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07/04/09
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April
15, 2005 Every libertarian has an understandable grievance with the United States Constitution. After all, it established a State that libertarian A is forced to abide. It implied a contractual agreement that libertarian B never made. It mandates libertarian C fund the State and its abhorrent actions with a seizeable portion of his or her personal earnings. But is the latter, a popularly held notion, truly the case? Or did the Constitutional Framers, with the foresight of 18th century intelligentsia, actually get something right? This
is the proposition of libertarian Peter Eric Hendrickson, who, in his
230 page book, Cracking
the Code,
documents the constitutional roots of the “3,413,780 word monstrosity”
known as Title 26 of the United States Code: the IRS tax code. As
April 15th approaches, many libertarians will customarily scramble
on the Internet, desperately searching for the latest method to “avoid”
paying the income tax. Many, left with the bitter taste of tax
programs which cost more than the material they were printed on,
will angrily, reluctantly and ashamedly hand over their rightful earnings
to the federal government. “After all”, some may rationalize,
“what good am I to anyone in a federal penitentiary?” For those who posses a desire to cease fueling the State with money and an aversion to serving jail time, look no farther than Cracking the Code (1). Cracking the Code is fundamentally different from so-called tax “avoidance” schemes. Why? Whereas the latter claim they will aid you in “evading” the income tax, Hendrickson actually analyzed the IRS tax code and came to a stunning conclusion: Most Americans are not required by law to pay an income tax.When Tile 26 is dissected, it becomes apparent that the only individuals required to pay the income tax are beneficiaries of the federal government – such as its employees, and those profiting from an interest in federally “privileged” businesses, such as railroads and national banks; and that the only individuals required to pay a Social Security (FICA) tax are those who work in the “Commonwealth of Puerto Rico, the Virgin Islands, Guam” and “the American Samoa”, and those who, working outside of these U.S. territories, are residents of such territories and work for either the United States, an employer who is a resident of the U.S. territories, or a business incorporated under the laws of the U.S. territories or of Washington, D.C. (2). Most likely, the reader will discover that he or she is not included in such provisions. This is true of the income tax for two reasons. First, the Framers established two forms of taxation in the U.S. Constitution: direct (apportioned to the population) and excise (not apportioned to the population but uniform throughout the states) (3). When the first income tax legislation was passed in 1862, it established the income tax as an excise tax, meaning it applied only to those gaining benefits from federally-granted “privileges”, such as the use of federal ports or service as a federal officeholder. Various pieces of legislation have modified the 1862 Act; however, none have removed the income tax from the realm of the excise tax.Second, the drafters of the 16th Amendment – the purportedly despicable statists who generated a federal tax on individual income – actually constructed the Amendment in response to a Supreme Court ruling regarding the Revenue Act of 1894 (4). What the Court ruled was that personal income (property) cannot be taxed unless apportioned to the population – even if the individual being taxed is exercising federal “privilege”. Consequently, the 16th Amendment was created, mandating that Congress may tax the income of any individual exercising federal “privilege”, even if such tax is not apportioned, therefore establishing the income tax as an excise tax on “privilege” and not a direct tax on property. This is why most Americans are not required to pay an income tax. Furthermore, to add weight to such constitutional evidence, the U.S. Supreme Court has ruled in multiple decisions that the 16th Amendment merely affirms that the income tax is an excise tax on federal “privilege” (5).Any and all proof required to digest such assertions is contained in the IRS tax code and the book itself. But to personally prove what he claims – that most Americans are not required to pay an income tax – Hendrickson provides both he and his wife’s 2003 Forms 1040, 1099 and 4852, and their subsequent check from the Treasury Department containing Hendrickson’s earnings withheld by his employer.For all of this, Cracking the Code is one of the most important books any anti-statist can read (6). Regardless, what do you have to lose? If you purchase Cracking the Code and discover that it is incoherent nonsense, you are out only $19. But if you continue on your current path, paying anywhere from 15 to 35 percent of your income to the State every year, not only are you losing your rightful earnings, you are also financially aiding, albeit indirectly, a malicious State whose ruin should be the sole purpose of all who attend this site.
(2) TITLE 26, Subtitle C, CHAPTER 24, Section 3204 (a); TITLE 26, Subtitle C, CHAPTER 24, Section 3401 (a), (c), (d); TITLE 26, Subtitle C, CHAPTER 21, Subchapter A, Section 3101 (a); TITLE 26, Subtitle C, CHAPTER 21, Subchapter C, Section 3121 (a), (b), (e), (h). (3) Article I, Section 2, Clause 3; Article I, Section 8, Clause 1; Article I, Section 9, Clause 4 (4) POLLOCK v. FARMERS’ LOAN & TRUST CO., 157 U.S. 429 (1895) (5) BRUSHABER v. UNION PACIFIC R. CO., 240 U.S. 1 (1916) STANTON v. BALTIC MINING CO., 240 U.S. 103 (1916) PECK v. LOWE, 247 U.S. 165 (1918) EISNER v. MACOMBER, 252 U.S. 189 (1920) EVANS v. GORE, 253 U.S. 245 (1920) BOWERS v. KERBAUGH-EMPIRE CO., 271 U.S. 170 (1926) (6) An introduction to the book can be read here. Eric Gronseth is a natural rights advocate. |
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