http://www.ernesthancock.com/archive
Today's guest were Irwin Schiff,
Bob Schulz and a special message from Claire Wolfe.
BEWARE THE IDES OF APRIL
Today is tax day. All across America, people will be
frantically filling out their 1040 forms, mailing them in
by midnight. Others will be sending in their extension
forms. The annual day of reckoning reminds us that there
are no free lunches.
Before income tax withholding was dreamed up by
Beardsley Ruml in 1942, and sold to Congress as a wartime
measure in 1943, Americans did not pre-pay through the
year. They paid on tax day. Most of them didn't pay in
1942. Ruml was at the time chairman of the Federal Reserve
Bank of New York, the most powerful regional FED bank. He
had been on one or another the Rockefeller Foundations'
payrolls since 1921. He was Treasurer of Macy's, the giant
department store. He had noticed there that customers paid
their bills more readily when required to spend a little
each month. He applied the same principle to taxes, with
payment in advance. It worked. Income tax withholding
raised revenues from this source from $686 million in 1943
to $7.8 billion in 1944.
http://www.nationalpayrollweek.com/article_payroll.htm
What very few Americans know is that the income tax
amendment was never actually passed by the voters. There
were major irregularities in the amendment's voting
procedure. The government wanted that tax in 1913, so the
irregularities were overlooked. The Attorney General
announced that it had been passed by the voters. Not for
another seven decades did anyone go to the original
sources, state by state, to see if the amendment had been
legally ratified. Bill Benson, a former tax collector for
the state of Illinois, did the spade work, collected 17,000
documents, and co-authored a book that showed that the 16th
Amendment had not been legally ratified. The book, THE LAW
THAT NEVER WAS, came out in 1985. It immediately was
dropped down the memory hole. Professional historians, who
should have done the work two generations earlier, ignored
the book. If you're curious, click through:
http://www.thelawthatneverwas.com
This historical fact does not mean that the tax laws
are not going to be enforced, as always. It surely doesn't
mean that a jury will uphold you if you stop paying taxes.
No jury will believe Benson's story. No jury is going to
let you off the hook when they know they are forced to pay.
It's a matter of envy.
Any attempt to use legal technicalities to overcome
the lifeblood of the modern welfare State will fail. The
courts are not going to overturn the entire modern economic
system, with its faith in salvation by legislation and
taxation. Our taxes are the judges' bread and butter.
Bill Benson doesn't pay income taxes. But he spent
time in prison, where he almost died, as part of his one-
man protest. He also has what you and I don't have:
officially certified records of each state's voting in
1912. Still, I would love to have a CD-ROM with the images
of all of those documents. They could be scanned in. I'd
pay Bill $50 for such a CD. I have recommended to him that
he do this, but so far he hasn't.
THE CON JOB IN 1913
You may have seen a copy of the original 1040 form.
If not, click here.
http://winke.com/wts/wts./1913f1040.htm
It was four pages long. Taxpayers paid 1% on
everything above $3,000. The top rate was 7% (6% plus 1%).
That rate kicked in at $500,000.
You can compare the purchasing power of the dollar in
1913 vs. 2003 by going to the website of the Bureau of
Labor Statistics. Use the "Inflation Calculator." (Under
"Inflation & Consumer Spending.) Use $100 for the 1913
figure. You will find that today, you would need $1,849 to
match the purchasing power of $100 in 1913.
http://www.bls.gov
So, anyone who did not earn $3,000 -- the equivalent
of $54,000 -- paid no income tax in 1913. Anyone who
earned more than the equivalent of $360,000 paid an
additional 1% surcharge on income over this. The top
surcharge of 6% kicked in at $500,000, the equivalent of
$9,245,000. That's annual income, not net wealth.
Within five years, the top rate was 77% on income of
more than $1 million. At the bottom bracket, the tax was
raised by a factor of 6, i.e., 6% on income over $4,000.
Most people escaped most of the income tax burden.
They escaped until 1942. But, generation by generation,
the bottom bracket has dropped, price inflation has risen
(pushing everyone into a higher bracket), and tax
compliance has increased. So has the authority of the tax
collectors at all levels to undermine our privacy.
The opponents of income taxation in 1912 said that we
would see the day when taxes would extract 25% of people's
income. Such Cassandras were ridiculed. Today, the
Federal government collects about 22% of national income.
State and local governments extract an additional 18%. Yet
the United States is taxed at lower rates than most Western
industrial nations.
Note: the level of taxation imposed by the
British after the French-Indian (Seven Years) War
ended in 1763 was in the range of 1% of national
income outside of the South, and possibly as high
as 2.5% in the South. To escape from that
oppressive tax burden, the colonists revolted in
1776.
Last Friday, it took a tie-breaking vote in the Senate
by Vice President Cheney to get a $350 billion tax cut
(spread over 10 years). With the war costs at $79 billion
for this year, we can see where we are headed: deficits for
as far as the eye can see. A $35 billion a year tax cut is
not going to get us on the upward slope of Arthur Laffer's
famous curve. To see the curve, click here:
http://www.investopedia.com/terms/l/laffercurve.asp
There must be economic growth to pay for the ever-
escalating Federal budget. But we remain in recession,
according the that National Bureau of Economic Research
(NBER), which is the official arbiter of when recessions
begin and end. The U.S. economy is stagnant. European
economies (excepting Ireland) are worse.
This has implications -- bad -- for the stock market.
Today's Radio Guests were Irwin Schiff and Bob Schulz. Irwin just had his book "The Federal Mafia" banned by the Federal Courts (ya' gotta love this :) and Bob Schulz is on a national campaign tour to stop withholding. Go to the Radio show Archive to listen in. Claire Wolfe also had a message to her friends.
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