Justplainbill's Weblog

September 17, 2014

Ending the State’s “Security” Monopoly, from Butch [c]

[There is too much truth in this to not have posted it. As the author points out, the true source of security failure is the political class. I agree with a bunch of what is here, but not all, yet do not feel any need to put any comment of mine beyond this, and, I wouldn’t be a police officer (LEO=Law Enforcement Officer) for almost anything in the world! God Bless All of You!]


Monday, September 15, 2014
Call the Anti-Police: Ending the State’s “Security” Monopoly

Dale Brown (center) with Garrett Ean and Pete Eyre.

|”How would things be different,” muses Dale Brown of the Detroit-based Threat Management Center, “if police officers were given financial rewards and commendations for resolving dangerous situations peacefully, rather than for using force in situations where it’s neither justified nor effective?”

Brown’s approach to public safety is “precisely the opposite of what police are trained and expected to do,” says the 44-year-old entrepreneur. The TMC eschews the “prosecutorial philosophy of applied violence” and the officer safety uber alles mindset that characterize government law enforcement agencies. This is because his very successful private security company has an entirely different mission – the protection of persons and property, rather than enforcing the will of the political class. Those contrasting approaches are displayed to great advantage in proto-dystopian Detroit.

“We’ve been hired by three of the most upscale neighborhoods in Detroit to provide 24/7 security services,” Brown proudly informed me during a telephone interview. “People who are well-off are very willing to pay for Lamborghini-quality security services, which means that our profit margin allows us to provide free services to people who are poor, threatened, and desperate for the kind of help the police won’t provide.”

“Unlike the police, we don’t respond after a crime has been committed to conduct an investigation and – some of the time, at least – arrest a suspect,” Brown elaborates. “Our approach is based on deterrence and prevention. Where prevention fails, our personnel are trained in a variety of skills – both psychological and physical – to dominate aggressors without killing them.”

Police typically define their role in terms of what they are permitted to do to people, rather than what they are required to do for them. Brown’s organization does exactly the reverse, even when dealing with suspected criminals.

To illustrate, Brown refers to an incident from a security patrol in which he encountered a black teenager “who was walking in a neighborhood at about 3:00 a.m. dressed in a black hooded sweatshirt, doing what is sometimes called `the drift’ – it was pretty clear he was up to something.”

Rather than calling the police – who, giventheir typical four-hour response time, wouldn’t have arrived soon enough to be of any help, as if helping were part of their job description – Brown took action that was both preventive and non-aggressive.

“I told him, `There are criminals here who might rob you, so you’ll get free bodyguard service anytime you’re in the neighborhood,’” Brown related to me. “I also asked for his name and personal information for a `Good person file’ that would clear him with the cops next time he decided to go jogging in a black hoodie a three in the morning. He didn’t have to give me that information, of course, but he told me what I needed to know – and we’ve never seen him there again.”

Brown and his associates take a similar approach to dealing with minor problems that usually result in police citations that clog court dockets and blight the lives of harmless people.

“When we see someone who is drunk or otherwise intoxicated, we offer to take their keys and call their families to get them home,” he reports. “This way we keep them safe from harm – and, just as importantly, protect them from prosecution. Again, everything we do is the opposite of what the police do. If you have a joint in your pocket, the cops will be all over you – but if you’re facing actual danger, they’re nowhere to be found, and aren’t required to help you even if they show up.”

That contrast is most visible in confrontations with potentially dangerous people. Brown’s company receives referrals to provide security for people who face active threats, such as victims of domestic violence. One representative case involved a young mother whose daughter had been abducted by a violent, abusive father with a lengthy criminal history. The child was rescued and reunited with her mother without guns being drawn or anybody being hurt.

For reasons of accountability and what the private sector calls “quality assurance,” Brown and his colleagues recorded that operation, as they document nearly everything else they do. However, they weren’t playing to the cameras. The same can’t be said of the Detroit PD SWAT team that stormed the home of 7-year-old Aiyana Stanley-Jones at midnight in May 2010 while filming the assault for a cable television program.

Officer Joseph Weekley, who burst through the door carrying a ballistic shield and an MP5 submachine gun, shot and killed Aiyana, who had been sleeping on the living room couch. By the time she was killed terrified little girl had already been burned by a flash-bang grenade that had been hurled into the living room.

The home was surrounded with toys and other indicia that children resided therein, and neighbors had pleaded with the police not to carry out the blitzkrieg. The cops did arrest a suspect in a fatal shooting, but he resided in a different section of the same building. In any case, the suspect could have been taken into custody without a telegenic paramilitary assault – if the safety of those on the receiving end of police violence had been factored into the SWAT team’s calculations.

Owing in no small measure to public outrage, Weekly has been charged with involuntary manslaughter and careless discharge of a weapon resulting in death. A jury deadlocked on the charges in July 2013. Weekley now faces a second trial that will produce a conviction only if the prosecution can overcome the presumption that the officer’s use of deadly force was reasonable. This is a function of the entirely spurious, and endlessly destructive, doctrine of “qualified immunity,” which protects police officers from personal liability when their actions result in unjustified harm to the persons or property of innocent people.

Lost Angel: Aiyana.

The rationale behind qualified immunity is the belief that absent such protection competent and talented people wouldn’t enlist as peace officers. In practice, however, qualified immunity merely emboldens incompetent and vicious police officers.

“Police should be subject to exactly the same laws and liabilities that the rest of us face,” contends Brown. “If we don’t have perfect reciprocity, then police should be held to a higher standard of accountability than the rest of the citizenry. If they commit criminal acts that result in injury or death, police should do double the time that a `civilian’ would face, because they’re supposed to be professionals.”

As private sector professionals, Brown observes, “we have double accountability – first to our clients who pay us, and then to the criminal justice system and civil courts if we do something wrong. And because the police usually see us as competitors, they are very eager to come after us if we screw up. But in all the years we’ve been working, we’ve had no deaths or injuries – either to our clients or to our own people – no criminal charges, and no lawsuits.”

Not only do Brown and his associates operate without the benefit of “qualified immunity,” they are required to expose themselves to physical risk on behalf of their clients – something that police are trained to avoid.

“For police officers, going home at the end of the shift is the highest priority,” Brown observes. “For us it can’t be. When we’re hired to protect a client, his home, his business, his family, we’ve made a choice to put the client’s safety above our own, and to make sure that he or she gets home safely at the end of the day.”

When people seek help from the police, Brown points out, they’re inviting intervention by someone who has no enforceable duty to protect them, but will be rewarded for injuring them or needlessly complicating their lives.

“Let’s examine this logically,” Brown begins. “What is this human being – the police officer – going to get out of becoming involved in your troubles? Will be he rewarded for helping you to solve them, especially if this involves a personal risk? Would solving your problem be worth getting injured or killed?”

“We’re dealing with a basic question of human motivations,” Brown continues. “Police are not required to intervene to protect you – there is a very long list of judicial precedents proving this. They’re actually rewarded for not intervening. Here, once again, I emphasize that Threat Management is not comparable to the police. We follow exactly the opposite approach. People don’t have to work with Threat Management, but if they choose to, that’s what we expect of them.”

Some critics of TMC and other private security firms insist that their personnel cannot match the qualifications and experience of government-employed police officers. That objection wildly overestimates the professional standards that must be met in order for an individual to become a government-licensed purveyor of privileged violence.

“An individual can become a police officer in six months,” Brown points out. “Can you become a doctor or an EMT in six months? Is there any other profession in which employees can become `qualified’ to make life-and-death decisions on behalf of other people after just a few months of training?”

By way of supplementing Brown’s point: In Arkansas, an applicant can become a police officer in a day, and work in that capacity for a year, without professional certification of any kind. However, to become a licensed practicing cosmetologist, an applicant must pass a state board examination and complete 2,000 hours of specialized training. For an investment of 600 hours an applicant can qualify to work as a manicurist or instructor.

While Arkansas strictly regulates those who cut hair or paint nails in private, voluntary transactions, it imposes no training or licensing standards whatsoever on armed people who claim the authority to inflict lethal violence on others. This is not to concede that there is any way one human being can become legitimately “qualified” to commit aggressive violence against another.

“Law enforcement attracts a certain personality type that is prone to narcissism and aggression,” Brown asserts, speaking from decades of experience. “People like that get weeded out from our program very early. We protect innocent people from predators, and we can’t carry out that mission by hiring people who are predatory themselves. Our people receive extensive training in firearms and unarmed combat techniques, but they’re also taught to look at all humans as members of the same family. The question we want them to ask themselves is – in what circumstances would you shoot, or otherwise harm a member of your family? They’re trained to apply that standard in all situations involving a potential use of force. People who can’t think that way aren’t going to fit in with our program.”

Brown emphatically agrees that the phenomenon called “police militarization” is a huge and growing menace, but insists that the core problem is “not the military hardware, or the other trappings of militarization, but the system itself. Police agencies attract the wrong kind of people and then tell them, `You’re like God’ – they get to impose their will on others and use lethal force at their discretion. And when someone who is really golden shows up – that is, an ethical, conscientious person who wants to protect the public – they get redirected into a role that will minimize their influence for good by people who are worried about their own job security.”

“Ideally, the best approach would be to abolish the current system and start over,” Brown concludes. “But the very least we should demand would be total equity and complete accountability – which would mean, as a starting point, doing away with this idea of `qualified immunity.’ Police are citizens, and they should be governed by the same laws that apply to all citizens. No exceptions, no special protections.”

Several studies have shown that there are between three and four times as many private peace officers – such as security guards, armored truck drivers, and private investigators – as sworn law enforcement officers in the United States. That fact demonstrates that the security market is completely unserved by government law enforcement agencies. This shouldn’t be surprising, since – as I have observed before – police agencies serve the interests of those who plunder private property, and thus can’t be expected to protect it.

Police personnel practice aggressive violence from the shelter of “qualified immunity.” The absence of such protection doesn’t deter talented, motivated people such as Dale Brown and his associates – and others providing similar services in Houston, Oakland, and elsewhere — from seeking employment as private security officers who actually accept personal risk to protect property.

Why not abolish qualified immunity for all security personnel? Critics of that proposal might protest that this would undermine the state’s monopoly on the provision of “security” by requiring its employees to compete on equal terms with the private sector. Which is precisely the point.


September 11, 2014

The Cryer Memo/ The illegality of the personal income tax, by T.K. Cryer, J.D. [nc]

The Cryer Memo:

Researched and Written by Tommy K. Cryer, J.D.
Filed in support of his Motion to Dismiss
Tax Evasion Charges Filed Against Him
United States v. Tommy K. Cryer
No. 06-50164-01
Western District of Louisiana
Shreveport Division
Tax Laws Subject to Strict Construction 8
The Internal Revenue Code does not “Plainly and Clearly Lay” any liability for an income tax on defendant. 11
The Internal Revenue Code does not “Plainly and Clearly Lay” a tax on any of defendant’s revenues. 21
The Federal Taxing Power 41
The income tax is an excise 61
Defendant’s activities and revenues are exempt from federal excise taxation as being outside the taxing authority of the federal government 68
Defendant and his revenues are exempt from federal excise taxation because they are within the sole and exclusive jurisdiction of the State 70
Defendant’s revenues are exempt from federal excise taxation because the activity is the exercise of a fundamental, constitutionally protected right, and, therefore, outside the taxing authority of the federal government 74
Defendant’s revenues do not constitute “income within the meaning of the Sixteenth Amendment” and the Constitution 88

Tommy K. Cryer
Attorney at Law
4348 Youree Dr.
Shreveport, LA 71105
Ph. (318) 865-3392
Born Lake Charles, LA, September 11, 1949
Married (1) Carolyn Fisher, dec’d.
(2) Bettye “Dee Dee” Woodard
Sam Houston High School, Moss Bluff, LA, 1967, third in class, American Heritage Award, Continental Oil Scholarship, T. H. Harris Scholarship, JFK Memorial Scholarship, Civitan Award; Activities: Football letterman, FBLA, Beta Club, Drama Club founder and Literary Rally.
McNeese State University, Lake Charles, LA, B.A. 1970 (Psychology, Sociology, Military Science & Pre-Law), 3.4 GPA (Note: Multi-major degree in three years)
LSU Law School, Baton Rouge, LA, J.D. 1973, Honor Graduate, Order of the Coif
Inducted LSU Law School Hall of Fame, 1987.
Honorably Discharged, Captain, U. S. Army, Adjutant General Corps.
Louisiana Constitutional Convention, 1973, Special Advisor and Draftsman (Declaration (Bill) of Rights, Municipalities)
Hargrove, Guyton, Ramey & Barlow, Shreveport, LA, 1973-1975; Oil & Gas, Oil & Gas Transmission (including extensive work in expropriation), Corporate, Estate, Estate Planning, Trusts, Personal Injury and others.
Private Practice, Shreveport, LA, 1975 – Practice has included virtually every aspect of the law, both criminal and civil, with clientele consisting of numerous individuals, families and 3
businesses (including many third generation clients) whose varied needs have provided experience and expertise across an extremely broad spectrum.
Litigation in all courts, including pro hoc vice appointments to try cases in New York, California and Texas.
Extensive trial experience, bench and jury, and appellate experience including Louisiana Supreme Court, in which have been privileged to successfully advocate numerous cases forging new law (two of which were significant enough that the legislature overturned them within one year).
Civic Activities:
Shreveport Jaycees (exhausted rooster), Board of Directors, Legal Counsel, Chaired numerous projects
Caddo Heights United Methodist Church, Board of Trustees 1974-1980
Shreveport Optimist Club, Board of Directors
Past Master, W. H. Booth Lodge #380, F & AM
Past Master, First Masonic District Lodge
Louisiana Grand Lodge, Law & Jurisprudence Committee; Board of Charities and Benevolences; Education Committee; Certified Instructor; Lecturer at numerous Grand Master’s Seminars across the state
Scottish Rite Bodies, Shreveport Valley, 32°
El Karubah Shrine, Shreveport, LA
Past President, Shreveport High Twelve Club
Chairman, Shreveport Republican PAC, 1991-3, Delegate 1992 State Republican Convention; oversaw and consulted for eleven campaigns, left office 11 and 0. (no longer active in politics)
Personal Interests:
Study of History and Constitutional Law
Hunting and Fishing
Licensed Pilot, Multi-engine Land

On October 25, 2006, the government filed herein an indictment charging defendant, TOMMY K. CRYER, hereinafter “Cryer”, with two counts of tax evasion, alleging that during the years 2000 and 2001 Cryer had received taxable income but had knowingly and willfully failed to timely file tax returns for said years and that, as an “affirmative act” of evasion Cryer had failed to file tax returns for the Tommy K. Cryer Trust, which, the indictment claims, had received taxable income, thereby (presumably) concealing income and misleading the Internal Revenue Service, hereinafter IRS, into believing that Cryer had no income for the years 2000 and 2001, all in violation of 26 U.S.C. § 7201.
Defendant now files this motion pursuant to Rule 12(b) to dismiss both counts of the indictment, with prejudice, on the basis that as a matter of law revenues received by him are not taxed or taxable under the provisions of the Income Tax laws and regulations thereunder promulgated, nor are any revenues received by him within the powers of the federal government to tax and that the revenues received by him are exempt from taxation by excise under the Constitution of the United States and that, therefore, an essential element of the charges, a “tax due and owing”, is absent in this case.
There are three essential elements to the crime of tax evasion, namely (1) willfulness; (2) existence of a tax deficiency; and (3) an affirmative act constituting an evasion or attempted evasion of the tax. Sansone v. United States, 380 U.S. 343, at 351, 85 S.Ct. 1004, at 1010 (1965); United States v. Bishop, 264 F.3d 535 (5th Cir. 2001); United States v. Dack, 747 F.2d 1172, at 1174 (7th Cir. 1984); and United States v. Mal, 942 F.2d 682, at 687 (9th Cir. 1991); United States v.Silkman, 156 F.3d 833 (8th Cir. 1998). See also Lawn v. United States, 355 U.S. 339, at 361, 78 S.Ct. 311 (1958). Mr. Cryer strenuously denies all three elements, but the absence of any one element constitutes a defense and is fatal to the charge.
Reserving all rights and objections to the indictment previously raised, it is respectfully submitted that there is, as a matter of law, no tax deficiency due and owing by defendant.
Tax laws are clearly in derogation of personal rights and property interests and are, therefore, subject to strict construction, and any ambiguity must be resolved against imposition of the tax. In Billings v. U.S., 232 U.S. 261, 34 S.Ct. 421 (1914), the Supreme Court clearly acknowledged this basic and long-standing rule of statutory construction:
“Tax statutes . . . should be strictly construed, and, if any ambiguity be found to exist, it must be resolved in favor of the citizen. Eidman v. Martinez, 184 U.S. 578, 583; United States v. Wigglesworth, 2 Story, 369, 374; Mutual Benefit Life Ins. Co. v. Herold, 198 F. 199, 201, aff’d 201 F. 918; Parkview Bldg. Assn. v. Herold, 203 F. 876, 880; Mutual Trust Co. v. Miller, 177 N.Y. 51, 57.”
(Id at p. 265, emphasis added)

Again, in United States v. Merriam, 263 U.S. 179, 44 S.Ct. 69 (1923), the Supreme Court clearly stated at pp. 187-88:
“On behalf of the Government it is urged that taxation is a practical matter and concerns itself with the substance of the thing upon which the tax is imposed rather than with legal forms or expressions. But in statutes levying taxes the literal meaning of the words employed is most important, for such statutes are not to be extended by implication beyond the clear import of the language used. If the words are doubtful, the doubt must be resolved against the Government and in favor of the taxpayer. Gould v. Gould, 245 U.S. 151, 153.” (emphasis added)
This rule of strict construction against the taxing authority was reiterated in Tandy Leather Company v. United States, 347 F.2d 693 (5th Cir. 1965), where Judge Hutcheson of our 5th Circuit eloquently and unequivocally proclaimed at p. 694-5:
“. . . In ruling as he did, that the taxpayer had the obligation to show that sales of the articles in suit were not subject to the excise taxes collected, the district judge was misled by the erroneous contention of the tax collector into misstating the rule of proof in a tax case. This is: that the burden in such a case is always on the collector to show, in justification of his levy and collection of an excise tax, that the statute plainly and clearly lays the tax; that, in short, the fundamental rule is that taxes to be collectible must be clearly laid.

“The Government’s claim and the judge’s ruling come down in effect to the proposition that the state of construction of appellants’ kits had reached such an advanced level that the tax levied on the finished products could be collected on their sale, though none had been clearly laid thereon by statute. Shades of Pym and John Hampden, of the Boston tea party, and of Patrick Henry and the Virginians! There is no warrant in law for such a holding. Gould v. Gould, 245 U.S. 151, at p. 153, 38 S.Ct. 53, 62 L.Ed. 211. In 51 American Jurisprudence, “Taxation”, Sec. 316, “Strict or Liberal Construction”, supported by a great wealth of authority, it is said:
‘Although it is sometimes broadly stated either that tax laws are to be strictly construed or, on the other hand, that such enactments are to be liberally construed, this apparent conflict of opinion can be reconciled if it is borne in mind that the correct rule appears to be that where the intent of meaning of tax statutes, or statutes levying taxes, is doubtful, they are, unless a contrary legislative intention appears, to be construed most strongly against the government and in favor of the taxpayer or citizen. Any doubts as to their meaning are to be resolved against the taxing authority and in favor of the taxpayer. * * *’

“The judgment was wrong. It is, therefore, reversed and the cause is remanded with directions to enter judgment for plaintiffs and for further and not inconsistent proceedings.” (emphasis is the Court’s) See also: Gould v. Gould, 245 U.S. 151, 38 S.Ct. 53, 153 (1917); Royal Caribbean Cruises v. United States, 108 F.3d 290 (11th Cir. 1997); B & M Company v. United States, 452 F.2d 986 (5th Cir. 1971); Kocurek v. United States, 456 F. Supp. 740 (1978); Norton Manufacturing Corporation v. United States, 288 F. Supp. 829 (1968); Grays Harbor Chair and Manufacturing Company v. United States, 265 F. Supp. 254 (1967); Russell v. United States, 260 F. Supp. 493 (1966).
Thus, as we enter into the labyrinth of the Internal Revenue Code and its related regulations, we must do so mindful of the hornbook rule that tax laws are strictly construed and that when the letter of the law is subject to more than one interpretation, it must be construed against the imposition of the tax, the rule of interpretation of taxes being:
“that the burden in such a case is always on the collector to show, in justification of his levy and collection of an excise tax, that the statute plainly and clearly lays the tax; that, in short, the fundamental rule is that taxes to be collectible must be clearly laid.” Tandy Leather Company, supra, at 694. (emphasis added)


The Internal Revenue Code does not “Plainly and Clearly Lay” any liability for an income tax on defendant.
The Income Tax Law, Subtitle A of Title 26, United States Code, imposes a tax on the taxable income of certain individuals in § 1:
“26 U.S.C. § 1. Tax Imposed.
“(a) Married individuals filing joint returns and surviving spouses
“There is hereby imposed on the taxable income of —
“(1) every married individual (as defined in section 7703) who makes a single return jointly with his spouse under section 6013, and
“(2) every surviving spouse (as defined in section 2(a)), a tax determined in accordance with the following table:
. . .
“(b) Heads of households
“There is hereby imposed on the taxable income of every head of a household (as defined in section 2(b)) a tax determined in accordance with the following table:
. . .
“(c) Unmarried individuals (other than surviving spouses and heads
of households) “There is hereby imposed on the taxable income of every individual (other than a surviving spouse as defined in section 2(a) or the head of a household as defined in section 2(b)) who is not a married individual (as defined in section 7703) a tax determined in accordance with the following table:
. . .
“(d) Married individuals filing separate returns
“There is hereby imposed on the taxable income of every married individual (as defined in section 7703) who does not make a single return jointly with his spouse under section 6013, a tax determined in accordance with the following table: . . .”
(emphasis added)

but this section does not designate anyone as liable for the payment of the tax.
It should be noted at this point that titles and headings, such as “Married individuals and surviving spouses filing joint returns” and “Heads of households” are not part of the law and have absolutely no legal effect. 26 U.S.C. § 7806. Therefore, the actual statute commences with “There is hereby imposed . . .” The imposition of the tax is on taxable income, only, not on any person or entity. In contrast, see 26 U.S.C. § 884, discussed more fully infra, which does impose a tax on an entity.
Subtitle A does, however, designate partners as liable for the taxes on income of a partnership, but only in their “individual” capacities (26 U.S.C. § 701) while certain partnerships are declared liable for excess recapture of credits (26 U.S.C. 704).
Foreign corporations are specifically designated as the party liable for payment of the “Branch profits tax” imposed by 26 U.S.C. § 884 (which, incidentally, does impose the tax on “any foreign corporation”).
The only other party that is identified in the income tax law as liable for the payment of any income tax is revealed in 26 U.S.C. § 1461:

“Sec. 1461. Liability for withheld tax
“Every person required to deduct and withhold any tax under this chapter is hereby made liable for such tax and is hereby indemnified against the claims and demands of any person for the amount of any payments made in accordance with the provisions of this chapter.”
(emphasis added)

“This chapter” is “Chapter 3 – Withholding Tax on Nonresident Aliens and Foreign Corporations”. Thus the liable party in this instance is anyone withholding tax on nonresident aliens and foreign corporations.
There are no other references in Subtitle A (the income tax law) to anyone being liable for the tax imposed by § 1 other than those: partners (but only in their “individual” capacity); certain large partnerships in certain excess credit situations; foreign corporations; and those withholding taxes on nonresident aliens and foreign corporations.
There is only one other party that is identified as being liable for the income tax, but to find that party we have to journey outside the realm of the income tax law to “Subtitle C – Employment Taxes”, where we find:
“Sec. 3403. Liability for tax
“The employer shall be liable for the payment of the tax required to be deducted and withheld under this chapter [“Subtitle C – Employment Taxes; Chapter 24 – Collection of Income Tax at Source on Wages”], and shall not be liable to any person for the amount of any such payment.” (emphasis and [bracketed material] added)
Thus, the only persons being assigned any liability for the income tax imposed by § 1 are those five instances — partners, certain large partnerships, foreign corporations, withholders of taxes on nonresident aliens and foreign corporations and those employers required by Chapter 24 of Subtitle C to withhold taxes on employees.
The absence, or near absence, of a statutory provision specifying exactly who is liable for a tax imposed is not customary. 26 U.S.C. §§ 2032A and 2056A specifically state who is liable for the Estate Tax; 26 U.S.C. § 3102(b) specifically states who is liable for the FICA tax;: 26 U.S.C. § 3202 specifically states who is liable for the Railroad Retirement Tax; 26 U.S.C. § 3505 specifically imposes liability for Employment Taxes; 26 U.S.C. §§ 4002 and 4003 specify not only who is primarily liable, but who is secondarily liable for the Luxury Passenger Automobile Excise Tax. See also: 26 U.S.C. §§ 4051 and 4052 (Heavy Trucks and Trailers Excise Tax); 26 U.S.C. § 4071 (Tire Manufacture Excise Tax); 26 U.S.C. § 4219 (Manufacturers Excise Tax); 26 U.S.C. § 4401 (Tax on Wagers); 26 U.S.C. § 4411 (Wagering Occupational Tax); 26 U.S.C. § 4483 (Vehicle Use Tax); 26 U.S.C. § 4611 (Tax on Petroleum); 26 U.S.C. § 4662 (Tax on Chemicals); 26 U.S.C. § 4972 (Tax on Contributions to Qualified Employer Pension Plans); 26 U.S.C. § 4980B (Excise Tax on Failure to Satisfy Continuation Coverage Requirements of Group Health Plans); 26 U.S.C. § 4980D (Excise Tax on Failure to Meet Certain Group Health Plan Requirements); 26 U.S.C. § 4980F (Excise Tax on Failure of Applicable Plans Reducing Benefit Accruals to Satisfy Notice Requirements); 26 U.S.C. § 5005 (Gallonage Tax on Distilled Spirits); 26 U.S.C. § 5043 (Gallonage Tax on Wines); 26 U.S.C. § 5232 (Storage Tax on Imported Distilled Spirits); 26 U.S.C. § 5364 (Tax on Wine Imported in Bulk); 26 U.S.C. § 5418 (Tax on Beer Imported in Bulk); 26 U.S.C. § 5703 (Excise Tax on Manufacture of Tobacco Products); and 26 U.S.C. § 5751 (Tax on Purchase, Receipt, Possession or Sale of Tobacco Products), to name a few. Considering the “standard in the drafting of taxation laws industry”, particularly in view of the requirement of strict construction, the limitation of liability to those five instances cannot be assumed to have been an oversight. In this instance the only ones liable are those specifically named as liable, just as in any other tax provision.
In United States v. Calamaro, 354 U.S. 351, 77 S.Ct. 1138 (1957), the Supreme Court reviewed the conviction of a “pick-up man” in a numbers game operation. Calamaro had been convicted of failure to pay an occupational tax, imposed not only on persons who are subject to the excise tax on being “engaged in the business” of wagering, but also on those who are “engaged in receiving wagers” on behalf of one subject to the excise tax.
Although the “pick-up man”, Calamaro, was the person who actually received the money from the players, handed out the betting slips to the players and was acting on behalf of the “banker”, the Supreme Court held that the he was not one who “engaged in receiving wagers” because “receiving wagers” meant accepting or entering into the wager, not receiving the money for the wager. See also Griffin v. United States, 588 F.2d 521 (5th Cir. 1979); Fine v. United States, 206 F.Supp. 520 (Colo. 1962); Drake v. United States, 355 F.Supp. 710 (ED Mo. 1973); and United States v. Mobil Corp, 543 F. Supp. 507 (ND Tex. 1981) (26 U.S.C. 6001 and 26 CFR 31.6001 stating records “shall at all times be available for inspection” by revenue officers did not permit IRS blanket access, without warrant or summons, to browse through employee W-4’s).
In Calamaro, the government cited a parallel regulation that more clearly included the “pick-up” man as one who “engaged in receiving wagers”, which the Supreme Court effortlessly dismissed: “Finally, the Government points to the fact that the Treasury Regulations relating to the statute purport to include the pick-up man among those subject to the § 3290 tax, and argues (a) that this constitutes an administrative interpretation to which we should give weight in construing the statute, particularly because (b) section 3290 was carried over in haec verba into § 4411 of the Internal Revenue Code of 1954. We find neither argument persuasive. In light of the above discussion, we cannot but regard this Treasury Regulation as no more than an attempted addition to the statute of something which is not there. As such the regulation can furnish no sustenance to the statute. Koshland v. Helvering, 298 U.S. 441, 446-447. Nor is the Government helped by its argument as to the 1954 Code. The regulation had been in effect for only three years, and there is nothing to indicate that it was ever called to the attention of Congress. The re-enactment of § 3290 in the 1954 Code was not accompanied by any congressional discussion which throws light on its intended scope. In such circumstances we consider the 1954 re- enactment to be without significance. Commissioner v. Glenshaw Glass Co., 348 U.S. 426, 431. Calamaro, supra, at 358-9 (emphasis added)

See also, Water Quality Ass’n v. United States, 795 F.2d 1303 (7th Cir. 1986), where, citing and quoting Calamaro, the court added at p. 1309: “It is a basic principle of statutory construction that courts have no right first to determine the legislative intent of a statute and then, under the guise of its interpretation, proceed to either add words to or eliminate other words from the statute’s language. DeSoto Securities Co. v. Commissioner, 235 F.2d 409, 411 (7th Cir. 1956); see also 2A Sutherland Statutory Construction § 47.38 (4th ed. 1984). Similarly, the Secretary has no power to change the language of the revenue statutes because he thinks Congress may have overlooked something.” (emphasis added)
There is no dispute, nor does the government otherwise contend, that defendant, Mr. Cryer, is not a partner in any partnership, is not a large partnership, nor is he a foreign corporation. Mr. Cryer is not required to withhold any taxes on a nonresident alien nor on any foreign corporation, nor is he required by Chapter 24 of Subtitle C to withhold taxes on any fees he receives. Accordingly, the only way the income tax law could be interpreted as imposing any liability for income tax upon Mr. Cryer is by inference or implication. “But in statutes levying taxes the literal meaning of the words employed is most important, for such statutes are not to be extended by implication beyond the clear import of the language used. If the words are doubtful, the doubt must be resolved against the Government and in favor of the taxpayer.” Merriam, supra.
If the provisions of the Internal Revenue Code, even considering those outside the Income Tax Law (Subtitle A) fail to “plainly and clearly” lay liability for the tax upon Mr. Cryer, then they cannot be given that effect through strained interpretations, implication or inference. Nevertheless, the government claims that Mr. Cryer owes income taxes “though none had been clearly laid thereon by statute. Shades of Pym and John Hampden, of the Boston tea party, and of Patrick Henry and the Virginians! There is no warrant in law for such a holding.” Tandy Leather, supra.
It is, therefore, respectfully submitted that there is no statute that renders Mr. Cryer liable for an income tax, and, therefore, he is not so liable. Absent a lawful liability for taxes, the essential element, liability for a tax deficiency, is lacking in this case as a matter of law, and, accordingly, it is respectfully submitted that both counts of the indictment should be dismissed, with prejudice. 20
The Internal Revenue Code does not “Plainly and Clearly Lay” a tax on any of defendant’s revenues.
The same rigid rule of strict construction laid down by the Supreme Court in Billings, Merriam, Gould and Calamaro, supra, applies to the question of what is taxed as well as who is made liable for the tax.
Our second foray into the labyrinth begins as the first, with § 1, which imposes a tax “on taxable income.” The first order of business is to determine the definition of the terms in order to define the scope of the tax. However, the first observation is stunning. Although the first 1,564 sections of the Internal Revenue Code are devoted to the Income Tax, the term “income”, the very subject of the tax, is not defined. Nor is the term defined in any of the related regulations promulgated by the Treasury Department. Nor is the term “taxable” defined in the Code or regulations.
The closest thing we have to definitions of “income” and “taxable” are all qualified, “hybrid”, definitions, income linked with another term. Thus when a body of statutory law fails to provide a definition of a term, we must use its customary meaning. Turning to dictionaries, we find: 21
Webster’s Dictionary:
Income. “A gain or recurrent benefit usually measured in money that derives from capital or labor”
(emphasis added)
Black’s Law Dictionary:
Income. “The return in money from one’s business, labor or capital invested; gains, profits or private revenue.”
(emphasis added)
and, since federal law provides no definition, we look to other laws:
Louisiana Civil Code:
“Art. 551. Kinds of fruits
“Fruits are things that are produced by or derived from another thing without diminution of its substance.
“There are two kinds of fruits; natural fruits and civil fruits.
“Natural fruits are products of the earth or of animals.
“Civil fruits are revenues derived from a thing by operation of law or by reason of a juridical act, such as rentals, interest, and certain corporate distributions.” (emphasis added) 22

In the Code we find hybrid definitions for “ordinary income” and “gross income”:
“26 U.S.C. § 64. Ordinary Income Defined.
“For purposes of this subtitle, the term “ordinary income” includes any gain from the sale or exchange of property which is neither a capital asset nor property described in section 1231(b). Any gain from the sale or exchange of property which is treated or considered, under other provisions of this subtitle, as “ordinary income” shall be treated as gain from the sale or exchange of property which is neither a capital asset nor property described in section 1231(b).”


“26 U.S.C. § 61. Gross Income Defined.
“General Definition — Except as otherwise provided in this subtitle, gross income means all income [income means income] from whatever source derived, including (but not limited to) the following items:
(1) Compensation for services, including fees, commissions, fringe benefits, and similar items; . . .” (emphasis and [bracketed material] added)

While the significance or import of the phrase “from whatever source derived” will be more fully discussed below, it is important at this point to at least note that the phrase “from whatever source derived” is tracked from the Sixteenth Amendment, which provided that an income tax could not be classified as a direct tax by virtue of the source of that income. Brushaber v. Union Pac. R.R., 240 U.S. 1, 36 S.Ct. 236 (1916); Tyee Realty Co. v. Anderson, 240 U.S. 115, 36 S.Ct. 281 (1916); Stanton v. Baltic Mining Co., 240 U.S. 103, 36 S.Ct. 278 (1916) This Amendment was adopted in order to overrule Pollock v. Farmers’ Loan and T. Co., 157 U.S. 537, 15 S.Ct. 673 (1895), which held that a tax on income derived from property burdened the property and was, therefore, a direct property tax subject to the requirement of apportionment. Therefore, the reference to “from whatever source derived” is not an indication that Congress may tax any income from any source, but is only an indication that an income tax (and a tax only on income) is not to be classified as a direct tax, subject to the requirement of apportionment, by virtue of the source of the income. This is not to say that the tax is to be applied and charged against all income without regard to its source.

The 16th Amendment did not expand the scope of Congress’ power to tax (Brushaber, Stanton, Tyee, supra et al.), thus although the source of income is no longer a factor in determining whether the tax is direct or indirect, neither the jurisdiction of the federal government nor its taxing authority was enlarged to include authority to tax activities and privileges that it could not have taxed before the 16th Amendment. Source of income, then, is still a factor in determining the scope of the taxing authority of the federal government. (See discussions of Bailey v. Drexel Furniture Co., 259 U.S. 20, 36 S.Ct. 236 (1916); McCulloch v. Maryland, 17 U.S. 316 (1819); and others, infra) As we will see, those factors were also taken into consideration in the determination of taxable income in the Code and regulations.
The obvious common usage for the term “taxable”, although not readily found in Websters, is “able to be taxed”, i.e., within the authority of a government to tax.
And finally, we have the hybrid definition of “taxable income”:

26 U.S.C. § 63. Taxable Income Defined.
(a) In general
Except as provided in subsection (b), for purposes of this subtitle, the term “taxable income” means gross income minus the deductions allowed by this chapter (other than the standard deduction).

Thus, when we combine the definitions we have, now, we have:
Income = gains, profits, from capital, labor or both
Taxable = within the authority of the government to tax

Thus, “taxable income” would be all gain [from activities that are within the authority of the federal government to tax] derived from capital, from labor, or from both combined from whatever source [that is within the authority of the federal government to tax] derived, and including certain enumerated items such as gains, or profits, from compensation for services, minus the deductions allowed by this chapter (other than the standard deduction).
“Whatever” does not identify those sources that are within the authority of the federal government to tax, but in checking the index under “Income Tax” we find “sources” and we also find “within the U.S.” In order to determine what income is taxable the index of the Code designates the starting point as 26 U.S.C. § 861:
26 U.S.C. § 861. Income from Sources within the United States.
(a) Gross income from sources within United States
The following items of gross income shall be treated as income from sources within the United States:
[This section goes on to list items of gross income, but does not define source nor does it specify any sources. Following the statutory text, however, we are referred to the Code of Federal Regulations:] “CODE OF FEDERAL REGULATIONS
“General regulations, see 26 CFR Sec. 1.861-1.
“. . . .
“Computation of taxable income from sources within U.S. and from other sources and activities, see 26 CFR Sec. 1.861-8.” (emphasis and [bracketed material] added)

So, now our journey into the labyrinth continues into the Code of Federal Regulations:
“26 C.F.R. § 1.861-1 Income from sources within the United States.
“(a) Categories of income.
Part I (section 861 and following), subchapter N, chapter 1 of the Code, and the regulations thereunder determine the sources of income for purposes of the income tax. These sections explicitly allocate certain important sources of income to the United States or to areas outside the United States, as the case may be; and, with respect to the remaining income (particularly that derived partly from sources within and partly from sources without the United States), authorize the Secretary or his delegate to determine the income derived from sources within the United States, either by rules of separate allocation or by processes or formulas of general apportionment. The statute provides for the following three categories of income:
“(1) Within the United States. The gross income from sources within the United States, consisting of the items of gross income specified in section 861(a) plus the items of gross income allocated or apportioned 27 to such sources in accordance with section 863(a). See 26 C.F.R. §§ 1.861-2 to 1.861-7, inclusive, and 26 C.F.R. § 1.863-1. The taxable income from sources within the United States, in the case of such income, shall be determined by deducting therefrom, in accordance with sections 861(b) and 863(a), the expenses, losses, and other deductions properly apportioned or allocated thereto and a ratable part of any other expenses, losses, or deductions which cannot definitely be allocated to some item or class of gross income. See 26 C.F.R. §§ 1.861-8 and 1.863-1.” (emphasis added)

There are two distinct provisions contained in this regulation that warrant our attention. First, the section informs us that §§ 861 et seq. are to be used to determine taxable income, but, equally significant, is, second, that besides the deductions of expenses, losses and other deductions referred to in 26 U.S.C. § 63 (taxable income = gross income less deductions), we are now made aware that there are either items or sources of income that CANNOT be (as opposed to “are not”) included in gross income to begin with. The inescapable conclusion from this revelation is that not all income is includable in gross income, reaffirming our previous discussion of “from whatever source derived” as being reflective of the 16th Amendment’s prohibition of considering the source in classifying the income tax as anything other than an excise, rather than defining the scope of the tax to include “each and every” source. 28
Now, in order to determine which sources can be considered in determining taxable income and, conversely, which sources cannot be included in gross income to begin with, § 1.861-1(a)(1) directs us to § 1.861-8:
“26 C.F.R. § 1.861-8 Computation of taxable income from sources within the United States and from other sources and activities.
“(a)In general — (1) Scope. Sections 861(b) and 863(a) state in general terms how to determine taxable income of a taxpayer from sources within the United States after gross income from sources within the United States has been determined.
[This again confirms that gross income from within the U.S. “whatever” sources derived is not necessarily subject to federal taxation. “Taxable” income, therefore, must be something less than all income from within from “whatever” source. Therefore, some sources within the United States are taxable and some sources within the United States are NOT taxable.]
“Sections 862(b) and 863(a) state in general terms how to determine taxable income of a taxpayer from sources without the United States after gross income from sources without the United States has been determined. This section provides specific guidance for applying the cited Code sections by prescribing rules for the allocation and apportionment of expenses, losses, and other deductions (referred to collectively in this section as deductions”) of the taxpayer. The rules contained in this section apply in determining taxable income of the taxpayer from specific sources and activities under other sections of the Code, referred to in this section as operative sections. See paragraph (f)(1) of this section for a list and description of operative sections.” (emphasis and [bracketed material] added)

So, what does paragraph (f)(1) of this section identify as those specific sources and activities that determine whether income is taxable?
“(f) Miscellaneous matters —
“(1) Operative sections. The operative sections of the Code which require the determination of taxable income of the taxpayer from specific sources or activities and which give rise to statutory groupings to which this section is applicable include the sections described below.
“(i) Overall limitation to the foreign tax credit.
“(ii) [Reserved]
“(iii) DISC and FSC taxable income.
“(iv) Effectively connected taxable income. Nonresident alien individuals and foreign corporations engaged in trade or business within the United States….
“(v) Foreign base company income.
“(vi) Other operative sections. The rules provided in this section also apply in determining – –
“(A) The amount of foreign source items of tax preference under section 58(g) determined for purposes of the minimum tax;
“(B) The amount of foreign mineral income under section 901(e);
“(C) [Reserved]
“(D) The amount of foreign oil and gas extraction income and the amount of foreign oil related income under section 907;
“(E) [Reserved] [The tax base for citizens entitled to the benefits of § 931 and the § 936 tax credit of a domestic corporation which has an election in effect under §936 – – deleted by amendment]
“(F) [Reserved] [The exclusion for income from Puerto Rico for residents of Puerto Rico – – deleted by amendment]
“(G) The limitation under section 934 on the maximum reduction in income tax liability incurred to the Virgin Islands;
“(H) [Reserved] [Income derived from Guam – – deleted by amendment]
“(I) The special deduction granted to China Trade Act corporations
under section 941;
“(J) The amount of certain U.S. source income excluded from the subpart F income of a controlled foreign corporation under section 952(b);
“(K) The amount of income from the insurance of U.S. risks under section 953(b)(5) [dealing with foreign corporations];
“(L) The international boycott factor and the specifically attributable taxes and income under section 999; and
“(M) The taxable income attributable to the operation of an agreement vessel under section 607 of the Merchant Marine Act of 1936, as amended, and the Capital Construction Fund Regulations thereunder (26 CFR, part 3). See 26 CFR 3.2(b)(3).” (emphasis and [bracketed material] added)

These sources, then, are what remains after deducting those items that “cannot” “be allocated to some item or class of gross income”. 26 CFR § 1.861-1
Whence came this acknowledgement that not all income, “from whatever source derived”, is to be included in gross income?
Prior to 1954, the income tax was levied upon “net income”. Gross income was, pursuant to the preceding act, the 1939 Code, determined in accordance with the 1940 regulations, of which § 19.22(b)-1 provided:
“(b) Exclusions from gross income — The following items shall not be included in gross income and shall be exempt from taxation under this chapter:
“Sec. 19.22(b)-1. Exemptions—Exclusions from gross income—Certain items of income specified in section 22(b) are exempt from tax and may be excluded from gross income. These items, however, are exempt only to the extent and in the amount specified. No other items are exempt from gross income except (1) those items of income which are, under the Constitution, not taxable by the Federal Government; (2) those items of income which are exempt from tax on income under the provisions of any Act of Congress still in effect: and (3) the income exempted under the provisions of section 116. Since the tax is imposed on net income, the exemption referred to above is not to be confused with the deductions allowed by section 23 and other provisions of the Internal Revenue Code to be made from gross income in computing net income. As to other items not to be included in gross income, see sections 112 and 119 [the predecessor of the current 1.861-1 et seq.] . . . ”
(emphasis and [bracketed material] added)

The previous regulations for the income tax laws contained similar, if not identical, acknowledgements that not all income is Constitutionally taxable by the federal government (early versions referred to exempt income being that which is not taxable by the federal government “under fundamental law”).
The admission made in these regulations is nothing less than shocking. Gross income is defined in the 1939 Code § 22(a) as virtually everything. Code § 22(b) lists some exemptions, like tax free interest and life insurance. But then the government admits, mumbling up its sleeve, that some of those things listed in § 22(a) are also exempt because they are, “under the Constitution, not taxable by the federal government.” If some of those items are not taxable, then why include them in gross income in the first place?
Not to make light of the gravity of the matter before the Court, but the best way to illustrate the import of this revelation is to imagine a new game show: Welcome to another exciting episode of “What’s My Tax” with your host, Manny Hauls. Our contestant today is John Q. Public! Are you up there John? Well, COME ON DOWN! Now, as you can see, Johnny, we have an array of doors here, salaries, compensation for services, rents, dividends, interest, and. . .well, there are too many for us to read them all off, but you can see them.
Now, Johnny, as you can see, we’ve already marked some of those doors for you, like “life insurance” over there, “tax-free interest” back here, just to get you started, but here’s the good news: Some of these other doors are actually Constitutionally EXEMPT! That’s right, Johnny, EXEMPT! So here’s the deal: You pick one of the doors, and if that door is correct, you get an EXEMPTION!! and you get to keep the money we aren’t allowed to take. How’s that for a prize? (audience cheers)
But here’s the catch: If you choose the wrong door, Beulah the chimp will blow her horn and you get the booby prize: INTEREST and PENALTIES!! (audience goes “Aawwww”) This would be funny if it were not true.
Similarly, in the 1939 Code itself, there is a clear indication that not all income is Constitutionally taxable income, notwithstanding the 16th Amendment and its “from whatever source derived” phrase. § 115(f)(1) and (h)(2) of the 1939 Code provide:
“(f) (1) GENERAL RULE—A distribution made by a corporation to its shareholders in its stock or a right to acquire its stock shall not be treated as a dividend to the extent that it does not constitute income to the shareholder within the meaning of the Sixteenth Amendment to the Constitution.
. . .
“(h) EFFECT ON EARNINGS AND PROFITS OF DISTRIBUTION OF STOCKS—The distribution (whether before January 1, 1939, or on or after such date) to a distributee by or on behalf of a corporation of its stock or securities, of stock or securities of another corporation, or of property or money, shall not be considered a distribution of earnings or profits of any corporation . . .
“(2) if the distribution was not subject to tax in the hands of such distributee because it did not constitute income to him within the meaning of the Sixteenth Amendment to the Constitution or because exempt to him under section 115(f) of the Revenue Act of 1934, 48 Stat. 712, or a corresponding provision of a prior Revenue Act.” (emphasis added)

Thus, prior to 1954 the tax was imposed on “net income” and although the Code and the regulations did not disclose what income is beyond the ability of the federal government to tax, nor did they disclose what income is not included within the meaning of “income” in the 16th Amendment, at least it did disclose that some items or sources of income are exempt from taxation.
While the citizen seeking to understand what was expected of him would have to conduct a great deal of legal research to identify the limits of the federal taxing authority and to determine what income is and is not included within the meaning of the 16th Amendment, at least he was, to some extent, “on notice” to look for those exemptions.
The 1954 Code and the regulations promulgated thereunder, which was not considered to have made any significant substantive changes in the income tax law (and which, certainly, did not enlarge the Constitutional scope of federal taxation authority nor the Constitutional definition of “income”), primarily reordered and renumbered the old Code and regulations. The new Code, however, made two very significant “adjustments”.
First, the tax was now imposed on “taxable” income. While the term is defined in its hybrid form, “taxable income”, in § 63 (drawing our attention from the separate meanings of the words), when placed in context with the second major “adjustment”, the term “taxable” income becomes monumentally significant.
Second, except for 26 CFR 1.312-6, each and every reference to the Constitution, to fundamental law, to limitations on the federal taxing authority and to the Sixteenth Amendment’s meaning of “income” was purged, erased, banished from both the Code and the regulations.
The previous disclosures of Constitutional exemptions, exemptions under fundamental law, Constitutional limitations of federal taxing authority and the qualified scope of the word “income” within the meaning of the Sixteenth Amendment, were no longer deemed necessary. Since the imposition of the tax itself was limited by changing “net income” to “taxable” income, imposing the tax only on that income the federal government was Constitutionally entitled, able, to tax, tax-able, thereby, technically, excluding all Constitutionally exempt or excluded income from the effects of the tax. By excluding exempt and excluded income in the imposition itself, there was apparently no longer any need perceived by the government to disclose that not all income is “taxable” income.
Thus, § 861 of the Code and its parallel regulations, 26 CFR 1.861-1 et seq. are vestigial disclosures, what is left of the previous § 22(b) exemptions and § 115 qualifications of the meaning of “income”. There is, however, another vestigial remnant of those disclosures. Conducting a search of the regulations for “exempt”, we are, not surprisingly, led back to § 861, more particularly, 26 CFR 1.861-8T(d)(2)(ii) and (iii):
“(ii) Exempt income and exempt asset defined — (A) In general. For purposes of this section, the term exempt income means any income that is, in whole or in part, exempt, excluded, or eliminated for federal income tax purposes. The term exempt asset means any asset the income from which is, in whole or in part, exempt, excluded, or eliminated for federal tax purposes. [Note the absence of reference to “fundamental law”, “under the Constitution, not taxable by the federal government”, or “not income within the meaning of the Sixteenth Amendment”]
“(iii) Income that is not considered tax exempt.
“The following items are not considered to be exempt, eliminated, or excluded income and, thus, may have expenses, losses, or other deductions allocated and apportioned to them:
“(A) In the case of a foreign taxpayer (including a foreign sales corporation (FSC)) computing its effectively connected income, gross income (whether domestic or foreign source) which is not effectively connected to the conduct of a United States trade or business;
“(B) In computing the combined taxable income of a DISC or FSC [international or foreign sales corporation] and its related supplier, the gross income of a DISC or a FSC;
“(C) For all purposes under subchapter N of the Code, including the computation of combined taxable income of a possessions corporation and its affiliates under section 936(h), the gross income of a possessions corporation for which a credit is allowed under section 936(a); and
“(D) Foreign earned income as defined in section 911 and the regulations thereunder (however, the rules of Sec. 1.911-6 do not require the allocation and apportionment of certain deductions, including home mortgage interest, to foreign earned income for purposes of determining the deductions disallowed under section 911(d)(6)).” (emphasis and [bracketed material] added)

Although this provision defines exempt income, it, again and still, does not identify or refer us to what those exemptions are or upon what they are based. Instead, it tells us what is NOT exempt, leading to the reasonable supposition that any income other than that which is not exempt is, or at least may very well be, “exempt, excluded or eliminated” from federal income tax.
Congress and the Treasury Department have statutorily and through regulations, respectively, acknowledged that there are limitations upon Congress’ power to tax and that there are items and sources of income that are Constitutionally exempt from taxation by the federal government. 1939 Code and 1940 regulations, supra. The present Code and regulations acknowledge that some income CANNOT be attributed to gross income; that some income is exempt from taxation; that the current Code and regulations specify those sources that CAN be included in gross income for determination of taxable income (§ 1.861-8(f)(1)) and specify those items that are not exempt (§ 1.861-8T(d)(2)(iii)).
Remembering that tax laws must be strictly construed and that any ambiguity must be resolved against imposition of the tax, it can, therefore, only be concluded that sources of income other than those enumerated cannot be included in gross income and that items of income other than those items of income specified as not exempt, are exempt from the federal income tax. With the sole exception of those sources specifically identified as taxable and those items specifically identified as not exempt, it cannot be said that the tax has “been plainly and clearly laid” on any other sources or items of income. Billings, Merriam, Gould, Tandy Leather, supra.
There is no dispute, nor does the government otherwise contend, that Mr. Cryer has received no income, gains, from any of the taxable sources enumerated nor has he received any non-exempt items of income specified, and, therefore, that no tax has been clearly laid on the fees received by Mr. Cryer for legal services.
It is a virtual certainty that the government will argue that there is another interpretation of the Codal and regulatory provisions detailed hereinabove, “But in statutes levying taxes the literal meaning of the words employed is most important, for such statutes are not to be extended by implication beyond the clear import of the language used. If the words are doubtful, the doubt must be resolved against the Government and in favor of the taxpayer.” Merriam, supra.
If the provisions of the Internal Revenue Code, even considering those outside the Income Tax Law (Subtitle A) fail to “plainly and clearly” lay a tax upon Mr. Cryer’s revenues, then they cannot be given that effect through strained interpretations, implication or inference. Nevertheless, the government claims that Mr. Cryer owes income taxes on those revenues “though none had been clearly laid thereon by statute. Shades of Pym and John Hampden, of the Boston tea party, and of Patrick Henry and the Virginians! There is no warrant in law for such a holding.” Tandy Leather, supra.
It is, therefore, respectfully submitted that the Internal Revenue Code and regulations do not plainly and clearly impose a tax on Mr. Cryer’s revenues, and, therefore, there can be no federal income tax owed thereon. Without “plain and clear” imposition of taxes there can be no tax deficiency and that essential element, liability for a tax deficiency, is lacking in this case as a matter of law. Accordingly, it is respectfully submitted that both counts of the indictment should be dismissed, with prejudice.


The Federal Taxing Power

The Supreme Court has on countless occasions described the taxing power of the federal government as “all encompassing”, and from one standpoint it is “all encompassing”. The manner and means of exercising that “all encompassing” power of taxation are not, however, limitless. A review of the Constitutional provisions specifying those means is helpful in understanding those limitations.
Article I, § 2, cl. 3:
“Representatives and direct Taxes shall be apportioned among the several States which may be included within this Union, according to their respective Numbers… .”
Article I, § 8, cl. 1:
“The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States… .”
Article I, § 9, cl. 4:
“No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or Enumeration herein before directed to be taken… .”
To these provisions has been added:
“Amendment XVI – Status of Income Tax Clarified.
“The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.”

In these provisions are incorporated the long-standing practice and understanding that all taxes must fall into one of two classes, direct or indirect, with duties, imposts and excises being considered as indirect and taxes on property or person as direct.
The limitation on direct taxes is perfectly harmonious and parallel to the intent of the framers in restricting the powers of the new federal government, keeping it at arms length from the citizens of the “Free and Independent States.”1 The gravest concern of both the States and the People was that the federal government would seek to govern the People, whether through regulation or by taxation, a role generally regarded as the exclusive realm of the States—something neither the People nor the States were willing to tolerate or permit. Congress was permitted to tax the public, but only indirectly. Any tax on person or property had to be imposed through the States, not directly upon any citizen. The States, not Congress, would then decide through what means and from what resources the tax, more like an assessment, would be paid.
[1 An understanding of the distinction between the nature of the individual and free-standing sovereignty of the States and the restricted and conditional sovereignty conferred by the Constitution is inherent in the fact that the Declaration of Independence did not establish the independence of the “United States”, but only of the “Free and Independent States.” ]

There are no Constitutional limitations upon the subject of a direct tax, and, therefore, it can honestly be said that the taxing authority of Congress is “all encompassing.” For example, Congress could pass a one dollar tax on each foot of beach frontage, but that tax would not be imposed on citizens owning beach-front property. The total amount of the tax would be calculated and then apportioned among the States, each State receiving an assessment for its apportioned share of the total, and without regard to the fact that most States have no beach frontage.
Indirect taxation, however, was limited by its definition, which excludes the taxation of person or property from its class of taxation. This form of taxation differed in more than the question of means and manner, that distinction being that every indirect tax is voluntary upon and avoidable by the citizen. Any tax upon an activity can be avoided by choosing not to engage in the taxed activity. Thus, the citizen “accedes” or “consents” to the tax by engaging in the activity that is taxed. In this vein, a tax upon the activity of breathing, being unavoidable and not, at least reasonably, within the ability of the citizen to abstain, would not be an indirect tax. While at least in theory a breathing tax could be imposed, it would have to be considered direct and apportioned among the States.
The primary issue, then, in any act of taxation by Congress is whether the tax is indirect, in which case the tax must meet the requirement of uniformity, or direct, in which case the tax must be apportioned among the states. That issue surfaced almost immediately. In Hylton v. United States, 3 U.S. 171 (1796), the Supreme Court was required to address a challenge that a tax on carriages “for the conveyance of persons” was a direct tax on property, carriages. The Court, however, distinguished between a tax on the ownership of property and one on the consumption (since carriages wear out) of the property, i.e., an avoidable activity, and upheld the tax as an excise, not requiring apportionment.
In 1861 the first tax on income was enacted. It imposed a tax on all income derived from property and was generally considered and implemented as, although no formal challenge was ruled upon, an indirect excise tax on the use of the property for gain. Thus the lines of demarcation between the two taxes, primarily due to Hylton, becomes clearer. A tax on property or person is a direct tax, requiring apportionment, and a tax on privileged and avoidable activities is an indirect tax, requiring uniformity.
The questions remaining, however, are: 1) What is the scope of taxation authority of the federal government in general? And 2) What activities may be the {2 It should be noted, in passing, that the taxing authority in this instance is of a full, free-standing sovereignty, not a limited or conditional sovereignty or sovereignty by convention. } proper subject of an excise tax? No determination of the extent of the federal taxing authority can be made without first answering those two questions.
The answer to the first was not long in coming. The scope of taxing authority was first and thoroughly dealt with in 1819 in McCulloch v. Maryland, 17 U.S. 316 (1819). The Supreme Court was required to define the limits of taxing authority a State2, Maryland, due to its attempt to tax the national bank, a body established by Congress. Justice Marshall, at p. 429:
“It may be objected to this definition, that the power of taxation is not confined to the people and property of a state. It may be exercised upon every object brought within its jurisdiction. This is true, But to what source do we trace this right? It is obvious, that it is an incident of sovereignty, and is co-extensive with that to which it is an incident. All subjects over which the sovereign power of a state extends, are objects of taxation; but those over which it does not extend, are, upon the soundest principles, exempt from taxation. This proposition may almost be pronounced self-evident.
“The sovereignty of a state extends to everything which exists by its own authority, or is introduced by its permission.” (emphasis added)

[3 This brief description of the legislative power and sovereignty of the state is found in a variety of subsequent decisions and is thus a well established principle; see Weston v. City Council of Charlston, 2 Pet. (27 U.S.) 449, 467 (1829); The Providence Bank v. Billings, 4 Pet. (29 U.S.) 514, 564 (1830); The Piqua Branch of the State Bank of Ohio v. Knoop, 16 How. 369, 409 (1853); People of State of New York, ex rel. of the Bank of Commerce v. Commissioners of Taxes and Assessments for the City and County of New York, 67 U.S. 620, 632 (1863); Union Pacific Railroad Co. v. Peniston, 85 U.S. 5, 38 (1873); The Wheeling, Parkersburg and Cincinnati Trans. Co. v. City of Wheeling, 99 U.S. 273, 279 (1879); Society for Savings v. Coite, 73 U.S. 594, 604 (1868); Van Brocklin v. Tennessee, 117 U.S. 151, 155, 6 S.Ct. 670 (1886); United States v. Rickert, 188 U.S. 432, 438, 23 S.Ct. 478 (1903); First National Bank in St. Louis v. Missouri, 263 U.S. 640, 663, 44 S.Ct. 213 (1924); Detroit v. Murray Corp. of America, 355 U.S. 489, 497, 78 S.Ct. 458 (1958); ]

It should be noted that these principles are not some antiquated philosophical enunciations, but are foundational Constitutional law, in full force and effect3 and relied upon hundreds of times by our courts, even as recently as this year (See U.S. v. Reynard, 02-50476 (9th Cir. 1-12-2007)).
Also noteworthy, is that in defining the extent of the taxing authority of a sovereignty as co-extensive with its jurisdiction, and, particularly, in defining all without that jurisdiction to be exempt from that authority, we are not hearing this from one who is unsympathetic to the powers of government. Marshall was a staunch Federalist. McCulloch is best known and remembered for its expansion of federal authority and his maximal views of jurisdiction are best evidenced in this ruling, where he holds that “not delegated” does not mean “not delegated” because it does not say “not expressly delegated” (at 406) and that “necessary” does not mean “necessary” because it does not say “absolutely necessary” (at 414).
It can safely be said, then, that the recognition of a State’s power to tax, which would either exceed or at least equal that of a sovereignty by convention, as co-extensive with its jurisdiction, would be an ample standard to apply in surveying the authority of the federal government to tax. Therefore, if we proceed with this analysis on the basis of assigning to the federal government the full taxing authority, subject to the restrictions on manner and means of that taxation, of an original and free-standing sovereignty, such as a State, we can be assured that we will not be undercutting or minimizing that authority.
From McCulloch, then, we can conclude:

A. The power to tax is co-extensive with the jurisdiction of the taxing authority;
B. All things without that jurisdiction are exempt from taxation by the taxing authority; and
C. The jurisdiction of a sovereignty extends to all things that exist by its authority or are introduced with its permission.

Since the taxing authority of the federal government, then, is co-extensive with it’s jurisdiction, a survey of that jurisdiction is necessary in order to define the limits of that taxing authority. Prior to doing so, there is another bookend to the extent of taxing authority. McCulloch not only delineated and defined the area or scope over which a sovereignty may exercise its power to tax, but also defined those areas over which a sovereignty may NOT exercise its power to tax. Marshall at 431:
That the power to tax involves the power to destroy; that the power to destroy may defeat and render useless the power to create; that there is a plain repugnance in conferring on one government a power to control the constitutional measures of another, which other, with respect to those very measures, is declared to be supreme over that which exerts the control, are propositions not to be denied. (emphasis added)

That answers the question of whether a State can tax those matters that are under the jurisdiction of the federal government and where the federal government’s authority over those matters is supreme, but what about the reverse of that issue? Who is the supreme authority over those matters within the State’s jurisdiction? The answer to that question was also provided by the Supreme Court in Farrington v. Tennessee, 95 U.S. 679 (1877)4, where the Supreme Court recognized that in the areas within State jurisdiction, State law is supreme to that of the federal government. Farrington at 685:
[4 Nor is Farrington a relic of bygone days, it is still controlling Constitutional law, having been cited and followed over one hundred thirty times and as recently as 2005, See Loeffel Steel Products, Inc. v. Delta Brands, Inc., (N.D.Ill. 01 C 9389, 7/28/2005) ]

“In cases involving Federal questions affecting a State, the State cannot be regarded as standing alone. It belongs to a union consisting of itself and all its sister States. The Constitution of that union, and “the laws made in pursuance thereof, are the supreme law of the land, . . . any thing in the Constitution or laws of any State to the contrary notwithstanding;” and that law is as much a part of the law of every State as its own local laws and Constitution. Farmers’ & Mechanics’ Bank v. Deering, 91 U.S. 29.
“Yet every State has a sphere of action where the authority of the national government may not intrude. Within that domain the State is as if the union were not. Such are the checks and balances in our complicated but wise system of State and national polity.” (emphasis added)

Thus, just as the State’s power of taxation may not be exercised over those items within its borders where federal jurisdiction is supreme, the federal government’s authority to tax may not be exercised over those items or activities over which the jurisdiction of the State government is supreme. The principle is further reinforced by the Supreme Court again, in Bailey v. Drexel Furniture Company (Child Labor Case), 259 U.S. 20, 42 S.Ct. 449 (1922)5, in which case the Supreme Court struck down a federal tax on the employment of children. Chief Justice Taft, writing at p. 37: 5 Bailey v. Drexel Furniture Co. is still controlling Constitutional law, having been cited and followed as controlling nearly 200 times and as recently as 2005, see Simpson v. U.S., 877 A.2d 1045 (D.C. 2005)
“It is the high duty and function of this court in cases regularly brought to its bar to decline to recognize or enforce seeming laws of Congress, dealing with subjects not entrusted to Congress but left or committed by the supreme law of the land to the control of the States. We can not avoid the duty even though it require us to refuse to give effect to legislation designed to promote the highest good. The good sought in unconstitutional legislation is an insidious feature because it leads citizens and legislators of good purpose to promote it without thought of the serious breach it will make in the ark of our covenant or the harm which will come from breaking down recognized standards. In the maintenance of local self government, on the one hand, and the national power, on the other, our country has been able to endure and prosper for near a century and a half.
“Out of a proper respect for the acts of a coordinate branch of the Government, this court has gone far to sustain taxing acts as such, even though there has been ground for suspecting from the weight of the tax it was intended to destroy its subject. But, in the act before us, the presumption of validity cannot prevail, because the proof of the contrary is found on the very face of its provisions. Grant the validity of this law, and all that Congress would need to do, hereafter, in seeking to take over to its control any one of the great number of subjects of public interest, jurisdiction of which the States have never parted with, and which are reserved to them by the Tenth Amendment, would be to enact a detailed measure of complete regulation of the subject and enforce it by a so-called tax upon departures from it. To give such magic to the word “tax” would be to break down all constitutional limitation of the powers of Congress and completely wipe out the sovereignty of the States.” (emphasis added)

And in Hill v. Wallace, 259 U.S. 44, 42 S.Ct. 453 (1922), wherein the Court struck down a federal tax on grain contracts. Chief Justice Taft, again, at p. 67:
“Our decision, just announced, in the Child Labor Tax Case, ante, 20, involving the constitutional validity of the Child Labor Tax Law, completely covers this case. We there distinguish between cases like Veazie Bank v. Fenno, 8 Wall. 533, and McCray v. United States, 195 U.S. 27, in which it was held that this court could not limit the discretion of Congress in the exercise of its constitutional powers to levy excise taxes because the court might deem the incidence of the tax oppressive or even destructive. It was pointed out that in none of those cases did the law objected to show on its face, as did the Child Labor Tax Law, detailed regulation of a concern or business wholly within the police power of the State, with a heavy exaction to promote the efficacy of such regulation.” (emphasis added)

Justice Sutherland, dissenting in Burnes Nat’l Bank v. Duncan, 265 U.S. 17 (1924), a case involving a national bank’s right to appointment as executor of an estate, reminded us of this important principle at p. 26:
It is fundamental, under our dual system of government, that the Nation and the State are supreme and independent, each within its own sphere of action; and that each is exempt from the interference or control of the other in respect of its governmental powers, and the means employed in their exercise. Bank of Commerce v. New York City, 2 Black, 620, 634; South Carolina v. United States, 199 U.S. 437, 452, et seq.; Farrington v. Tennessee, 95 U.S. 679, 685. “How their respective laws shall be enacted; how they shall be carried into execution; and in what tribunals, or by what officers; and how much discretion, or whether any at all shall be vested in their officers, are matters subject to their own control, and in the regulation of which neither can interfere with the other.” Tarble’s Case, 13 Wall. 397, 407-8. Except as otherwise provided by the Constitution, the sovereignty of the States “can be no more invaded by the action of the general government, than the action of the state governments can arrest or obstruct the course of the national power. Worcester v. Georgia, 6 Pet. 515, 570.” (emphasis added)

Thus, the taxing authority of the federal government ends where the regulatory authority of the States begin and are, therefore, limited to those areas of activities over which the States granted the federal government authority and those lands the States granted permission to the federal government to acquire for specific purposes. Accordingly, the Constitution affords federal legislative jurisdiction over certain enumerated areas of activity and exclusive legislative jurisdiction over certain geographic areas:
Article I, § 8:
To lay and collect Taxes, Duties, Imposts and Excises
To borrow Money
To regulate commerce with foreign Nations, among the States and with Indian Tribes
To establish uniform Rules of Naturalization
To enact Laws on Bankruptcy
To coin Money, regulate the value thereof and of foreign Coin
To fix the Standard of Weights and Measures
To provide for Punishment of counterfeiting
To establish Post Offices and post Roads
To make Patent and Copyright laws
To constitute Tribunals inferior to the supreme Court
To define and punish Piracies and Felonies committed on the high Seas, and Offences against the Law of Nations
To declare War, Grant Letters of Marque and Reprisal and make Rules concerning Captures on Land and Water
To raise and support and regulate Armies and a Navy and to regulate the Militia
To call out the Militia
To govern the District of Columbia [infra]
To make laws “necessary and proper” to enforce the Constitution
Enabling Clauses:
To enforce 13th Amendment [abolition of slavery]
To enforce 14th Amendment [equal protection of the law]
To enforce 15th Amendment [right to vote]
To enforce 19th Amendment [women’s suffrage]
To enforce 23rd Amendment [prohibition of poll tax]
Exclusive legislative authority:
Article II, § 8, cl. 17:
“To exercise exclusive Legislation in all Cases whatsoever, over such District [of Columbia] (not exceeding ten Miles square) as may, by Cession of particular States, and the Acceptance of Congress, become the Seat of the Government of the United States, and to exercise like Authority over all Places purchased by the Consent of the Legislature of the State in which the Same shall be, for the Erection of Forts, Magazines, Arsenals, dock-Yards, and other needful Buildings.”
Article III, § 2:
“The congress shall have power to dispose of and make all needful rules and regulations respecting the territory or other property belonging to the United States. . .”
([bracketed material] added)
That Congress may, then, tax those activities, such as interstate commerce, foreign trade and the exercise of patent rights, would seem established under the McCulloch definition. That it may tax any and every privileged activity within those lands over which it has exclusive legislative jurisdiction is equally apparent.

The latter, however is virtually inconsequential, since the federal jurisdiction consists solely of the District of Columbia, the territories and those scattered islands of federal lands over which the States have ceded jurisdiction to the federal government, “federal enclaves”. All other territory within the country is in the States, which means they are not within the federal jurisdiction.
Most people would be surprised to learn that they do not live on United States soil and that many have been born, lived and died without ever having set foot on United States soil.
This would be a good time to review one of the regulations discussed hereinabove, more particularly, 26 CFR 1.861-8T(d)(2)(iii):
“(iii) Income that is not considered tax exempt.
“The following items are not considered to be exempt, eliminated, or excluded income and, thus, may have expenses, losses, or other deductions allocated and apportioned to them:
“(A) In the case of a foreign taxpayer (including a foreign sales corporation (FSC)) computing its effectively connected income, gross income (whether domestic or foreign source) which is not effectively connected to the conduct of a United States trade or business; [Jurisdiction to regulate foreign commerce]
“(B) In computing the combined taxable income of a DISC or FSC [international or foreign sales corporation] and its related supplier, 56
the gross income of a DISC or a FSC; [Jurisdiction to regulate foreign commerce]
“(C) For all purposes under subchapter N of the Code, including the computation of combined taxable income of a possessions corporation and its affiliates under section 936(h), the gross income of a possessions corporation for which a credit is allowed under section 936(a); and [Exclusive legislative jurisdiction (all persons, property and activities) in territories or possessions]
“(D) Foreign earned income as defined in section 911 and the regulations thereunder (however, the rules of Sec. 1.911-6 do not require the allocation and apportionment of certain deductions, including home mortgage interest, to foreign earned income for purposes of determining the deductions disallowed under section 911(d)(6)).” [Jurisdiction to regulate foreign commerce] (emphasis and [bracketed material] added)

There is, however, a second area of taxation granted Congress beyond those particular activities and those federal enclaves of exclusive legislative jurisdiction, and that is in the taxation clause itself. Article I, § 8, cl. 1 grants Congress the power to lay and collect duties, imposts and excises. Duties and imposts are related to foreign trade, leaving the sole remaining grant, for internal taxation, to be excises. Thus, those activities that are included within the power to lay and collect excises would, reasonably, be implicit in the grant. The question, then, is to what extent may an excise tax be laid and collected?
6 Again, Flint v. Stone Tracy Co. is controlling and Constitutional law, having been cited and followed over 600 times by virtually every court as the authoritative definition of the scope of excise taxing power.

The inquiry must begin with defining what, exactly, an excise tax is. Webster’s Dictionary defines an excise as:
Excise: obsolete Dutch excijs (now accijus), from Middle Dutch, probably modification of Old French assise session, assessment 1 : an internal tax levied on the manufacture, sale, or consumption of a commodity 2 : any of various taxes on privileges often assessed in the form of a license or fee (emphasis added)

Black’s Law Dictionary defines an excise as:

Excise taxes are taxes “laid upon the manufacture, sale or consumption of commodities within the country, upon licenses to pursue certain occupations, and upon corporate privileges.” Flint v. Stone Tracy Co., 220 U.S. 107, 31 S.Ct. 342, 349 (1911); or a tax on privileges, syn. “privilege tax”. (emphasis added)

The Supreme Court, as noted by Black’s, has provided a clear and definite scope of the excise taxing authority. In Flint v. Stone Tracy Co., 220 U.S. 107 (1911)6, the Supreme Court held that:
“Duties and imposts are terms commonly applied to levies made by governments on the importation or exportation of commodities. Excises are “taxes laid upon the manufacture, sale or consumption of commodities within the country, upon licenses to pursue certain occupations, and upon corporate privileges.” Cooley, Const. Lim., 7th ed., 680.” Flint, supra, at 151 (emphasis added)

Now we have two basic areas of internal indirect taxation authority:

1. Taxing authority that is inherent in sovereignty, i.e., “co-extensive with jurisdiction” (McCulloch, supra);
2. Authority to lay and collect excises “upon the manufacture, sale or consumption of commodities within the country, upon licenses to pursue certain occupations, and upon corporate privileges (Flint, supra).

There is a third area of taxation authority that is not found in the Constitution, nor can any historical or traditional foundation for the taxing authority be found, but since the Supreme Court based its sanctioning of the exercise of taxation over that area as an excise, we can call it an excise of unknown ancestry. This third area of excise of unknown ancestry was established in two cases that, ironically, the Supreme Court believed would be of little significance. The fact, however, is that these cases had a profound effect on taxation in the country that accounts for many of the arcane and mysterious twists, turns and surprising dead ends in the labyrinth of past and current tax codes and regulations.
In Railroad Co. v. Collector, 100 U.S. 595 (1879), the Supreme Court was faced with a challenge to a tax on interest paid by corporations. In this particular case, however, the interest was payable to foreign bond holders. Fully aware of the fact that the foreign bond holders were outside the jurisdiction of the government and that the situs of an obligation is always that of the obligee, the Court (sort of) upheld the tax:
“That the tax was actually collected without resistance, and the present suit is brought to recover it back, is sufficient answer to the assertion that it could not be enforced.
“Whether Congress, having the power to enforce the law, has the authority to levy such a tax on the interest due by a citizen of the United States to one who is not domiciled within our limits, and who owes the government no allegiance, is a question which we do not think necessary to the decision of this case.
“The tax, in our opinion, is essentially an excise on the business of the class of corporations mentioned in the statute.
“. . .The tax is laid by Congress on the net earnings, which are the results of the business of the corporation, on which Congress had clearly a right to lay it; and being lawfully assessed and paid, it cannot be recovered back by reason of any inefficiency or ethical objection to the remedy over against the bondholder.” Railroad Co., supra, at 597-9 (emphasis added)

See also, United States v. Erie Railway Co., 106 U.S. 327 (1882).

So, now we have three areas of indirect taxation authority that the federal government can exercise, those activities within its regulatory authority and all privileged activities within those territories and federal enclaves over which it has exclusive legislative authority (McCulloch); excise taxes on the manufacture, sale or consumption of commodities, licensing of certain occupations and corporate privileges (Flint, supra), and, finally, the excise of unknown ancestry or authority on monies payable to nonresident aliens and foreign corporations (Railroad Co., supra).
We also have prohibited areas, those being any activities that are within the scope of the regulatory authority of the States (McCulloch, Farrington, Bailey and Hill, supra) and those activities to which the jurisdiction of the federal government may not apply, i.e., those subjects of taxation that do not exist by the federal government’s authority and are not introduced by its permission (McCulloch, supra) (with the exception, of course of monies owed nonresident aliens and foreign corporations). In other words every activity outside of those three areas of taxation authority are, in Marshall’s words, exempt from federal taxation.
The income tax is an excise
The next issue is whether the income tax is a direct tax, which can be levied on virtually anything, or an indirect tax, which can only be laid on those activities listed in Flint. In 1861 the federal government imposed a tax on income derived from property. The tax was never challenged, but was referred to by Chief Justice White in Brushaber as an excise tax. Brushaber, supra, p. 15. Prior to Brushaber, however, the nature of the income tax had come into question.
In Pollock v. Farmers’ Loan and T. Co., 157 U.S. 429 (1895), the Supreme Court held that the Income Tax Act of 1894 imposing a tax on income from real estate and investments was a direct tax, and, therefore invalid for want of apportionment. The basis of the ruling was that the tax on the revenues from real estate was a burden on the ownership of the real estate, and, hence, a tax on the property itself. The decision that the tax was direct turned on the source of the income, rather than the income itself and was not in agreement with prior Supreme Court reasoning, such as in Hylton, supra.
In response to the ruling the federal government sought an amendment to overrule the Pollock decision. Ultimately, in 1913, the Sixteenth Amendment to the Constitution was certified as adopted. It read:
“The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several states, and without regard to any census or enumeration.”

Congress immediately passed the Income Tax of 1913, imposing a tax on net income, “from whatever source derived.” The law was challenged in Brushaber v Union Pac. R.R. Co., 240 U.S. 1, 36 S.Ct. 236 (1916), requiring the Court to determine the impact of the Sixteenth Amendment on tax authority. Chief Justice White, who had dissented in Pollock, wrote for the Court, holding that the Sixteenth Amendment did not confer any additional authority to tax and that its sole purpose and effect was to preclude the consideration of the source of income in order to reclassify the tax as a direct tax, requiring apportionment.
. 7 See Funk v. C. I. R., 687 F.2d 264 (8th Cir. 1982) and Miller v. U.S., 868 F.2d 236 (7th Cir. 1989)
8 See Lonsdale v. C. I. R., 661 F.2d 71, 5th Cir. 1981); but, “[I]ts enactment was not authorized by the Sixteenth Amendment.” Brushaber, supra, at 20.
9 See Parker v. Commissioner, 724 F.2d 469, 471 (5th Cir. 1984); as opposed to Brushaber, supra, at 19.
There has been some confusion regarding the actual import of the Brushaber ruling, one court actually holding that the effect of Brushaber was to uphold the constitutionality of the Sixteenth Amendment7(?), and another has held that Congress was given the power to tax incomes by the Sixteenth Amendment8. One court, incredibly, cited Brushaber as holding that the Sixteenth Amendment “provided the needed constitutional basis for the imposition of a direct non-apportioned income tax,”9 a proposition that the Supreme Court in Brushaber categorically rejected! The clear and unequivocal ruling of the Court in Brushaber is that the Sixteenth Amendment granted no new powers to Congress:
“It is clear on the face of this text that it does not purport to confer power to levy income taxes in a generic sense — an authority already possessed and never questioned — or to limit and distinguish between one kind of income taxes and another, but that the whole purpose of the Amendment was to relieve all income taxes when imposed from apportionment from a consideration of the source whence the income was derived.” Brushaber, supra, at 17-8 (emphasis added)

nor did the Court recognize a third class of taxes, a direct tax not requiring apportionment:

“The various propositions are so intermingled as to cause it to be difficult to classify them. We are of opinion, however, that the confusion is not inherent, but rather arises from the conclusion that the Sixteenth Amendment provides for a hitherto unknown power of taxation, that is, a power to levy an income tax which although direct should not be subject to the regulation of apportionment applicable to all other direct taxes. And the far-reaching effect of this erroneous assumption will be made clear by generalizing the many contentions advanced in argument to support it, . . .” Brushaber, supra, at 10-11 (emphasis added)

The effect of the Sixteenth Amendment was not to permit a direct income tax, nor to grant Congress any additional power of taxation. If that conclusion can be in any doubt from the difficulties experienced by some in understanding the Brushaber opinion, the point is reiterated in Stanton v. Baltic Mining Co., 240 U.S. 103 (1916), the Supreme Court held:
“. . . The provisions of the Sixteenth Amendment conferred no new power of taxation but simply prohibited the previous complete and plenary power of income taxation possessed by Congress from the beginning from being taken out of the category of indirect taxation to which it inherently belonged and being placed in the category of direct taxation subject to apportionment by a consideration of the sources from which the income was derived, . . .” Stanton, supra, at 112-3 (emphasis added)

and by the Supreme Court, again, in Peck & Co. v. Lowe, 247 U.S. 165 (1918), at p. 172-3:

“The Sixteenth Amendment, although referred to in argument, has no real bearing and may be put out of view. As pointed out in recent decisions, it does not extend the taxing power to new or excepted subjects, but merely removes all occasion, which otherwise might exist, for an apportionment among the States of taxes laid on income, whether it be derived from one source or another. Brushaber v. Union Pacific R.R. Co., 240 U.S. 1, 17-19; Stanton v. Baltic Mining Co., 240 U.S. 103, 112-113.” (emphasis added)

and by the Supreme Court, again, in Eisner v. Macomber, 252 U.S. 189 (1920), at p. 206: As repeatedly held, this [the 16th Amendment] did not extend the taxing power to new subjects, but merely removed the necessity which otherwise might exist for an apportionment among the States of taxes laid on income. Brushaber v. Union Pacific R.R. Co., 240 U.S. 1, 17-19; Stanton v. Baltic Mining Co., 240 U.S. 103, 112 et seq.; Peck & Co. v. Lowe, 247 U.S. 165, 172-173.
(emphasis and [bracketed material] added)
10 See “Some Constitutional Questions Regarding the Federal Income Tax Laws”, by Howard Zaritsky, Congressional Research Service, Library of Congress, May 25, 1979, p. 3.

In a memorandum from the Congressional Research Service, Library of Congress, it was stated, citing both Brushaber and Stanton, supra, “Therefore, it is clear that the income tax is an ‘indirect’ tax.”10
There can be no doubt, the income tax is an indirect tax, not a property tax that is immune from direct tax apportionment, and there can be no doubt that the Sixteenth Amendment did not in any way, shape or form enlarge or enhance the taxation power of Congress. Brushaber, Stanton, Peck and Eisner, supra. It is, therefore, subject to the same limitations on taxing authority that are established hereinabove, and that is that it cannot tax person or property without apportionment (Article I, § 9, cl. 4), nor any activity that is without either the scope of federal legislative authority (McCulloch and Farrington, supra), outside the scope of excise (Flint, supra) or monies owed to nonresident aliens and foreign corporations (Railroad Co. and Erie R.R., supra). Nor does the power to tax by excise permit the federal government to tax activities that are solely within the realm of the State jurisdiction (Bailey and Hill, supra).
All of these cases, McCulloch, Farrington, Flint, Railroad Co, Bailey and Hill, are still controlling and the last word of the Supreme Court on the power of the federal government to tax. While there have been other Supreme Court cases upholding the imposition of the income tax, every one of them has been upheld against challenges by corporations and others whose activities are by definition of the excise within the taxing authority. Notwithstanding continuous taxation of income for the last 94 years, there are only two instances where the Supreme Court has ruled on the validity of the income tax with respect to anyone who is either not a corporation or otherwise within the jurisdictional and jurisprudential limitations of the federal taxing authority and in both instances it held the income tax exceeded its Constitutional scope. See Towne v. Eisner, 245 U.S. 418, 38 S.Ct. 158 (1918) and Eisner v. Macomber, 252 U.S. 189, 40 S.Ct. 189 (1920) That question, then, remains unsettled and unanswered. The principles set forth in those cases, however, do provide the answer by defining the limits of the federal taxing authority with enough certainty to establish that defendant and the revenue he received for services personally rendered in the practice of law are not subject to that taxing authority.
11 See § 19.22(b), 1940 Code of Federal Regulations

Defendant’s activities and revenues are exempt from federal excise taxation11 as being outside the taxing authority of the federal government

Justice Marshall, in McCulloch v. Maryland, supra, stated without qualification or reservation, that:
It is obvious, that it [the power to tax] is an incident of sovereignty, and is co-extensive with that to which it is an incident. All subjects over which the sovereign power of a state extends, are objects of taxation; but those over which it does not extend, are, upon the soundest principles, exempt from taxation. This proposition may almost be pronounced self-evident.
“The sovereignty of a state extends to everything which exists by its own authority, or is introduced by its permission.” (emphasis and [bracketed material] added)

That principle is still the law of the land. It has never been questioned, challenged nor distinguished into an insignificant corner, much less overruled, probably due to the fact that, as Justice Marshall indicates, the principle is “obvious” and “self evident.” He also gives us a test by which to determine whether a proposed subject of taxation is within that authority, “the sovereignty of a state (not a political subdivision, but a “state”, whether it be the State of Louisiana or the State of Israel or any other sovereign) extends to everything that exists by its own authority or is introduced by its permission.”
Does defendant exist by authority of the federal government? Does he work, live, practice law by permission of the federal government? The answer to both of those questions is, undoubtedly, no. He is, therefore, not within the sovereign power of the federal government and, therefore, both he and his revenues “are, upon the soundest principles, exempt from taxation” by the federal government.
Defendant, Mr. Cryer, is, and was during the two subject years, 2000 and 2001, engaged solely in the practice of law, under license from the State of Louisiana. He is not engaging in interstate commerce, he is not exercising any corporate privileges, he does not work or reside within the federal jurisdiction, residing and working in the State, within State jurisdiction only. Nor is he engaged in the manufacture or sale of commodities and his occupation requires no license from the federal government. And, obviously, he is not a nonresident alien or foreign corporation to whom a person in the United States owes money.
Accordingly, both Mr. Cryer and his revenues are outside the indirect taxing authority of the United States. The federal government is without authority to tax defendant’s revenues because he and his revenue are not either within the jurisdiction of the federal government nor the scope of the excise taxing authority. Therefore, Where there can be no tax, there can be no tax deficiency, an essential element of the charges against Mr. Cryer, and, therefore, it is respectfully submitted that both counts of the indictment should be dismissed, with prejudice.
12 See National Federation of Republican Assemblies v. U.S., 218 F. Supp.2d 1300 (S.D.Ala. 2002)

Defendant and his revenues are exempt from federal excise taxation because they are within the sole and exclusive jurisdiction of the State
In Bailey v. Drexel Furniture Co., 259 U.S. 20 (1922), the Supreme Court held that the federal government could not tax those activities that were under the sole and exclusive realm of the States. This is still sound, controlling Constitutional law, and is cited as such on a regular basis, and only recently in nullifying a federal tax law that required an organization to disclose the names of its contributors of money for use by or for the benefit of candidates in state and local elections.12 Reiterating what Justice Taft wrote in Bailey at p. 37:
Grant the validity of this law, and all that Congress would need to do, hereafter, in seeking to take over to its control any one of the great number of subjects of public interest, jurisdiction of which the States have never parted with, and which are reserved to them by the Tenth Amendment, would be to enact a detailed measure of complete regulation of the subject and enforce it by a so-called tax upon departures from it. To give such magic to the word “tax” would be to break down all constitutional limitation of the powers of Congress and completely wipe out the sovereignty of the States.” (emphasis added)

Hill v. Wallace, supra, followed, reiterating the principle that the State sovereignty cannot be invaded through a so-called exercise of taxing authority. These principles are sound and valid, being in total agreement with the concepts of mutually exclusive sovereignty expressed by Justice Marshall in McCulloch. Where one government is sovereign, another cannot be, thus Maryland’s attempt to tax the United States Bank, a creation and agency created by and within the sole jurisdiction of the federal government, could not be sustained.
Farrington, supra, in 1877, made it clear that the mutually exclusive nature of sovereignty, and, via McCulloch, power to tax, was reciprocal, holding that where the State governs, it is as though the federal government does not exist. The cases holding state taxes unconstitutional insofar as they tax any interstate transaction are too numerous to list, but the same principle upon which those cases were based applies to federal attempts to tax activities that are purely within the power of the States to govern.
As Justice Marshall properly, and wisely, observes in McCulloch, at p. 431:

“That the power to tax involves the power to destroy; that the power to destroy may defeat and render useless the power to create; that there is a plain repugnance in conferring on one government a power to control the constitutional measures of another, which other, with respect to those very measures, is declared to be supreme over that which exerts the control, are propositions not to be denied.” (emphasis added)

The courts have repeatedly held, as Chief Justice Taft pointed out in Bailey, that where there is authority to tax, the tax must be upheld, even if the tax is intended to and does destroy its subject. However, where the subject of the tax is within the realm of another sovereignty which, within that sphere of activities, is supreme, then the tax cannot be sustained.
The practice of law is solely and exclusively within the jurisdiction of the State, and, therefore, is outside both the jurisdiction and the taxing authority of the federal government.
The Supreme Court has acknowledged the States’ jurisdiction over the practice of law. Railroad Trainmen v. Virginia Bar, 377 U.S. 1 (1964); Mine Workers v. Illinois Bar Association, 389 U.S. 217 (1967).
A review of the enumerated powers of Congress, supra, readily reveals that the regulation of the practice of law is not among those powers. Accordingly, the regulation of the practice of law is “one of the great number of subjects of public interest, jurisdiction of which the States have never parted with, and which are reserved to them by the Tenth Amendment.” Bailey, supra. It is within that “sphere of action where the authority of the national government may not intrude. Within that domain the State is as if the union were not.” Farrington, supra.
Therefore, it is respectfully submitted that the activities and revenues derived from defendant’s law practice are exempt from federal taxation, which cannot intrude into or upon that activity. Accordingly, those revenues being exempt, there is no tax deficiency, an essential element of the charges against Mr. Cryer, and, therefore, it is respectfully submitted that both counts of the indictment should be dismissed, with prejudice.
13 See § 19.22(b), 1940 Code of Federal Regulations

Defendant’s revenues are exempt from federal excise taxation because the activity is the exercise of a fundamental, constitutionally protected right, and, therefore, outside the taxing authority of the federal government

Fundamental rights are those described in general terms by Thomas Jefferson in the Declaration of Independence. They are derived from Natural Law, “the Laws of Nature and of Nature’s God”, not from the Constitution, not from the government. Such rights are inalienable and inviolable, and are not privileges that can be the subject of a tax on privileges.
Therefore, under Marshall’s definition of the scope of sovereignty, being those things that exist by its authority or are introduced by its permission, the scope of the federal government’s sovereignty cannot extend to the exercise of such rights. The right to work and engage in one’s chosen occupation is one of those fundamental rights.
A person’s freedom and ability to work is his own property, and that right cannot be taken, bought, sold or bartered away, at least not since the 13th Amendment was adopted. The Supreme Court has recognized this right as a fundamental right and part of the freedom to pursue happiness. In Butchers’ Union Co. v. Crescent City Co., 111 U.S. 746, 4 S.Ct. 652 (1884), the Supreme Court was presented with a case involving a Louisiana statute granting exclusive and irrevocable right to operate stock-receiving and slaughter house operation to Crescent City Company. Crescent City Company had sued Butchers’ Union Co. for a restraining order in an effort to enforce its exclusive franchise. The Supreme Court held that the grant was unconstitutional because it purported to be irrevocable, ceding authority of subsequent legislative action rescinding the monopoly grant.
The case has been cited, however, more often for the premises set out in Justice Field’s Concurrence, in which he stated at p. 756:
“As in our intercourse with our fellow-men certain principles of morality are assumed to exist, without which society would be impossible, so certain inherent rights lie at the foundation of all action, and upon a recognition of them alone can free institutions be maintained. These inherent rights have never been more happily expressed than in the Declaration of Independence, that new evangel of liberty to the people: ‘We hold these truths to be self-evident’ — that is so plain that their truth is recognized upon their mere statement — ‘that all men are endowed’ — not by edicts of Emperors, or decrees of Parliament, or acts of Congress, but ‘by their Creator with certain inalienable rights’ — that is, rights which cannot be bartered away, or given away, or taken away except in punishment of crime — ‘and that among these are life, liberty, and the pursuit of happiness, and to secure these’ — not grant them but secure them — ‘governments are instituted among men, deriving their just powers from the consent of the governed.’ “Among these inalienable rights, as proclaimed in that great document, is the right of men to pursue their happiness, by which is meant the right to pursue any lawful business or vocation, . . .
“It has been well said that, “The property which every man has in his own labor, as it is the original foundation of all other property, so it is the most sacred and inviolable. . . .” Adam Smith’s Wealth of Nations, Bk. I. Chap. 10.” (emphasis added)

Although this opinion was a concurring opinion, Justice Field was not alone in his assessment. He was joined in his concurrence by Justice Bradley, who, joined by JJ. Harlan and Woods, also concurred, but on the basis of Field’s reasoning, stating at p. 762:
“The right to follow any of the common occupations of life is an inalienable right; it was formulated as such under the phrase “pursuit of happiness” in the Declaration of Independence, which commenced with the fundamental proposition that “all men are created equal, that they are endowed by their Creator with certain inalienable rights; that
among these are life, liberty, and the pursuit of happiness.” This right is a large ingredient in the civil liberty of the citizen.” (italics, the Court’s; bold emphasis added)

In Yick Wo v. Hopkins, 118 U.S. 356 (1886), the Supreme Court, again, recognized this fundamental right in declaring unconstitutional a statute that would force a Chinese laundry businessman out of business, holding at 370:
“But the fundamental rights to life, liberty, and the pursuit of happiness, considered as individual possessions, are secured by those maxims of constitutional law which are the monuments showing the victorious progress of the race in securing to men the blessings of civilization under the reign of just and equal laws, so that, in the famous language of the Massachusetts Bill of Rights, the government of the commonwealth ‘may be a government of laws and not of men.’ For, the very idea that one man may be compelled to hold his life, or the means of living, or any material right essential to the enjoyment of life, at the mere will of another, seems to be intolerable in any country where freedom prevails, as being the essence of slavery itself.” (emphasis added)

In Allgeyer v. Louisiana, 165 U.S. 578 (1897), the Supreme Court held invalid a Louisiana statute prohibiting a citizen from contracting outside the State for insurance on his property lying therein because it violated the liberty guaranteed to him by the Fourteenth Amendment.
In Truax v. Raich, 239 U.S. 33 (1915), an Arizona statute requiring a minimum quota of citizens was declared unconstitutional. The Supreme Court held at p. 41: “It requires no argument to show that the right to work for a living in the common occupations of the community is of the very essence of the personal freedom and opportunity that it was the purpose of the [14th] Amendment to secure. Butchers’ Union Co. v. Crescent City Co., 111 U.S. 746, 762; Barbier v. Connolly, 113 U.S. 27, 31; Yick Wo v. Hopkins, supra; Allgeyer v. Louisiana, 165 U.S. 578, 589, 590; Coppage v. Kansas, 236 U.S. 1, 14.” (emphasis and [bracketed material] added)
Again, in Adams v. Tanner, 244 U.S. 590, 37 S.Ct. 662 (1917), the Supreme Court considered a statute prohibiting employment agencies from charging fees for obtaining employment. The Supreme Court, citing and quoting Allgeyer, held:
“The liberty mentioned in that amendment means not only the right of the citizen to be free from the mere physical restraint of his person, as by incarceration, but the term is deemed to embrace the right of the citizen to be free in the enjoyment of all his faculties; to be free to use them in all lawful ways; to live and work where he will; to earn his livelihood by any lawful calling; to pursue any livelihood or avocation.” Adams, supra, at 595 (emphasis added)

The Supreme Court was presented with a challenge by a German teacher of a Nebraska law which prohibited teaching lessons in any language other than English in Meyer v. Nebraska, 262 U.S. 390, 43 S.Ct. 625 (1923). The Supreme Court held the law was an unconstitutional infringement on a fundamental right protected by the 14th Amendment. At p. 399 the Supreme Court stated:
“While this Court has not attempted to define with exactness the liberty thus guaranteed, the term has received much consideration and some of the included things have been definitely stated. Without doubt, it denotes not merely freedom from bodily restraint but also the right of the individual to contract, to engage in any of the common occupations of life, to acquire useful knowledge, to marry, establish a home and bring up children, to worship God according to the dictates of his own conscience, and generally to enjoy those privileges long recognized at common law as essential to the orderly pursuit of happiness by free men. Slaughter-House Cases, 16 Wall. 36; Butchers’ Union Co. v. Crescent City Co., 111 U.S. 746; Yick Wo v. Hopkins, 118 U.S. 356; Minnesota v. Barber, 136 U.S. 313; Allgeyer v. Louisiana, 165 U.S. 578; Lochner v. New York, 198 U.S. 45; Twining v. New Jersey, 211 U.S. 78; Chicago, Burlington & Quincy R.R. Co. v. McGuire, 219 U.S. 549; Truax v. Raich, 239 U.S. 33; Adams v. Tanner, 244 U.S. 590; New York Life Ins. Co. v. Dodge, 246 U.S. 357; Truax v. Corrigan, 257 U.S. 312; Adkins v. Children’s Hospital, 261 U.S. 525; Wyeth v. Cambridge Board of Health, 200 Mass. 474.” (emphasis added)

In Massachusetts Bd. Of Retirement v. Murgia, 427 U.S. 307, 96 S.Ct. 2562 (1976), at issue was a Massachusetts law regarding an age limit for police officers. There was no question regarding the right to pursue one’s occupation as being protected under the Constitution, but only with respect to the standard of review of the law. In objecting to the court’s application of a rational basis standard rather than a strict scrutiny test, Justice Marshall writing at 322: “Whether “fundamental” or not, “`the right of the individual . . . to engage in any of the common occupations of life'” has been repeatedly recognized by this Court as falling within the concept of liberty guaranteed by the Fourteenth Amendment. Board of Regents v. Roth, 408 U.S. 564, 572 (1972), quoting Meyer v. Nebraska, 262 U.S. 390, 399 (1923). As long ago as Butchers’ Union Co. v. Crescent City Co., 111 U.S. 746 (1884), Mr. Justice Bradley wrote that this right ‘is an inalienable right; it was formulated as such under the phrase `pursuit of happiness’ in the Declaration of Independence . . . . This right is a large ingredient in the civil liberty of the citizen.’ Id., at 762 (concurring opinion). And in Smith v. Texas, 233 U.S. 630 (1914), in invalidating a law that criminally penalized anyone who served as a freight train conductor without having previously served as a brakeman, and that thereby excluded numerous equally qualified employees from that position, the Court recognized that ‘all men are entitled to the equal protection of the law in their right to work for the support of themselves and families.’ Id., at 641.” “‘In so far as a man is deprived of the right to labor his liberty is restricted, his capacity to earn wages and acquire property is lessened, and he is denied the protection which the law affords those who are permitted to work. Liberty means more than freedom from servitude, and the constitutional guarantee is an assurance that the citizen shall be protected in the right to use his powers of mind and body in any lawful calling.’ Id., at 636.” (emphasis added) See also In re Slaughter-House Cases, 16 Wall. 36, 21 L.Ed. 394; Minnesota v. Barber, 136 U.S. 313, 10 S.Ct. 862, 34 L. Ed. 455; Lochner v. New York, 198 U.S. 45, 25 S.Ct. 539, 49 L.Ed. 937, 3 Ann.Cas. 1133; Twining v. New Jersey, 211 U.S. 78, 29 S.Ct. 14, 53 L.Ed. 97; Chicago, Burlington & Quincy R.R. Co. v. McGuire, 219 U.S. 549, 31 S.Ct. 259, 55 L.Ed. 328; New York Life Ins. Co. v. Dodge, 246 U.S. 357, 38 S.Ct. 337, 62 L.Ed. 772, Ann.Cas. 1918E, 593; Truax v. Corrigan, 257 U.S. 312, 42 S.Ct. 124, 66 L.Ed. 254, 27 A.L.R. 375; Adkins v.Children’s Hospital, 261 U.S. 525, 43 S.Ct. 394, 67 L.Ed. 785, 24 A.L.R. 1238; Wyeth v. Cambridge Board of Health, 200 Mass. 474, 86 N.E. 925, 23 L.R.A., N.S., 147, 128 Am.St.Rep. 439; Farrington v. Tokushige, 273 U.S. 284, 47 S.Ct. 406, 71 L.Ed. 646; Pierce v. Society of Sisters, 268 U.S. 510, 535, 45 S.Ct. 571, 69 L.Ed. 1070, 39 A.L.R. 468; and Wysinger v. Crookshank, 82 Cal. 588, 23 P. 54.
There is no doubt that the right to work and to pursue one’s chosen occupation is a basic and fundamental right that the federal government, and, through the 14th Amendment, the States, may not abridge. This is a right that is not owed to the federal government or the Constitution and one the federal government does not grant or permit, thus it neither exists by its authority nor is it introduced by its permission.
The taxing of fundamental rights is so repugnant to the mind, spirit and conscience of any man that even Congress has, with this exception, not undertaken to impose a tax on the exercise of those rights. Therefore there is little case law on the issue. There is, however, some illumination to be gleaned from some home-grown law. In 1934, Louisiana passed an excise tax on publishers of newspapers, magazines and other printed publications. The Supreme Court, in Grosjean v. American Press Co., 297 U.S. 233 (1936), struck the law down as an abridgement on the fundamental freedom of speech, stating:
“That freedom of speech and of the press are rights of the same fundamental character, safeguarded by the due process of law clause of the Fourteenth Amendment against abridgment by state legislation, has likewise been settled by a series of decisions of this Court beginning with Gitlow v. New York, 268 U.S. 652,666, and ending with Near v. Minnesota, 283 U.S. 697, 707. The word “liberty” contained in that amendment embraces not only the right of a person to be free from physical restraint, but the right to be free in the enjoyment of all his faculties as well. Allgeyer v. Louisiana, 165 U.S. 578, 589.” Grosjean, supra, at 244. (emphasis added)

The Court in Grosjean pointed out, as it did in Murdock and Follett, infra, that a publishing company was not immune from all taxation, in that it could be taxed on its profits as a corporation or on its property, but this tax was an excise on “the privilege of engaging in such business” (publishing a newspaper), not on the exercise of corporate privilege nor on its property.
A license fee for distributing religious material door to door was struck down by the Supreme Court in Murdock v. Pennsylvania, 319 U.S. 105 63 S.Ct. 870 (1943) as abridging freedom of speech, press and religion. The Court stated at p. 108: 82
“The First Amendment, which the Fourteenth makes applicable to the states, declares that “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press . . .” It could hardly be denied that a tax laid specifically on the exercise of those freedoms would be unconstitutional. Yet the license tax imposed by this ordinance is, in substance, just that.”

And at 112:

“the power to tax the exercise of a privilege is the power to control or suppress its enjoyment.” (emphasis added) See also Jones v. Opelika, 316 U.S. 584, 56 S.Ct. 444 (1943); Follett v. McCormick, 321 U.S. 573 64 S.Ct. 717 (1944)

Striking down a Virginia poll tax in 1966, the Supreme Court in Harper v. Virginia Bd. Of Elections, 383 U.S. 663, 86 S.Ct. 1079 (1966), quoted and cited United States v. State of Texas, 252 F. Supp. 234 (1966), a three-judge panel case, that said at p. 254:
“If the State of Texas placed a tax on the right to speak at the rate of one dollar and seventy-five cents per year, no court would hesitate to strike it down as a blatant infringement of the freedom of speech. Yet the poll tax as enforced in Texas is a tax on the equally important right to vote.”

There is, in addition to the repugnancy of imposing a tax on an activity that is the exercising of what is clearly a fundamental right, protected under the Fifth and Fourteenth Amendments, and in addition to the fact that the exercise of that fundamental right and freedom is beyond the reach of the jurisdictional arm as defined by Justice Marshall in McCulloch, still another conflict, and that is that one of the characteristics of an indirect tax is that it is voluntary in the sense that one can avoid payment of the tax by abstaining from the activity taxed. A tax that cannot be avoided by abstention from the activity is a tax on the person or property, not on the activity described. For example, if an excise on tobacco products is imposed, one can simply abstain from consuming tobacco products, avoiding the tax.
However, as was mentioned previously, if a tax were imposed on breathing, a tax that could not be avoided by abstention, or at least not without dire consequences, then such a tax would be a mandatory tax on being (remaining) alive, on one’s existence, and would, therefore, be direct, subject to apportionment.
Working, practicing one’s craft in one’s chosen occupation is, like breathing, not an avoidable activity. While one could resign himself to the life of a hobo, scraping, foraging and begging for his daily bread and living under whatever he can find resembling shelter, that option is only slightly better than abstaining from breathing.
The Supreme Court, in Brushaber, did not uphold the constitutionality of the income tax in all respects, but only in that presented to the Court. The Court left the door open for challenges in other situations where the tax would operate to tax a property (as is a fundamental right) or fall into the class of direct taxes:
“Moreover in addition the conclusion reached in the Pollock Case did not in any degree involve holding that income taxes generically and necessarily came within the class of direct taxes on property, but on the contrary recognized the fact that taxation on income was in its nature an excise entitled to be enforced as such unless and until it was concluded that to enforce it would amount to accomplishing the result which the requirement as to apportionment of direct taxation was adopted to prevent, in which case the duty would arise to disregard form and consider substance alone and hence subject the tax to the regulation as to apportionment which otherwise as an excise would not apply to it.” Brushaber, supra, at 16-17. (emphasis added)

Chief Justice White, obviously, could see that not all income was taxable by the federal government and anticipated that if the income tax were applied to such income that is outside the taxing authority or would in effect require the taxing of person, property or possession, the effect, or substance, not the name, or form, of the tax would be considered and that apportionment would be required, the Sixteenth Amendment notwithstanding. {14 Black’s Law Dictionary identifies “privilege tax” as a synonym for “excise tax” }
Recalling the reasoning of Justice Marshall in McCulloch, that “the power to tax involves the power to destroy”, and that “there is a plain repugnance in conferring on one government a power to control the constitutional measures of another, which other, with respect to those very measures, is declared to be supreme over that which exerts the control, are propositions not to be denied.” at 431.
Applied to and paraphrased for the instant case: That the power to tax a fundamental right involves the power to destroy that right, and that there is a plain repugnance in the conferring on any government a power to control the freedoms and rights granted by another, which other, with respect to those very measures, is the most supreme sovereignty, the sovereignty and supremacy of the “Laws of Nature and of Nature’s God”, are propositions not to be denied.
It is, therefore, strenuously submitted that where that “privilege tax”14 is imposed upon the exercise of a fundamental, natural right, as opposed to a privilege, to an unavoidable activity, as opposed to an optional activity, that it must be “concluded that to enforce it” against the wages and fees personally earned in the exercise of that fundamental right “would amount to accomplishing the result which the requirement as to apportionment of direct taxation was adopted to prevent.”
Thus, given that the Supreme Court has made it clear that fundamental rights are not to be abridged by taxation (Grosjean, Murdock, Follett and Harper, supra), that a fundamental right is not a privilege by authority or permission of the federal government, and, therefore cannot be the proper subject of an excise (Flint, McCulloch, supra), that the right to work and engage in one’s chosen occupation is his property (Butchers’ Union, supra) and, therefore exempt from indirect taxation by the federal government (Article I, § 9, cl. 4 and McCulloch), it is respectfully submitted that the income tax, as applied (or claimed to be applied), to wages and fees personally earned, without exercise of corporate privileges, without manufacture or sale of commodities and without the lawful jurisdiction of the federal government, is clearly in violation of the Fifth Amendment in that it deprives and abridges an inviolable, fundamental right, and a violation of Article I, § 9, cl. 4, of the Constitution in that it is in substance a direct tax on property, requiring apportionment.
It is, therefore, respectfully submitted that defendant’s revenues, deriving solely from his own labor and effort in the pursuit of his chosen occupation, is {15 See § 115, 1939 Revenue Code }exempt from taxation by the federal government and certainly exempt from indirect taxation by the federal government, and, accordingly, those revenues being exempt, there is no tax deficiency, an essential element of the charges against Mr. Cryer, and, therefore, it is respectfully submitted that both counts of the indictment should be dismissed, with prejudice.
Defendant’s revenues do “not constitute income to him within the meaning of the Sixteenth Amendment to the Constitution”

In order to avoid repetition of materials already included hereinabove, a brief review of premises already established is in order:
1. The Internal Revenue Code does not define “income”;
2. Webster defines income as a gain or recurrent benefit usually measured in money that derives from capital or labor;
3. Black’s Law Dictionary defines income as The return in money from one’s business, labor or capital invested; gains, profits or private revenue.
4. Louisiana law defines income, “fruits”, as things that are produced by or derived from another thing without diminution of its substance.
5. From 1913 through 1954, the Congress, by statute, acknowledged that some revenues are not income within the meaning of the Sixteenth Amendment (e.g., 1939 Code, § 115);
6. From 1913 through 1954 the Treasury Department in regulations acknowledged that some items are exempt from federal taxation due to either the Constitution or fundamental law and need not be included in gross income (e.g. 1940 Regulations, § 22(b));
7. Following 1954, vestigial remnants of those acknowledgements remain (26 CFR § 1.861-8(f)(1) and 1.861-8T(d)(2)(ii) and (iii));
8. The Supreme Court, in Brushaber, kept the door open on any application of the income tax law that would impose a tax on property or person in which case the Supreme Court would look to substance rather than form and require apportionment (Brushaber, at 16-17).
We have already discussed two examples of Constitutional exemption acknowledged by the Treasury Department, those activities that are beyond the federal government’s jurisdiction and those fundamental rights that are endowed by a superior sovereignty, but what about the regulations acknowledging that some revenues “do not constitute income within the meaning of the Sixteenth Amendment to the Constitution”?
If Johnny Public were to choose the door marked “wages, salaries and fees personally earned”, he would win the prize, the exemption, not only because the right to earn a living is exempt as a fundamental right, but because “‘The property which every man has in his own labor, as it is the original foundation of all other property, so it is the most sacred and inviolable. . . .’ Adam Smith’s Wealth of Nations, Bk. I. Chap. 10.” Butchers’ Union, supra.
In addition to Webster and Black’s above, the Supreme Court weighed in on the definition of “income”, the same year the word was used in both the Sixteenth Amendment and the first version of the current imposition of a tax on income. In Stratton’s Independence v. Howbert, 231 U.S. 399, 400; 34 S.Ct. 136 (1913) the Supreme Court stated: “Income may be defined as the gain derived from capital, from labor, or from both combined.” and ” . . . And, however the operation shall be described, the transaction is indubitably ‘business’ within the fair meaning of the act of 1909; and the gains derived from it are properly and strictly the income from that business; for “income” may be defined as the gains derived from capital, from labor, or from both combined, combined operations and here we have of capital and labor.” Id at p. 415 (emphasis added)
Five years later, the Supreme Court in Doyle v. Mitchell Brothers Co., 247 U.S. 179, 38 S.Ct. 467 (1918), states:
“Yet it is plain, we think, that by the true intent and meaning of the act the entire proceeds of a mere conversion of capital assets were not to be treated as income. Whatever difficulty there may be about a precise and scientific definition of “income,” it imports, as used here, something entirely distinct from principal or capital either as a subject of taxation or as a measure of the tax; conveying rather the idea of gain or increase arising from corporate activities. As was said in Stratton’s Independence v. Howbert, 231 U.S. 399, 415: ‘Income may be defined as the gain derived from capital, from labor, or from both combined.'” Id at 184-5 (emphasis added)

As was pointed out, supra, the Court in Brushaber indicated that in the event that receipts that, if taxed, would have the effect of taxing person or property, the Sixteenth Amendment would not prevent it from applying the rule of apportionment, and one such occasion was presented in Towne v. Eisner, 245 U.S. 418, 38 S.Ct. 158 (1918). The district court had ruled that the stock dividend was included in the government’s definition of income subjected to the tax. Justice Holmes, writing for the Court:
“But it is not necessarily true that income means the same thing in the Constitution and the act. A word is not a crystal, transparent and unchanged, it is the skin of a living thought and may vary greatly in color and content according to the circumstances and the time in which it is used. . . .The plaintiff says that the statute as it is construed and administered is unconstitutional. He is not to be defeated by the reply that the Government does not adhere to the construction by virtue of which alone it has taken and keeps the plaintiff’s money, if this court should think that the construction would make the act unconstitutional. Id at 425 (emphasis added)

The Supreme Court did think that construction would make the act unconstitutional. The Court went on to hold that the stock dividend was a conversion of capital from one form to another, and, therefore, was not income, regardless of whether the Government’s definition included such conversions in its definition.
In another stock dividend case, Eisner v. Macomber, 252 U.S. 189, 40 S.Ct. 189 (1920), the Supreme Court ruled the Revenue Act of 1916 (successor of the 1913 income tax) unconstitutional insofar as it applied to stock dividends. The Court held that:
“. . . Income may be defined as the gain derived from capital, from labor, or from both combined,” provided it be understood to include profit gained through a sale or conversion of capital assets, to which it was applied in the Doyle Case (pp. 183, 185).” “Brief as it is, it indicates the characteristic and distinguishing attribute of income essential for a correct solution of the present controversy. The Government, although basing its argument upon the definition as quoted, placed chief emphasis upon the word “gain,” which was extended to include a variety of meanings; while the significance of the next three words was either overlooked or misconceived. “Derived — from — capital;” — “the gain — derived — from — capital,” etc.

Here we have the essential matter: not a gain accruing to capital, not a growth or increment of value in the investment; but a gain, a profit, something of exchangeable value proceeding from the property, severed from the capital however invested or employed, and coming in, being “derived,” that is, received or drawn by the recipient (the taxpayer) for his separate use, benefit and disposal; — that is income derived from property. Nothing else answers the description.” Id at 207 (italics the Court’s, bold emphasis added)
The only addition or supplement to the Supreme Court’s definition of “income” “within the meaning of the Sixteenth Amendment” is in Commissioner v. Glenshaw Glass Co., 348 U.S. 426, 75 S.Ct. 473 (1955).16 In that case, the Court determined that where treble damages had been awarded in a fraud claim and was paid and received, the exemplary damages, those in excess of the compensatory damages, were income and subject to taxation.
The Court in Glenshaw Glass distinguished Eisner v. Macomber, stating that the additional damages were “accessions to wealth.” In fact, however, the {16 Cited and followed in Murphy v. I.R.S., 460 F.3d 79 (D.C. Cir. 2006) } reasoning behind Eisner v. Macomber was actually no different from that in Glenshaw, in that the reason stock dividends were found not to be income is that they were not accessions to wealth, i.e., that the corporation was no worse off for the dividend nor was the stockholder any better off for the dividend.
The applicability of the Eisner definition of income to Glenshaw’s exemplary damages was apparently misunderstood because the compensatory damages were never at issue and were not regarded in the analysis. Had the Court done so, it would have realized that in order to recover three hundred percent, the plaintiff must have first incurred one hundred percent. In other words, the income was three hundred less one hundred, the one hundred being the basis, the capital, that produced a gain, profit or “accession to wealth” of two hundred. Glenshaw Glass received three hundred, but its wealth was only enhanced by two hundred. Macomber received additional shares, but his wealth was not enhanced. Whether Eisner v. Macomber or Glenshaw Glass, the measure of income is in the GAIN realized.
There is no doubt that had the government contended that all of the treble damage award in Glenshaw was income, the Court would have rejected such a position. Likewise, if the government were to contend that a widget shop owner could only deduct his shop expenses, but not his cost of goods, from his gross revenue, the Court would not stand for that, either, because that would not only be a tax on the income (gain or profit), but on the capital, as well.
Gain or profit is, without question, that portion of monies received that is above and beyond what was given up, either in property or expense, in order to receive those funds. Gross revenue less cost and overhead equals profit or gain—income. Neither the Court nor the government gave a thought to whether the compensatory damages were income, having backed those compensated damages out of the equation to begin with.
Given the understanding, then, that in order to be income there must first be a gain, or profit, we are prepared to examine whether wages, salaries and fees personally earned (hereinafter referred to collectively as “wages” in the interest of brevity), are income within the meaning of the Constitution.
The Code defines gross income as “income from . . . compensation for services”. Since income is gain, profit, then that definition is actually “that portion of compensation for services that is gain or profit.” The government’s contention is that the gain or profit is everything received for compensation for services, thus with respect to wages the government contends that gross revenue and gross income are the same. Wages are the only revenue that the government treats as equivalent to income.
A tax on gross revenue as opposed to net gain is not an income tax, but a tax on both capital and income. State Tax on R. Gross Receipts, 15 Wall. 284, 21 L. Ed. 164; Philadelphia & S. Mail S. S. Co. v. Pennsylvania, 122 U.S. 326, 30 L. Ed. 1200; Maine v. Grand Trunk R. Co., 142 U.S. 217, 35 L. Ed. 994; and since a tax on gross revenue is taxing both income and capital, insofar as the tax on capital is concerned it is not indirect nor is it ‘exempt’ from the requirement of apportionment.
The problem with wages is that, unlike every other form of “income” described in the code, the government does not permit the wage-earner to back out what he has given up in order to receive those wages. It has been established that a man’s labor is his property, the capital. Thus wages are the purchase price for that property. Any other exchange of property for money must generate a profit before it is considered income, so on what basis does the government contend that all of the money exchanged for his property must be and is profit or gain?
While many have contended that wages are not income because they are a fair and equal exchange of value for money and, therefore, a break-even transaction, that position would be difficult to maintain. The sale of a widget is, presumably, an equal exchange of value for money but such a transaction could generate income (or loss) to the seller.
To contend, however, that there is no value contributed by the seller of labor for wages, and that, therefore 100% of all wages are profit, i.e., income, is not only equally untenable, but is offensive to the senses of reason and justice.
Some may be paid far more than the true value of their effort, exertion and proficiency. Others may be paid only a fraction of the value of their labor and skill. It is impossible to determine what portion of wages is basis and what part is gain.
It is equally impossible, however, to seriously contend that all wages are received in exchange for nothing. As absurd as such a proposition sounds, that is what the government is saying when it states that the cost basis for wages is zero. If, however, the wage-earner must give up something in order to receive his wages, then the wages he receives are not free. If the wages are not free, then they are not 100% profit. Employing a Glenshaw approach, if he must first sacrifice a loss to another in order to receive the wages, then only the “exemplary” portion of his wages is income.
The remainder is capital. What the court termed “human capital” in Murphy v. I.R.S., 460 F.3d 79 (D.C. Cir. 2006).
Assuming that any of the wage is above and beyond the amount of expenditure on the wage-earner’s part, a tax on the entire wage would have to be considered a tax on both the capital, the expenditure, and the profit, and would, therefore be a tax on the capital, or property, portion of the wage. This is exactly what Chief Justice White was describing when he stated that should the application of the income tax have the effect of taxing property or person, rather than profits and gains, alone, then “duty would arise to disregard form and consider substance alone and hence subject the tax to the regulation as to apportionment.” Brushaber, supra.
If any portion of wages represents what the wage-earner had to give in exchange for the wages, then that portion, however minute or great, is not income, is not a gain or an accession to wealth, and, therefore, that portion is not “income within the meaning of the Sixteenth Amendment” and would be in conflict with the Constitution to the same and identical extent as in Towne and Eisner, supra. It is a tax on gross receipts, which includes the basis or capital, and, therefore, not an income tax. Gross Receipts, Philadelphia Steamship, Grand Trunk and Brushaber, supra.
The distinction here is not one of mere form or technicality. It is a distinction of substance.
So, what does a wage-earner give up in order to receive his wages? It has been said that “When man is born his days are numbered and filled with trouble.” So, too are his work days numbered and filled with toil and exertion. The term “expending” energy is no different than “expend”iture of money or goods. The wage-earner has made an expenditure and received a wage in return.
This and every other court has on innumerable occasions suffered through the monotony of an expert witness recounting statistical and actuarial data in evaluating the remainder of a disabled plaintiff’s work life. While those witnesses usually disagree, having used different assumptions and/or data pools, the one thing upon which every one of them does agree is that the work life of any person is not infinite. We are all mortal. These experts will also agree that work life and life expectancy are rarely the same, but in both instances they are not infinite.
When a wage-earner finishes his year of labor and receives his W-2, it reflects his gross revenue, what he received, not his gross income, what he gained. It does not reflect what he gave up in exchange. He has over the year received the total shown on the W-2, and during the same year he had expended a great deal of energy and labor, he has given a year out of his work life a year out of his life expectancy to another in exchange for his wages. And, yet, the government contends that those wages were all profit, all gain, and that the basis for his earnings was $0.00. He contributed nothing to the exchange and was paid for nothing.
The obvious conflict in the government’s assessment of wages as having been paid for nothing is that if that is the case, then the wages are gratuities, gifts, not “income”. The government cannot have it both ways, to state that the wage-earner on the one hand realized earnings, or income, but on the other hand received a gift, purely gratuitous.
If we attempt to imagine the most “worthless” employment possible, one that required the absolute least amount of expenditure of effort and no knowledge or skill, we would still have to admit that no matter how much or how little such an employment paid, the employee is not paid for nothing. A night watchman, whose only requirement is that he remain in the premises overnight, is still giving up something for his wages. He is not being paid for nothing in exchange.
In Bailey v. Drexel Furniture Co., supra, Chief Justice Taft stated “All others can see and understand this. How can we properly shut our minds to it?” Id at 37.
A few examples should demonstrate that this distinction between wages, salaries and fees personally earned is one of substance:
Example 1: Gains on Capital
Joe places $100,000 in a certificate of deposit earning 6% per annum. Joe gave up his $100,000 for a year and at the end of the year he received $106,000 of which only $6,000 would be income as defined by the act. Joe still has his original $100,000 and can ‘rent’ it out again for another year, but he pays taxes only on the $6,000 gain.

Example 2: Gains on Sales
Tom buys a widget for $1 and sells it for $2. Tom gave up $1 in order to receive $2, but only the additional $1 is considered income. Tom still has his dollar back and can purchase another widget to sell, but he pays taxes only on the $1 gain.

Example 3: Gains on Labor
Bob pays Bill $50 to unplug Mrs. Haversham’s drain for which Bob charges Mrs. Haversham $75. Bob gave up $50 in order to receive $75, but only $25 is considered income, his realized gain of $25 on Bill’s labor. Bob still has his original $50 that he can use to purchase more labor that he can sell for profit, but he pays taxes only on the $25 gain.

But what about Bill’s $50? What has Bill given up? Nothing? Bill gave up a day out of his life, he expended his effort and skill, employed the use of his working tools. Bill no longer has his day or his labor, both are spent. He cannot, even with every penny of his $50, buy another day or recover the effort he expended, yet according to the government, his $50, every bit of it, is profit, gain, accession to wealth and was received in exchange for nothing. What Bill gave up to receive his $50 was not “nothing”, it was “‘The property which every man has in his own labor, [and] as it is the original foundation of all other property, so it is the most sacred and inviolable. . . .’ Adam Smith’s Wealth of Nations, Bk. I. Chap. 10.” Butchers’ Union, supra.
Joe recovered his $100,000, and paid no tax on it; Tom recovered his $1 and paid no tax on it; Bob recovered his $50 and paid no tax on it; but Bill can never recover his day, energy or labor, but pays tax on his gross revenue, including the value of his day, energy and labor and even if the value of that day, energy and labor exceeds the gross revenue!
We can all agree that a person’s labor is not only his property, his capital, but that it is depleted in its employment and, eventually, is exhausted and totally spent. We have two major, landmark Supreme Court decisions, still controlling law, dealing specifically with that issue, and the decisions of the Supreme Court in those two cases makes a conclusion that an income tax on wages is not an income tax, but a tax on gross receipts, taxing both income and capital, and, therefore, unconstitutional.
Stratton’s Independence v. Howbert, 231 U.S. 399, 400; 34 S.Ct. 136 (1913) and Stanton v. Baltic Mining Co., 240 U.S. 103, 36 S.Ct. 278 (1916) both dealt with challenges to a tax on profits of mining companies. The first dealt with the Corporation Tax Law of 1909 and the latter with the Income Tax Law of 1913.
The mining companies were contending with an identical issue as we have here with wages, salaries and fees personally earned. They were engaged in a business that required them to deplete their ore deposits in order to conduct that business. They not only incurred costs of operations, overhead and cost of sales, etc., they incurred the depletion of a finite, albeit of unknown quantity, capital asset. At the end of the mine’s life, all of the ore would be gone, just as at the end of our work lives, our ability to earn will be gone. Our human capital will have been exhausted, “sold out”.
The wage issue is exactly the same. Not only does one personally earning a wage, salary or fees incurring costs for tools, work clothes and other expenses, he is depleting his working life along with a goodly portion of his life itself, a finite, albeit of unknown duration, capital asset, his “most sacred and inviolable” asset.
The Supreme Court in both mining cases resolved the problem by determining that the tax, insofar as Baltic was concerned, was not an income tax at all, but a tax on the exercise of corporate privileges and the privilege of conducting mining operations that was “measured in income.”
In Stratton’s Independence, that was the case. The law in question was not an income tax, per se, but an excise on the exercise of corporate privileges, the Corporation Tax Law of 1909. The Court in Stratton’s Independence pointed out that Stratton’s was a corporation and that it was engaging in business activities that generated mining products, two of the proper objects of an excise. On that basis the Court held that the tax was not on the income of the mining operation, but rather an excise on the conducting of the business of a mining operation that was measured in income.
But in Baltic Mining, the Court was dealing with the Income Tax Law of 1913, the same law it dealt with in Brushaber and the direct statutory ancestor of our present income tax law. The tax was not a corporation or mining operations tax, it was an income tax and identified itself as such.
The Court had only two options: 1) Find that the income tax was taxing both the income and the capital and, therefore, unconstitutional, or 2) find that the income tax was taxing something else. It went with the something else. After stating the case and respective positions, the Court briefly and simply stated: “. . . independently of the effect of the operation of the Sixteenth Amendment it was settled in Stratton’s Independence v. Howbert, 231 U.S. 399, that such a tax is not a tax upon property as such because of its ownership, but a true excise levied on the results of the business of carrying on mining operations.” Id at 114 (emphasis added)
The clear and unmistakable message here is that the only tax that could tax more than income, gross receipts without allowance of deduction for the depletion of the ore body, was a corporate or manufacture of commodities based excise tax. If the income tax could constitutionally tax income of a mining operation, which would include taxing the depletion of its ore body, then the Court would have simply said so. It did not because it could not.
In the case of wages, salaries and fees personally earned, there are no corporate privileges being exercised. The wage-earner is not (at least not for himself, See Calamaro, supra) manufacturing a commodity or conducting mining operations. All he is exercising, and exhausting in the process, is his body, mind and his God-given right to earn a living with both, all at the expense of the loss, or cession, of a good portion of his lifetime here to another in exchange for a wage.
There is no alternate subject of excise. No “something else”, as in Baltic Mining, and the only conclusion we can reach, based upon the sound, ample and still controlling principles set out in all of the Supreme Court cases referred to herein, is that any tax that taxes 100% of wages personally earned has to be taxing not only the gain the wage-earner realized, if any, but also the asset that the wage-earner gives up in exchange for those wages, salaries and fees.
It is, therefore, respectfully submitted that insofar as the government purports to apply the income tax law as imposing a tax on wages, salaries and fees personally earned, it is in conflict with Article I, § 9, cl. 4, of the Constitution, and is, as so applied, unconstitutional and not entitled to enforcement.
17 See “Some Constitutional Questions Regarding the Federal Income Tax Laws”, by Howard Zaritsky, Legislative Attorney, updated by John R. Luckey, research assistant, Congressional Research Service, Library of Congress, May 25, 1979, updated September 26, 1984, p. 8

Based upon recent cases involving claims that wages are not income there is an apparently common misconception, an erroneous understanding or belief, that the issue of whether wages, salaries and fees personally earned are “income” within the meaning of the income tax law and, particularly, “within the meaning of the Sixteenth Amendment”, has been settled. It has not.
One government official contends that wages are constitutionally taxable income because the Supreme Court has not found them to be otherwise.17 The same reasoning could be employed to conclude that since the Supreme Court has not found wages, salaries and fees personally earned to be lawfully and constitutionally taxable by the federal government, they are not.
Although numerous cases have been cited as supporting that misconception, a review of the cases commonly cited as such reveals that they fail to support that conclusion. The Supreme Court has never considered the issues here presented, and until it does the latest enunciations from that Court are the law of the land. The position here advanced is not only supported, but mandated, by the current and controlling pronouncements of the principles involved by that body, and no District or Circuit Court can override or negate, much less overturn those Supreme Court pronouncements.
The Court is urged to scrutinize any cases cited to the contrary, and it is suggested that a careful review of those cases mistakenly cited will, it is hoped, clarify that the issue is still in urgent need of resolution and that in the cases generally relied upon to the contrary either the court involved has not actually dealt with the issues here presented, did not have the issue before it, stated no reasoning on any dictum to that effect or is totally without weight.
It is, therefore, respectfully submitted that defendant’s revenues, deriving solely from his own labor and effort in the pursuit of his chosen occupation, without involvement of corporate privilege or conduct of manufacturing or sale of commodities, is in conflict with the Constitution and, therefore, invalid as so applied, and, accordingly, those revenues being excluded from taxation as such, “not constituting income within the meaning of the Sixteenth Amendment” or of the Constitution, there is no tax deficiency, an essential element of the charges against Mr. Cryer, and, therefore, it is respectfully submitted that both counts of the indictment must be dismissed, with prejudice.


For the reasons hereinabove given and upon the authorities hereinabove cited it is respectfully submitted that there is and can be no tax deficiency, an essential element of the charges against defendant, and, therefore, it is respectfully submitted that both counts of the indictment should be dismissed, with prejudice.

September 4, 2014

Nicolai Sennels, PhD, on Islam, from Kay, [c]

<emI encourage everyone to read all the way through.
This explains a lot about faithful Muslims

Just in case any of you have wondered why those folks in the Middle East who are wearing weird full-length clothing in 120 degree heat, living in hovels, riding camels, beheading people who disagree with them, stoning their daughters, cutting off hands, and putting bombs on their children do these things, I think the answer lies in the commentary below. Sure makes sense to me. Of course, I am just an infidel. This came to me from a Lockheed friend who has had 3 assignments to Saudi Arabia .

*During the pilot transition program with the KV-107 and C-130 with Lockheed, we found that most Saudi pilot trainees had very limited night vision, even on the brightest of moon lit nights. Their training retention rate was minimal including maintenance personnel. Some had dim memories and had to be constantly reminded of things that were told to them the day before. Needless to say, an American, British or any other western instructor gets burned out pretty quick. It actually took Muslim C-130 pilots years before they could fly in the dark safely and then would be reluctant to leave the lights of a city. Ask any Marine, Air Force or Army guy who's been trying to train Iraqis, and especially Afghans. They will say, "Yep, dumber than homemade do-do"*

*Islam is not only a religion, it's a way of life, all the way around.
Yet another set of revealing facts about Muslim beliefs and traditions and ways of life. 400 years of inbreeding. I found this to be interesting. Didn't know whether to believe it or not. To research I went to
Wikipedia, "Cousin Marriage", and far down in the article "Genetics",
it seems there is a lot of truth here. A huge Muslim problem: Inbreeding Nikolai Sennels is a Danish psychologist who has done extensive research into a little-known problem in the Muslim world: the disastrous results of Muslim inbreeding brought about by the marriage of first-cousins.*

*This practice, which has been prohibited in the Judeo-Christian tradition since the days of Moses, was sanctioned by Muhammad and has been going on now for 50 generations (1,400 years) in the Muslim world.*

*This practice of inbreeding will never go away in the Muslim world, since Muhammad is the ultimate example and authority on all matters, including marriage.*

*The massive inbreeding in Muslim culture may well have done virtually irreversible damage to the Muslim gene pool, including extensive damage to its intelligence, sanity, and health. According to Sennels, close to half of all Muslims in the world are inbred. In Pakistan , the numbers approach 70%. Even in England, more than half of Pakistani immigrants are married to their first cousins, and in Denmark the number of inbred Pakistani immigrants is around 40%.*

*The numbers are equally devastating in other important Muslim countries: 67% in Saudi Arabia, 64% in Jordan, and Kuwait, 63% in Sudan, 60% in Iraq, and 54% in the United Arab Emirates and Qatar. According to the BBC, this Pakistani, Muslim-inspired inbreeding is thought to explain the probability that a British Pakistani family is more than 13 times as likely to have children with recessive genetic disorders. While Pakistanis are responsible for three percent of the births in the UK, they account for 33% of children with genetic birth defects.*

*The risks of what are called autosomal recessive disorders such as cystic fibrosis and spinal muscular atrophy is 18 times higher and the risk of death due to malformations is 10 times higher. Other negative consequences of inbreeding include a 100 percent increase in the risk of still births and a 50% increase in the possibility that a child will die during labor.*

*Lowered intellectual capacity is another devastating consequence of Muslim marriage patterns. According to Sennels, research shows that children of consanguineous marriages lose 10-16 points off their IQ and that social abilities develop much slower in inbred babies. The risk of having an IQ lower than 70, the official demarcation for being classified as "retarded," increases by an astonishing 400 percent among children of cousin marriages. (Similar effects were seen in the Pharaonic dynasties in ancient Egypt and in the British royal family, where inbreeding was the norm for a significant period of time.) In Denmark, non-Western immigrants are more than 300 percent more likely to fail the intelligence test required for entrance into the Danish army.*

*Sennels says that "the ability to enjoy and produce knowledge and abstract thinking is simply lower in the Islamic world." He points out that the Arab world translates just 330 books every year, about 20% of what Greece alone does.*

*In the last 1,200 years of Islam, just 100,000 books have been translated into Arabic, about what Spain does in a single year. Seven out of 10 Turks have never even read a book. Sennels points out the difficulties this creates for Muslims seeking to succeed in the West. "A lower IQ, together with a religion that denounces critical thinking, surely makes it harder for many Muslims to have success in our high-tech knowledge societies." Only nine Muslims have ever won the Nobel Prize, and five of those were for the "Peace Prize." According to Nature magazine, Muslim countries produce just 10 percent of the world average when it comes to scientific research measured by articles per million inhabitants. In Denmark , Sennels' native country, Muslim children are grossly over represented among children with special needs. One-third of the budget for Danish schools is consumed by special education, and anywhere from 51% to 70% of retarded children with physical handicaps in Copenhagen have an immigrant background. Learning ability is severely affected as well. Studies indicated that 64% of school children with Arabic parents are still illiterate after 10 years in the Danish school system. The immigrant drop-out rate in Danish high schools is twice that of the native-born.*

*Mental illness is also a product. The closer the blood relative, the higher the risk of schizophrenic illness. The increased risk of insanity may explain why more than 40% of patients in Denmark 's biggest ward for clinically insane criminals have an immigrant background.*

*The U.S. is not immune. According to Sennels, "One study based on 300,000 Americans shows that the majority of Muslims in the USA have a lower income, are less educated, and have worse jobs than the population as a whole."*

*Sennels concludes: There is no doubt that the wide spread tradition of first cousin marriages among Muslims has harmed the gene pool among Muslims. Because Muslims' religious beliefs prohibit marrying non-Muslims and thus prevents them from adding fresh genetic material to their population, the genetic damage done to their gene pool since their prophet allowed first cousin marriages 1,400 years ago are most likely massive. This has produced overwhelming direct and indirect human and societal consequences.*

*Bottom line: Islam is not simply a benign and morally equivalent alternative to the Judeo-Christian tradition. As Sennels points out, the first and biggest victims of Islam are Muslims. Simple Judeo-Christian compassion for Muslims and a common-sense desire to protect Western civilization from the ravages of Islam dictate a vigorous opposition to the spread of this dark and dangerous religion. These stark realities must be taken into account when we establish public polices dealing with immigration from Muslim countries and the building of mosques in the U.S.A.*

*Let's hope the civilized West and the North Americans wake up before the reality of Islam destroys what remains of our Judeo-Christian culture and what is left of our domestic tranquility.*

[Below are the first 2 of 6 pages of search results, with links. Dr. Sennels’ work, for those of us with a pre-common core/ progressive education, are fully aware that his work conforms to the basic Mendelian Genetic Research conclusions, as well as the commentaries of the various Q’Ran interpretors.]

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Muslims and Westerners: The Psychological Differences …
http://www.newenglishreview.org/Nicolai_Sennels/Muslims_and&#8230; Cached
When I first read about Nicolai Sennels’ work concerning therapy, which he had conducted with criminal Muslims in Denmark, I knew that it would be groundbreaking.
Nicolai Sennels – FrontPage Magazine
http://www.frontpagemag.com/author/nicolai-sennels Cached
Why, as a psychologist, I am not surprised at the common denominator in the U.K.’s rape epidemic.
English | Nicolai Sennels
nicolaisennels.dk/?page_id=211 Cached
Articles and interviews with Nicolai Sennels. Robert Spencer interviews Nicolai Sennels: “Muslims are taught to be aggressive, insecure, irresponsible and intolerant”
The American Muslim (TAM)
theamericanmuslim.org/tam.php/features/articles/robert… Cached
Feb 07, 2013 • Nicolai Sennels’ Nazi Style Propaganda. by Sheila Musaji. Nicolai Sennels is very popular with the Islamophobia echo chamber. His articles on Muslim …
Muslim Inbreeding: Impacts on intelligence, sanity, health …
http://www.rightsidenews.com/2010081120756/life-and-science/&#8230; Cached
Aug 11, 2010 • Massive inbreeding within the Muslim culture during the last 1.400 years may have done … Nicolai Sennels is a psychologist and author of “Among …
Nicolai Sennels. Muslim Violence and Rape from Muslim Beliefs
worldtruthsummit.com/nicolai-sennels.html Cached
Nicolai Sennels, Danish psychologist. Muslim violence and rape, Muslim rage, aggression and irresponsibility are from Muslim beliefs, Islamic beliefs.
User:Nicolaisennels – Wikipedia, the free encyclopedia
en.wikipedia.org/wiki/User:Nicolaisennels Cached
Nicolai Sennels (born Denmark 11. febuary 1976). Education: psychololist. Longtime practitioner of Tibetan Diamondway Buddhism.
Nicolai Sennels, Danish Psychologist – World Truth Summit
worldtruthsummit.com/917/nicolai_sennels_9923.html Cached
Nicolai Sennels at the World Truth Summit, speaking of his personal journey exploring Islam and the West
Moderate Muslims and Nicolai Sennels – blogspot.com
enzaferreri.blogspot.com/…muslims-and-nicolai-sennels.html Cached
Feb 27, 2013 • The excellent psychological and sociological essay linked to below is by the Danish psychologist Nicolai Sennels, who has worked with many Muslims and non …
PJ Media » The Problem of Inbreeding in Islam
pjmedia.com/blog/the-problem-of-inbreeding-in-islam Cached
[Editor’s note: Several days ago, an interview with Nicolai Sennels by Jamie Glazov on Muslim inbreeding was published but taken down soon after at the request of …
• User:Nicolaisennels – Wikipedia, the free encyclopedia
en.wikipedia.org/wiki/User:Nicolaisennels Cached
Nicolai Sennels (born Denmark 11. febuary 1976). Education: psychololist. Longtime practitioner of Tibetan Diamondway Buddhism.

Writings by Nicolai Sennels :: Islamist Watch
http://www.islamist-watch.org/author/Nicolai+Sennels Cached
External Articles: Title: Publication: Date : Denmark: Muslims are around 4.5 times more criminal than non-Muslims: Jihad Watch: August 26, 2014: Swedish PM on the …

Nicolai Sennels: Psychology: Why Islam creates monsters …
counterjihadknight.wordpress.com/2014/…/nicolai-sennels… Cached
Jan 04, 2014 • Dr. Sennels well-thought points are irresistibly logical. There is no way to fight a psychologically-invested foe that is making a many-pronged attack on a …

Robert Spencer interviews Nicolai Sennels: “Muslims are …
Nicolai Sennels regularly contributes to Jihad Watch, with articles on psychology and translations of Scandinavian and German news. To help you get to know Sennels …

Gates of Vienna: Nicolai Sennels
gatesofvienna.blogspot.com/p/nicolai-sennels.html Cached
Nicolai Sennels is a psychologist and the author of “Among Criminal Muslims: A Psychologist’s experiences with the Copenhagen Municipality”.

Muslim Inbreeding – True Orthodox Polemics – Non-Christians …
http://www.trueorthodoxy.org/non_christian_islam_inbreeding.shtml Cached
Muslim Inbreeding. A Study by Nicolai Sennels. Nicolai Sennels is a Danish psychologist who has done extensive research into a little-known problem in the Muslim …

Nicolai Sennels : Jihad Watch
http://www.jihadwatch.org/author/nicolai Cached
Radical imams, patrolling Muslim father groups and Sharia courts are safe in Europe’s Muslim-ruled areas, while non-Islamic authorities are regularly attacked.

Tag Archives | Nicolai Sennels – Loonwatch.com – "The …
http://www.loonwatch.com/tag/nicolai-sennels Cached
Local Kansas GOP official: ‘Offending Muslims is the duty of any civilized person. Especially with a .45.’ August 7, 2014

Nicolai Sennels | ZoomInfo.com – Business Profiles and …
http://www.zoominfo.com/p/Nicolai-Sennels/1378363138 Cached
View Nicolai Sennels's business profile as Danish Psychologist and see work history, affiliations and more.

Robert Spencer Interviews Nicolai Sennels about Hostile Islam …
http://www.vdare.com/posts/…nicolai-sennels-about-hostile-islam Cached
As someone fascinated by the psychology of why the multicultural society envisioned by diversity utopians is a failed idea (hint: human nature is tribal), I find this …

August 13, 2014

Secession: The Intermediate Argument, by and (c) Justplainbill

Secession: The Intermediate Argument
Posted: 14 August 2014

Fair Warning, this post is a relatively long post of several pages. It is not that I want to bore you. It is that the subject matter is not amenable to much more shortening.

When someone tells you that solving incredibly complex problems is easy or that there IS a quick solution, or they have the answer to all problems “in a nutshell,” and that person is not Jesus the Christ, then the odds are that they want you to buy something or vote them into office and “just trust them”. Think of “Hope and Change” as the mantra, yet not one reasonable suggestion is offered beyond “just trust me”.

For those uninterested in true argument or debate, there is a short post supporting the position of secession. This new post actually gives reasons, answers and the reasoned benefits of secession!

It may take a while for you to get to the end, but it is worth it if you really do want to preserve American Values. Just as an example, in the 1770’s, the supporting arguments for secession were published in pamphlets of scores of pages. As a standard academic ma-neuver, I am incorporating herein, two of the most important, Common Sense and The Rights of Man, both by Thomas Payne, by reference. Truly, y’all who are interested in free-dom, liberty, equality (ya, equality, not affirmative action or some other pseudonym for discrimination, bigotry and legalized theft – read the five virtues post for more), and pri-vate property & personal wealth, regardless of what you may think of these arguments, you should have and read more than once, both of those pamphlets.

With Dan Greenfield and Fred-on-Everything making the obvious points on Execu-tive Branch Scandals and Illegal Aliens Invading; Mark Levin and Sean Hannity professing Originialist Constitutionalism; Taxihack Depressions (on wordpress.com) reporting active black ops; Michael Savage and Glenn Beck talking Survivalism, John Beck, PhD proving visually the profound uselessness of most federal programs, and with nothing reasonable coming from “the ivy covered halls ofacademia”, except appeasement and the surrender of Western Civilization to Transnational Industrial Feudalism, occasionally called Statism, I have decided to enter as “a voice of reason,” even though this will not read as “reason” on the first or even the third reading.

This is not as emotional as you think, the conclusions are both reasonable and rea-soned.

Posted on this blog (www.justplainbill.wordpress.com) is a book list. There have been several good books, including Gasparino’s The Sellout, Jared Diamond’s Collapse, Brion McClanahan’s The Founding Fathers’ Guide to the Constitution, and Pauline Maier’s Ratification, The People Debate the Constitution, 1787 – 1788, published since the last update.

Of immediate interest, and y’all should have this anyway, is the leather-bound pock-et edition of The Constitution of the United States of America with the Declaration of Inde-pendence, FALL RIVER PRESS © 2012, NYC NY ISBN 978-1-4351-4553-5, interestingly enough, printed and bound in China. Common Sense is also available through the same publisher, in a similar leather bound booklet.

Y’all’s reference library should also have Edwin Meese III’s, The Heritage Guide to the Constitution, ISBN 978-1-59698-001-3, if for no other reason than to see how the original intent of The Founders has been corrupted by the United States Supreme Court, almost since the beginning. Y’all should have it anyway as it is a comprehensive and understandable, at least to those with a 10th grade education, guide to what is NOW the law of the land as interpreted by SCOTUS, ignominiously ignored by congress, and implemented by the executive branch. As conflicted as SCOTUS has made it, Professor Maier’s work, Ratification – noted above, offsets the chaos, for those interested; otherwise, we are back to, understandably, secession, moreover, the 1776 kind of secession, too!

Thucydides’ The Peloponnesian Wars, Sun Tzu’s The Art of War, de Tocqueville’s De-mocracy in America, and Freehling’s two works, Nullification, and Secession, (both having disappeared from book shelves during “The Clinton Years”), with Shelby Foote’s The Civil War: a narrative, are still the most important starting places for understanding the back-ground of why The Red States must secede.

This Secession MUST BE before the funded national debt exceeds twenty trillion U.S. dollars, (20T USD or $20,000,000,000,000.00) and the unfunded debt exceeds ninety trillion U.S. dollars (90T USD or $90,000,000,000,000.00). This debt crisis is on a national economy of less than fourteen trillion U.S dollars (14T USD or $14,000,000,000,000.00). I explain this statement later.

This is a debt to asset ratio of worse than 1:6!!!

Dodd-Franks’ asset tests (reserves) and the Basil III tests, used to determine the solvency of banks, would have declared The United States Bankrupt years ago, like Greece, closed it down, and sold off all of its assets and property, at bargain basement prices, probably less than ten cents on the dollar, to cover those debts; which is an absurdity. None-the-less, the standard that these pissant politicians apply to others, they fail to apply to themselves as they garner billions of dollars from the public treasury for themselves and their associates.

A simple glance at the accumulation of money by Nancy Pelosi, Dodd, Franks, the DNC contributor/ owners of Solyndra, and the Reid Family in Nevada, and the methods used, prove this point.

And, because of these things, we are left with Revolution/ Civil War, a Constitutional Convention, economic collapse and bankruptcy with an unemployment rate approaching 50%, delayed social implosion and its resulting anarchy to tyrannical governments, or Secession, my personal option if done before the debt becomes irre-deemable.



The Preamble to The Constitution of The United States of America is NOT law. It is a statement of purpose. [We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America]. Notice the words emphasized by capitalization, and the sentence structure, notice that the constitution is FOR the United States. Notice that throughout the constitution, the word ‘state’ is capitalized as ‘State,’ thus proving the independence and sovereignty of each State; proving that they are not a subordinate division devised for the purposes of ease of suppression, oppression, and repression.

This is a statement of intent, not law, and not to be construed as law.

The Preamble is one of two looking glasses, through which we should be scrutinizing every activity of the federal government. If any action of the federal government does not further one of these stated interests, it should fail as violating the IXth and Xth Amendments. If those proposing such illegal actions are in federal government, those people should be deemed untrustworthy and unreliable by every citizen, and treated as such.

The second looking glass is that collection of works known as The Anti-Federalist Papers. The Anti-Federalist Papers were those arguments used against the ratification of the original seven articles. The Federalist Papers, predominantly written by Alexander Hamilton, ESQ., with contributions by James Madison, ESQ., and a handful by John Jay, ESQ., later the first Chief Justice of the United States Supreme Court, is a set of circular and specious reasoning, often used to justify or explain various clauses of the constitution.

Chronologically, and logically, The Federalist Papers should be ignored as having been displaced by The Bill of Rights. The sequence of events are: failure of The Articles of Confederation, the failed Annapolis Convention, the successful Philadelphia Convention, presentation to the states for ratification, argument where initially the press pushed The Federalist Papers and suppressed The Anti-Federalist Papers, the prospect of ratification failure, and then the acceptance of The Bill of Rights as the cost of ratification. The Federalist Papers are arguments for ratification WITHOUT THE TEN AMENDMENTS of The Bill of Rights. Thus, in order to interpret this constitution, it is The Anti-Federalist Papers which must be first looked to for understanding, and The Federalist Papers to be used ONLY when they are either not in conflict with the Anti-Federalist Papers, or where the AFP’s are silent on the subject.

Thus, more than one-half of all constitutional issues decided by The Supreme Court, by The Congress, and by The Executive, have been founded on the false premises of The Federalist Papers. The methods available to correct this are either that congress review ALL of these decisions and over-rule them by legislation, and thereby face a SCOTUS revolt, this revolt based on decisions such as Holy Trinity Church, (included below), and The Federalist Papers themselves, or SCOTUS, on its own Motion review and over-rule these rulings.

The likelihood of SCOTUS emasculating itself are nil and less than nil, especially giv-en Justice Bader-Ginsburg’s recent sexist ramblings and Justice Kagen’s published igno-rance of American History.

During George Washington’s presidency, The Executive frequently declared legisla-tive bills as unconstitutional. The understanding then was that congress would reconsider what President Washington sent them and either re-write or drop the bill. President Washington frequently took the opportunity to place his Secretary of the Treasury, Alexander Hamilton, and his Secretary of State, Thomas Jefferson, at odds writing responses to congress, then he would pick the one that suited his point of view, and return the bill to congress with the appropriate response. Hamilton frequently trumped Jefferson, thus, the Jobber High Federalist rutted road was ridden, and not the green pathway of the Yeoman-Farmer.

Congress will do nothing to change this, as members of congress are too intimately involved in accumulating personal wealth and power under this system, I will explain elsewhere how this dysfunction functions. The likes of Jackson, Rangel, Boehner, Pelosi, Reid, &c., will do nothing to jeopardize their own personal positions, even unto total de-struction of the society around them. There is a book, Throw them All Out, which details the dirty but legal transactions involved; consider the recent rash of convictions for corruption amongst the political aristocracy and their families.

Arguments made to have another constitutional convention or add 27+ amend-ments, the amending process as defined in Article V of the constitution, fail for several reasons. The first is, as noted elsewhere on this blog, that the electoral process has failed utterly. It has been corrupted to a point beyond cure. The election of Al Franken and the corruption in Noxubee County MS are the standard and not the exceptions such that fair representation, unbiased national interest, and altruism would be non-existent at this convention. The second major defense is the same as that made in 1860: the regional interests will suppress the national ones. The cliché, “All politics are local”, is too true to be ignored.

Only through the Red States seceding are all of those bad SCOTUS decisions removed from law.

A consideration of historical context and technology intrudes at this point. When originally ratified, the congress was designated to sit for only a few months out of the year, and, that it sit several months after the polling occurs because of primitive transportation technology. In 1788, there was no electricity and the steam engine, “Fulton’s Folly”, still years away. Bluntly, there was NO SUCH THING AS A LAME DUCK SESSION as we now know it, as congress had recessed and would not return until the Spring. Recess appointments were few and far between, but understandable when congress could be months away from sitting. Only through secession will Lame Ducks and Recess Appointments be eliminated! They are too ingrained into the political corruption of both major parties to be done away with in any other fashion.

With electricity, electronics, jet transportation, I-Phones, I-Glasses, internet access, &c., the reasons for lame duck and recess appointments completely disappear. With seces-sion and a new constitution, polling can take place on the 3rd Saturday of the 1st month of each quarter; certification of the election can take place within 5 working days; and a re-striction on laws and appointments during those 5 days included in the constitution, thereby completely eliminating the egregious, self-serving, irresponsibility of passing an unwanted law or giving the wrong person an appointment, when the next government would not do those things, especially if the issues surrounding those laws and appointments are what the election was about. Think about it: John Marshall and his entire line of High Federalist SCOTUS rulings would not exist if this had been the law in 1800!

Secession cures this disease.


There are seven Articles to the 17 September 1787 Constitution of The United States of America. Before 1866, “These United States” were what we were. A Union of In-dependent Nations with each State having its own constitution, not answerable beyond those restrictions explicit in the constitution, to a Federal Government, but to its citizens, and thus free to organize and live free, unoppressed, with the right to self-realization uninhibited by those living thousands of miles away.

The Federal Government, according to the IXth and Xth Amendments,(enacted as ten of twelve proposed Amendments, currently known as The Bill of Rights, on Wednes-day, 4 March 1789), was to be a junior partner in the triumvirate of, the federal govern-ment, We The People, and The States. [Amendment IX: The enumeration in the Constitution of certain rights shall not be construed to deny or disparage others retained by the people. *** Amendment X: The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.]

The ten sections of Article I of the 1787 Constitution establish, define, and restrict the Congress of These United States of America. They create the bicarmel legislature with the “lower” house as the’ house of commons,’ or of “We The People”, and the “upper” house that of THE STATES; not that of an electoral majority of we the people on an extended appointment of exalted, and aristocratic, position.

The XVIIth Amendment effectively eviscerates Article I §3 [The Senate of the United States shall be composed of two Senators from each State, chosen by the Legislature thereof, for six Years, and each Senator shall have one Vote. … .] and clearly violates both the IXth and Xth Amendments. It reduces State Sovereignty to nil, with ONLY Nullification +/or Secession, as a response to an overbearing or out of control federal government. [Shelby Foote has a decent discussion of this in The Civil War: a narrative both in the ante-bellum section and in the section discussing the aftermath of Antietam.] One only need look to the effects of “The Dream Act” and its complete abandonment of the Southern Border and the Governor of Texas having to call up his state’s militia to attempt to protect his citizenry, their lives and their society and private property & wealth.

The discussion of the effect of reducing the senate to little more than a House of Lords, was on partisan lines, with the typical political result: In the short term, it helped the majority party, in the long term it has afflicted the taxpayer with trillions of dollars of unnecessary, unwanted, and unconstitutional burdens, both social and economic. The very effect of having this House of Lords has been constant gridlock, with, for all of the yammering on the subject, little, if any, compromise in the legislative process. The purpose of the senate as put forth in McClanahan’s book was to act as a brake on the impetuousness of the House of Representatives, AND to REPRESENT THE INTERESTS OF THE INDIVIDUAL STATES!

With the senators elected by the general population instead of by the states’ legislatures, the senate no longer represents the States, but is now irrelevant. It reduces to near zero, the political strength of the citizens of the individual states and clumps them into a rural vs urban sewer of issue conflicts, winnable only by that group procreating the most rapidly, and, history shows us, destroying economic efficiency through socialist “safety net” programs, instead of the necessary self-reliance/ self-responsible of the Judeo-Christian Ethos.

This same purpose, protecting the interests of the States, is better served by the process of Nullification. Both Thomas Jefferson and James Madison saw, and agreed to this, when they wrote and put forth The Kentucky and Virginia Resolutions. Nullification, (there is a post on this blog discussing Nullification more fully), has been used as recently as 2014 by the various states. Three examples are California nullifying federal immigration law by creating sanctuary cities, Colorado nullifying federal illicit drug laws by legalizing the recreational use of Cannabis and the 2010 rejection of the Patient Protection and Affordable Care Act, (aka PPACA or “Obamacare”) by the citizens of Missouri (by a margin of 70% – 30%).

Nullification as currently used, is another argument in favor of secession due to Article IV, [§1. Full Faith and Credit shall be given in each State to the public Acts, Records, and Judicial Proceedings of every other State. And, the Congress may by general Laws prescribe the manner in which such Acts, Records, and Proceedings shall be proved and the effects thereof. … .] Nullification is acceptable in California and Colorado, but not Missouri, ever wonder why?

Please note where and under what circumstances nullification is acceptable and not acceptable. In point of fact, legally and morally, SCOTUS should have taken this into account when ruling on various aspects of PPACA. The failure of SCOTUS to perform within the law, in and of itself, should be reason enough for secession. Due to various XVIIIth Century SCOTUS rulings, not only is tenure for life a facet of being a federal judge, but one may be suffering from dementia or extreme alcoholism, yet remain on the bench, AND THAT JUDGE OR JUSTICE’S RULINGS ARE STILL BINDING!

Thus, by their own actions, both SCOTUS and the entire senate have defeated the purpose of the constitution. Secession is the least objectionable response to such irresponsibility, to this assault on personal Faith, private property and personal wealth.

The need for the upper house to be placed, as originally intended by The Founders, back to the citizen-taxpayers of each, and every individual, INDEPENDENT, State, is shown every time a party official prevents national work from being performed. The current institution is nothing more than a millionaires’ club, with its purpose naught more than self-perpetration, and making their bubba’s rich. The “Black Hole” in Boston is an excellent example of this, as is the constant raiding of the Transportation Fund for projects like “light rail”, instead of roads and bridges, which was what the original enabling was for.

Consider further this little tidbit. The money for the Federal Transportation Fund is from a tax on gasoline. The reasoning was that since cars and trucks would be using the roads and bridges, car and truck owners should pay for the bridges and roads. Now, the gasoline tax must be raised so that members of congress can buy construction workers’ votes by spending the money on less effective projects that are more expensive like “light rail”. Interestingly enough, the 9 Aug 14 issue of The Economist, has an article on this very subject.

As to Secession, the Stanford Convention of 1814, where the New England States voted to remain in the Union, provided that The War of 1812 be ended, is only one of several secession conventions. Dr. Freehling’s work is excellent for those who actually want to research the issue. Suffice it to say that, the next secession was when Andrew Jackson and his Democratic Party so controlled the federal government that the South was so heavily taxed for “economic improvement,” (canals & railroads, special loans to industry – think Solyndra), and the benefits of all of these taxes given to the Northern states, that South Carolina did hold a convention and start the secession process. Former president John Q. Adams, then a senator from Massachusetts, intervened, and South Carolina did not secede and Jackson’s Tax Law was repealed! Think Obamacare!

Shortly thereafter, the third party candidate, Abraham Lincoln got elected to the executive, and the seven Deep South states seceded. Lincoln, arguably the worst president this country has ever had, [know anybody else who not only caused a civil war costing as much as The War of 1861 did in both lives and wealth; violate the constitution so many ways through executive decree {instituted an unconstitutional raising of an army, fired on States’ militias, took and hanged innocent hostages as a means of controlling citizens in occupied territories, instituted a draft without an act of congress, created an income tax specifically prohibited by the constitution – not made legal in this country until 3 February 1913 with the questionable ratification of the XVIth Amendment, invaded the Sovereign Commonwealth of Virginia, piratically boarded British commercial vessels and kidnapping private citizens under the protection of The Crown, and on and on} – BTW, Lincoln freed NO slaves, the XIIIth Amendment did that, and the discussion by his own cabinet as to the constitutionality of his Emancipation Proclamation shows it to be unconstitutional as it is not allowed even within the executive’s war powers, AS IT DEALS WITH THE CONFISCATION OF PRIVATE PROPERTY W/O DUE PROCESS (!!!), AN ISSUE ALREADY DECIDED BY SCOTUS, Scott vs Sanford, THAT THE FEDERAL GOVERNMENT HAS NO SUCH AUTHORITY!!!], in direct violation to the constitution, congress was NOT in session, started to raise a Standing Army and threatened to “cross” Virginia with it in order to put down the legally seceding states.

Virginia and the three border states, then held secession conventions and decided to secede from the union. For the results of Lincoln’s unconstitutional acts, I direct your attention back to Mr. Foote’s excellent work. His discussion of how Missouri did not secede yet Lincoln’s general, Frèmont, invaded anyway, treating Missourians as subjugated serfs, the treatment of occupied territories by such union generals as Butcher Butler in New Orleans and the confiscation of private property sold for personal gain, are enlightening, to say the least.

Point being, secession was and is legal. Further proof, is that in 1854, then Repre-sentative from Illinois, that same A. Lincoln, made a speech on the floor of the House of Representatives declaring so, and that he understood the law to be so. And, consider that although called The American Revolution of 1776, it was, in both fact and law, a secession from the Hanoverian Crown!

A last point on Article I, the “just and proper” enabling clause, is always interpreted through the dark glass of the specious Federalist Papers. Since it has been shown that it should be viewed through both The Preamble and The Anti-Federalist Papers, every case that has supported this clause’s use to over-reach and extend federal authority, should be made null and void. Only through secession can all of those laws and SCOTUS decisions be removed.

I – b

Ok, here’s the simple view and clearly why the federal government must be limited to federal issues ONLY!!

A Congressman from Detroit wants special tax privileges for certain constituents. Lady Speaker wants an extension to an Interstate to go over land to which she and her husband have options to buy. They swap votes, each voting for the other’s special situation. The result:
A special section of the Internal Revenue Code (IRC), based on the section of the constitution stating that the congress should be doing things to help commerce and science, is amended to include that any money lost from the start-up of a Hip-Hop/ Rap Record Label, shall be written off the investor’s Gross An-nual Income at 50:1. Thus, for every dollar lost on said record label start-up, the investor can take off $50.00 of income. The result is a boom of record labels in Detroit, creating proprie-tary jobs for in-laws, family, and friends, an economically mis-direction of economic resources, and an incredibly favorable tax break for those specific investors.

Balancing this congressional support for advancing commerce and science, Madame Speaker, knowing months in advance of the public exactly where the unnecessary Interstate extension will go, exercises her options to buy hundreds of acres of land at $180/acre, and then sells it to The Department of Transportation for $1,800/acre.

Both the Congressman from Detroit and the Congresswoman from San Francisco, have personally, AND LEGALLY, profited from these acts of congress. We, the taxpayers, have lost. We have lost in the one case by being over-charged for the land, and in the other in that those “losses” have reduced the “investors’” tax payments.
Is this simple enough for you?


Article II establishes, defines, authorizes, and restricts, The Executive Branch.

In a full-blown argument including Article II, discussion of presidential over-reach, appointing of bubba’s, failure to enforce the law, &c., would be gone into. However, with all of the public discussion, or lack thereof, regarding The Obama Administration and its scandals, its appointments of racists and bigots such as Perez and Holder; scandals such as NSA spying on US citizens, the IRS, Benghazi, Hillary & Kerry, the dropping of the New Black Panther Voting Violation law suit, its failure to enforce the Mississippi Federal Court Decision regarding the Sheriff of Noxubee County, the as yet unexhausted abuse of the military, the continuing exercise of executive authority to change passed legislation without returning to the legislature for a re-write, the “Dream Act” executive order, the deaths of Federal Agents by foreigners, &c. I see no such need. The only way to re-write The Executive and get rid of all of the entrenched civil servants like Lois Lerner, is through secession.

Let us be more clear: Obama has appointed over three dozen ACLU and La Raza attorneys to the Justice Department Civil Rights Division, how impartial will they be, when J. Christian Adams’ book Injustice: the Obama Justice Department, already shows how bad things are in the DoJ. The evidence mounts.

And, as to the whole civil service, the over One Million of Them, what shall be done now? How many of them are Lois Lerners?

Bluntly, if even one is a Lois Lerner, the integrity of the whole system fails. Only se-cession cures the cancer of the Obamacratic Bureaucracy. Or, do you really think that Lois Lerner was (she got to retire with full pension and benefits) the only rotten apple in the bureaucracy, or that only the IRS, NSA, CIA, SSA, HUD, OPM, NLRB, ACE, Medicare, and the VA, are the only really bad federal agencies? Mmm, wait a minute, doesn’t that leave ONLY the Military as honest? And, hasn’t Obama fired so many generals and admirals that the only people appointed to flag positions are those with good records on gender, race, and affirmative action, pretty much leaving combat skills out of the promotion equation? Or, did I miss something in the recent speech by The Commandant of The Marine Corps (Barry, the P is silent!) condemning current Executive Policies?


The failure of The Supreme Court of the United States, created by Article III, to follow even the most basic of The Rules of Contract and Statutory Construction, that every person who has completed their first year of law school, not only understands the rule but the WHY the rule exists reasoning, is, in and of itself, reason to secede. The failure to follow the most simple of the rules of law, proves beyond any doubt that The Federal Judiciary is incapable of being impartial, of rendering a constitutionally grounded ruling, or even of acting on the surface in a non-partisan, reasoned judgmental manner.

When PPACA was ruled constitutional as a tax and CJ Roberts declared that the duty of SCOTUS is not to make law, but to interpret law in accordance with the intent of congress, he was correct. That he completely ignored the affirmed and boldly broadcast intent of congress, was NOT correct. Madame Speaker, Nancy Pelosi, had declared openly, and had printed in The Congressional Record, the official source and record of congressional intent, that there was not to be a severability clause in PPACA. She said outright that PPACA was an all or nothing bill, and was to be an all or nothing law. When SCOTUS ruled one iota of the law unconstitutional, the will of congress was that then the entire law was to be unconstitutional!

But there is so much more!

The chain of Marshall Cases beginning with Marbury vs Madison, (~1803) all in vio-lation of a clear reading of the constitution, has as its purpose a re-write of the constitution along High Federalist lines, and gives SCOTUS a higher footing than the other two branches, when the original intent was that it be the least of the three branches. The overt end of that line is the following, and it is still law, Shepardize it if you like. It has been “restricted” and “narrowed” but never the less, it is still good law. The covert end of these rulings has not been reached. The gross failure to follow the simplest of the rules of construction, the severability clause, proves SCOTUS is still seeking absolute dominance over government.

Rector, et al, Holy Trinity Church vs United States
143 US 457 (1892)
“(@ 12 SCT 511) It must be conceded that the act of the corporation is within the letter of (the law) … (@ 12 SCT 512) It is a familiar rule that a thing may be within the letter of the statute and yet not within the statute, because not within its spirit nor within the intention of its makers. This has been often as-serted, and the Reports are full of cases illustrating its application. This is not the substitution of the will of the judge for that of the legislator; for frequently words of general meaning are used in a statute, words broad enough to include an act in question, and yet a consideration of the whole legislation, or of the circum-stances surrounding its enactment, or of the absurd results which follow from giving such broad meaning to the words, makes it unreasonable to believe that the legislator intended to include the particular act.”

Emphasis added.

It is important to note the historical context of this decision, especially with the court using the illogical reasoning that it expresses above.
In 1892 there was a Federal Labor law that stated that no enterprise could em-ploy a foreigner for any position whatsoever in these United States if there was an American able and willing to do that job.
Holy Trinity Church is the Episcopal Church located at Wall & Church Streets in New York City. It was originally Anglican a.k.a. Church of England (C of E), but, as did most Anglican Churches in 1776, vote to distance itself from The Crown. Holy Trinity Church is where Alexander Hamilton is buried. It is where the power elite of old families of New York City, and the early Federalists, belonged, worshipped, and congregated. It is where the business people attended. Currently, it owns ALL of the land from Wall Street south and collects all of the rents therefrom. As a church, it pays no taxes but supports various politicians and approved charities.
In 1888, Holy Trinity Church decided to employ a new bell ringer. The Elders de-cided to hire a German to do it. They did in fact know that there were hundreds, if not thousands, of New Yorkers ready, willing and able to do the job. They did not care, and they did in fact know that they were breaking the law, at least according to the syllabus.
And, the Supremes decided to keep John Marshall’s usurpation of power alive and well, the Constitution of the United States notwithstanding.

[page taken from The Albany Plan Re-Visited © 2012 William S. Klocek]


Article IV is one of the most egregiously and violently violated articles of the constitution. [§1 Full Faith and Credit shall be given in each State to the public Act, Records, and Judicial Proceedings of every other State. And the Congress may by general Laws prescribe the Manner in which such Acts, Records, and Proceedings shall be proved and the Effect thereof. §2 The Citizens of each State be entitled to all Privileges and Immunities of Citizens in the several States. … . §3 New States … . §4 The United States shall guarantee to every State in this Union a Republican Form of government, and shall protect each of them from Invasion; and on Application of the Legislature, or of the Executive (when the Legislature cannot be convened) against domestic violence.]

(I must pause and catch my breath every time that I proofread this essay when I get to this point. Ah-ha, not better, should probably go get a scotch & water, no ice.)

Just a little bit here, as once you read the very few points that I make, y’all will be putting forth many more of your own, and realize that secession is the least bloody way of getting rid of this.

For decades, the only two places an American could get a divorce were Mexico and the State of Nevada. For Nevada, you went to Reno, rented a room for six weeks to establish CITIZENSHIP through meeting the residency requirements, then filed for a “no fault” divorce and it was routinely granted. Ta-da! The divorce became good worldwide!!!

First problem, as SSA and Medicaid became rights, the residency requirement limit-ing access to State Aid, was dissolved by SCOTUS, as residency requirements somehow infringed on a magically implied constitutional right to mobility. This issue as a national issue is still unresolved.

Second problem, now that California and New York have decided to grant Illegal Aliens driver’s licenses, these new license holders may now travel legally everywhere within the federal jurisdiction, regardless of the rights and laws of the other 48 states. Note also the invasion all along our Southern border and how the feds are not protecting our citizens.

Third problem, these NY & CA driver’s licenses are Legal Acts within the meaning of Article IV. THEY ARE NOW USABLE AS GOVERNMENT ISSUED LICENSES, WHICH MAY BE USED TO REGISTER TO VOTE IN ALL 50 STATES!!! Think that I’m joking? Look at how the ACLU and La Raza have prevented the use of photo ID’s to register to vote and as proof of citizenship at voting precincts. Magically, to denote citizenship or lack thereof on these licenses will, by federal court ruling, be discrimination, thus, all driver’s licenses MUST be the same, and thus, automatic amnesty and FULL citizenship!

Now, consider this, if any State pass a law that CA or NY licenses are not valid forms of identification, do you really think that the NAACP, La Raza, or the ACLU, will sit idly by? What federal court won’t declare such a law unconstitutional simply on a clear reading of Article IV???

Do I really need to go into the problems with PPACA, abortion laws, right to work laws, DMV laws, tax laws, landlord-tenant laws, &c.? Or do you think that you can pick up your local paper, or listen to your local talk radio, and see the problems with how Article IV has been interpreted and abused? Hasn’t Breitbart reported more than a dozen illegal alien crimes this week alone, including child molestation and vehicular manslaughter?


I’m going to pass on the rest of the articles, except to point out that Article V is the amending article, and the post on this blog regarding how The XIVth Amendment has never been ratified pretty much covers all of that, and Article VI §1 is about debts made before the constitution was ratified, but that Article VI §2 is the so often abused and intentionally misinterpreted “supremacy” clause. As pointed out earlier, this clause should be viewed through the two glasses of the preamble and the AFP, and has not been. Article VII is that this constitution shall go into effect as between them when nine of the 13 STATES ratify it.


I should probably go into the amendments, there are 27 of them, but there are only a few of immediate concern. We are constantly talking about The 1st Amendment, which deals with various freedoms including that of religion and assembly. One point, it applies to rules and laws made by The Federal Government and was put in to specifically prevent the feds from doing things like the PPACA forcing people to pay taxes that violate their religious beliefs. Keep in mind that Massachusetts and Pennsylvania had State religions into the 1840’s. Those states collected taxes that paid for the salaries of preachers and their estates, so much for the supremacy clause and freedom of religion.

The 2nd Amendment as intended by The Founders gives non-felons the right to bear arms. A quick look at the time and how The Minute Men were formed, organized, supplied, and supported, proves this without any doubt. However, for those of you who do not believe this, elsewhere is a complete essay on the federal law that defines the militia. Simply put, ALL healthy males, except for a very limited set of exemptions – primarily the “essential” personnel groups of federally elected officials and certain bureaucrats- between the ages of 16 and 48 (the ages may have changed as I haven’t looked since I wrote the original essay), are The Militia. Ya, and some women, too, but you need to read the law to see who. AND, each and every member of this militia is supposed to know basic drill/ The Landing Party Manual, a basic knowledge of infantry tactics, basic marksmanship, and to have and maintain a RIFLE! Yupper, Federal Law states this! Under this federal law, who among you are un-convicted felons?

And, a quick aside as to a peculiar point of history and The 2nd Amendment: After Lee’s surrender at Appomattox Courthouse, the hatred between the races, as pointed out by Shelby Foote’s book, caused by The Emancipation Proclamation, caused the creation of the KKK, which went about keeping the former slaves in check, mostly through violence, particularly murder. The National Rifle Association was created to buy arms, GIVE THEM to former slaves, and train them in their use, so that they may protect themselves from such terrorism.

Last point in here, the 4th, 5th, and 6th Amendments are the ‘criminal rights’ amendments. Originally designed to protect ALL citizens from the over-reach of the federal judiciary and congress, they have been misinterpreted to protect only criminals. Think about it, only criminals are granted Due Process. PPACA is a tax that the taxpayer cannot individually challenge. YOU CANNOT challenge the feds when the IRS takes everything away through a mistake. YOU CANNOT challenge the feds when the DEA breaks into your home when they meant to break in next door. YOU CANNOT challenge the EPA when they declare that all standing water is protected by The Clean Air Act, thus they have authority on your driveway even though that puddle will evaporate. Under The Patriot Act, you cannot challenge a warrantless search. And, the list goes on and on.

Epilogue and Conclusion

There are other things to consider, but with all of the above, where else can you go? National Bankruptcy, Civil War, a perverted Constitutional Convention, Anarchy to Tyranny, or Secession, which one is actually reasonable and workable?

But what benefits derive from secession?


The first and most urgent benefit from a Red State Secession is that of immediate and complete control over the National Debt.

The Red States will take 1/3rd of the debt, or a projected $6T, leaving the industry heavy and, if allowed to be, completely energy independent blue states with $12T. No real change is apparent at this point. OH! COME LOOK AND SEE!!! The $83T of UNFUNDED DEBT immediately disappears through operation of Contract Law through rescission and novation!!! Simply put, because the legal entity known as The United States of America dis-appears, except for the total national debt, all contracts and promises made by it also dis-appear. Magic! Harry Potter couldn’t do it better. Don’t believe me? Consider how when someone dies, his estate pays off what debt it can, but once unprotected assets are used up, the rest of the debt is simply written off. Here, the new entities, blue and red, accept their proportionate share of that debt, but, as in death, all of the deceased’s promises are vacated as un-executable.

Thus, there is NO MORE unfunded debt. Magic!


Next, as noted many times above, all of the laws and court decisions of The Union are no longer applicable to The Red States. And, because of the secession, The Blue States MUST review ALL of those laws and decisions for current applicability to them! Gosh and Golly, two win-win situations in a row, I wonder if there are any more to be had.


The Red States will write a new constitution. One applicable to the Times! One that will include electricity, electronics, medicine, &c. in it. This convention would have over 238 years of U.S. AND WORLD HISTORY to guide it. It could start with The Albany Plan, The Virginia Plan, The New York Plan, The Heartland Plan, and The Rhode Island Plan as well as Hagehot’s British Constitution as initial proposals, and then put together a truly workable federal government that would leave local issue to the locals, and make certain that the new federal government dealt ONLY WITH FEDERAL ISSUES. Hmm, three good reasons in a row.


By secession, the economic circumstances of North America would change almost instantly for the better. Yupper, Canada, The Red States, The Blue States, Mexico, Central America, and The Caribbean would instantly become the most dynamic economic machine through the forced renegotiation of all trade agreements. The XL Pipeline would immedi-ately be started, Pass Christian MS, Pascagoula MS, Tampa FL, Vera Cruz MX, Hispaniola, and Cuba, could start building new, environmentally safe, refineries. NAFTA would be re-done to require uniform enforcement. Unemployment should drop to 3% average throughout the entire region while labor force involvement should jump to 69%. Nuclear Fusion plants would be planned and built. A standardized rail system from Point Barrow to Panama City Panama would be built. Stabilization of currency would be immediate.


How much more do you want? Taxation would be rationalized and evened out. Education throughout would be standardized and equalized. Private property and wealth would be protected, which could be done now if only the various governments would im-plement the laws currently on the books.


Borders would be closed and protected. An intelligent and uniform foreign policy would be emplaced.


More? How about true freedom of religion? How about being protected against terrorist attacks, like the Boston Marathon, by terrorists, instead of useless assaults on our persons by an ineffective TSA?
Secession, secession, secession, and secession BEFORE THE NATIONAL DEBT GOES PAST $18t AND THE UNFUNDED $83T


July 28, 2014

Know Your Military Colonists, by Dan Greenfield [c]


Sunday, July 27, 2014
Know Your Military Colonists

Posted by Daniel Greenfield @ the Sultan Knish blog 0 Comments

“Military Colonist” is a term that has gone out of fashion in this brave new world of “No Human Being is Illegal” and “Every Refugee Deserves to be Resettled.”

http://3.bp.blogspot.com/-jReR5RtQmQw/U9VNPPaSzaI/AAAAAAAAOGE/goGc7-W8lTs/s1600/border-crossing-ann-coulter-voter-fraud-620×412.jpgThe university history professor with an office full of fake Indian jewelery and a view of the parking lot will lecture on the military colonies of the Roman period, always careful to emphasize their eventual fate. And he may even get up to the 16th century. But he’ll stay away from the present.

But if you are going to take land or seize power, you will need military colonists to hold it. The military colonist may be an ex-soldier, but he’s more likely to be someone the empire, present or future, doesn’t particularly need or have a use for. The Czars used serfs. The present day military colonist who shows up at JFK or LAX may also be a peasant with even less value to his culture.

Mexico’s military colonists are not military. Often they aren’t even Mexican. But they have managed to take back California without firing a shot. Unless you count the occasional drive by shooting.

While the United States sent tens of thousands of soldiers to try and hold Iraq and Afghanistan only to fail; Mexico took California with a small army of underpaid handymen who claim entire cities and send back some 20 billion dollars a year. As conquests go, it’s not hard to see who did more with less.

In 2009, 417 Mexican migrants died trying to reach America, and 317 American soldiers died in Afghanistan. But Mexico has more to show for it than America does. Every Mexican who settles across the border is a net gain who sends back money and spreads political influence. Meanwhile America is spending trillions on a much smaller army in a country whose land no one actually wants.

In 2009, the year Obama approved a 30,000 man troop surge, 3,195 Afghans received permanent legal status in the United States.

In the decade since the US invaded Afghanistan, 24,710 Afghans successfully invaded the United States and received permanent legal status. That is an occupying force larger than US troop numbers were at any point in time in Afghanistan until the very end of the George W. Bush’s second term.

During this same period there were also 19,000 Afghan non-immigrant admissions. As invasions go, the Afghan invasion of America was far more successful than the American invasion of Afghanistan.

That is even more true when you consider birth rates. Military colonists are not a mere invading army. They are generational footholds.

The American birth rate was at 13.5. The Afghan birth rate was at 37.3 at the time. American soldiers go home when their time is up. Sometimes they come home with a Muslim wife after converting to marry her. Afghan immigrants come with a birth rate that is nearly three times that of the country they are invading.

Across the ocean, the Algerian War is still going strong and France is losing badly. There are fewer bombs and bullets. Only men and women showing up and expecting to be taken care of. An army of millions could not have landed in France and begun pillaging the countryside. Not unless they came as immigrants. If you are going to invade a Socialist country, the best way to do it is as a charity case.

Unfortunately that holds true for us as well.

The military colonists flooding our shores are part of an unacknowledged partnership between their political leaders and ours. Their political leaders are fighting a war to redress the wrongs of centuries or millennia. Our political leaders are looking to shift the voting balances in a ward or a district for the next election. When they resettle the next shipment of Afghans in an otherwise conservative area with a view to tilting the electoral balance, they are using them as military colonists for the short term while their homelands use them as military colonists in the long term.

War is about controlling land, resources and populations. Land just sits there. It’s the populations that cause the trouble. The military colonist makes a more enduring occupation possible by settling the land and giving the conquering power a deeper foothold in the enemy territory.

There was a time when American settlers acted as military colonists holding down lands in Florida and Texas. Today America is being colonized by the settlers of other nations and ideologies. And we will find ourselves in the same position as the Spanish did in Florida and the Mexicans did in Texas.

Mexico invited American settlers to move in to Texas on the understanding that they would learn Spanish and otherwise fit in. Instead language and culture proved to be stronger than land and oaths of citizenship. Many of the Texas settlers might not have had much use for the United States at the time, but creed and culture made them American military colonists whether they knew it or not. The same holds true for the present state of affairs there today.

It’s more than just cultural or ethnic differences that make one a military colonist. It’s a cause. Whether it’s Manifest Destiny or the Reconquista or the Caliphate. Underlying it all is that sense of destiny. The power of an exceptionalism that makes it impossible for the settler to sink in and abandon his roots and beliefs to the tidal pull of a new culture when his grudge against it is more than the mere personal dissatisfaction of the new immigrant or his children caught between two worlds.

Integration is hopeless in the face of that sense of destiny. European nations struggling to defend some notion of secular space misunderstand the problem as one of extremism. Some of the more visible terror attacks may indeed be associated with what can be described as extremism in the sense that its participants are willing to push the envelope harder and further in more violent ways.

But Islamic terrorism is only the foam on the surface. It’s the bubbles at the edge of the pot. A minor symptom of a much bigger problem. Ir’s simply the most violent expression of a widely shared belief that Islamic law is superior to Western law. Most peoples feel that their ways and customs are best. It doesn’t become a problem until they become the majority and won’t take no for an answer.

American liberalism and European republicanism have no answers to Islamic terrorism. Their embrace of the Arab Spring was motivated by the need to believe that the Muslim world was ready to “advance” to the same postmodern level of existence eliminating the need to worry about women in Burkas or Al Qaeda. The same misreading of the power of tribe and religion that led to the foolish belief that Saudi Arabia’s military colonists could safely be turned into Labour voters led to the Arab Spring’s equally misplaced confidence that the Muslim Brotherhood wanted to be just like Europe.

It isn’t only a tiny minority of extremists who believe that Islamic values are superior to Western values and who would like the law to recognize that assumption. It’s a tiny minority of extremists who try to prove their devoutness by jumping the gun and killing people over it before the full demographic impact of the military colonists would make a Burka ban into the next Syrian Civil War.

Think of two armies maneuvering into position. The extremist is the one who fires before the enemy is fully in range ruining the strategic effect of the surprise attack. Trying to understand the extremist not only misses the point, it misses the whole chain of events in motion. The schemes for integrating the disgruntled youth and countering violent extremism is symptom control.

Terrorism is an early warning in the clash of civilizations and all our leaders can think to do is hold a meeting with the heads of the opposing army asking them to get their hotheads to stop shooting at us because it’s bringing our civilizations into conflict. Our civilizations are in conflict and have been as far back as they have both existed. The occasional plane hijacker is the first snowflake of a winter storm. Instead of preparing for a storm, we’re trying to figure out how to stop snowflakes.

The conflict is primal. It isn’t about American foreign policy or War X or Country Y or Cause Z. These are all “arguments” that explain the conflict once it’s already under way. It’s simpler than that. It’s about the incompatibility of cultures, religions, political and economic systems. And it’s about countries with a lot of oil and not much else trying to buy their way to an empire by using their own impoverished brethren as cannon fodder. And finally it’s about what happens when birth rates fall.

http://2.bp.blogspot.com/-29LVwLQc6Wc/U9VNrDWC8CI/AAAAAAAAOGU/mAnky0NH7NY/s1600/LondonProtest.jpgWestern countries have achieved individual comforts with an unsustainable system.

This unsuistainability is both economic and demographic as budgets and children are both lacking. Meanwhile the countries and cultures that have failed have achieved a perfectly sustainable state of misery. They may not have much income, but they also don’t have much to eat. They may have high infant mortality rates, but they have even higher childbirth rates.

America of 2013 cannot go on being this way indefinitely. It probably can’t even manage another two decades without major changes of some kind. Afghanistan 2013 however can go on being the way it is indefinitely. And that sustainability is what makes its people effective military colonists. Living the Afghan lifestyle in London or Los Angeles is even sustainable because food and housing are free.

That just leaves large packs of nomadic youths roaming the streets, selling drugs and rioting at the slightest provocation until it’s time for them to get married and make more nomadic youths of their own. It’s not that different from Afghanistan. It’s the tribal life transplanted to the West. It’s a culture with no real purpose except to produce young males eager to fight and expand tribal power and a religion with no real purpose except to affirm that as a religious duty.

Islam embodies expansionism. Its directives of male violence and female subjugation have no other end. They protect the tribal imperatives of endogamy and violence, of inbreeding and the feud. It has no ideas except to get bigger and that makes its followers into ideal military colonists.

[I said all of this back in 2007/8, both in the books and on the podcasts. This only possible solution from all of this, is secession, and soon, before all of King Barry’s Dreamers spread their terrorism, and their diseases, throughout the continent.]

July 23, 2014

WalMart Pays High Wages, Not Low Wages, Forbes [nc see earlier Wealth Posts]

WalMart Pays High Wages, Not Low Wages
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It’s a fairly standard condemnation of the business practices of WalMart that it pays low wages to its associates, what in other companies we tend to call employees. It’s certainly true that WalMart pays low wages by the standards of, say, the computing industry, or the joys of government work. But that’s not actually how we should be measuring whether WalMart’s wages are high or low. The correct method would be, well, what would wages be in retail in the absence of WalMart? And there’s an intriguing little paper that looks at this question. Not exactly, as it’s not looking at WalMart as a specific company, rather it’s looking at the effect of big retail on wages in the retail sector. Given that WalMart is very definitely big retail we can take this paper as being a useful proxy for the effect of the firm. And the result is most interesting:

With malls, franchise strips and big-box retailers increasingly dotting the landscape, there is concern that middle-class jobs in manufacturing in the U.S. are being replaced by minimum wage jobs in retail. Retail jobs have spread, while manufacturing jobs have shrunk in number. In this paper, we characterize the wages that have accompanied the growth in retail. We show that wage rates in the retail sector rise markedly with firm size and with establishment size. These increases are halved when we control for worker fixed effects, suggesting that there is sorting of better workers into larger firms. Also, higher ability workers get promoted to the position of manager, which is associated with higher pay. We conclude that the growth in modern retail, characterized by larger chains of larger establishments with more levels of hierarchy, is raising wage rates relative to traditional mom-and-pop retail stores.

Don’t you think that’s an interesting result? That pay at Big Box and chain retail is higher than it is in the Mom and Pop stores that they largely replace?

Agreed, $8.50 an hour, $10 an hour, whatever it is that WalMart does pay in specific locations and at different levels of training, isn’t all that great an amount of money. However, it’s still rather better than the straight minimum wage that many in the smaller players in the retail industry get. Plus, as the authors not, it’s possible to get promoted inside a large corporation (something which WalMart is very proud of itself, they continually note how many store managers started out as hourly paid associates), to have a career path, which is something not generally available in a small store where there’s the workforce and then the owners as the only level of management.

So the workers appear to be better off as a result of the existence of WalMart. They get higher wages than they would have done in the absence of the company and with the older retail landscape of largely Mom and Pop stores. The Waltons have certainly done well out of the arrangement. And what about the consumers? Well, Jason Furman, currently Obama’s chair of the Council of Economic Advisers has had a look at this:

Productivity is the principal driver of economic progress. It is the only force that can
make everyone better off: workers, consumers, and owners of capital. Wal-Mart has
indisputably made a tremendous contribution to productivity. From its sophisticated inventory
systems to its pricing innovations, Wal-Mart has blazed a path that numerous other retailers are
now following, many of them vigorously competing with Wal-Mart. Today, Wal-Mart is the
largest private employer in the country, the largest grocery store in the country, and the third
largest pharmacy. Eight in ten Americans shop at Wal-Mart.

There is little dispute that Wal-Mart’s price reductions have benefited the 120 million
American workers employed outside of the retail sector. Plausible estimates of the magnitude of
the savings from Wal-Mart are enormous – a total of $263 billion in 2004, or $2,329 per

So consumers benefit, and it is consumption that is supposed to be the starting point of any economic investigation according to M. Bastiat, workers benefit, the owners benefit, it all seems like a remarkably good idea really. Which leaves us with just the one final question. Why is there so much rage directed at the company? Why do we have people actively proposing public policy that would prevent these various good things from happening?

My thanks to Paul Walker for the pointer to the first paper.

July 3, 2014

The Reality of “Climate Change”

1. For the 2nd time in the last 2 weeks, scientists have measured and recorded the largest amount of Antarctic ice in history. And “yes”, you read correctly, the record has been achieved/broken 2 times in the last 2 weeks!

2. Last year NOAA, one of the “scientific” groups that expounds the “man made climate change” and “CO2” myths, went on record as saying July 2012 was the hottest July on record (if you recall MO was in a drought). This replaced July 1936 as the hottest July on record (July 1936 being smack dab in the middle if the dust bowl). Well over the last 2 weeks NOAA has very “quietly adjusted” the findings and surprise, July 1936 is once again the hottest July on record. Apparently NOAA’s pronouncement in 2013 that July 2012 was the hottest July was based completely on computer modeling and not real data. I gathered from the story that I heard that really the only reason they went back and “re-modeled” the data and “adjusted” the findings is due to a couple of very serious and vigilant watch dog groups. These groups are dedicated to ensuring there is accuracy and transparency w/ respect to the data, findings and stated causation impacts when it comes to the “man made climate change” debate. So they called NOAA out in several articles w/ respect to how they reached their conclusion and NOAA “quietly” “adjusted” the findings.

3. And, again, for those of us who watch “Deadliest Catch”, this is all true as confirmed by the men, and now woman (Mandy Hansen), who fish for crab in The Bering Sea.

July 2, 2014

Precis of SCOTUS NLRB Ruling, read carefully, [c]

U.S. Supreme Court Finds President Obama Lacked the Power to Make Three Recess Appointments to the National Labor Relations Board

This Hot Topic was prepared by the ABA Section of Labor and Employment Law, Practice and Procedure Under the National Labor Relations Act (“NLRA”) Committee, with the assistance of Brian R. Garrison of Faegre Baker Daniels LLP in Indianapolis, Indiana, representing employers in labor and employment matters, and Lisa C. Demidovich of United Nurses Associations of California/Union of Health Care Professionals in San Dimas, California, representing the Union and its represented employees.

On June 26, 2014, the United States Supreme Court decided NLRB v. Noel Canning, holding that President Obama lacked the power to make three of his recess appointments to the National Labor Relations Board (“NLRB”). 573 U.S. ___ (2014). Notably, this is the first time the Supreme Court has interpreted the U.S. Constitution’s Recess Appointments Clause, Art. II, §2, cl. 3. See Slip Op. at 9.

The NLRB is composed of five members and cannot issue decisions or take other actions in the absence of a valid three-member quorum. Over the course of 2011, President Obama nominated three people–Sharon Block, Terence Flynn, and Richard Griffin–to serve as members of the NLRB. Their nominations required Senate confirmation and remained pending through 2011. On December 17, 2011, the Senate adopted a resolution stating that it would take a series of brief recesses beginning the following day. Under that resolution, the Senate held pro forma sessions every Tuesday and Friday until it returned for ordinary business on January 23, 2012. During each pro forma session, the Senate would be gaveled to order and then immediately adjourned without conducting any actual business.

The Senate held one such pro forma session on January 3, 2012, which was the same day that NLRB Member Craig Becker’s term expired. This left the NLRB with only two confirmed members–Chairman Mark Gaston Pearce and Member Brian Hayes. The next day, President Obama appointed Block, Griffin, and Flynn to the NLRB, using his authority under the Recess Appointments Clause in Article II, section 2 of the U.S. Constitution. This clause provides that the President has the power “to fill up all Vacancies that may happen during the Recess of the Senate, by granting commissions which shall expire at the End of their next Session.” The President took the position that the Senate was in “recess” on January 4 within the meaning of the Recess Appointments Clause, so he had the authority to fill the three NLRB vacancies.

On February 8, 2012, after an administrative trial and an appeal to the NLRB, a three-member panel consisting of Members Hayes, Flynn, and Block found that Noel Canning–a bottler and distributor of Pepsi-Cola products based in Washington State–had violated the NLRA by refusing to reduce to writing and execute a collective-bargaining agreement with Teamsters Local 760. The NLRB ordered Noel Canning to execute the agreement and make employees whole for any loss.

Noel Canning petitioned the U.S. Court of Appeals for the District of Columbia Circuit to review the NLRB’s decision. It argued that the NLRB’s order was invalid and unenforceable because the President’s January 4, 2012, appointments were unconstitutional, as they were made during a period when the Senate was not in recess. As a result, Noel Canning submitted that the NLRB did not have a valid quorum of three members when it issued its order. In response, the NLRB argued that the President’s recess appointment power is not so limited as to prevent him from making recess appointments during a recess that is a “break in the Senate’s business when it is otherwise in a continuing session.” Therefore, the NLRB argued that the President’s appointment of the NLRB members was constitutionally valid and the NLRB’s order should be enforced.
The D.C. Circuit’s Decision

On January 25, 2013, a three-member panel of the D.C. Circuit agreed with Noel Canning that the President’s recess appointments were unconstitutional. Writing for the court, Chief Judge David Sentelle found that the appointments fell outside the scope of the Recess Appointments Clause for two reasons. First, the D.C. Circuit unanimously found that the phrase “the Recess of the Senate” does not include “intra-session” recesses–those that occur within a formal session of Congress–and applies only to “inter-session” recesses–those that occur between such sessions when a return date is not set. Therefore, as the Senate was holding pro forma sessions at the time of the President’s January 4, 2012, NLRB appointments, they were not made during an inter-session recess. Second, the D.C. Circuit found, by a 2-1 vote, that the vacancies filled by the President’s recess appointments did not “happen” during “the Recess” as required by the Recess Appointments Clause. As the NLRB vacancies existed at the time the “recess” began and did not arise during the Senate’s recess, the majority concluded that they did not “happen” during the “recess” so could not be filled pursuant to the Recess Appointments Clause. Consequently, the D.C. Circuit concluded that the NLRB lacked a quorum of validly appointed members when it issued its order in the Noel Canning case, so that order was invalid and unenforceable.
Supreme Court Proceedings

On April 25, 2013, the NLRB petitioned the United States Supreme Court for a writ of certiorari. Noel Canning did not oppose certiorari. The Supreme Court granted certiorari on June 24, 2013, and heard oral arguments on January 13, 2014.

The Supreme Court’s Ruling

Justice Breyer delivered the Court’s decision unanimously affirming the D.C. Circuit’s decision that the Recess Appointments Clause does not give the President authority to make the three challenged appointments to the NLRB. NLRB v. Noel Canning, No. 12-1281, Slip Op. at 1 & 41 (U.S. June 26, 2014). The majority opinion, joined by Justices Kennedy, Ginsburg, Sotomayor and Kagan, rejected the reasoning of the lower court in its “first time in more than 200 years” call to interpret the Recess Appointments Clause. Id. at 9 & 41. With three of the five NLRB members’ appointments invalidated, the Court found the Board lacked a quorum and set aside its order. Id. at 2-5 & 41. Justice Scalia, joined by Chief Justice Roberts and Justices Thomas and Alito, filed a concurring opinion.

The Opinion, rich in historical references, recognized that the issue of first impression has been extensively considered by the Executive Branch as “Presidents have made recess appointments since the beginning of the Republic.” Id. at 8.

The first aspect of the Recess Appointments Clause the Court examined was whether it applied to intra-session recesses in addition to undisputed inter-session recesses and concluded–contrary to the D.C. Circuit–that the Clause applies to both kinds of recess so long as the intra-session recess was for more than ten days. Id. at 1 & 9-21. Historically, “Presidents have made thousands of intra-session recess appointments,” likely because “opinions of Presidential legal advisers . . . are nearly unanimous in determining that the Clause authorizes these [intra-session] appointments.” Id. at 12. While all Justices agreed the President may make recess appointments during any break–“no matter how short”–between sessions, compare id. at 19 with Concurrence Slip Op. at 15 n.4, the majority found that an intra-session recess “of more than 3 days but less than 10 days is presumptively too short to fall within the Clause,” except for “a national catastrophe,” preventing the Senate from reconvening to approve the President’s needed recess appointments to address the emergent situation. Slip Op. at 21.

The Court next examined whether the Clause covered “vacancies that arise prior to a recess but continue to exist during the recess” or whether the power was limited to “vacancies that first come into existence during a recess,” and concluded–again contrary to the D.C. Circuit–that the Clause applies to both kinds of vacancy. Id. at 1-2 & 21-33. Again, relying on history, the Court noted that Presidents, dating back to at least President James Madison and including “every President since James Buchanan,” have made recess appointments to pre-recess vacancies. Id. at 26-29. The Court noted Presidents would not likely abuse this power because of limitations on recess appointments, such as they serve “a limited term” and they may have more difficulty tackling controversial issues without the credibility commensurate with Senate approval. Id. at 25.

The Court’s final consideration was whether pro forma sessions where no business was transacted could be excluded when calculating the length of the recess. It concluded that the pro forma sessions could not be ignored and break up a recess where the Senate “retain[ed] the capacity to transact Senate business,” “received a message from the President,” and actually “passed a bill by unanimous consent during the second pro forma session after its [initial] adjournment.” Slip Op. at 2 & 33-40. Because of the pro forma session every Tuesday and Friday during the recess at issue here, the President’s three NLRB recess appointments occurred during a three-day recess, which is “too short a time to bring a recess within the scope of the Clause.” Id. at 2.

The Concurrence

Concurring in “judgment only,” Justice Scalia criticized the majority opinion for “transform[ing] the recess-appointment power from a tool carefully designed to fill a narrow and specific need into a weapon to be wielded by future Presidents against future Senates.” Concurring Op. at 2. Instead, Justice Scalia, just as the D.C. Circuit held, would have limited the Recess Appointments Clause to inter-session recesses and to “offices that become vacant during the intermission.” Id. at 1-2. Justice Scalia concludes his opinion by offering alternative speculations of the import of the majority’s opinion: Either the Senate may seek to “avoid triggering the President’s now-vast recess-appointment power by the odd contrivance of never adjourning for more than three days without holding a pro forma session at which it is understood that no business will be conducted” or “[m]embers of the President’s party in Congress may be able to prevent the senate from holding pro forma sessions with the necessary frequency, and if the House and Senate disagree, the President may be able to adjourn both ‘to such Time as he shall think proper.'” Id. at 62 (quoting U.S. Const., Art. II, §3).

Management Perspective

The Noel Canning decision calls into question every official action taken by the NLRB during the terms of its unconstitutionally appointed Members. This means all the NLRB’s actions between January 4, 2012 and August 2, 2013–which includes issuing over 700 decisions and appointing several Regional Directors–are likely invalid. The NLRB now must revisit and reconsider all the invalid decisions that return to it. It is likely that the parties to many of these cases have already complied with the NLRB’s order or otherwise resolved their disputes, which may render the underlying issues moot. For those cases that have not been resolved and return to the NLRB, the NLRB will have to review each of these cases as new decisions and reissue decisions after this review, just as it did after the Supreme Court’s 2010 New Process Steel decision. As happened after New Process Steel, the NLRB will likely reconsider and reaffirm its decision in most, if not all, of these cases. But that may take substantial time, as many of the invalidated decisions were high-profile cases in which the decisions departed from NLRB precedent and had significant implications for employers. They are much different from the decisions invalidated by New Process Steel, which were issued in cases where a two-member NLRB, with one Democratic Member and one Republican Member, could find consensus. So, while it is unclear what will happen in the decisions invalidated by Noel Canning and in current cases the General Counsel’s office is prosecuting based on those decisions, employers are wise to take guidance from them. On the other hand, the likely invalidation of the NLRB’s Regional Director appointments poses a thornier issue, as its consequences may extend beyond the need to merely revisit cases and reissue decisions. Employers may challenge as invalid a variety of decisions made and actions taken by those Regional Directors since their appointments, such as those related to determining the appropriate bargaining unit, ruling on election objections, and certifying election results in union representation cases.

In conclusion, due to the time necessary for the NLRB to revisit the invalid decisions, Noel Canning will likely bog down the NLRB and inhibit its ability to proceed as planned on the other cases and issues currently before it. This means it will likely take some time before the NLRB takes action on two fronts of significant concern for employers: finalizing new rules to expedite representation election procedures and issuing decisions in cases in which the NLRB has invited amicus briefs (such as Purple Communications, Inc., which addresses employees’ right to use an employer’s email system for activity unrelated to the employee’s business purposes, and Browning-Ferris Industries, which addresses the NLRB’s joint employer standard). Due to Noel Canning and the NLRB’s obligation to continue addressing other pending cases, it may not get around to these two significant issues until after December 16, 2014, when Member Nancy Schiffer’s term ends. That would mean that instead of a Democratic majority, the NLRB would have two Democratic and two Republican members. While lawfully able to operate, the lack of Democratic control would mean uncertainty for the cases and issues pending before the NLRB at that time. And depending on the results of the November 2014 elections, a Republican-controlled Senate may significantly limit the President’s ability to make a recess appointment upon Member Schiffer’s departure. At bottom, during the period while the uncertainty caused by Noel Canning is resolved, employers should work closely with labor counsel when making strategic decisions on how to proceed before the NLRB.

Union Perspective

Subsequent events–namely the Senate rules change to allow for the President’s Executive Branch appointments to be confirmed by a Senate majority and the Senate’s confirmation of the NLRB General Counsel and five board members–have circumscribed the continuing impact and scope of the Court’s holding on NLRB decisions. The greatest effect of the Court’s ruling on labor will be the decisions that were decided by former Members Block, Flynn, and Griffin where the unsuccessful party sought review on the basis that their appointments were invalid, but unions are optimistic that the NLRB–having experience with reconsideration after the Court’s 2010 invalidation of the Agency’s delegation of power to a two-member board in New Process Steel v. NLRB, 560 U.S. 674 (2010)–will handle those pending cases expeditiously and effectively to ensure the NLRA’s purposes are effectuated.

[This is from the ABA LEL section, of which I am a member. Read this carefully, noting the arbitrary 10 rule, and that there are several different opinions involved. Different opinions means that although they all agree on the outcome, they all DISAGREE on WHY. In future rulings, courts and lawyers will point to different opinions, claiming that they were unanimous, which they obviously are NOT. Everyone needs to read this carefully because of the potential impact this case will have in the future. Good outcome, very bad decision making.]

February 11, 2014

The Health Care Hoax

The Health Care Hoax
Posted: 12 February 2014

Let’s put national health care in its historical perspective, and then consider the truth of the matter.

For our purposes, we will ignore the rest of the world, not bring too far forward how the NHS in the UK dictates their internal politics and is ration driven, nor how in Canada they flood to the US for care, nor how they invade the US from Mexico to get social services of all kinds.

We will start in 1950.

As noted elsewhere, everything is connected, just not in the ‘butterfly effect’ that a small number of physicists and mathematicians think.

Prior to 1950, health care was the responsibility of the individual. The medical profession was regulated in the same manner as other special service businesses, most notably lawyers, accountants, and bankers. Doctors, lawyers, and barbers had to take proficiency exams before they could charge for their services and were held accountable for their actions, not only through Tort Law, but through internal policing, and self-defense by buying liability insurance. They attended specialized schools, with specialized educations and fields of study. Funding of health care was primarily in the form of direct payment for services, with a small, expanding, insurance segment.

In the 1950’s, the failure of The Federal Government to overhaul the income tax code, led to unions negotiating for benefits, rather than wages. This change in direction was a direct result of FDR’s Transnational Policies. Government had decided that income would be taxed in the unfair step-rate method. Those whose incomes where under $10,000 would not be taxed. Union wages, and thus first line supervisors and then up the entire corporate chain of command got compensation increases. Through negotiation, post WW II labor shortages, and an aggressively growing US economy, people found their wages entering the taxable income levels. In order to reduce the impact on blue collar and first level white collar workers, benefits were, as a matter of law, decided to not be income , and thus, non-taxable. Before the expansion of health care as a benefit of employment, and therefore, the insurance industry, the individual had to pay for medical services either out of pocket, or by paying for his own insurance, again, out of pocket.

The consumer of health care knew AND FELT, the direct costs of medical care. (For purposes of clarity, simplicity, and understanding, we’ll gloss over technological –pharmaceutical advances in the field, which, in and of themselves, are a significant factor in driving up costs.)

The individual needed cash in hand to visit the doctor.

The individual needed cash in hand to have the doctor make a house call.

The individual often looked to alternative, less expensive, care options. One got a mid-wife to deliver ones’ child. One had the child born at home, not in a specialized and expensive ‘birthing facility’.

The individual knew what he was paying for when he got it, and got what he was paying for and, in many instances, was getting more than he was paying for, the medical profession being very altruistic and actually believing in the Hippocratic Oath.

Almost all peaking of health care expenses have been caused by the interference of the Federal Government.

As noted, with Federal Labor Laws and the Internal Revenue Code impacting employment compensation, health care became an area of national interest. While employers and employees were working out a viable adaptation of this into their business models , left wing idealists were actually looking to create a capitalistic style economic safety net. Enter Camelot Jack and LBJ.

Jack was controlled by a GOP congress. Even so, he got us started in Viet Nam, failed us with Cuba, killed “The Monroe Doctrine” , but was persuaded to leave the domestic economy alone. Benefits packages became traditional in a very short time, and expected to expand as a method of tax avoidance.

LBJ, wanting to be more left than Camelot, with a Democratic Party controlled congress, got Medicare passed. Medicare is the first, direct, and most damaging of government intervention in health care spiking costs to levels that we will never be able to go back to.

Medicare provided our second, federally enforced, Ponzi scheme. Medicare, through the HCFA payroll tax, takes money from employees and employers, to pay for, AT NON-MARKET, BUREAUCRATICALLY DISCOUNTED FIXED RATES, health care for those over 65. There is NO negotiation for these rates, and facilities must meet government fixed standards. The actual cost of Medicare services has not, in Medicare’s history, ever met the actual cost of the services provided. Health care providers, and insurance companies, have simply allowed those unpaid costs to be integrated into insurance premiums.

This is the first, huge and unrealistic spike in health care costs; not caused by technological –pharmaceutical advances; NOT caused by an increase in wages to doctors and nurses; & NOT caused by a surge in facilities’ expenses.

A decade later comes the next huge spike, again caused by federal intervention.


Except in few jurisdictions, those applying for a marriage license must get blood tests. These tests are not for DNA incompatibility, they are a check for venereal diseases being harbored in the applicant’s body. These tests are carried out by state law, under state constitutions, authorized by each state’s right to protect the health and welfare of its citizens. This is NOT a federal issue, however ….

With the expansion of “civil rights” well beyond that intended by the founders , or even by most US citizens, sexual preferences have been designated as constitutionally protected civil rights. In order to protect the reputations of people with HIV/Aids, HIPAA created a situation that so altered the medical care delivery system, that this political agenda and group preferential treatment, again unrelated to actual medical services, had caused billions of dollars to be spent to reconfigure the physical facilities of the system.

Prior to HIPAA, wards and semi-private rooms existed in hospitals, emergency rooms, and clinics. Wards, where groups of people could be treated using economy of scale to keep down costs, disappeared. Where one ward could treat 20 people, with a small group lavatory, where one main line could feed oxygen or other gases to patients, where one physician making rounds could visit 9 patients in an hour as opposed to 2, where nurses could be physically on hand for all circumstances .

Here are only some of the physical costs. A complete lavatory per room instead of a group lavatory, LIKE THE ONE THAT YOU HAVE AT WORK OR AT A RESTAURANT! Expanded physical space, the hospital building needing to expand the walls, ceilings, floors, electrical wiring, plumbing, elevators, &c, at what cost? Buying land to build on. Telephones, corridors, laundries, visitation space, &c. absolutely none of these things enhancing the delivery of services, but now required by federal law!

The Emergency Room Access Act, another federal law, requiring that, regardless of condition, legal right, criminal status, or ability to pay, everyone, in any and all conditions, who presents at an emergency room, must be treated and may not be released until the presenting condition has been “stabilized”. This, as argued prior to the enactment of this legislation, simply made Emergency Rooms, the clinic of choice for the uninsured, the illegal, and the criminal. This created an economic crisis in the delivery of emergency care.

And now, The Affordable Care Act, which, according to all realistic estimates and CBO reports, will increase costs across the board, while at the same time, significantly lowering standards of care and rationing care in the same fashion as in Europe!

Consider: before The Affordable Care Act, everyone physically in the US, had free access to premium, personal health care, REGARDLESS OF ABILITY TO PAY!!!

Consider: before The Affordable Care Act, over 40% of all hospital beds, were being provided by charitable institutions, e.g., The Sisters of Carondelet (Roman Catholic), Long Island Jewish Hospital (B’Nai B’Rith), Shawnee Mission Medical Center (Seventh Day Adventists), St. Luke’s Health System (Episcopalian), &c., whose whole purpose is charitable giving, charity health care, and at no cost to taxpayers.

St. Jude’s doesn’t charge; Children’s Mercy Kansas City doesn’t charge; Cornell Medical Center doesn’t charge; KU Med doesn’t charge, &c. They are pleased to take insurance payments if the patient has insurance, but admission is not based on ability to pay.

Need I go into the constitutionality of it? It isn’t!

I could easily go into how FDR created the extended US economic depression through his keeping the US Dollar pegged to gold when economists were telling him not to and his Euro-Centric monetary policy, and other anti-US policies of his, but there’s a whole section in “The Albany Plan Re-Visited” about this.
Tangentially, this has led to the pension problem, most particularly how it has killed the US auto industry through the inability to fund UAW pensions, and the bankruptcy of Detroit, and soon of Illinois and California.
Another point not needed here: Tort Reform and the needed additional education, and its inherent expense, that doctors need to understand and use the advancing technologies.
Ok, it’s the 50’s. This model predated globalization and the fierce competition in labor costs currently impacting us. For the moment, we are only dealing with a portion of the entire problem of utopian government failure.
Yah, another area we’ll gloss over. Just suffice it to say that in exchange for the USSR removing inoperable missiles from Cuba, Camelot Jack promised that the US would no longer take any military action against anything going on in the Western Hemisphere, and guaranteed the territorial integrity of Cuba.
Avoidance, not evasion: Avoidance is every citizen’s duty, evasion is a felony.
I have litigated extensively in this area; I know whereof I speak in detail.
And, one must consider that 90% of ones’ total medical costs come in the last one year of ones’ life. Pause for effect: yupper, this means that by unconstitutional government fiat, 90% of almost all medical costs of ones’ life had just been shifted from the individual, to the taxpayer! AND, worse yet, these are at an unrealistic discount!
Two direct points here: a quick survey of the writings of the founders shows both health care and sexual preferences to be areas of life from which the federal government was specifically excluded; and two, the founders included Article V, again in both “The Federalist Papers” and in “The Anti-Federalist Papers”, as a method of allowing THE TAX PAYING CITIZENS, to amend The Constitution, to specifically deal with such issues. As an aside, they did consider giving this power to The Supreme Court, and rejected it. Something that CJ Marshall decided on his own to change.
Compare that to the current facility where a nurses’ station is located yards down the hall from the patient’s room. If the nurse is busy in room 3 and the patient in room 1 pushes her emergency button, which lights up the previously un-needed red bulb over the patient’s exterior door, how is she to know that the patient in room 1 is in need? What if this need is a critical need? The heart monitor beeping flat line, but the nurse so out of position that she will never know until the patient in room 1 has passed.
While running for president in 2008, Hillary Clinton stated in an interview that the cost of the uninsured to the insured was $800 per premium/ individual covered by private insurance. Compare that to the CBO $2,500 – $7,500 estimate of premium increase under “The Affordable Care Act”.
A known to me true example is that of the Multiple Sclerosis sufferer, unfortunately no celebrity like Michael J. Fox has chosen this disease to become the spox for, but, Avonex, Beta-Seron, and Ampyra, are now on the questionable list for Rx. The first two are anti-cancer drugs, the last a muscle treatment which allows a sufferer to actually lift one’s legs and walk without falling, stumbling, or collapsing.
Although the unconstitutionality of it is posted elsewhere on this blog, y’all must consider the very simple fact that The Federal Government, under this constitution, does not have the authority to force someone to buy something, nor to force an employer to pay for something, that they do not want. (I have pointed out elsewhere how CJ Robert’s ruling is corrupt and unconstitutional on its face, posted elsewhere on this blog.)

[Addenda: received the following email, its self-explanatory, on 27 March 14 :


I don’t think ‘pissed’ really covers it!!!!

Alan Simpson, the Senator from Wyoming , calls senior citizens the ‘Greediest Generation’ as he compared “Social Security” to a Milk Cow with 310 million teats.

Here’s a response in a letter from PATTY MYERS in Montana … I think she is a little ticked off! She also tells it like it is!


“Hey, Alan, let’s get a few things straight!!!!!

1. As a career politician,

you have been on the public dole (tit) for FIFTY YEARS.

2. I have been paying Social Security taxes for 48 YEARS (since I was 15 years old. I am now 63).

3. My Social Security payments, and those of millions of other Americans, were safely tucked away in ‘an interest bearing account’ for decades until you political pukes decided to raid the account and give OUR money to a bunch of losers in return for votes , thus bankrupting the system and turning Social Security into a Ponzi scheme that would make Bernie Madoff proud.

4. Recently, just like Lucy and Charlie Brown, you and “your ilk” pulled the proverbial football away from millions of American seniors nearing retirement and moved the goalposts for full retirement from age 65 to age, 67. NOW, you and your “shill commission” are proposing to move the goalposts YET AGAIN .

5. I, and millions of other Americans, have been paying into Medicare from day one, and now

“you” propose to change the rules of the game. Why? Because “you” mismanaged other parts of the economy to such an extent that you need to steal our money from Medicare to pay the bills.

6. I, and millions of other Americans, have been paying income taxes our entire lives, and now you propose to increase our taxes yet again. Why? Because you “incompetents” spent our money so profligately that you just kept on spending even after you ran out of money. Now, you come to the American taxpayers and say you need more to pay off YOUR debt.

7.To add insult to injury, you label us “greedy” for calling “bullshit” to your incompetence . Well, Captain Bullshit , I have a few questions for YOU:

1. How much money have you earned from the American taxpayers during your pathetic 50-year political career?

2. At what age did you retire from your pathetic political career, and how much are you receiving in annual retirement benefits from the American taxpayers?

3. How much do you pay for YOUR government provided health insurance?

4. What cuts in YOUR retirement and healthcare benefits are you proposing in your disgusting deficit reduction proposal, or as usual, have you exempted yourself and your political cronies?

It is you, Captain Bullshit , and your political co-conspirators called Congress who are the

“greedy” ones. It is you and your fellow thieves who have bankrupted America and stolen the American dream from millions of loyal, patriotic taxpayers. And for what? Votes, your job and retirement security at our expense, you leech.

That’s right, sir. You and yours have bankrupted America for the sole purpose of advancing

your political careers. You know it, we know it, and you know that we know it.

And you can take that to the bank you miserable son of a bitch .

NO, I did not stutter.

P.S. And stop calling Social Security benefits “entitlements”. WHAT AN INSULT!!!!

I have been paying in to the SS system for 45 years. It’s my money-give it back to me the way the system was designed and stop patting yourself on the back like you are being generous by doling out these monthly checks.


If you like the way things are in America delete this.

If you agree with what a Montana citizen, Patty Myers, says, please PASS IT ON]

August 19, 2013

The Disconnect

Filed under: Political Commentary — Tags: , , , , , , , — justplainbill @ 3:33 pm

The Disconnect (19 Aug 13)

So, I got a call from Arbitron asking me to take their survey on what did I watch on TV yesterday, and what did I listen to on the radio. I answered all of the young lady’s questions without a problem until we got to the demographics section.

In order to be accurate, she said, she needed to know my ethnic background. She read off her available choices, to which I responded, “American”, and to which her response was, she did not have that choice, was I or was I not, and she went through her list again. When I repeated, “I’m an American”, she told me that she could not enter that, and that if I refused to answer, my survey was incomplete and could not then be used, so my viewing preferences would not be entered into her statistics.

So, Americans are not part of the corporate statistical universe. What does that tell you of AMERICA TODAY?

BTW, I repeated, “American”, to which she said, “Thank you,” and politely hung up the phone.

September 7, 2012

Basic Economics for the Taxpayer – Consumer

Filed under: Political Commentary — Tags: , , , , , , , , , , — justplainbill @ 6:38 pm

Wealth = Productivity – Waste

Productivity = Available Labor X Available Resources

Waste = (100% < Effort) + (100% < Resource Use)

7 September 2012


            wealth, Black’s Law Dictionary 9th Ed. 1730: 1. A large quantity of something, 2. The state of having abundant financial resources, affluence. Dictionary of Banking and Finance 3rd Ed. 377: (wealth tax), (a tax on) money, property or investments owned by a person.

            productivity, Black’s no definition labor, Black’s 952, 1. Work of any type, including mental exertion * the term usually refers to work for wages as opposed to profits. 2. Workers considered as an economic unit or a political element, 3. A Spanish land measure equal to 177 1/7 acres. DB+F 273, the rate of output per employee or per machine in a factory.

            waste, Black’s 1727 + 1728: Permanent harm to real property committed by a tenant to the prejudice of the heir, the reversioner, or the remainderman. (List of acts follows.) (List of specific types of waste follows.) DB+F 376: material left over from a production process which is of no value and is thrown away. To use more than is needed

Justplainbill’s definitions:

            wealth: that which enhances the human condition beyond the necessary

            productivity: human effort

            waste: crime, inefficiency, negligence, incompetence; in the above equation, waste is actually the difference between 100% effort and that actually put forth; and it’s the same type of difference when figuring resource use

            effort: total human involvement in the production process

Additional references: The works of James Q. Wilson, Ph. D.; The works of Thomas C. Sowell (pronounced soul) Ph. D.;  The Albany Plan Re-Visited, www.bn.com/ebooks, & Ng’s coursera. (Jared Diamond’s book, Collapse is ok, too.) For the sake of brevity and carpal tunnel syndrome, the abbreviation T-C is being used to denote the long suffering Taxpayer-Consumer.

The current political climate has caused so much confusion regarding fair share, rich vs. poor, income gap, welfare & disability, and the social obligation of the wealthy, that some basic discussion has become necessary. The definitions that I’ve put up show the disparity between groups on what’s what, but almost all of the arguments made ignore the key ingredient in the creation of wealth: productive people.

Rather than repeat myself, at this point you should read the first section of the earlier posting on entrepreneurship and education where the basic point is made that man’s labor, both intellectual and physical, is necessary for raw material to be converted to a product or service that has value. The headlined equations are socio-legal, not mathematics or economics. These are the equations that taxpayers and consumers (T-C) should use when evaluating all situations requiring those decisions affecting our political community.

Fair Share, simply put, means that you receive in proportion to what you contributed. All else is coerced charity, and as such, is NOT a government function, but is, instead, theft. A good example of this is a few years ago in Missouri, there was a large enough surplus such that the legislature voted to return the excess to the taxpayer, if memory serves, like the Missouri Balanced Budget, because the Missouri Constitution requires it. Various civil rights groups, (isn’t it amazing how civil rights groups often conjures up thievery?) filed suit in federal court saying that the return of collected taxes to the taxpayers was unconstitutional because it meant that the colored would not be receiving their fair share of the money. Unlike subsequent federal rulings in Missouri, in this case the court ruled that you only got back if you put in, meaning, each taxpayer received his fair share of the excess collected taxes. Fair Share IS proportional, NOT absolute.

Income Gap has existed since before time, now, and will continue until the end of time, however, the concept that this is anything more than a minor statistic in certain economic theories, is a political trap to force guilt on the taxpayer in order to coerce charity through forced taxation. The concept of this gap being both eternal and universal is historically obvious. It shows up in The Bible, in Chinese literature from The Warring States period, in Pre-Columbian (before Columbus reached North America) Civilizations, in fact, in ALL cultures and societies. The points to be made here are that before The Industrial Revolution, the gap in terms of wealth was immensely greater than now. Some examples:

During the Diaspora in Egypt, a huge segment of Hebrews was held in slavery. 100% of their labor and their person was owned by Pharaoh. In Latinium, 100% of the labor of the slaves, plus their person, was owned by Roman Citizens. In the antebellum U.S., slaves were allowed in most states, to own property, and in fact, to work to a very limited degree, for themselves (with occasionally making enough to buy their freedom. Freehling’s Secession has some excellent in-context historical commentary on this). Prior to The Industrial Revolution, even though the income gap was huge, what you could buy was limited to food, clothing, shelter, and savings. There was nothing else to own! The purposes of Wealth Accumulation were limited to creating an inheritance, good health, and easing your work situation! Historically, just consider the condition of the French Peasant in 1790, and the Russian Serf in 1917, or for that matter, the East German Citizen in 1985 and the Chinese rice farmer in 2012, or heck, just about anybody in sub-Sahara Africa! So, how huge is the gap between Roman Slave and Roman Caesar, and how do you compare that with today’s arbitrarily proclaimed income gap?

All were subject to the same diseases, climate trauma, famines, old age, wars, &c.! Post-Industrial Revolution, the variety of goods and services available for purchase & use, is huge, and let us not forget that such services such as health care, are now among the benefits brought to us by that Industrial Revolution. So, what is now being speciously argued by this income gap is that the less productive are somehow entitled to goods and services that they cannot afford without charitable subsidy by the more productive. The fallacy with income gap is simply that there is so much to buy, and so much of it has been made “necessary”, that only the very rich can afford it all, yet, those at the poverty level, at least in the industrial countries, are well-to-do by all other standards.

[And, not to hurt your feelings in here, but as a matter of cold, hard fact, the disabled, the very young, and the elderly are not productive, that is, their activities, generally, are not contributing to the creation of Wealth – and, yes, the elderly buy goods & services, but they are using either savings or charity to pay for them. BTW, I give a greater share of my wealth to charity than, Obama, Biden, Kerry, &c., so please don’t send me emails about how these people should be taken care of. As a matter of economic fact, not emotion or socio-religious morality, the disabled, the young, and the elderly, are not productive members of society. Actually, if you wish to argue this, let’s start with how health-care is rationed in Europe, Asia, India, Africa, and South & Central America. The aforementioned three groups are excluded through rationing, of the tax supported health-care systems!]

Consider how many “poor” people have cell phones, cable, year-round housing, 100% access to health-care (and this pre-PPACA [Obama-Care], Patient Protection Affordable Care Act – and as an aside, prior to PPACA there was 100% access to health-care for every person, legal or not, walking within the U.S.A., including both free birth-control and pre & neo-natal care! Rather than enter into an argument here, just remember that during the 2008 Presidential Primary Cycle, Hon. Senator (NY) Hillary R. Clinton, Esq. (AR), made a big deal about it, pointing out that the, then current, situation was that although everyone had access, it was the hidden surcharge of $800 that each health insurance policy holder paid to cover those who did not have insurance, and she included those on Medicaid and Medicare in her computations!), school breakfasts and luncheons, paid education from K – 12, and even beyond with Pell Grants, accessibility to sub-prime student loans, scholarships, and even unqualified direct support from both public and private sources. So, how is that ‘poor’ to the point of justifying taking over 50% of my gross in taxation?

The availability of necessary products and services to those at the low end of the income gap is the same as that for those at the high end. The difference is in those goods beyond the minimum needed for good health and a basic education. Community basketball courts, “summer programs” for the poor, special +/or remedial courses, set-asides, &c., are in fact, waste, unless those accessing such charity perform some communal productive function, and even then, without 100% return on wealth, there’ll still be waste, but, it will be a socially acceptable waste, if the T-C has set the standard, one not arbitrarily set by politicians for the purpose of vote buying.

Bill Gates can buy a Ferretti Yacht; I cannot. The income gap between Bill Gates and me is huge and is based on his productive contribution to the global economy compared to mine. He’s earned his yacht, I have not. The gap factor between us is over 10,000X. Now, the gap factor between a person legally designated as poor by The Federal Government and me, is less than 4X, based on the federal standard of $27,000/yr. And, if the reporting on www.snopes.com is accurate, the complaint of the woman with the $10,000+ wall TV, receiving welfare & AFDC in New Orleans stating that after Katrina she wasn’t getting enough aid, is a showing of the uselessness of income gap as a factor in any reasonable decision making. The income gap between the middle class and the poor is less than a factor of 4.

Let’s cover the nomenclature of these groupings, too, while we’re here. When using income gap as a measure, Keynesians refer to the different groupings of poor, working poor, blue collar, lower middle class, white collar, upper middle class, lower upper class (aka nouveau riche) and upper class (old money). While “the name remains the same”, membership in these various classes, until recently, has been in constant flux with the two poor classes, and the blue collar class, shrinking, and all of the others increasing, as a percentage of the population. Lots of factors for this, but free market post industrialism, coupled to minimal reasonable government intervention, have made this so. Reaganomics and the silicone chip have made wealth creation less expensive, Clinton’s abuse of the Community Recovery Act (CRA), and his combine with Goldman Sachs and CitiGroup (Corzine, Weill & Co getting Glass-Steagall repealed, Clinton single handedly creating the sub-prime mortgage bubble – along with the corrupt political appointees at Fannie Mae & Freddie Mac; and before you say that it ain’t so, the historians are already reporting it as such, just read William D. Cohan’s House of Cards, as one of many already out there reporting this, Charlie Gasperino’s last two books give more insight to what went on, too. BTW, if you get FBN, Lou Dobb’s chalk talk on 6 September 2012, gives an almost adequate summary of this.), coupled to the Swiss, who, for the second time in 100 years, refusing to take US brokerage-house collateral for cash, (last time was 1929 – oh, you didn’t know that it was Swiss refusal to accept collateral that caused the 1929 Stock Market Crash and the ensuing depression? Well, now you do;) which caused the global financial collapse of 2008, since exacerbated by Bernanke & Co.’s release of paper into the system without the concomitant creation of the wealth necessary to give that paper value.

Price is different from Value, and in fact, not related to each other. Both are quantifiable and qualitative. Professor von Mises’ work Currency and Money explains this from the economist’s perspective, yet from the viewpoint of the consumer, two simpler examples show clearly the differences, and, yes, there are many differences but we usually only see one or two. Basically, price is an arbitrary number of a specific meaningless paper currency which a buyer and seller agree to trade for a desired product or service. This transaction need not, in fact rarely does, take place in a free and open market place. Empirically, I have yet to find an actual or reference to an actual, free and open market place. TANST (There Ain’t No Such Thing!)

It’s impossible for the T-C to know enough about any transaction or occurrence such that he can make the best/ most informed decision. This is primarily because T-C must work for a living, which means that T-C simply hasn’t got the time to get the necessarily extensive education nor the time necessary to gather enough data, to be able to make the best possible decision. However, T-C can acquire the necessary basics of things to make good guesses. Refer back to the Education & Entrepreneur posting for one acceptable and adequate methodology. Another would be to require test-able standards of all government positions, especially judicial and elected positions. The Albany Plan Re-Visited (www.bn.com/ebooks) has two approaches to this problem, neither perfect, but both are better than what we currently have.

Gold ore has zero value. Once processed into bullion or coin, it has both price and value. You can find the price of gold by googling it, getting The Wall Street Journal, or just by following most adequate News sources. Today, it’s about $1,700 a Troy Ounce, ten years ago it was about $800 tr/oz. Whether in 2002 or 2012, it’s still just one troy ounce of gold! Only the price has changed. Price has NO relationship to Value!

The value of gold, or any other product or service, is more than its purchasing power. Ok, where to go to learn about purchasing power? Best discussion that I’ve ever found is in Mark Twain’s A Connecticut Yankee in King Arthur’s Court. Go enjoy the good read. For those who want the quick reference, answer this question, who is richer: the man with $5, who must pay $5 for a loaf of bread, or the man with $3 who must pay $1 for a loaf of bread?

Value includes the satisfaction value, the aesthetic value, and the resultant, of the product or service. That Canadian Maple Leaf has more than 1 tr/oz. of gold in its value. It has the art work of the dye maker, the sweat of those who manufactured the gold, the distribution expense, the pleasure of the warmth of its glow and feel (only metal that I think actually feels warm; yes, I know that’s subjective, but I really do like gold), and the secure feeling that one gets knowing that this little coin has a future use directly related to my health & welfare! Think about it: how many people with their savings are purchasing gold and silver in the expectation that at some time in the future, they will be able to purchase food, water, shelter, clothing, and medical care? Remember the Weimar Republic and where that led the world! Will the pretty paper be able to do that?

So, what actually happens when Bernanke & Co. use quantitative easing? You’ve already got the necessary basics, price and value.

Yup, more paper, the same amount of gold, no increase in wealth.

Unless more gold is dug, processed, and manufactured, in which case, and you should refer back to the equations at the top of the page because that means: more wealth!

But there’s more. Because of Clinton’s repeal of Glass-Steagall, brokerage houses are now allowed to access the “cash window” at the Federal Reserve. Goldman-Sachs is not a bank in the traditional sense of holding consumers’ deposits and then loaning that money out. It is an investment bank, meaning that it deals in instruments of debt and equity. von Mises and Hazlett are good for all of the details, but the key for T-C is this, businesses use brokerage houses, consumers use banks; brokerage houses deal in stocks, bonds, letters of credit, DBO’s, CBO’s, Mutual Funds, &c., consumers deal with home mortgages, credit cards, auto, and appliance loans, i.e., personal financing including savings accounts, and checking accounts. (Yes, there are many individuals who deal directly with brokerages, but they are acting as businesses, not consumers, think about it, but you should be looking some of this stuff up in The Dictionary of Banking and Finance, or Black’s, and you really should own a current copy of each and update them every three years.) Because of the Crash of 1929, they were made separate and as such, not one of them became “too big to fail”, primarily because T-C’s money was kept separate from speculator’s money. Now consider what happened to the $1,600,000,000.00 of T-C’s money missing from MF Global, oh, BTW, that’s Corzine of Goldman-Sachs fame, that just got off Scott-free of all liability +/or responsibility for the T-C loss.

Accessing the cash window means that they can get tax dollar cash to finance leveraged purchasing of financial instruments. Think like this, it means that they don’t have to put up their own capital to buy/speculate in the markets; think the aforementioned MF Global. They get to use our money instead. It’s part of why the stock market keeps going up, think price increase, while the economy is so bad, think no change in value. Think why large companies are keeping cash on hand, trade in currencies because the price of other currencies is tied to the dollar, and small companies are losing ground, think steady value with no wealth increase. Think about the relationship between the currency number on your IRA or 401(k) and its actual value. You may have a large dollar amount, but to what value does that dollar amount relate? Think $5 vs. $3, which is what the big companies are thinking.

So, where are we? Y’all should now have enough knowledge to make rational decisions when people start talking to you about price and value. Y’all now have enough to know whether or not you’re better off now, four years ago, and you should be able to rationally speculate on how well you will be four years from now!

And better yet, you will be able to use this little bit anytime, anywhere, and anyplace that people try to talk to you about economics. Just keep in mind that there’s no correlation between price and value, and be able to answer the question of who’s richer, the man with $5 cash and $5 cost for a loaf of bread, or the man with $3 cash and $1 cost for a loaf of bread.

–          86 –


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