The biggest scam and how they did it. Part 6.

Court cases. Taxpayer non taxpayer

The courts have ruled that there are taxpayers and non taxpayers. One must be subject to a tax, to be a taxpayer. It is possible to be liable for one tax, and not another, thus you can be both taxpayer and non taxpayer at the same time.

For the purposes of income tax, we will look at a few cases. 

Eisner v. Macomber 252 US 189, 40 SCt 189, Decided March 8, 1920,

"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.     “

Let me show you what they mean.

According to the  United States Supreme Court, (USSC) definition of income, Income is the gain or return of capital, separated from the capital for the use of the individual. Cases that came after, continued to support this definition. 

Column A is the investment, Column B, the return, Column C the tax and D the net return.

There must be a return, a gain, and you must be able to reinvest it, but that choice is yours. You are free to spend it, use it, or reinvest it. In this case the income would be the amount shown in column B. the net return after taxes is shown in column D.   D is the return you get to use as you see fit.

The IRS says your pay is income. It cannot be income by the definitions given to us by the US Courts. Look at the chart. You take 40 hours at 5 an hour and get 200 dollars. You get something different than what you invested (time and labor). The IRS says this is pure profit and is taxed. They say it is profit because they claim it cost you nothing to get the 200 dollars. They are wrong in so many ways it would take me another 5 pages to explain it.

Now, can you take the end result of the net income (as the IRS calls it) or net return of 180 dollars and re invest it into that 40 hours to give you a bigger return in Column B? NO, you cannot. Why? Because time is finite for humans. Once used it cannot be re used, unlike the capital used in blocks A2, A3, and A4.

Simply put: The time invested by a worker for pay, cannot generate a return or profit that can be separated from the capital investment, to be use for reinvesting. Thus it cannot be “income” as defined by the courts.

A workers pay is equal compensation because the time exchanged for the pay, cannot be reinvested and can only be used once because time is finite for humans.

Congress has taxed income, not compensation – US V Conner.  

So how does the IRS covert your equal compensation to an income tax? By word art and trickery.