Income Tax – Handout PDF – The income tax is mis-applied to everyday workers.

The income tax is mis-applied to everyday workers.

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1.      ‘wages’ defined as payments to govt worker or corporate officer.

The definitions:

Employee includes an officer, employee, or elected official of the United States [the govt], a State [the govts], or any political subdivision thereof, or the District of Columbia, or any agency… The term “employee” also includes an officer of a corporation.                                                                                            26 USC 3401 (c)

Wages means all remuneration (other than fees paid to a public official) for services performed by an employee for his employer…                                                                     26 USC 3401 (a)

💡Therefore, ‘wages’ means payments to federal employees or corporate officers. Not us!

2.     “Medicare Wages” and “Social Security Wages”

The other two ‘wages’ on the W2 are also defined:

Wages means all remuneration for employment…  26 USC 3121 (a)

Employment means any service performed by an employee for the person employing him, irrespective of citizenship or residence of either, within the United States.     26 USC 3121 (b)

In the tax code, ‘United States’ is a thing. It means the federal government not the 50 states.

💡Therefore, wages are remuneration for services within the government.

3.     Constitution forbids direct taxes

The definitions must be this way because the constitution does not allow direct taxation of the people and the 16^th Amendment did not change this. The federal government can tax the 50 states and anything connected to the government, such as working for the government or selling to it.

4.     16^th Amendment and ‘every source’

The 16^th Amendment says ‘from whatever source derived’, meaning every federal source. A court case from 20 years before the amendment deemed taxes on rents & dividends from government-owned businesses as a direct tax, and therefore unconstitutional. The 16^th amendment addressed that one issue. The 16^th Amendment does not mention direct taxes.

5.     United States – a thing, not a place

In the tax code, United States means the government, not the 50 states.

The term “United States” when used in a geographical sense includes only the States and the District of Columbia.       26 USC 7701 (9)

99% of the time, ‘United States’ is NOT used geographically. United States is the federal govt. This definition mentions geography because it’s rarely used as a geographic term.

6.     ‘citizen’ and ‘resident’ are titles in the U.S. Government workforce

Obama described ‘citizen’ as office of the democracy. Resident means ambassador. In the context of the U.S. tax code, we are not citizens or residents of the United States.

7.     U.S. Individual & U.S. Person

Definition of ‘wages’ says payments to corporate officers are also taxable. Federal government devised a scheme to make us act like corporate officers/misters.

We are told to call ourselves ‘individuals’ and ‘persons’. We are not either.

• ‘U.S. Individual’ is a corporation. A franchise. NOT man or woman.
• ‘U.S. Person’ is a corporation. A persona. A franchise. NOT man or woman.

💡We are presumed to be corporate officers. The 1040 form is for corporations and completed by…a corporate officer. We should not use the 1040 form.

8.     1099 forms and Trade or Business

Best evidence of schemes to defraud the people is this definition:

The term “trade or business” includes the performance of the functions of a public office.                        26 U.S. Code § 7701 (26)

While we are meant to be believe ‘trade or business’ means a local bike-shop, it means government worker. Everyone is taught to refer to their private business as a ‘trade or business’, which is taxable.

9.     Activities vs Income

The tax on federal income is a tax on federal activities, not income. The activity of working for the government is taxable because the government enabled it. The amount of the tax is determined by the amount of income.

Receiving income is not automatically taxable. One must look at the activity that generated the income. If someone sells jets to United States (the govt), that is taxable. But selling jets to United Airlines is not taxable because federal government not involved.

10.             ‘Taxable income’ not all income

26 USC 1 says “There is hereby imposed on the taxable income of every head of a household…” The tax only applies to taxable income, not all income, otherwise the code would just say ‘income’. Taxable income is income from activities related to the federal government, such as working for the government, selling to the government, being corporate officer of a U.S. corporation.

11.            WW2 and Withholding

Most people started paying the income tax during WW2, not after the 16^th Amendment. They voluntarily paid the ‘Victory Tax’ and kept on paying.

In 1943–during the war—the federal government rolled out tax withholding. This led to the erroneous W2s and 1099s that falsely label private-sector pay as (1) ‘wages’, (2) ‘social security wages’, (3) ‘medicare wages’, and (4) ‘compensation for services in United States’.

💡IRS uses the erroneous W2s and 1099s as evidence we engaged in taxable activities.

12.            “Includes” is a fence

Many tax-code definitions use the word ‘includes’ – it is restrictive; like a fence. ‘Employee’ means govt worker and similar. It does not mean all workers.

13.            What I do

• Choose ‘exempt’ on W2. While it’s a benefit exclusively for govt workers and corporate officers, it’s the best way to prevent my money from being taken erroneously
• I don’t ‘file’ the 1040 form since this would doing a ‘function of public office’ and because it’s a form for govt workers and corporate officers to fill out.
• I do rebut erroneous W2s that mischarectirize my pay as ‘wages’ and ‘compensation for services within United States’.
• I do rebut erroneous 1099s that claim I run a ‘trade or business’ which means to do the functions of public office.