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Tuesday, March 15, 2011

Returning to a LEGAL Tax System - OPINION

Pat Palmer of Sebastopol on Celebrating tax opinion...

'Tis the tax season, so this is a timely topic, especially after reading stories of tight money from so many in this county. Instead of complaining, let's consider remedies. One solution that most of us can employ: get a raise in pay. No, your business isn't going to give you more, but you can take more home: by not volunteering to donate up to half of your pay to the IRS.

Note to "tax protesters": the "income" tax law is indeed constitutional, as written. It is an excise tax, like sales tax -which is voluntary, (you don't have to choose to buy stuff).

Just what is being taxed? Not earnings. According to the IRS code: "the exercise of Federal privilege" is being taxed, and it is measured by "gross income" or "wages" (revenue accumulated via the privilege). What Federal privilege are you exercising today? Earning a living? Existing? (there's no law preventing us from giving up our rights.) This "privilege" is defined in law, and most of us don't fall into that category.

What is unconstitutional is the way the IRS collects money: This excise tax is  fraudulently enforced as a mandatory, direct tax on earnings—and extorted by threat of imprisonment. Looks like criminal behavior to me! Racketeering defined: “Organized conspiracy to defraud or extort.” This accurately describes the “income” tax scheme which relieves its victims of up to half of their money every payday.

After 60 years of trial-and-error legal challenges to the "new" personal withholding tax (started in WWII, as the voluntary, and temporary "Victory Tax"), resulting in losses and jail time for well-meaning but legally ignorant tax-justice advocates, the IRS Code was finally cracked in 2002. The only safe, legal way to un-volunteer from this racket was uncovered by legal scholar Peter Eric Hendrickson. You can prove it to yourself by studying his website at and reading his book: Cracking the Code: The Fascinating Truth About Taxation in America (12th edition). This is the result of his reading the entire 3.5-million-word, deliberately obfuscated statutes, regulations and legal precedents for the "income" tax, as far back as 1862.

After satisfying yourself as to the veracity of my words, you might be more comfortable acting on my proposed solution; in a nutshell: to start with, demand that your payer ("employer" means US Gov't) stop all “voluntary” withholding from your paycheck and then enjoy an instant pay raise of 30 percent or more. At the end of the year, you file your 1040 and 540 affidavits of self-assessment of the status of your compensation: as non-privileged (non-taxable), if applicable. Then you MUST rebut your payer's false allegations of “wages” paid, via the W-2 and/or 1099 forms. You do this by using "corrected 1099 information returns" and/or substitute W-2's: form 4852 for U.S. and form 3525 for California.

Lastly, if your payer had unlawfully refused to stop withholding, then you can claim a full refund of all of your weekly tax deposits -right on the U.S. and California tax returns. Enjoy the bigger check! You are now helping to stimulate the economy, like thousands of folks before you.

I can’t imagine why a payer would not want to stop withholding. >From a balance-sheet perspective: thousands of dollars per year, per worker could be saved in payer’s contributions. Only fear of the racketeers would stop them, unless they could find honest lawyers who would choose to apply the law.

I can hear the liberals moan about how their social programs (and for the conservatives -their military adventures) would lose funding if we fail to volunteer our compliance with the “income” tax scheme. Poppycock! Have you ever looked at the reverse of your tax payment check? It was cashed by a private bank called Federal Reserve, not the U.S. Treasury. Your donations never see a government program—those are paid for by loans. All income tax receipts pay the interest on the so-called "national debt".

The definition of "federal privilege" needs to clarified in order to make sure all the loopholes are closed, so that all who use it will pay for it.

Only the innocent are benefited by my proposed solution. This excise tax on federally privileged activities will finally be properly paid by all federal employees, contractors and beneficiaries of federally-created monopoly advantage, such as medical doctors, lawyers, bankers, pro sports team owners, etc. Also include corporations that possess federal concessions such as oil, mining, utilities, broadcasting, drugs, banks, etc. And don't forget international business: U.S. corporations that rely on federal political pressure, military and intelligence activities to acquire and protect their foreign assets. These infamous non-payers are definitely “federally privileged.”

As you can see, returning to a legal tax system accomplishes fiscal relief for the private worker while the fat cats who use lobbying to get government corporate welfare will be properly charged for their advantages. As Moses declared, “Let my people go!” Make the legally liable taxpayers pay their fair share, and release the non-liable. Let us (private earners) seize our rights by grassroots action, because rights are not going to be given from on-high.  Vote with your wallet and your public servants will cease to be your masters.

Pat Palmer, Sebastopol

For more information on the Law & Logic behind this opinion - please visit

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