FITAYL? Part 8 "Income" or "Net Income"?

Continued from Part 7

As can be expected, the Internal Revenue Code is vigorously enforced on individuals given that the vast majority of the United States government's "income" comes from this source. This is perfectly fine when the laws supporting this end are well defined and executed. The problem arises when the laws become misinterpreted and misapplied. This happens far too often in the case of Citizens of the fifty States subject to the U.S.A. Constitution. Taxes in their purest sense are burdens placed on the people to support the functions of government. Per the U.S.A. Constitution, this was to be done primarily through indirect taxes; specifically imposts (taxes on foreign imports), duties (same as imposts; term associated with United States Customs Service, which regulates foreign commerce), and excises (taxes on the performance of specific activities). When these indirect taxes do not provide enough revenue to support the cost of government, then the States are taxed directly on their property to make up the shortfall.

The United States government is a non-profit entity which is not supposed to act for private, but for public gain. If a law does not exist for Citizens of the fifty States subject to the U.S.A. Constitution to pay a tax on their income, then any amounts paid to the government from this income is a donation to the government. Furthermore, because we do not place any stipulations on the money being granted to the government, we are essentially awarding them unrestricted grants, endowments, or earmarks. Revenues with no associated (stipulated) expenses are income to the recipient.

Revenues & Expenses

From the financial dictionary online:

Revenue - "The dollar amount of sales during a specific period, including discounts and returned merchandise. It is the "top line" figure from which costs are subtracted to determine net income." (Note: this is synonymous with "income")

Expenses - "Money spent by a firm to continue its ongoing operations."

Net income - "An individual's or company's total earnings, calculated by revenues adjusted for costs of doing business, depreciation, interest, taxes and other expenses. Often referred to as "the bottom line"." (Note: this is synonymous with "profit")

A tax on income (i.e., revenues) hardly makes any sense given that the wealth of the government is in actually that of the people. For a government to tax income, without regard to costs, burdens the people which, by default burdens the government. A tax on net income, which is income free of any burden (i.e., a gain) would make more sense. Give the government your income, which has expenses associated with it, with no stipulations made as to how that money is to be spent, results in net income for the government (i.e., non-earmarked funds). Below is how the legal dictionary defines income.

Income - "The gain which proceeds from property, labor, or business"

Gain - "The word is used as synonymous with profits."

It is important to note that if you are a natural person, you can never have profit because anything that you receive is associated with the mere fact of you living and interacting with nature and your fellow man. Any "income" that you receive will forever have "expenses" tied to it, because life itself is an expense. The expense may apply itself sooner or later, but it is always there. This differs from a government, corporation, or other artificial entity created by natural persons, in that they have a fixed charter, and a fixed time to carry out the mission of that charter. While these such entities exist via a defined person, the existence of natural persons is infinite and cannot be defined.

Natural persons only have equal exchange when dealing with other natural persons, as evidenced by the concept of consideration in common law contracts. When a farmer tills the soil, his return is the fruit of the land. When a parent gives his child a "gift," his exchange is benevolent feelings bestowed in him of his son. Consideration is not to be confused with value, which is relative and defined by the individual person. Also, value does not necessarily have a financial context.

Wages

As for natural person working for an "employer" in the fifty States subject to the U.S. A. Constitution, you do not have wages. Wages are a form of payment, not a receipt of payment. This is why wages are not included in the list of items comprising gross income in Section 61 of the IRC. Wages are an expense AND NOT income. It is an expense by your employer for the cost of your services. The cost of your services are what you contract to the employer based on the value that you assign to your services. In EXCHANGE for your services, your employer pays you wages. If you were to hire yourself, you would pay yourself wages equal in amount to what your employer pays you for your services. Your revenues and expenses would be equal and your net income exactly zero. As a result of an employment contract, neither the employee nor the employer (if a natural person) gain anything from the contract, but merely exchange consideration amongst themselves. Below is how wages is defined, both legally and in everyday usage.

Wages (legal) - "A compensation given to a hired person for his or her services."

Wages (common)- "a payment usually of money for labor or services usually according to contract and on an hourly, daily, or piecework basis... 2: recompense, reward"

Compensation - "2 a (1): something that constitutes an equivalent or recompense (age has its compensations) (2): payment to unemployed or injured workers or their dependents b: payment, remuneration"

Recompense - "1 a: to give something to by way of compensation (as for a service rendered or damage incurred) b: to pay for2: to return in kind : requite"

Requite - "1 a: to make return for : repay b: to make retaliation for : avenge2: to make suitable return to for a benefit or service or for an injury"

It should be clear that wages are received in EXCHANGE for value received by an employer. The same holds for salaries and tips, both of which appear on a 1040 income tax form as being synonymous with wages. Salaries and tips are what is paid by someone. The recipient of these items has compensation (i.e., money, cash, etc.), and not what the remitter (employer) is paying. Corporations are given much more discretion in allowable deductions in the IRC than individuals, and essentially taxed on their "net income," while individuals are taxed on their "income." Does not this picture look a little backwards? How is it that an individual, who has the right to life cannot deduct expenses from his income, but a corporation, which can have its charter revoked is taxed essentially only on its business profits? It is because we, in our ignorance, are completing tax forms which do not truly reflect what our economic situation. We are in essence, completing the forms BACKWARDS. A natural person residing and doing business exclusively in the fifty States subject to the U.S.A. Constitution does not have wages, salaries, or tips; his income is from compensation.

Compensation

Compensation is a blanket term for payments received, and Section 61 correctly defines compensation as income. But the types of compensation the Code lists as taxable are 1) fees, 2) commissions, and 3) fringe benefits. Based on the above analysis, it should be clear that these items represent gain to the recipient, or rather they do not fall into the category of exchange. They are separate components in addition to a contract based on even exchange (consideration). Below are the legal definitions for the these three forms of compensation listed as "gross income" (i.e., "income") in Section 61:

fee - "a charge for services."

commission - "a fee paid based on a percentage of the sale made by an employee or agent, as distinguished from regular payments of wages or salary."

benefits - "1) n. any profit or acquired right or privilege, primarily through a contract. 2) in worker's compensation the term "benefit" is the insurance payment resulting from a fatal accident on the job, while "compensation" is for injury without death. 3) in income taxation, anything that brings economic gain. 4) "fringe benefits" are rights from employment other than salary or wages, including health or disability insurance. 5) v. to gain a benefit."

Natural persons residing and doing business exclusively within the fifty States subject to the U.S.A. Constitution do in fact receive compensation, but rarely from the types listed above. Their compensation is "income" with attached "expenses" to it (i.e., rights with attached duties). In exchange, they have "income" but no "net income." But if they receive the compensation in the forms above, then they would have positive "net income." But, as discussed in previous parts, this "net income" would not be taxable per the IRC for other reasons.

Summary

The above point about exchange is very important and deals with the concept of ownership. Quite frankly, you can only charge a tax, or fee on things that you own or control. The United States does not control the citizens of the fifty States subject to the U.S.A. Constitution anymore so than they allow themselves to be owned or controlled. The extent of their submission to the United States government is limited by what's defined in the Constitution. What the United States does not own or regulate it cannot tax. This is why the concept of an income tax makes absolutely no sense. Natural persons can never have "net income" and are burdened by such a purported tax. The Constitution allows for this burden to occur in financial emergency situations of the government only. It is a direct tax on property, and not any income; and should not, and cannot be a perpetual law without an expiration date.

Despite the obvious, the United States has a big incentive to turn a blind eye on those natural persons residing in the fifty States subject to the U.S.A. Constitution to give them unrestricted contributions for the function of governance as Congress sees fit. After all, who would resist a benefit with no attached responsibility. This is what is referred to in economics as a free lunch. Natural persons residing in the fifty States have essentially been given free lunches to the United States, via there ignorance of both the Constitution, and the Laws of the United States; both of which affects them directly. The enforcers of the IRC play on this ignorance, and employ every trick in the book to keep the free meals coming.

What's Being Done with the Free Money?

As an example of how the United States is spending all of this "free" money it is receiving, consider that 72% of the entire budget of the U.S. is spent in only four places. These four, ranked from the most costly to the least are: 1) The Department of Health and Human Services (HHS), 2) Department of Defense (DOD), 3) Social Security Administration (SSA), and 4) Interest on Treasury Securities held by the Public. Of the $2.5 trillion in revenues received by the United States, about two-thirds is not earmarked. For individual income taxes, which represents three-fourths of the total income, the amount of non-earmarked funds is more than half the total.

The HHS budget is comprised largely of health care expenditures. The U.S. spends more on health care than any other country in the world, but is ranked 37th by the WHO in overall performance, and 72nd by overall level of health (link). The Department of Defense is responsible for half the world's military spending, and 8 times larger than that of China, the runner up nation (link). Despite this, terrorists were able to strike this country on September 11, 2001. So rather you want to be a conspiracy theorists about 9/11 or not, the fact that it happened despite its elaborate budget is a huge red flag that the money is being wasted. And speaking of waste, the DOD cannot account for over $1 trillion of assets related to the Department (link).

The last two departments are a total waste. Firstly, the interest on the national debt is a testament to the years of overspending by this government. For the fiscal year ended September 30, 2007, the government operated at a deficit of $255 billion. This amount increased the national debt, which means that the United States government will pay even more in interest next year.added to the national debt amount.

The SSA Department has nothing to do with any function of governance whatsoever. For starters, this Department is an independent establishment, which means it functions contrary to the U.S.A. Constitution. The Constitutional separates the government into three branches, the legislative, executive, and judicial. Government corporations and Independent agencies are private and do not provide full accountability, if any at all, to the People. They represent conflicts of interest in that the legislative branch both define and enforce the law via these agencies. This alone should red flag the agencies as far as State Citizens are concerned. The SSA is responsible for administering a private retirement benefits program which is all but bankrupt.

For various reasons, it is clear that we need to get a handle on this income tax situation.

Continue to Part 9