Saturday, September 16, 2006
Gloom at the IRS
As it stands now, there is one glaring flaw in our Constitution, and that's the detrimental, some say evil, 16th Amendment which legalized the income tax. If the Supreme Court upholds a decision handed down by the U.S. Court of Appeals for the D.C. Circuit on Aug. 22, that decision may have more far-reaching effects on the income tax than the innocuous case to which it was applied.
Marrita Murphy sued the government and the IRS to recover taxes she'd paid on a court award for "emotional distress." The problem is the wording in the 16th Amendment, which states: "The Congress shall have the power to lay and collect taxes on incomes from whatever source derived." But the amendment doesn't define what income is, so Congress and the IRS devolved a covert, evermore inclusive, "living" definition. Don't that just burn your toast?
In a surprisingly powerful ruling, the court stated: "At the outset, we reject the government's breathtakingly expansive claim of congressional power under the Sixteenth Amendment--upon which it founds the more far-reaching arguments it advances here. The 16th Amendment simply does not authorize the Congress to tax as 'incomes' every sort of revenue a taxpayer may receive. As the Supreme Court noted long ago, the 'Congress cannot make a thing income which is not so in fact'."
In an excellent analysis of the implications of this decision, syndicated columnist Bruce Bartlett has gathered some interesting information. He reiterates the court's points that the IRS can deem any revenue to be taxable income, and that's because there's no legal definition for it. To facilitate its ever-increasing hegemony, Congress has little interest in overhauling or abolishing the incomprehensible, self-contradictory gargantuan tax code.
Another implication Bartlett mentions is the likely possibility that, if this decision is upheld, interest could be ruled not to be income and not taxable. If so, could capital gains and other investments be far behind?
Until now, the argument against abolishing the income tax has been the "momentum" behind it, what with the need for Congress to maintain its omnipresent influence and its ability to pander to lobbyists. But this decision could well undermine that impetus and force Congress to have to pass another amendment to define "income," with the inevitable re-re-rehashing of the tax code.
In lieu of that, as Bartlett puts it, "Given the logic of the Murphy decision it could revolutionize taxation and eventually lead to a pure consumption tax, which most economists today favor." This is music indeed to the ears of those who see the corruption and frustration engendered by the income tax code, as well as it being the focal point for the soak-the-rich class warfare that motivated popular opinion to favor the passage of the 16th Amendment in the first place. At that time, only the wealthiest 1 percent were going to have to pay income taxes. Class warfare was and is democracy at its worst.
The situation went downhill from there. Conservatives in 1913, playing to the mob and thinking it would never pass, voiced their support, and the rest is history.
However, it just so happens, there's a bill before Congress right now that would establish the aforementioned consumption tax, contingent upon repealing the income tax. If passed, that consumption tax would be the FairTax opposed only by lobbyists and the naysayers who don't like it because they didn't propose it.
No matter how hard the powers that be try to ignore it, it just keeps slowly and surely gaining momentum, making it harder and harder to ignore, especially if this decision holds.
In view of the lack of leadership and fear of the press displayed by so many of our politicians, perhaps they should try the "it'll never pass" stratagem again.
Just think, when it fails they'd not only get the growing FairTax crowd to shut up, but they'd be able to continue to use the income tax to manipulate the populace and bring in the lobby dough with a level of impunity never before imagined.
I like it.
Mahlon Marr lives in Byron and can be reached at thepainefultruth@wmconnect.com.
The full article will be available on the Web for a limited time:
http://www.macon.com/mld/macon/news/opinion/15502587.htm
(c) 2006 Macon Telegraph and wire service sources. All Rights Reserved.
Marrita Murphy sued the government and the IRS to recover taxes she'd paid on a court award for "emotional distress." The problem is the wording in the 16th Amendment, which states: "The Congress shall have the power to lay and collect taxes on incomes from whatever source derived." But the amendment doesn't define what income is, so Congress and the IRS devolved a covert, evermore inclusive, "living" definition. Don't that just burn your toast?
In a surprisingly powerful ruling, the court stated: "At the outset, we reject the government's breathtakingly expansive claim of congressional power under the Sixteenth Amendment--upon which it founds the more far-reaching arguments it advances here. The 16th Amendment simply does not authorize the Congress to tax as 'incomes' every sort of revenue a taxpayer may receive. As the Supreme Court noted long ago, the 'Congress cannot make a thing income which is not so in fact'."
In an excellent analysis of the implications of this decision, syndicated columnist Bruce Bartlett has gathered some interesting information. He reiterates the court's points that the IRS can deem any revenue to be taxable income, and that's because there's no legal definition for it. To facilitate its ever-increasing hegemony, Congress has little interest in overhauling or abolishing the incomprehensible, self-contradictory gargantuan tax code.
Another implication Bartlett mentions is the likely possibility that, if this decision is upheld, interest could be ruled not to be income and not taxable. If so, could capital gains and other investments be far behind?
Until now, the argument against abolishing the income tax has been the "momentum" behind it, what with the need for Congress to maintain its omnipresent influence and its ability to pander to lobbyists. But this decision could well undermine that impetus and force Congress to have to pass another amendment to define "income," with the inevitable re-re-rehashing of the tax code.
In lieu of that, as Bartlett puts it, "Given the logic of the Murphy decision it could revolutionize taxation and eventually lead to a pure consumption tax, which most economists today favor." This is music indeed to the ears of those who see the corruption and frustration engendered by the income tax code, as well as it being the focal point for the soak-the-rich class warfare that motivated popular opinion to favor the passage of the 16th Amendment in the first place. At that time, only the wealthiest 1 percent were going to have to pay income taxes. Class warfare was and is democracy at its worst.
The situation went downhill from there. Conservatives in 1913, playing to the mob and thinking it would never pass, voiced their support, and the rest is history.
However, it just so happens, there's a bill before Congress right now that would establish the aforementioned consumption tax, contingent upon repealing the income tax. If passed, that consumption tax would be the FairTax opposed only by lobbyists and the naysayers who don't like it because they didn't propose it.
No matter how hard the powers that be try to ignore it, it just keeps slowly and surely gaining momentum, making it harder and harder to ignore, especially if this decision holds.
In view of the lack of leadership and fear of the press displayed by so many of our politicians, perhaps they should try the "it'll never pass" stratagem again.
Just think, when it fails they'd not only get the growing FairTax crowd to shut up, but they'd be able to continue to use the income tax to manipulate the populace and bring in the lobby dough with a level of impunity never before imagined.
I like it.
Mahlon Marr lives in Byron and can be reached at thepainefultruth@wmconnect.com.
The full article will be available on the Web for a limited time:
http://www.macon.com/mld/macon/news/opinion/15502587.htm
(c) 2006 Macon Telegraph and wire service sources. All Rights Reserved.
posted by Steve Harris, 11:14 AM
0 Comments:
-
- Reclaiming America for Christ
- John Piper Ministries
- Elijah Ministries
- Man in The Mirror
- Setting Captives Free
- Stand to Reason
- Foundation for American Christian Education
- American Center for Law and Justice
Marriage & Family
Christian Views
Tax Reform
General Politics
God, family, and country. My allegiance stands in that order. Church and State will illustrate my opinions on issues of religion and politics, along with regular thoughts on family.
Contact Me
Recently Published Letters
Blogs I Read
- Blue Dog
- The Market Center Blog
- Government Bytes
- RedState
- The Club for Growth
- Tax Policy Blog
- Joshua P. Allem
Archive
- current
- March 2006
- April 2006
- May 2006
- June 2006
- July 2006
- August 2006
- September 2006
- October 2006
- November 2006
- December 2006
