Subject: Complying With The Law (Part 3) -----BEGIN PGP SIGNED MESSAGE----- Hash: SHA1 (If you missed any of the prior messages in this series, you can find them at this address: http://www.3rdear.com/ubb/ultimatebb.php?ubb=forum;f=16 ) Dear Subscriber, Suppose you were alive several decades ago, and you knew several well-respected zoology experts, each of whom declared to you that all mammals have live young. Since they were the "experts," you'd probably assume they knew what they were talking about. Then suppose someone visited you from Australia with his pet platypus--an egg-laying mammal. Then you'd have a conflict: little ol' you would have a piece of evidence (the platypus) that flew in the face of what the supposed "experts" told you. So which would you believe, your own eyes or the opinions of the professionals? Well, now you have a REAL example: you've seen the regulations saying that some income is exempt for federal income tax purposes because of the Constitution itself, while the vast majority of tax professionals have no idea that any such Constitutionally-exempt income exists. (Then you saw how, for some reason, those in government really don't like talking about the subject.) How do our rhetorical zoologists above explain the platypus? To begin with, they don't. They didn't know it existed, so they didn't have an explanation for it. After they've been shown it, they either have to change their opinions, or deny that a platypus is a mammal, or deny that it lays eggs (with the latter two being rather silly things to argue). They can't just pretend it doesn't exist. Likewise, there aren't very many rational responses a modern tax professional can give to the regs we've seen, because he's never seen that evidence before. He could (and should) say "I didn't know it said that, and I'm not sure what income it's talking about." (Hopefully he'd be curious enough to want to then go figure out what it means before continuing to pass himself off as a tax "expert.") But he can't rationally just ignore it and pretend it doesn't exist... which I have found is what most of them do. I mention all this to make something clear: when I give you my conclusions about the meaning of those regulations, I basically have no competition from the government or the tax industry "experts." You can poo-poo my conclusions all you want, but those who have tantrums about my beliefs DO NOT HAVE an alternative explanation for the evidence. Instead, they use the time-honored method of ignoring the evidence and vilifying anyone who would dare to contradict the provably false proclamations of the self- appointed "experts." So if anyone can come up with a DIFFERENT explanation of the evidence, I'd love to see it. (I've been begging the government to give me their explanation for the last eight years, and they won't.) Now we finally get to the question, WHAT income might be non-taxable because it is, "under the Constitution, not taxable by the Federal Government"? Well, there is only ONE thing that the Constitution specifically says that Congress can't tax: state exports. But in Peck v. Lowe (before all the regulations we've looked at), the Supreme Court specifically said that just because the income tax gets applied to income from exporting things does NOT make it an unconstitutional tax on state exports per se, so that can't be what the regulations were talking about. Nothing else in the Constitution specifically prohibits Congress from taxing anything. HOWEVER, the Supreme Court has stated that there are “certain virtual limitations” on the taxing power, arising from the principles of the Constitution itself [United States v. Butler, 297 U.S. 1]. As one silly example, the Constitution does not empower the U.S. government to tax everyone in China. Obviously the feds don't have jurisdiction over everyone in China, even though the Constitution doesn't bother to specifically say they CAN'T tax everyone there. So, under the Constitution, what was Congress intended to tax? In Federalist #45, James Madison (often called "The Father of the Constitution") explained that under the new Constitution the federal government would have only a few, limited powers, and went on to say that the federal power “will be exercised principally on external objects, as war, peace, negotiation, and FOREIGN commerce; with which last [foreign commerce] the power of TAXATION will, for the most part, be connected.” So the Father of the Constitution said that federal taxes would primarily apply to FOREIGN commerce, meaning trade which crosses country borders. But what does that have to do with an income tax? Anything? As you may or may not know, the Constitution specifically gives Congress jurisdiction over INTERNATIONAL trade (aka "commerce with foreign nations"). So that kind of trade IS Congress' business. On the other hand, “very different considerations apply to the internal commerce or domestic trade of the states. Over this commerce and trade Congress has NO POWER of regulation nor any direct control. This power belongs exclusively to the states. No interference by Congress with the business of citizens TRANSACTED WITHIN A STATE is warranted by the Constitution, except such as is strictly incidental to the exercise of powers clearly granted to the legislature” [License Tax Cases, 72 U.S. 462 (1866)]. So, as James Madison explained, under the Constitution Congress' powers mainly had to do with international matters, while purely domestic matters were the business of state governments. But again, does this have any relation to taxation? Well, in one of the earliest cases about the 1913 federal income tax (from which the current tax evolved), the Supreme Court ruled that because the Constitution grants Congress the general power to tax, AS WELL AS giving Congress specific jurisdiction over “commerce with FOREIGN nations,” the federal government could therefore “undoubtedly” apply an income tax to an American business engaged in INTERNATIONAL trade [Peck v. Lowe, 247 U.S. 165]. (Before you bother writing any of this stuff down, I should let you know that at the conclusion of these messages, I'll be telling you how to download for free my complete "Taxable Income" report, with all relevant quotes and citations, which is a lot more thorough than what I'm trying to cover quickly here.) Might that be the answer to our question about what is Constitutionally taxable? Might it be that Constitutionally, the income tax is only supposed to be applied to income which comes from "commerce with foreign nations"? Guess what. That's not for you or me to decide. Yes, you heard me right. It's not OUR job to decide the proper application of the law. Our system of written law is not supposed to be a guessing game, where we each theorize about what is or is not Constitutionally taxable. But if we don't do that, how are we ever to know what is taxable and what is exempt? If it's not our job to decide that, whose job is it? The answer is, it is the job of the government's regulation-writers. The law must be knowable and precise; the law books themselves must specifically TELL us what our legal obligations are. And the regulations published by the government are our official notice of what the law requires of us. So, rather than theorizing (like I just did), let's see if we can find where the regulations answer the question. Once again, here is a link to scans of the old regulations defining "gross income." Last time we focused on where it talks about some income being excluded because it is, "under the Constitution, not taxable by the Federal Government." Okay, so what is to be included? Well, it says that all income is "gross income" unless exempted by law--which we are told means exempted by statute OR excluded because of the Constitution. See for yourself what the regulation says after that: http://irobyou.info/TaxableIncome_Net/exhibits/1956regs.html As you can see, the regs specifically say that income which citizens and domestic companies receive from FOREIGN commerce "must be included in their gross income." It then mentions nonresident aliens, foreign corporations, and certain matters involving federal possessions (e.g., Guam, Puerto Rico), but nowhere does it specifically mention the DOMESTIC income of the average American. (That matches my theorizing pretty well, don't you think?) Remember all those different years of older regs talking about some income being exempted by "fundamental law" (the Constitution)? Well EVERY YEAR those same regulations specifically explained that income from "FOREIGN commerce" was subject to the tax; NEVER did they mention purely domestic income. (The only time income from inside the U.S. was mentioned was when it was received by foreigners, which again constitutes international trade.) But surely that just means that income from international trade is taxable in ADDITION to domestic trade, right? I mean, we can't just assume that our income isn't taxable because it's not mentioned there, right? Okay, it's a little weird that they didn't just say that Americans are taxed on income from "foreign OR domestic commerce," which would have been easy to say. But it can't REALLY mean that the tax only applies to international trade. Can it? Once again, let me conclude today's message with the following: In what I've said above, do you see me encouraging anyone to break the law? Do you see me objecting to the law? Do you see me arguing anything "frivolous"? (No, no, and no.) Lastly, would you consider it okay for the government to try to forcibly stop me from telling you what I've told you so far, or to punish me for publicly talking about such things? (Me neither.) Sincerely, Larken Rose -----BEGIN PGP SIGNATURE----- Note: This signature can be verified at https://www.hushtools.com/verify Version: Hush 2.5 wpwEAQECAAYFAkWvfUoACgkQGmVFo/iGj31g1wP+I2QJXkyErOrLYLsuCJAdNtwq7N3H Oq9vZ/gADto2POrr+iQkRzvbtuwy75Hekve5FIQmgadT7rs1c+5+/GDbx6xT1jvbhcwH 3p2jgfAqcj03XmfioqjSHGOUJncNOH5sOHfKp9Mo2dPb9jCjKthY9mZfewvMH19lJHQR LUcwi84= =krFE -----END PGP SIGNATURE----- Concerned about your privacy? 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