CtC Quiz IV: What Led To The Sixteenth
Amendment?
SCORING
0 - 24% correct: I'm afraid you've gotten your
"education" exclusively from the IRS.
25 - 49% correct: Your heart's in the right
place, but you haven't yet started down the path
to knowledge.
50 - 74% correct: You're well on the path, but
still have some studying to do.
75 - 99% correct: You're on the very verge of
self-empowerment...
100% correct: Hello,
CtC Warrior!
The Answer Key and Notes:
Question
1. The tax on federal income first went dormant at
the end of:
1872.
Question
2. The income tax was first revived in:
1894.
Question
3. The chief reason for the revival of the tax
was:
To recover for the public treasury a portion
of the enormous profits in rent and
dividends being enjoyed by beneficiaries of
corruption-ridden publicly-subsidized
projects like the trans-continental
railroads.
NOTE:
During the Lincoln administration and
subsequent Republican administrations,
corruption in administration of
publicly-funded projects like the railroads
became epidemic. By the time of the second
Cleveland administration the public was sick
of the scandal and the exploitation of the
public purse, and chose to revive the
dormant income tax-- which is designed to
capture a portion of private profits gained
by exploitation of public privilege (and
also to suction excess fiat currency out of
circulation so as to conceal the true extent
of the "inflation tax" being imposed by the
state). See more on this
here.
Question
4. The revived tax was quickly challenged in court
on the argument that:
Insofar as the tax was applied to otherwise
excisable rent and dividends, it took on the
legal character of a property tax by virtue
of the relationship between real estate and
rent and stock and dividends, and thus these
two federally-connected types of gains could
only be taxed by the rule of apportionment.
Question
5. The Supreme Court ruled that:
While apportionment is irrelevant to all other
objects of the tax because they are
unambiguously proper objects of an excise
tax, when applied to rent and dividends the
tax amounts to a property tax requiring
apportionment, and therefore the revival
act, which included these things in its list
of objects to be taxed without
apportionment, was unconstitutional.
Question
6. Congress responded to this ruling by:
Enacting a series of alternative measures
aimed at those rents and dividends in hopes
of getting around the Supreme Court ruling--
most notably the Corporate Excise Tax Act of
1909-- while paying no attention whatever to
other objects of the income tax.
Question
7. The Sixteenth Amendment was designed to:
Overrule the Supreme Court's decision
protecting the profits of crony-capitalists
realized in the form of rents and dividends
from the tax, and do nothing else, since
nothing else needed to be done-- all other
objects of the income tax had always been
taxable without apportionment.
NOTE: It is by virtue of the fact that all
other objects of the income tax have always
been taxable without apportionment that we
can see revealed what those things are (and
can only be). Since
capitations and other direct taxes
require apportionment, these "income
tax-able" things must be other than the
proper subjects of those
apportionment-required taxes, which include
(among other things) activities engaged-in
by right, and the revenues they produce.
"Income tax-able" objects then, can only be
activities engaged-in by privilege, and the
revenues they produce-- which not
coincidentally are the proper objects of an
excise such as the "income tax" is
uniformly acknowledged to be.
Question
8. Upon the declared adoption of the Sixteenth
Amendment, the income tax was revived for the
second time in:
1913.
Question 9. When subsidized-railroad investor
Frank Brushaber challenged the re-revived income
tax in 1916 on various grounds based on taking the
Sixteenth Amendment as having authorized an
unapportioned capitation, a unanimous Supreme
Court:
Simply and squarely ruled that the only
thing the amendment is for, and the only
effect it has, is to overrule the earlier
Supreme Court reasoning that because of the
personal property sources through which they
arise, otherwise excisable activities whose
gains are realized as rent or dividends
require apportionment in order to be Constitutionally
taxed.
Question
10. After the adoption of the Sixteenth Amendment,
and especially during and immediately after
World War I during which the U.S. government
went hugely in debt, the United States began
collecting income tax from:
The same percentage of households on average
as had been the average during the 1860s and
early 1870s-- a bit less than 10%, even
though the dollar amounts of the available
exemptions were well below most household
earnings.
Question
11. The statutory structure of the re-revived
income tax as enacted after the Sixteenth
Amendment-- including what is taxed and how:
Is virtually word-for-word identical to the
1862 and 1894 statutory structure of the
tax, including the specifications of what is
taxed and how-- in fact, a great deal of the
structure still in use to day IS the
structure enacted during the 1860s. That
structure also generated much fear and
trembling in the yacht-making industry and
among its customers, who began a sustained
campaign to subvert general understanding of
the tax as having been transformed by the
amendment into a tax reaching
non-federal-beneficiaries, both in hope of
marshaling broad political opposition to the
tax and to eventually divert some of the
burden of public finance which would
otherwise fall predominantly on them alone
onto ignorant others.
Question
12. In the early 1940s the portion of American
households affected by the income tax-- which
had previously averaged less than 10% over all
years in which the tax was in force from 1862
on, including the 30 years since the Sixteenth
Amendment-- leapt to more than 90% (and has
stayed in that area ever since). During the
couple of years in which this dramatic change
occurred:
Exemption rates didn't dramatically change,
there was no Constitutional amendment
expanding the tax, and there was no
statutory expansion of what was subject to
the tax. All that happened during that
transforming period was that the taxing
entities, having concluded that
understanding of the tax and the effect of
the Sixteenth Amendment had been
successfully compromised over the previous
thirty years, suddenly sent tax forms to
more-or-less everyone, on which recipients
were instructed to declare "wages" and so
forth, and calculate tax liabilities
accordingly, with the definitions of these
terms omitted.
It was a
masterful play
by a venal
community of folks who have ever since been
living large by "the political means", while
dreading the time when enough Americans
learn the truth and resume control of their
wealth and power.