I decided to create a new thread on this topic, so it would not get buried in the other thread.
First off, it is blatantly false that the income tax was created to pay for World War 1.
The tax was passed in 1913. The war did not start until 1914, and the US did not get involved until 1917.
So, there is no evidence that it was created to pay for the war.
But it WAS passed in 1913, and just before the Federal Reserve Act, which was passed in the dead of night two days before Christmas.
Regarding the income tax, I decided to go to the ONLY official source of the original statute.
This is found at the Statutes at Large. The SAL are the chronological documentation of ALL bills passed by Congress, starting with the first one by the First Congress, and going through to the most recent one (that has been published -- they are behind a little of the SAL publications).
This is the ONLY official source for ANY statute passed by Congress.
Here is the SAL publication for the 63rd Congress in 1913:
https://tile.loc.gov/storage-services/service/ll/llsl//llsl-c63/llsl-c63.pdf
Now, regarding the income tax ... this is REALLY WEIRD:
It looks to me like there was never an official "Income Tax" passed by Congress.
Instead, it was a GENERAL tax, which covered hundreds of things to be taxed, and then the income tax was inserted WAY, WAY, WAY down and buried inside all the legalese of these other taxes.
Starting on page 114, you see under "Chapter 16," the words of introduction to this piece of legislation:
An Act To reduce tariff duties and to provide revenue for the Government and for other purposes
Notice: It does not say an act to impose an income tax. The purpose was to reduce tariff duties and provide revenue.
The next paragraph says:
... there shall be levied, collectd, and paid upon all articles when imported from any foreign country when imported into the United States or into any of its possessions the rates of duty which are by [the following rules].
Notice: There were certain ARTICLES (i.e. types of actions for which a tax would be levied), AND ... ONLY ... for IMPORTING something into the US or its possessions (territories).
This is CRUCIAL, because the federal government does NOT have ANY authority to pass GENERAL LEGISLATION WITHIN THE STATES, except for those items specifically enumerated in the Constitution. One of those enumerated powers if FOREIGN COMMERCE.
When YOU go to work at the office or factory, YOU are NOT engaging in foreign commerce. Only the companies and individuals who BRING FOREIGN GOODS INTO THE USA are engaged in foreign commerce.
So ... this was constitutional, as it was originally written (but NOT as it is currently implemented).
Next, it goes on to list HUNDREDS of "items" that would be subject to this new tax "to REDUCE tariffs and to provide revenue."
A few of these are taxes on:
(1) Boracic acid, citric acid, formic acid, and other acids.
(2) Acetic anhydrid.
(3) Acetone
(4) Dried egg albumin
(7) Ammonia
(10) Barium chloride
(12) Bleaching powder
(13) Caffein
(15) Chalk
(41) Lime citrate
(43) Menthol
(44) Oils of various types
(47) Opium
(68) Sponges
(69) Talcum
(84) Glass bottles
(93) Opera and field glasses
(106) Iron or steel anchors
(119) Automobiles, valued at $2,000 or more
(129) Sword blades, and swords and side arms
(136) Fish hooks, fishing rods and reels
(201) Pickles
(202) Cider
(213) Straw
(217) Apples and other fruits
(237) Brandy and other spirits
(243) Champagne
(300) Carpets
(305) Hair of the Angoran goat
(311) Silk
(351) Human hair
(354) Hats, bonnets, or hoods
(402) Arrowroot in its natural state
(403) Arsenic
(424) Books, engravings, photographs
(477) Drugs, such as barks, beans, berries, buds, bulbs ... [interesting that these were "drugs" back in 1913]
(500) Gum
(501) Gunpowder
(503) Hair of horse, cattle, and other animals
(602) Skeletons
(605) Soda
(614) Stone and sand
In all, there are a list of 657 items that would be considered "articles" for which a tax would be levied ... IF (and only if) ... they were IMPORTED INTO THE US OR FEDERAL TERRITORY ... because Congress had the constitutional authority to regulate FOREIGN COMMERCE.
Now, I will break it down even further, but keep in mind THESE IMPORTANT POINTS:
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The way the statute was structured was that "Section I" would be a list of all these items that would be "articles" that could be taxed by this new legislation. (The words "Section I" is not there, but the next sections (Sections II, III, and IV) are, and that is very important. So, keep in mind how this statute was structured.
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ALL of these items/articles are for FOREIGN COMMERCE by way of IMPORT under the foriegn commerce clause of the Constitution ... OR (also VERY important) ... for anything that has to do with these items/articles WITHIN THE FEDERAL TERRITORIES (Washington DC, Puerto Rico, Guam, etc.). ... but NOT the States.
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The US federal government has TWO constitutional authorities: (1) the subjects that are ENUMERATED in the Constitution, and these apply within the States, such as post offices and foreign commerce, and (2) EXCLUSIVE JURISDICTION over everything that goes on WITHIN the federal territories (Washingon DC is treated like a State, in that the Congress is like the State legislature for that and the other federal territories).
Again, this all starts on page 114 of the 63rd Congress for 1913:
https://tile.loc.gov/storage-services/service/ll/llsl//llsl-c63/llsl-c63.pdf
NOW ...
At page 166, under "Section II," we have the "Income Tax," although it is NOT OFFICIALLY called that (there is merely a footnote in the margin).
Under Subdivsion 1:
That there shall be levied, assessed, levied and paid annually upon the entire net income ...
This is where they stuck in the "income tax" in the middle of a foreign commerce tax bill. Very sneaky and underhanded -- to say the least.
It then goes on to Section III, which once again goes back to amend a previous law about foreign commerce.
Section IV continues with the foreign commerce authority.
This was a MASSIVE piece of legislation, passed October 3, 1913.
I am not going to read through the entire thing, looking for the "this is only temporary" clause. I doubt it is there because, again, this was a MASSIVE piece of legislation.
I doubt more than a few members of Congress had any real idea what they were voting on.
It was the setup for the Federal Reserve Act, which was passed December 23, 1913.
There is ZERO chance that it was meant to be temporary, though I would not be suprised if the people behind the scenes who pushed both laws were planning on also pushing World War 1 on the Europeans, but the members of Congress probably had no clue (most of them), if that was the case.
Now ... let's dig further.
This legislation was all about taxes on (a) foreign commerce and (b) activities connected to the federal territories (such as Washington, DC).
Who was considered liable for the income tax?
Page 166, A. Subdivision 1:
... every citizen of the United States, whether residing at home or abroad, and to every person residing in the United States, though not a citizen thereof ...
Now, are YOU a "citizen of the United States?"
Let's set aside what that definition means in legal terms. If YOU state, and sign under penalty the truth of the statement, that YOU ARE a "citizen of the United States," then this law APPLIES TO YOU.
Abracadabra ... YOU have volunteered that YOU are one of these people subject to the tax.
This is WHY the US federal government constantly TRICKS you into claiming that you are a "citizen of the United States," because that pushes you into this box.
Checkmate.
Sort of.
That is WHO. But what about the WHAT?
WHAT exactly is taxed?
... a tax ... upon the entire net income from all property owned and of every business, trade, or profession carried on in the United States by persons residing elsewhere.
That was the original language, that is more or less similar to today's language, which we will explore, but first, let's talk about the US Supreme Court case that declared this statute as constitutional.
That was Brushaber v. Union Pacific Railroad (1916).
Frank Brushaber was a citizen of New York. He owned stock in Union Pacific Railroad, which was a FEDERAL CORPORATION, created by Congress to build the railroads.
He received a dividend, which is covered on page 167:
B. ... dividends ...
So, Frank challenged the income tax on his dividends, but SCOTUS ruled that he had to pay. The real reason for this is that the company paying the dividend was a federal corporation, and receiving a dividend from a federal corporation was a PRIVILEGE and not a right. Therefore, since the Congress created the corporation, it could tax the dividends paid.
But this has morphed into Congress taxing dividends from ALL (non-federal) corporations. BUT ... they have done so by subterfuge, not by honest legal means.
Let's go to the current "Income Tax Code" found at 26 USC, and look under Subtitle F, Chapter 79, "Definitions."
The original act said that an income tax would be imposed on NET income of every "citizen of the United States," and to every "business, trade, or profession" of non-citizens.
But what are these definitions?
https://www.law.cornell.edu/uscode/text/26/7701
(a)(30) United States Person:
(A) a citizen or resident of the United States
What is the definition of "United States?"
(a)(9) The term “United States” when used in a geographical sense includes only the States and the District of Columbia.
What is a "State?"
(a)(10) The term “State” shall be construed to include the District of Columbia, where such construction is necessary to carry out provisions of this title.
So ... this whole thing is ONLY for the things that the federal government has CONSTITUTIONAL AUTHORITY for: (a) foreign commerce and (b) exclusive legislation for FEDERAL TERRITORIES, and NOT that 50 States. They had to RE-DEFINE the word "State" to mean something OTHER THAN the 50 geographical States, in order to stay within the constitutional confines of the Constitution.
What is the definition of "Trade or Business?"
(a)(26) The term “trade or business” includes the performance of the functions of a public office.
AGAIN ... staying within the CONFINES OF THE CONSTITUTION.
The way the law is WRITTEN is constitutional. BUT ... it is not promoted the way it is written.
What is the definition of "employee?"
There is only a specialized definition in Subtitle F, and that only applies to something specific that does not apply to most people:
(a)(20) ... For the purpose of applying the provisions of section 79 with respect to group-term life insurance purchased for employees, for the purpose of applying the provisions of sections 104, 105, and 106 with respect to accident and health insurance or accident and health plans, and for the purpose of applying the provisions of subtitle A with respect to contributions to or under a stock bonus, pension, profit-sharing, or annuity plan, and with respect to distributions under such a plan, or by a trust forming part of such a plan, and for purposes of applying section 125 with respect to cafeteria plans, the term “employee” shall include a full-time life insurance salesman who is considered an employee for the purpose of chapter 21.
That is the only definition of "employee" found in Subtitle F.
But ... the definitions in Subtitle F apply to ALL of Title 26 ... UNLESS ... a different definition is found elsewhere that applies more specifically to a particular section of Title 26.
So, let's look at Subtitle C, "Employment Taxes" --
https://www.law.cornell.edu/uscode/text/26/subtitle-C
Notice: There are are 6 chapters within Subtitle C.
The employment taxes are collected by the employer, right?
Chapter 24 -- Collection of Income Tax at Sourse on Wages, Section 3401 ("Definitions"):
What is "Employee?"
(c) Employee. For purposes of this chapter, the term “employee” includes an officer, employee, or elected official of the United States, a State, or any political subdivision thereof, or the District of Columbia, or any agency or instrumentality of any one or more of the foregoing. The term “employee” also includes an officer of a corporation.
So, elected officials of the United States or "a State" (which means Washington DC and federal territories, based on general definitions, and constitutional prohibition from the federal government taxing the States, other than via apportionment), any AGENCY OR INSTRUMENTALITY of Washington, DC, such as Union Pacific Railorad, or Fannie Mae (Federal National Mortgage Association), a corporation created by Congress for buying mortgages, or an officer of such a corporation.
What you will find about the income tax is that it was originally passed as part of a tax bill for foreign commerce and taxes related to the operations of the federal territories, and the modern day definitions still agree with this concept ... BUT ... it has since been fraudulently promoted and unconstitutionally applied and enforced by the Internal Revenue Service, which is NOT a federal agency and its agents are NOT federal employees.
It is a clever con game.
Do I file tax returns? Yes, because I understand the game and I know where to find the "hidden" aspects that are often only found in the federal regulations and only hinted at in the actual statute or code.
But we would all be better off if we just got rid of it, along with the privately owned (and more important: privately controlled) central bank, which has never had a meaningful public audit of what it REALLY does with all of its fake money creation.
First of all, OP, excellent dig and a very commendable post. Thank you. However, I am going to respectfully poke a hole in some of its 2nd half.
Notwithstanding my user name, I am not an expert in the law. If I may be so bold, then, I think you are mistaken about your points about the definitions of State and of employee. Anyone may correct me if I'm wrong.
In regards to the excerpts you posted in the 2nd half of your post, you argue that those excerpts don't apply to something that the legislation supposedly defined. Your excerpts follow the pattern "x includes y."
I don't think you can take that to mean the definition, but rather an expansion of the definition. You cannot equate that with "x is defined narrowly as y." It means that x contains y as well as everything commonly known to be x.
For example, mammals include dolphins. However, you cannot accurately say mammals are defined narrowly as dolphins. So where you said:
OK. I am happy to reconsider my position. I want to know the truth, either way.
Actually, yes I can. The word "includes" has a long legal history of meaning the definition is confined to what the term defines, as well as anything within its "class."
No, not "commonly known," but those things that are in the "same class."
Let's look at the FULL language of that definition for "State":
They COULD HAVE defined it like this:
But they DIDN'T.
Why?
Because they WANTED people to do what you are doing.
They wanted people to ASSUME the States are included in the definition.
BUT ...
DC is a FEDERAL TERRITORY. Therefore, it is NOT of the "same class" as the 50 States.
It cannot be "included" with the 50 States because it is a DIFFERENT JURISDICTION, and the Constitution (even with the 16th Amendment) does NOT grant Congress the power to DIRECTLY tax the People if they do not have any direct federal tie.
This is why the Brushaber case was taken up. It was just confusing enough to slide through. Union Pacific Railroad was a corporation that was CHARTERED BY THE FEDS, making any dividends received something connected to a federal privilege, rather than a fundamental right.
Also interesting is that I have heard (have not read it myself, but I have full confidence in the person who read it from the document) that the IRS came out with a statement to its agents right after the Brushaber decision. In that letter, it said that the SCOTUS had recently ruled that a NON-RESIDENT ALIEN'S receipt of dividends were taxable.
Frank Brushaber declared himself, in his original complaint, to be a "citizen of New York."
The States are ALIEN to the federal government, and NOT a part of it.
This is why they allow double jeopardy cases to go ahead, where a State prosecutes someone, and then the feds prosecute for the same exact crime. Two different sovereigns.
So, you cannot have the word "includes" in a definition of "State" without also saying, "The term 'State' shall include Alabama, Alaska, ... etc., and also the District of Columbia."
If you ONLY say it includes DC, then the CLASS of items under "includes" is NOT any of the States.
Notice, it says "The term 'States" ..." and they DO NOT mention ANYTHING about the actual States. They ONLY list DC. The fact that they are defining "States" is irrelevant. It could have been the term "Jabberwoky includes DC."
They did it ON PURPOSE.
Very confusing, I know. But this is the word games they play.
So yes, the word "includes" CAN mean things not listed, but ONLY if they are of the SAME CLASS. And federal jurisdiction is NOT of the same class as State.
They HAD to say "... where such construction is necessary ..." BECAUSE if they didn't have that in there, then it would be unconstitutional.
The construction IS NECESSARY, BECAUSE they ONLY have LIMITED jurisdiction, per the Constitution.
It is up to YOU to understand it, or your attorney. But even if your attorney does understand it, not 1 in 1,000 of them would ever have the BALLS to challenge the law as it is written. Most of them are fucking cowards.
No! Absolutely not! You can NEVER simply "imply" that the legislature must have meant this or that.
That would make the law VOID FOR VAGUENESS.
I know that the regulators (government employees) have long been doing this garbage in their regulations.
And SCOTUS is taking up cases on this very subject (the Chevron doctrine).
We will see, but I expect them to strike down that doctrine as unconstitutional.
The words the legislature uses MUST be taken VERBATIM.
You cannot simply add things you like to what the legislature wrote.
That is NOT Rule of Law.
BTW, I found a definition for "State" in the tax code that I believe supports my position.
Note: As I said earlier, the general definition in Subtitle F can be modified elsewhere to mean something different in another part the code, which is what they do here:
So ... why couldn't they be THAT specific for the other section?
They COULD be, but they DON'T, because they WANT people to be deceived.
In this section, they go on to list cities and municipalities under the definition of "State," because some cities, like NYC, also collect an income tax and they WANT information sharing between these other tax collectors.
My point is: They have the capacity to be VERY SPECIFIC, but when they are not, they might be hiding something.
In this case, the definition that only includes DC as a "State" is really stating that the federal government is what that term applies to, generally in the code, unless another definition is given for a specific chapter or section, like here.
Notice: They use the term "means" here rather than "includes." They don't use "includes" because it would require a list that is of the SAME CLASS, and these are not the same class, so they have to list them all, individually.
In Subtitle F, they don't do that because the ONLY class they have authority to do anything with (for the entirety of the internal revenue code) is federal jurisdiction. They only list DC and go on to say "wherever such construction is necessary" ... which is necessary EVERYWHERE in the code.
They COULD define "State any way they want, such as "State means/includes all 50 States that have a population of 5,000,000 residents or more." IOW, they can make up terms to mean something that is FAR DIFFERENT from the common understanding of what the term usually means in everyday language.
That is now legalese works.
I think I have beaten this horse to death, though, so ... carry on.
Thanks for taking the time to respond in such detail. I do see what you mean and am ready to believe it as a possibility. I also see you know more about the law than I do. I do think you make good arguments and I've always been prepared to be wrong on this. However, I think your example of the definition of State, you will notice that they say "the term State means" whereas in the other example they say the term State "includes". I'm not 100% convinced about what you're saying, but I'm far from 0% convinced too. I can't say whether they are deliberately trying to make things confusing, but they are. I know enough from hanging around here that the powers that be are not above obfuscating creating loopholes and cheat codes to screw us over to their benefit. Anyways, thanks for the intellectual stimulation.
u/MAG768720 is essentially correct about legal construction.
What you describe is the ordinary English language, in which people use "includes" all the time as nonlimiting because they have things in mind that are not being said. Laws are not written in ordinary English, but in English confined to very narrow limits so that there is no ambiguity.
The courts have long discussed the use of "includes" in taxation, which is why 26 USC 7701(c) defines "includes" itself, but it is again ambiguous because it says it does not exclude; and the Supremes then interpreted that it does not include either. So we are left to derive meaning via standard statutory construction.
If you see the same pattern over and over in the law, and always on a matter where the ordinary citizen can rope himself/herself into becoming a taxpayer volunteer, it indicates intent. When you see the legal objections written by the IRS deal with the issue always backhanded and roundabout in such way that the person can be misled again in exactly the same way, it indicates intent. I passed my level of "coincidence" long ago, and it is safe for me and for Swamp Rangers to say so. Each person must determine the meaning of the law for himself/herself.
Oh, to OP: 26 USC 7701(a)(10) IS THE EXACT CODIFICATION OF 13 Stat 233, 306. Interesting?
Good way to put it.
It's weird. Look at page 304, and a few sentences above where Sec. 174 starts.
This actually does not support my position, it would seem.
It looks more like sloppy writing by whichever committee put this together.
I went through the whole thing looking for "state" and did not see anything where DC would need to be "included" where it was not already listed.
Looks more like the last section on page 306 was nothing more than an afterthought.
But that section, as I traced through SAL, is exactly the origin of 26 USC 7701(a)(10), though there are code variations over time and it's the RS that are current positive law on it: that is, each enactment contains this same clause carried over in the same place except when it's marked as moved or slight wording changes. So if just an afterthought it's essential to every income tax in America since 1864, i.e. every but the very first one. Plus it's one of the top five most important anomalies in the code by the OP standard, you note. So, it interests me.
Sec. 174 does not disprove, again a disproof would only be inferred in conversational English, not in law. The laws of US football define the word "ball" very narrowly, and (even though "includes" is not at issue) nobody gets to take the word "ball" elsewhere in the law and say it means the ordinary use of "ball" and thus any spheroid, like a soccer ball. In conversation when the word "ball" is used even though a narrow definition may have also been offered, context will determine if the definition does not apply; but in law the whole is its own context and so the definition always applies throughout, and nothing else does. So if a law says "ball includes football" and then later "balls and footballs", it's redundant; but if a human says it, it's likely (but not necessary) that the human is indicating other (e.g. soccer) balls in view. (It's hard to say and I don't have ready examples to show. I know there are even legal contexts, though not US statutory construction, where we might use a different canon and say "balls and footballs" by canon default must mean that context has changed and the inclusion class added to; but their existence doesn't change the preselected canons by which these legislators wrote this law.)
So in the many times I've looked it's hard to find a perfect on-point example as a "smoking gun". The 1864 clause and its placement at the very end is telling enough to me. If I find a better one I'll be telling people, for sure. Thanks again for the OP plus.