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IWP!, flagship product is Chicago's premiere real estate Investment
magazine. Entitled Invest With Passion!, it is the tool for investors and professionals in the
Mid-West. The publication seeks to grow it's market share by providing
powerful information designed to build the reader both as an investor and a
person.
Since it's release in January of 2006, the magazine has been well received and
continues to gain momentum and support. The education, information, and
networking opportunities for the real estate investor has been long neglected.
No More!
The time is now and the momentum is building.
It's Happening!
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THE FEDERAL TAX SYSTEM: LEGAL OR NOT
By Cheron Williams
In the break of a failing
economy, people are finding it more difficult to comfortably financially
support their families. Most people work hard day in and day out, but
many times their take home pay does not reflect their efforts due in part
to income tax deductions. Therefore, “income tax” is a familiar word that
we all have a tendency to associate with the loss of our hard earned
dollars. As a result, there are a growing number of people in our society
that oppose the income tax. According to these opponents, the federal
income tax is illegal. They base their conclusion on several factors of
the United States Constitution and inconsistencies in government
messages. The Constitution states that a direct tax must be apportioned
or divided equally amongst the people and all indirect taxes must be the
same throughout all the states. The government asserts that the Sixteenth
Amendment opened the door for the income tax. However, those in
opposition, claim that the Sixteenth Amendment was never ratified. In
2003, U.S. District Court Judge, James C Fox, stated “If you …examined
[16th Amendment] carefully, you would find that a sufficient number of
states never ratified that amendment.” In addition, they stand on
various Supreme Court ruling between 1913-1923, where the income tax was
ruled unconstitutional and that the Sixteenth Amendment conferred “no new
power of taxation” (Brushaber vs. Union Pacific R.R. Co., 240 U.S. 1).
In addition, they contend that “income” in the Constitution, as defined by
the Supreme Court case Doyle vs. Mitchell (1918), is “the idea of gain or
increase rising from corporate activity” - not wages or labor. Instead
labor is considered private property as stated in the Supreme Court
rulings, Coppage vs. Kansas 236 U.S. 1, 14 (1914): “chief among such
contracts is that of personal employment by which labor and other services
are exchanged for many or other forms of personal property.”
As far as the
inconsistencies in government messages, we will start with the
government's claim that the income tax is necessary to fund the
government. G. Edward Griffin, author of “Creature From Jekyll Island,”
states that “the main purpose of the income tax is not to raise revenue,
but to redistribute wealth and to control the society.” The documentary,
“America: Freedom to Facism,” by Aaron Russo states, “after interest
payments and government waste, not one penny collected from the tax on
your labor pays for services you expect from the government.” Instead
those services are funded from other taxes and fees collected by local and
federal agencies. If you remember the Federal Reserve System article
published in the July-August 2007 issue of IWP! magazine, a distinguished
group of bankers, consisting of J.P Morgan, Paul Warburg, Benjamin Strong,
Abraham Piatt Andrews, Frank Vanderlip and Charles Norton were
introduced. It was stated that this group of infamous bankers were also
involved in the creation of the Federal Reserve System. This same group
of bankers is now being linked to the creation of the Federal Income Tax
system. Aaron Russo’s documentary also states, “the bankers understood
that whoever issued the money for America would control the government and
they knew that the tax would ultimately end up in their pocket.” With the
establishment of the two entities, the bankers would issue the money,
charge the government interest and the government would then tax the
people to pay the bankers. Brilliant isn't it?
The next inconsistency
lies with the fact that the Federal Income Tax is mandatory. The
opponents of the income tax declare that there is no statue or law
requiring American citizens to pay taxes. In fact, they reference that
the Internal Revenue Code states “the purpose of publishing revenue
rulings and revenue procedure in the Internal Revenue Bulletin is to
promote correct and uniform application of the tax law by IRS employees
and to assist taxpayers in attaining maximum voluntary compliance.” Did
you get that - “voluntary compliance!” If it is indeed voluntary, then
why is it regulated with people being penalized for not participating?
There is a big difference between voluntary and mandatory and the Income
tax is nowhere near voluntary.
ALTERNATIVE TAX SYSTEM
Many opponents of the
current tax system are supporters of an alternative tax system - “The
FairTax.” The FairTax proposes that the IRS tax system/code is too
complicated, broken and unrepairable. “In 1995, FairTax.org assembled a
team of economists to conduct extensive economic and market research to
devise a simpler and more efficient tax system that would unleash the
potential of the U.S. economy and help every working American create
wealth.” The end result was the Fair Tax Act (HR 25 & S1025). As stated
on FairTax.org, “it abolishes all personal and corporate income taxes,
gift, estate, capital gains, alternative minimum, social security,
Medicare, and self employment taxes and replaces them with one simple,
visible, federal retail sales tax administered primarily by existing state
sales tax authorities.” It is simply a retail sales tax that is collected
on items we purchase. It only taxes goods one time, when they are
originally purchased. Therefore, the purchase of used items (i.e. used
cars) are not taxed again, ever. It includes a family consumption
allowance that is disbursed monthly to each taxpayer to cover the tax
collected on purchases of basic household necessities. The amount of the
monthly allowance would be based on the federal poverty levels. The tax
would be 23% on every item purchased, but taxpayers would get to keep
their entire paycheck, capital gains, dividends, etc. and receive a
monthly family consumption check. Essentially the taxpayer would control
how much he/she pays in taxes based on the items he/she choose to
purchase. Under the system, the IRS would be eliminated and the
government would still get the same amount of funds they currently
receive. In addition, Social Security/Medicare benefits would still be
functional.
Overall, according the
contributors of the FairTax, it will:
o
Eliminate the income tax and the
dreaded IRS
o
Jump-start the U.S. economy
o
Bring businesses and jobs back
to the United States
o
Lower interest rates
o
Make April 15 just another
beautiful spring day
With each passing day,
people are finding it more difficult to make ends meet. The government is
attempting to provide some relief, but how much relief does a one-time
economic stimulus payment of $600 really provide? Therefore, I ask the
question, “how much more of a difference would the elimination of the
Income Tax withholding make?” Does the Fair Tax Plan provide a possible
solution? Maybe or maybe not! However, if there is a chance to increase
taxpayers’ take-home pay by eliminating the income tax, then why not
explore the option? It could be on a temporary basis - sort of a trial
run to see if it actually works. For more information, visit
www.FairTax.org.
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Cheron Williams is just a
concerned citizen seeking answers and providing information to the
uniformed public. Get In The Know - The Information Is Out There. |
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