
 

It Wasn’t Always This Way  

In 1913, there was no forced labor in America. Forty-eight years prior, the dark remnants of involuntary servitude had been finally abolished with the end of the Civil War and the government was not forcing any man, women or child to work for it. Those who worked for the government did so voluntarily as public servants. The government spent only what money it collected from indirect taxes, i.e., taxes the People did not have to pay if they did not want to. 

Before 1913, the federal government depended only on indirect taxes, i.e., tariff duties, corporation and other excise taxes, as its chief sources of revenue. Revenues came not from labor, but from taxes on goods—tariffs on imported products and excise taxes on items like alcohol, tobacco, firearms and margarine. 

Before 1913, people could chose not to pay any and all federal taxes by choosing not to buy the goods. 

In 1894, Congress passed a 2-percent individual income tax on those earning $4,000 or more a year, less than 1 percent of the population at the time. Everyone with an income over $4,000 was to pay the same, “flat” 2-percent tax rate.  

However, barely a year after it was enacted, the Supreme Court declared the tax unconstitutional. In a 5-4 ruling in Pollack v. Farmers’ Loan & Trust Co., 158 US 601, the high court decided that the income tax, as a direct tax, was forbidden by Article I, Section 9, of the Constitution. This ruling prohibited direct taxes on individuals unless apportioned on the basis of the population of each state.  

In 1909, Congress passed a corporation income tax and a proposed constitutional amendment to authorize Congress to enact an individual income tax.  

The proposed 16th Amendment was approved by the Senate (77-0) and the House (318-14). The main argument for ratification was that the amendment would force the wealthy to take on a fairer share of the federal tax burden that had in the past been largely carried by those earning relatively little. Only a few critics spoke out forcefully against the amendment. John D. Rockefeller, one of the country's richest men, stated: "When a man has accumulated a sum of money within the law. . . the people no longer have any right to share in the earnings resulting from the accumulation." 

In 1913, the 16th Amendment to the U.S. Constitution was (fraudulently) declared to have been ratified. Since then, the government refers only to the 16th Amendment as its authority to force Americans to work for the government, turning over the first fruits of their labor to the IRS.  

Pursuant to the (alleged) ratification of the 16th Amendment, Congress adopted a graduated tax starting with a 1-percent rate for incomes between $4,000 and $20,000 increasing to a top rate of 3 percent for those earning $50,000 or more.  

The first tax collection day under the new law took place on March 1, 1914. Since the average worker earned only about $800 a year, few people actually had to pay any federal income tax. Less than 4 percent of American families made an annual income of $3,000 or more. Deductions and exemptions further shrank the pool of taxpayers. Nevertheless, the federal government collected $71 million that first year. Millionaire John D. Rockefeller alone paid an estimated $2 million.

In 1916, three years after the adoption of the modern income tax statutes, the Supreme Court ruled in Brushaber v. Union Pacific R.R. (240 US 1) that the income tax – as an indirect excise tax, was constitutional, tacitly admitting in its opinion that a direct tax on income was, in fact unconstitutional.   

Despite this significant setback by the high court (and other adverse Supreme Court rulings would follow), the income tax collectors persisted with collection actions and the tax lumbered forward, never again to be understood by an average American and never to have the government cite the statutory authority for its enforcement. As the Foundation has previously detailed, the government, subsequently – and very quietly -- altered key phrases in the internal revenue statutes rendering them (beyond the fraud of the 16th Amendment) legally inapplicable to average Americans.  

By 1916, the world events were moving much of the world toward war.  By April, 1917, the United States had entered World War I. As in the Civil War, Congress turned to the income tax to quickly raise large amounts of revenue. In 1917, Congress lowered the standard exemption to $1,000 for individuals thus expanding the taxpayer pool. At the same time, the lawmakers increased the base tax rate from 1 percent to 2 percent. Those earning over $1 million were taxed at the unheard of rate of 50 percent (this rose to 77 percent by the end of the war). 

With the income tax increases, federal receipts climbed from about 500 million dollars in 1917 to nearly $4 billion in 1918. At war's end, the individual income tax replaced corporation, tariff duties and excise taxes as the main source of revenue for the U.S. government. Tax rates were reduced after the war -- but Congress had discovered how easy it was to pump enormous amounts of money into the U.S. Treasury. 

Today, unlike 1913, most Americans are forced to pay a federal tax on their labor. Instead of the $71 million collected in 1913, the federal government currently collects over $1.6 trillion in individual income taxes each year, through high tax rates and low exemption levels. 

Today, unlike 1913, taxes at America’s borders on goods from corporations coming into the county, and taxes on internal corporate privileges (excise taxes) are a small percentage of the Federal government’s revenue. Instead of 90 % in 1913, excise taxes and customs duties, even at $21 billion, account for a mere 1% of the revenue today.  

Today, taxes on the profits of corporations are also a small percentage of the total federal revenue. Even at $230 billion, corporation taxes amount to only 11% of the total revenue.

It is certainly worth noting that on a nominal basis, federal revenues in 2005 are 5,962 times greater than they were in 1913.  Even accounting for compound inflation which has reduced the purchasing power of the dollar some 95% since 1913 (data source: Federal Reserve Bank of
Minneapolis), the annual federal budget is approximately 300 times larger in relative terms than what it was in 1913.

Make no mistake: the incredible growth in the size of our government has been funded not by taxes upon corporations and the privileges they enjoy – but upon the backs of the working men, women and children of America.

Our government is out of control.  To have grown beyond practical control as a result of our flawed political process is a deplorable statement about We the People and the values we possess as a nation.  To have allowed this to happen via the enforcement of a tax system that lacks any authority in our Constitution or our written laws is an unconscionable failure of citizen vigilance. Only the Constitution and our will to defend it can restore Freedoms lost. The Constitution is not dead. Copies abound.
 

North Carolina USDC Sr. Judge Fox:
 
Continued
Tyranny In America Has
Changed The Constitution


As you decide whether to become more pro active in defense of the Constitution, consider what a sitting federal judge recently had to say – on the record -- regarding the Constitution.

In March of 2003, just prior to the invasion of Iraq, Donald Sullivan, an active duty Lt. Colonel, and Jeffrey Sullivan, his nephew -- an active duty Sp4 -- sued the government to prevent the application of the armed forces in Iraq unless and until the Congress declared war, in keeping with the war powers clauses of the Constitution.

A hearing for a temporary restraining order was held before the Senior United States District Court Judge James C. Fox. Note: The hearing was scheduled for March 21, 2003, without the knowledge that the war would start on March 20, 2005.  

An official transcript of the hearing has been obtained by WTP.

(Right-click on the link above to download it
to your computer before opening.
650 KB, .pdf)   

Sullivan argued in relevant part, “I talked to the Governor; talked to the commander of the National Guard of North Carolina; wrote letters, as you saw in the exhibits, to the Congress asking how we can do this over and over and over without someone standing up and straightening things out. After the phone calls and the letters and no response, not even return phone calls in some cases from the congressional committees, because of the urgency of the case before the court, I went ahead and put the documents together and filed the case…Until the congress can meet and issue a declaration of war to the President, plaintiffs stand by their complaint…Plaintiffs [pray for] a final decision rendered to require the federal government to again obey the tenets of the constitution (page 4-5). 

At one point during the hearing, Sullivan admits that when he filed the complaint he did not expect us to be at war so quickly. He says, “I would not ask the court in good conscience to stop hostilities now they’ve begun, but I would ask the court to require the congress to make it right for the future so we don’t make this same mistake again. We’ve been in, as I said in my complaint, 240 different conflicts since 1947, and I can’t identify one of those that was protecting my domestic security or my constitution” (page 20). 

Remarkably, at this point, Judge Fox says, on the record, that the President and the Congress have been in collusion violating the war powers for a long time and that this long course of history has changed the constitution. He said, “I think that it has occurred over a long period of time, and consequently, there is less hesitancy on the executive branch to preserve [the Constitution]. It’s just like kids who break a rule the first 200 times and after a while they don’t care; they don’t acknowledge that the rule exists…the course of conduct over a long period of time has advanced that collusion, if you will, between those two branches.” (page 20). 

The, Judge Fox, completely on his own initiative, brings up the income tax and offers it as another example of collusion by the President and the Congress that, because it has occurred over a long course of history, has changed the Constitution. 

Judge Fox says, “If you were to go back and try to find and review the ratification of the 16th Amendment, which was the internal revenue, income tax, I think if you went back and examined that carefully, you would find that a sufficient number of states never ratified that amendment…And nonetheless, I think it is fair to say that it is part of the constitution of the United States, and I don’t think any court would ever set it aside.
Well, I’ve seen that – I’ve seen somewhere a treatise on that, and I think it was --- I think I’m correct in saying that actually the ratification never really properly occurred…Yet nonetheless, I’m sure no court’s going to say that the 16th Amendment permitting income tax is void for any reason…I think there may be something analogous there vis a vis the continued practice of the Executive to have incursions and police actions or to commit the country to hostilities without the formal declaration of war.” (page 22-24).
 

Acta Non Verba

These comments by an active senior judge are clear evidence that the American experiment in self-government is in serious trouble and America’s Constitution is approaching the same status as China’s "constitution" --- it reads well, but is meaningless.

The motto of the WTP organization is “Acta Non Verba,” or “Deeds, not words.”

Civic education, such as contained in this article is important, but education without civic action, especially when confronting governmental tyranny and constitutional torts, has never brought about the necessary reforms.

A Plan for Civic Education and Action to Restore The Constitution is needed.
We will have more to say on this in the near future.

* * *

Download these to your computer before opening:

       White House OMB 2005 Budget document (see page 269-270 for 2005 revenue projections by source)

      
           Right-Click
to save a copy to your computer
                  2.9 MB
size, .pdf format 

      
The official court transcript of North Carolina's Federal Judge Fox

                 Right-Click
to save a copy to your computer
                  650 KB
size, .pdf format
 

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