Since Eisner v Macomber defines Income, and without income there can be no tax, why are we paying it?

Question

Attention Tax Honesty members. Forget 861 and the 16th!Stop asking if the Income Tax is Constitutional. That's the wrong question. It doesn't matter!! If you don't have income you don't owe income tax.

Your homework: Study Eisner v Macomber starting at "Income may be defined as..." and ending at "Nothing else answers the description." That is THE official legal definition of income. Period.

ANY profit above "capital investment" is defined as income. If you earn profits you are subject to the income tax, period. Totally constitutional on all fronts.

But:

-We are not serfs mandated to surrender our compensation for laboring for our living to the king.

-Labor is property - too short to prove here. Research it.

-You trade labor for equal compensation. Paychecks are not profit! Labor has value!

-We have the right to contract, to pursue happiness and earn a living. Making a profit above that is taxable as a privalege.

See Eisner. No income, no tax!

Detail added: Thanks, but nice try. The fundamental is unavoidable: We are not serfs forced to pay homage to our government. You can't really argue that we are without destroying our freedom. From that, it is extrapolated that either we're slaves or we're misapplying something. You can't provide another definition of income that trumps Eisner. You can't reconcile how labor is our capital and we are allowed to deduct our captial expenses while somehow earning 100% profit as is declared on the W-2.

In short, you're an apologist, suggesting income has other definitions without proving it. Strawman math examples hold no water.

Either we're serfs to our master government or we're not. Produce another definition of income the Supreme Court agrees with.

You can't.

From Eisner: 'Income may be defined as the gain derived from capital, FROM LABOR, or from both combined,' provided it be understood to include profit gained through a sale or conversion of capital assets,..."

Now then, to be fair, I'll go review the narrowing subsequent cases. Thanks for those. Never afraid to research. Please explain how labor is excluded in Eisner's embedded definition, and please explain how an embedded definition of income is restricted only to dividends.

Please also reconcile the logic that we are serfs of our government in terms of being taxed on our fundamental right to earn a common living.

Realize I support the income tax where applicable.

Addendum: Bostonia - Thanks. As quoted: "Congress was at liberty under the amendment to tax as income, without apportionment, everything that became income, in the ordinary sense of the word, ..." The ordinary sense of the word Income in 1920 was just as I've quoted, profit, not today's ordinary sense of take home pay.

Further: "manifest to tax the stockholder with respect to such accumulations ONLY IF AND WHEN, and TO THE EXTENT that, his interest in them comes to fruition as income," means only that which comes as profit.

Further: "when dividends are declared out of a pre-existing surplus." meaning out of profit above original capital invested.

It remains; at least until I am able to research your other cases, that per Eisner, income means profit, and we do not profit working for a living. It further remains that we are not serfs forced to surrender our living to our king.

I am all for income tax, where income is profit and an excise. Taxing common living must end.

NGC6205 - Explicitly explain the misinterpretation if you will for the benefit of all.

Wayne: The reference to serfdom is based on the forced surrender of money for the privalege of earning a living. Can you work in the US and not be taxed? Working for yourself is a fundamental 'pursuit of happiness' right we as a country acknowleged before we authored the Constitution to limit the government's rights. Our rights were not limited, though you wish it so.

Produce the Supreme Court case(s) where the cost of living argument argued 1) labor is property; 2) labor is the asset you trade for compensation without profit; 3) laboring for a common living is a fundamental right, not an excise to be taxed. You can't. Lower court cases mean nothing.

Also, cash basis is not a test of compensation. Dollars are not the test. Further, you can not reconcile what the employer pays for if he receives nothing of value. If he pays you but receives nothing of value that is a non-taxable gift

Stephan;

As I said, a zero cash basis means nothing, otherwise we'd all be paid in commodities. Further, the purchaser of your labor either receives something of value or he doesn't. If the work you do has no value and yet you get paid, why not just sit in a chair all day? If your work has no value, you don't earn income, you were given a gift. If your labor has no value, what capital expediture is your boss rightfully claiming? If your labor has no value why is there a market for it? If your labor has no value, why do you expect compensation?

Why do tax apologists believe we must surrender what Congress deems they can extract from our laboring to put food on our plate?

Resolved: All income taxes are excise taxes. By implication that makes earning a living a privalege, following apologist logic. We do not live in a country where survival is a privalege granted by the government. Earning a profit is a privalege, but you don't have an accsession of wealth just surviving

NGC6205

Now, see? NGC6205 knows how to dialog, though he still get's in a dig here and there;, at least he furthers the conversation. If I'm wrong I'm wrong, but telling me to up my meds for working out a difficult subject when most don't even bother is immature at best.

I'll research the works and reply. The quotes are most appreciated. I'm raising an eyebrow at the use of "gain" and "wages", e.g.- what does one gain when being compensated for labor? Federal Reserve Notes? There's no mention of FRN's in the code. Rather, the tax is applied against the accesson of wealth as measured by income(profit). We must now define Gain and Wages. I'll be back.

Answer 1

You are misinterpreting Eisner, but since you won't see that, I'll point you to some other cases that explain things quite clearly.

Lucas v. Earl, 281 U.S. 111, 114 (1930), the court stated, "There is no doubt that the statute could tax salaries to those who earned them...."

Commissioner Internal Revenue v. Smith, 324 U.S. 177 (1945)
"the Revenue Act is broad enough to include in taxable income any economic or financial benefit conferred on the employee as compensation, whatever the form or mode by which it is effected."

Central Illinois Public Serv. Co. v. United States, 435 U.S. 21, 25 (1978), "Wages usually are income..."

Finally, the tax code itself refutes your position.
§ 3401(a) "For purposes of this chapter, the term “wages” means all remuneration (other than fees paid to a public official) for services performed by an employee for his employer..."
and
§ 3402(a)(1) "...every employer making payment of wages shall deduct and withhold upon such wages a tax determined in accordance with tables or computational procedures prescribed by the Secretary."

EDIT:
I'm almost certain you won't accept it, but here is an explanation of Eisner v. Macomber. The government (Eisner) declared that stock dividends a taxpayer (Macomber) received were taxable as income. As part of the court's discussion, they referred to two earlier decisions, Stratton's Independence v. Howbert and Doyle v. Mitchell Bros. where both decisions contained the phrase, "Income may be defined as the gain derived from capital, from labor, or from both combined". The rest of the sentence in the Eisner decision was not a limiting sentence. The court was defining income in the context of corporate activities in order to correctly determine whether a stock dividend was to be considered income and the rest of the statement you quote is to be considered in that context. The court determined that a stock dividend was income whether the person sold the stock or not.

Another Supreme Court case that you SHOULD find interesting is LUKHARD v. REED, 481 U.S. 368 (1987). In that decision the court quotes Eisner, Stratton, and Doyle using the phrase you highlight.
[QUOTE]
"In common speech `income' generally is understood as gain or profit . . ." (footnote omitted)); Eisner v. Macomber, 252 U.S. 189, 207 [481 U.S. 368, 375] (1920) ("`Income may be defined as the gain derived from capital, from labor, or from both combined,' provided it be understood to include profit gained through a sale or conversion of capital assets . . ." (quoting Stratton's Independence, Ltd. v. Howbert, 231 U.S. 399, 415 (1913); Doyle v. Mitchell Brothers Co., 247 U.S. 179, 185 (1918))), respondents conclude that personal injury awards cannot fairly be characterized as income. But the premise that personal injury awards cannot involve gain is obviously false, since they often are intended in significant part to compensate for the loss of gain, e. g., lost wages.
[END QUOTE]

Notice exactly what the court says at the end of the above quote. To paraphrase, personal injury awards "often are intended in significant part to compensate for the loss of gain, e.g., lost wages." There is only one meaning to that. Wages is a gain and therefore wages are income.

Also, the Supreme Court cases I cited in the original part of this post refute your position.

In UNITED STATES v. BURKE, 504 U.S. 229 (1992), a sexual discrimination case where the court discussed whether the settlement for back pay should be taxable, the court said, "Congress declined to recompense Title VII plaintiffs for anything beyond the wages properly due them - wages that, if paid in the ordinary course, would have been fully taxable."

Answer 2

Wow....if you are correct then there must be hundreds or thousands of cases where people have gotten all of their taxes back using this theory. How come there isn't even one? I am guessing that it is because you are wrong. Do you think that you are the first tax protester that has used this theory? Some how, I think not.

Just because in one case "Income" was defined as "profit" doesn't mean that it can only mean profit. You tax protesters love to limit the definition of words when in it suits you. ("Includes" being the most famous example). Here is an analogy that disproves your theory: The statement 4 + 4 = 8 true is it not. But does that mean that 8 can only be derived by adding 4 and 4. Obviously not. There goes your theory on "Income".

EDIT:

1) Go to your shrink and have him increase or decrease your meds. Something isn't quite right upstairs.
2) The "Cost of Labor" argument has been made many times in court and has never won. Sorry...your time has no value.
3) Where did you get the idea that just paying an income tax makes us serfs? This isn't feudal Europe.
4) There is no right to earn a tax free living in the Constitution. That is only in your head.

Answer 3

If you actually believe that palaver that you're spewing you're too young and immature to be running around with crayons. Please put them away now.

FYI, Eisner v Macomber related to a very narrow situation involving stock dividends. It said nothing about any other type of income including labor. It was subsequently narrowed significantly by other rulings such as United States v. Phellis, Rockefeller v. United States, and Cullinan v. Walker.

For further reading on how using Eisner v Macomber failed when referenced by tax protestors claiming that wages were not income see Snyder v. Indiana Department of State Revenue and Pennybaker v. Commissioner of Internal Revenue.

YOUR homework is to now read the ENTIRE decision and report back what it REALLY says. You cannot take an excerpt from a court ruling and attempt to let it stand on its own out of context.

Now, please, you really need to put those crayons away.

Addendum: Go back and read Eisner IN ITS ENTIRETY. If you can then claim that it says anything about labor not being taxable then you REALLY need help that is beyond the scope of this forum.

Addendum 2: From Eisner, for your information: "Just as we deem the legislative intent manifest to tax the stockholder with respect to such accumulations only if and when, and to the extent that, his interest in them comes to fruition as income, that is, in dividends declared, so we can perceive no constitutional obstacle that stands in the way of carrying out this intent when dividends are declared out of a pre-existing surplus. ... Congress was at liberty under the amendment to tax as income, without apportionment, everything that became income, in the ordinary sense of the word, after the adoption of the amendment, including dividends received in the ordinary course by a stockholder from a corporation, even though they were extraordinary in amount and might appear upon analysis to be a mere realization in possession of an inchoate and contingent interest that the stockholder had in a surplus of corporate assets previously existing."

Answer 4

Eisner V Macomber

Answer 5

Gain or profit is the difference between what you obtain by selling something and what you PAID for it, not what it is worth. For example, if a car dealer pays $1 for a car that is worth $10 and then sells the car (still worth $10) for $100, the car's total profit is $99, not $90. The actual value does not matter, only the difference between what you receive and what you PAID.

Since you pay NOTHING for your labor, everything that you receive for it is PROFIT.

Answer 6

THINGS I DIDN'T KNOW UNTIL I READ THEM ON THE INTERNET:

Nobody ever really landed on the moon - it was a giant hoax. What you saw on TV was filmed in Utah.

Elvis is still alive and performing marriages in Las Vegas..

It is unconstitutional for the government to tax your wages (income tax) - what you earn isn't really income subject to tax..

Excuse me now....I just won 2 million pounds in the online UK lottery when my email was randomly selected, and I have to go answer the email.....

;-}

Answer 7

we are all slaves. The government is our masters. they can dictate what we have to pay them, their share, of our labor. we belong to them, and what we do, labor, also belongs to them. thus we must pay them their cut as rent for getting paid for our labors, because we are slaves.

Answer 8

"Fogy" is an appropriate name for you!