An Open Letter To Jacob Hornberger, Lew
Rockwell, And Glenn Greenwald
'Cause I don't know what else to do...
GUYS! WHEN ARE YOU GOING TO PUT ASIDE YOUR NAIVE BELIEFS IN THE
INHERENT HONESTY OF THE STATE?!
For years now, each of you has been receiving definitive batches
of evidence that 1.) the income tax-- one of the primary pillars
on which the leviathan state rests-- isn't actually the tax on
"all that comes in" which you have always taken it to be, and
about which you have always bitterly complained; and 2.) there
is a massive, largely successful cover-up of point 1. that has
been going on for a number of decades (one so successful that
even YOU have been taken in).
For just shy of a year now, each of you have been receiving
these batches of evidence every single week. These evidence
dumps include outright admissions of point 1. by the IRS and
other government tax agencies, such as those posted
here; historical data on the origin, legal evolution and
actual application of the tax such as that found
detailed analysis of key portions of tax law illustrating point
1. such as those found
here; and complete, detailed documentation and analysis of
fitful IRS and DOJ efforts to "work around" the problem point 1.
represents to their mission of maximizing state revenue and
control such as is presented
AND YET, DESPITE ALL THAT EVIDENCE, YOU PERSIST IN BELIEVING
THAT THE STATE WOULD NEVER MISLEAD THE AMERICAN PUBLIC ABOUT THE
REAL NATURE OF THE TAX!
The state invites you to believe that the tax began with the
16th Amendment, and you say, "OK!"
The state invites you to believe that the tax applies to "all
that comes in", and you say, "OK!"
The state invites you to believe that the historical record and
legal precedent and existing body of tax law supports these
other myths, and you say "OK!" to that myth, too.
NONE of this is true. But where you wouldn't trust self-serving
assertions by statists on ANY OTHER SUBJECT any further than you
could throw those making them, here you just say, "OK!"-- even
in the face of massive evidence to the contrary.
YOU WHO ARE, I THINK, MY COMPANIONS ON THE MARCH TO REIGN IN THE
LOOMING DANGER OF THE UNRESTRAINED STATE!!
SHAKE IT OFF!!!
STUDY THIS DAMN EVIDENCE and wake to the fact that in our hands
RIGHT NOW is a HUGE and POTENT instrument of salvation against
all the evils of the state, so many of which you DO acknowledge.
All that instrument needs to work its magic is YOUR VOICE.
Can you not understand the outcome of all Americans becoming
aware that UNDER EXISTING LAW they DON'T have to feed the state
50% of all they earn, and NEEDN'T have done so previously? Can
you imagine the outcome of all Americans becoming aware that
they have been corruptly snookered out of as much as half their
wealth for all of their lives?
Can you not understand the significance of all Americans
becoming aware that they DON'T have to organize their lives
around a state- and state-client-and-crony-serving framework of
Surely you DO recognize these things-- you must. The problem is
that as cynical as you are about most other state claims, on the
subject of the income tax you have drunk the statist Kool-Aid.
It's astonishing. You are clear-headed enough to recognize that,
for instance, the 4th Amendment still makes unconstitutional a
warrantless search, EVEN IF THE SUPREME COURT SAYS OTHERWISE.
But here, where that same Supreme Court REPEATEDLY tells you
that the 16th Amendment DID NOT do what the tax-collectors
suggest that it did (and its plain language makes that obvious
on its own), you nonetheless swallow the statist hook, line and
sinker, and counsel others to do the same!
It's true that the "income tax" Kool-Aid is of an age and
strength appropriate to the über-significance
of mis-application of the tax to the state's law-defying
ambitions. This Kool-Aid is THE KOOL-AID; the
This dark poison is so important to the statist mission that for
sixty years every government school has doled out regular doses
to every child in its clutches. Its potency is enhanced by the
defense and amplification of its delusion not just by agencies
of every government in the country but by huge private
industries (such as tax preparation and advocacy, "human
resources", and so on), as well. Indeed, there has never been a
misconception so deeply embedded and corruptly and
remuneratively relied upon in our history (although the
"security-state" industry lately metastasizing like a dark
cancerous cloud over this great land is starting to acquire a
But really! Endless evidence of the truth lies before you!
SHAKE OFF THIS SPELL!!
Just last week, I presented you with another piece of evidence,
one a bit different from most of the rest, and VERY revealing.
Unlike some varieties, this evidence requires a little thought,
but only a little.
Last week I shared
the story of an Institute for Justice lawsuit against the
IRS over its effort to bring under its direct control everyone
who offers the service of helping others complete tax returns. I
celebrated the IJ victory because the IRS effort was improper on
its face, as well as defiant of the language of the law upon
which it absurdly relied, in a classic example of the agency's
predilection for deliberately mis-reading statutory
specifications in order to create pretenses of authorization for
what it wished to do when it in fact has no such authorization.
But the aspect of the case that furnishes the evidence to which
I refer is the fact that the statute invoked by the IRS is one
of 1884 vintage. This is a statute long-preceding the 16th
Amendment, and yet acknowledged by both agency and federal judge
as still fully in force and controlling of the tax-collectors
and their actual authority.
evidenced by this agency and judicial acknowledgement, beliefs
that the income tax of1862 was repealed in 1873 and that post
16th Amendment we had a new tax, initiated and launched under
new rules, are simply manifestations of ignorance. Everything
believed about the tax in company to those false beliefs-- that
is, everything that YOU believe about the tax-- is inevitably
wrong to one degree or another, in an example of the "garbage
in, garbage out" principle.
Now, the Kool-Aid might whisper in your ear, "So what? This
isn't a statute imposing or defining the tax-- it's just an
"administrative" thing. Pay no attention. Anyone who says the
tax isn't what the IRS clearly wants you to think it is is an
extremist, a tin-foil-hat-wearer-- probably one of those crazy
Ron Paul "loonytarians"!"
The object of such a sly whisper would be to generate a little
confusing fog, make things a little hard to see clearly and
seduce you onto the easier path of just closing your eyes to
this challenge of your conditioning and hurrying away. DON'T
Reflect on the fact that administrative or not, the 1884 statute
controls how the income tax was administered prior to the 16th
Amendment, and since the 16th Amendment. Same rules, before and
Now, reflect as well on the fact that whatever you may believe
about the meaning, purpose and effect of the 16th Amendment, it
does NOT re-define "income". All it says is, "The
Congress shall have power to lay and collect taxes on incomes,
from whatever source derived, without apportionment among the
several states, and without regard to any census or
enumeration." No definition, no changes as to what qualifies
as "income", or, if you prefer, no changes as to what is
subject to the tax.
Those who want you to believe what isn't true (for the benefit
of their ambitions) encourage you to IMAGINE a definitional
change in this language. They want you to imagine that by
declaring that the tax on gains from privileged activities-- "incomes",
as the term is meant in related tax law-- can be applied without
apportionment the amendment is saying that something which
couldn't be taxed before now can be (or can be without
apportionment). But that's NOT what the amendment says, nor what
The 16th Amendment is simply designed to correct an error made
by the Supreme Court in Pollock v. Farmer's Loan & Trust,
157 U.S. 429 (1895). In that ruling the court erroneously
resorted to the personal-property sources from which "income"
realized in the form of dividends and rent is derived-- stock or
real estate-- to treat as a property tax on those sources what
is actually just an excise on the privileged activity producing
the gains. The 16th Amendment is designed and intended solely to
overrule the court's mistake and allow the pre-amendment tax to
resume operation as the excise on privilege-related gains that
it always has been.
Even the Pollock Court readily conceded that the "income" tax is
and always has been an excise and was and is properly applied as
such to "income" realized in any and every way other than as
dividends and rent. The court references and re-iterates one of
its several previous rulings to this effect:
Springer v. U. S., 102 U.S. 586 , it was held that a tax
upon gains, profits, and income was an excise or duty, and
not a direct tax, within the meaning of the constitution,
and that its imposition was not, therefore,
Farmer's Loan & Trust, 158 U.S. 601, 1895.
The court is saying that because the gains, profits and income
upon which the tax falls are only those proceeding from the
exercise of privilege, the tax is recognized as an "excise" tax,
needing no apportionment to pass Constitutional muster. In
its ruling in
Brushaber v. Union Pacific RR. Co., 240 U.S. 1 (1916), when
the meaning and effect of the 16th Amendment is being analyzed
and declared, the court summarizes the 170+ page Pollock ruling
in this regard:
"...the conclusion reached in the Pollock Case did not
in any degree involve holding that income taxes generically
and necessarily came within the class of direct taxes on
property, but, on the contrary, recognized the fact that
taxation on income was in its nature an excise entitled to
be enforced as such..."
Going on, the Brushaber court explains the Pollock
court's reasoning in excepting dividend- and rent-realized
and until it was concluded that to enforce [the income tax]
would amount to accomplishing the result which the
requirement as to apportionment of direct taxation was
adopted to prevent in which case the duty would arise to
disregard form and consider substance alone and hence
subject the tax to the regulation as to apportionment which
otherwise as an excise would not apply to it. Nothing could
serve to make this clearer than to recall that in the
Pollock Case, in so far as the law taxed incomes from other
classes of property than real estate and invested personal
property, that is, income from 'professions, trades,
employments, or vocations', its validity was recognized;
indeed, it was expressly declared that no dispute was made
upon that subject, and attention was called to the fact that
taxes on such income had been sustained as excise taxes in
You can see now that the Pollock court DIDN'T declare that the
income tax WASN'T an excise in regard to the two excepted
categories of dividends and rent. Rather, the court declared
that in those two cases what was in form an "income" tax
nonetheless in substance didn't fall on the "income" at
all. Instead (the court reasoned) the tax being proposed in
those cases actually fell on the "sources" by which the "income"
was derived, meaning that in those cases the tax proposed was
really a property tax, and therefore "direct" and requiring
The Brushaber court goes on to declare that the 16th
Amendment doesn't authorize a non-apportioned property tax
(which would be a new kind of tax: a capitation or other direct
tax which is free of the apportionment requirement). Rather, it
simply overrules the Pollock Court's conclusion that
because these two kinds of privilege-based (and therefore
otherwise excise-taxable) gains are realized in connection with
personal property any tax on them must be apportioned.
Responding to litigant Frank Brushaber's argument to the
contrary, the court says:
"We are of
opinion, however, that the confusion is not inherent, but
rather arises from the conclusion that the 16th Amendment
provides for a hitherto unknown power of taxation; that is,
a power to levy an income tax which, although direct, should
not be subject to the regulation of apportionment applicable
to all other direct taxes. And the far-reaching effect of
this erroneous assumption will be made clear by generalizing
the many contentions advanced in argument to support it...”
The court goes on to
discuss those many contentions argued to support the "new hybrid
tax" error, and then returns to again directly address that
clearly results that the proposition and the contentions
under it, 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 [purportedly]
exempting a direct tax from apportionment into
irreconcilable conflict with the general requirement that
all direct taxes be apportioned."
"Didn't happen", the court goes on to say in so many words
(actually, in TOO many words-- Chief Justice White, who wrote
the unanimous opinion, had a knack for writing 200-word
sentences). A series of subsequent rulings and summaries by
experts reviewing the Brushaber ruling summarize and
re-iterate the ruling more succinctly:
provisions of the Sixteenth Amendment conferred no new power of
Baltic Mining Co.,
240 U.S. 103 (1916);
Sixteenth Amendment, although referred to in argument, has no real
bearing and may be put out of view. As pointed out in recent
decisions, it does not extend the taxing power to new or excepted
Peck v. Lowe,
247 U.S. 165 (1918);
settled doctrine is that the Sixteenth Amendment confers no power
upon Congress to define and tax as income without apportionment
something which theretofore could not have been properly
regarded as income."
Taft v. Bowers, 278 US
470, 481 (1929).
CtC Warrior Greg Sutton just unearthed two law review
articles contemporaneous with the Brushaber ruling which
summarize it very well:
v. Union Pacific Railroad Co., Mr. C. J. White, upholding
the income tax imposed by the Tariff Act of 1913, construed
the Amendment as a declaration that an income tax is
"indirect," rather than as making an exception to the rule
that direct taxes must be apportioned."
Review, 29 Harv. L. Rev. 536 (1915-16).
through C. J. White held that the tax was constitutional.
The major proposition of appellant's argument is not true.
Hence, the conclusion does not follow. The 16th Amendment
does not permit a new class of direct tax, (in fact as it
will be later shown, the court does not think that the
amendment treated the tax as a direct tax at all)... The
Amendment, the court said, judged by the purpose for which
it was passed, does not treat income taxes as direct taxes
but simply removed the ground which led to their being
considered as such in the Pollock case, namely, the source
of the income. Therefore, they are again to be classified in
the class of indirect taxes to which they by nature belong."
Quarterly, 1 Cornell L. Q. 298 (1915-16).
Enjoy an excellent
commentary by Greg on the legislative history of the amendment
and the jurisprudence summarized in these journal articles
Department legislative draftsman F. Morse Hubbard summarized the ruling for Congress
in hearing testimony in 1943:
made it possible to bring investment income within the scope of the
general income-tax law, but did not change the character of the tax.
It is still fundamentally an excise or duty..."
tax... ...is an excise tax with respect to certain activities and
privileges which is measured by reference to the income [earnings]
which they produce."
Legislative Attorney of the American Law Division of the Library of
Congress Howard M. Zaritsky in his
1979 Report No. 80-19A, entitled
'Some Constitutional Questions Regarding the Federal Income Tax
Court, in a decision written by Chief Justice White, first noted
that the Sixteenth Amendment did not authorize any new type of tax,
nor did it repeal or revoke the tax clauses of Article I of the
Constitution, quoted above. Direct taxes were, notwithstanding the
advent of the Sixteenth Amendment, still subject to the rule of
In 1988, the
Supreme Court again re-iterates that the 16th Amendment doesn't
allow the application of the tax to anything not already properly
subject to it before the amendment was ever adopted:
legislative history merely shows... ...that the sole purpose of the
Sixteenth Amendment was to remove the apportionment requirement for
whichever incomes were otherwise taxable."
So. Carolina v. Baker,
485 U.S. 505 (1988).
Let that sink in.
Despite the strenuous and sustained campaign to plant the
contrary in your mind by the beneficiaries of your ignorance of
all the foregoing, there is no "unapportioned direct tax" or
"direct tax free of the apportionment requirement".1
There is no "income" tax on anything which would have required
apportionment if taxed before the 16th Amendment. The Pollock
court was wrong, a tax on otherwise excise-appropriate
property-sourced dividends and rent ISN'T thereby properly taken
out of the indirect excise category and into the direct property
tax category. Its error has been overruled by the REAL "highest
court"-- the People, acting through their several-state agents,
by way of Constitutional amendment.
That overruling is ALL the 16th Amendment did, and what is
taxable by the unapportioned "income" tax today is unchanged
from what was taxable by the properly understood unapportioned
"income" tax prior to the 16th Amendment. The tax is and remains
an excise, falling only on subjects to which an excise is
Okay, to resume then, we have nothing changing with the 16th
Amendment about what is subject to the "income tax", and we have
the rules for its administration remaining the same now as they
were before the amendment.
Everything involved with the "income tax" has carried forward
from its original implementation long prior to the 16th
Amendment. The amendment didn't create the tax, or authorize it,
or do anything except prevent its application in the case of
"income" realized in two particular ways from being treated
as the "capitation or other direct tax" that it never actually
was, as briefly had happened under the Supreme Court's ruling in
Clearly, if the rules for administering the tax2
pre-date the 16th Amendment, and the definition of "income"
didn't change, then what is to be reported in connection with
the tax TODAY (and what qualifies as the "income" about which
reports are made) remains what it was BEFORE the amendment.
Taxed "income" can only be the specialized, privileged
activities upon which an unapportioned
excise can Constitutionally fall (or the gains resulting
therefrom), and it CANNOT be anything a tax on which would
capitation or other direct tax.
You understand now, don't you!!
OKAY, HERE'S THE FUN (AND KIND OF AWKWARD) PART: We didn't
really need to go over ANY of that "history of the tax" stuff.
As I said early-on, the tax laws-- as written-- completely and
faithfully conform to everything I just showed you! Only the
profitable exercise of federal prerogatives and the profitable
exercise of federal privileges are taxed UNDER THE LAWS AS
CURRENTLY WRITTEN! All you have to do is
read them with your newly-cleared eyes and this will now be
as obvious as the sunrise.
Here's the un-fun (and kind of awkward) part: Unless YOU start
helping other people become aware of, and begin acting on, the
liberating, state-restraining truth about the tax that you have
just learned, what is true won't matter. You and most other
Americans will keep getting bled and growing weaker, and the
state and its pelf- and power-fed clients and cronies will keep
getting fed and growing stronger.
IT'S ON YOU!!
THE WAY, we DON'T want to abolish the tax. IT'S A GOOD TAX!
will be dawning on you now, the "income tax" actually falls on
the political class and its clients and cronies. WE WANT SOME OF
THE PROFITS ENJOYED BY THOSE FOLKS AS A RESULT OF EXPLOITING
PUBLIC RESOURCES RETURNED FOR PUBLIC USE!!
don't let yourself just fall into the mindless, "Abolish the
IRS, repeal the income tax!" mantra, just because it's easier
and less scary to chant such things than to file accurate,
knowledge-based returns and reclaim your property, and to urge
and educate others to do the same. The right thing isn't always
the easiest thing. It's just always the right thing.
P. S. I direct
this letter particularly to the three gentlemen mentioned in the
title because in addition to being voices with very bully
pulpits from which to get it right and help restore the rule of
law-- or get it wrong, and play host to others who get it wrong,
and therefore do much ill-- these three have been receiving
losthorizons.com newsletters for pretty nearly a year now.
Thus, they really have something of a moral responsibility for
being right on the subject of the tax by now.
libertarian e-zine hosts Hornberger and Rockwell-- most of whose
work both as writers and as editors I heartily endorse and to
whose sites I have sent thousands of readers over the years--
both persist in constantly posting erroneous and harmful
nonsense about the income tax. I want them to stop this bad
practice, at least, and I really hope that they become instead
active voices promoting the liberating truth about this subject.
Their doing so would advance liberty more than they can
apparently understand, and in any event their doing so would
perfect their otherwise admirable work and allow me to
appreciate their efforts without reservation.
In the case of
Glenn Greenwald, the situation is a bit different. I have
nothing but appreciation for Greenwald's work. He is one of the
most reliably clear-headed pundits out there, is plainly
impassioned about truth and respect for the rule of law properly
understood, and is very widely read.
doesn't post on the subject of the tax at all. I direct this
letter to him simply hoping to enlist him to the cause of
promoting knowledge that will actually make happen what I
believe he dearly wishes for-- the rising of the American people
to their responsibilities as grown-ups upholding and enforcing
the law. We in this
CtC community who are already doing that work need good
people like Greenwald lending a hand at rallying the rest.
However, all that
said, this letter is also directed at everyone who has stood
silent concerning the truth about the tax, or has helped
perpetuate the bs by which ignorance about the subject is
maintained and becomes ever-more deeply-rooted. In my mind, each
such person has a moral responsibility to acknowledge the truth
about this matter, and recognize its importance.
There is no
cognitive assault more practically significant and
philosophically dangerous than the campaign to convince the
American people of the falsehood that the state has
Constitutional authorization to seize their earnings, punish
disfavored economic choices and scrutinize pretty-much
everything they do economically and otherwise under the pretense
that it all relates to a legitimate state interest. Thus, there
is no more urgent imperative than thwarting that assault.
subject to a lot of usurpatious and threatening state behavior,
but none is as mature, pervasive and ultimately fatal to liberty
as the state's illegitimate pretenses about its "income taxing"
authority. When Americans get that one back under control, a
huge part of all the rest will collapse completely or shrink to
There's a reason
material like what is presented above is so hard for many folks
to take in, and it's not because the material is complicated or
inadequate. It is because the state, at least, knows how
fundamentally-important to its improper ambitions is the
misunderstanding of the tax power, and its greatest efforts at
propaganda and conditioning have been devoted to this subject.
The very difficulty and resistance most folks feel at taking in
the truth on this subject is the indication of just how
important that truth is. Here is where Sauron, if you will, has
woven his deepest and most potent defensive spells and
illusions, because here is his Mount Doom.
“Although all men are born free, slavery has been the general
lot of the human race. Ignorant--they have been cheated;
asleep--they have been surprised; divided--the yoke has been
forced upon them. But what is the lesson?…the people ought to be
enlightened, to be awakened, to be united, that after
establishing a government they should watch over it....It is
universally admitted that a well-instructed people alone can be
A number of jurists have over the years
confusedly referred to the post-16th "income" tax as an "unapportioned
direct tax", but these are not expressions that the "income"
subject to the tax includes objects a tax upon which would be
inherently direct (such as non-privileged activities or personal
property). It is just an expression of a persistent opinion that
as to dividend- and rent-realized "income", the tax isn't on the
"income" itself but on the sources from which it is derived.
Even these jurists presumably understand that this argument is
now of no use, but they still see things as did the Pollock
The "income tax" rules predating the 16th
Amendment comprise far more than just the 1884 act cited in the
Institute for Justice lawsuit. For instance, what is to be
reported in connection with the tax, and how this is to be done,
and what can be examined by the IRS in that regard, are among
those ancient rules. In 1978, in
United States v.
LaSalle Nat'l Bank, 437 US 298, the US Supreme Court cites to
the 1870 case of Stanwood v. Green, 1870 U.S. Dist. Lexis 279 to
clarify the present-day examination authority and point out that
it was granted in 1864.
The language of
that old ruling is itself very useful for purposes of this
commentary, by the way. In ruling that Green can be compelled to
produce books and records in response to an Bureau of Internal
Revenue summons, the court says:
"...Messrs. Green will be directed to produce
such books and papers as the supervisor may desire to
examine, connected with their banking operations; it being
understood that this right upon the part of the supervisor
extends only to such books and papers as relate to their
banking operations, and are connected with the
internal revenue of the United States."
"It is said that this is an attempt at an unreasonable
seizure and search into the private affairs of the citizens,
against which they are protected by the constitution. [But
t]here is no attempt to investigate any of the private
affairs of the Messrs. Green, only an examination into so
much of their business as relates to the operations of their
banking house and is connected with the subjects of
taxation; beyond this, he has no right to institute an
inquiry." (Emphasis added.)
read that language again:
"[O]nly such books and papers as relate to
their banking operations, and are connected with the
internal revenue of the United States."
"[O]nly an examination into so much of their business as
relates to the operations of their banking house and
is connected with the subjects of taxation; beyond this, he
has no right to institute an inquiry."
distinctions being drawn by this court are clear, bright, and
remain the law today: While some of the business of these
Americans MAY be connected with "the subjects" of taxation and
the internal revenue of the United States, none is "connected"
simply because it is "business" (and that part of their business
not so connected is NONE OF THE GOVERNMENT'S BUSINESS)!
the derivation tables published by Congress, which identify the
actual statutory basis for 1884 act, the "examinations"
authority discussed above, and every other section of the
current "internal revenue code", click
here or see your
To see how the tax
laws, as faithful as they are to their Constitutional limits, come to be
misapplied so as to seem other than what they really are,
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