Thread: Taxing you on income never received, Moore v. United States

.
See: An Unconstitutional Income Tax Without Income

"Can the government impose an income tax when you never had income? That may seem like a trick question, but it’s exactly what happened to Charles and Kathleen Moore."

......snipped for brevity....

Now the Moores have petitioned the Supreme Court to take their case, and the Cato Institute has filed an amicus brief supporting that petition."


This case may inspire our Supreme Court to, once and for all, address what is, and what is not, a direct tax, which still to this very day requires apportionment.

It may also inspire our Supreme Court to re-confirm the meaning of "incomes" as found in the Sixteenth Amendment, which was elaborated upon in EISNER v. MACOMBER , 252 U.S. 189 (1920)


"After examining dictionaries in common use (Bouv. L. D.; Standard Dict.; Webster's Internat. Dict.; Century Dict.), we find little to add to the succinct definition adopted in two cases arising under the Corporation Tax Act of 1909 (Stratton's Independence v. Howbert, 231 U.S. 399, 415 , 34 S. Sup. Ct. 136, 140 [58 L. Ed. 285]; Doyle v. Mitchell Bros. Co., 247 U.S. 179, 185 , 38 S. Sup. Ct. 467, 469 [62 L. Ed. 1054]), '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, to which it was applied in the Doyle Case, 247 U.S. 183, 185 , 38 S. Sup. Ct. 467, 469 (62 L. Ed. 1054). Brief as it is, it indicates the characteristic and distinguishing attribute of income essential for a correct solution of the present controversy."

JWK

If, by calling a tax indirect when it is essentially direct, the rule of protection [apportionment] could be frittered away, one of the great landmarks defining the boundary between the nation and the states of which it is composed, would have disappeared, and with it one of the bulwarks of private rights and private property. POLLOCK v. FARMERS' LOAN & TRUST CO., 157 U.S. 429 (1895) JUSTICE FULLER

.
There is a glaring flaw in Circuit Judge Gould’s (U.S. Court of Appeals for the Ninth Circuit) WRITTEN OPINION

I. The MRT does not violate the Apportionment Clause

The Constitution’s Apportionment Clause provides that “No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or Enumeration herein before directed to be taken.” U.S. CONST. art. I, § 9, cl. 4. “This requirement means that any ‘direct Tax’ must be apportioned so that each State pays in proportion to its population.” NFIB, 567 U.S. at 570. The Apportionment Clause traditionally applied to only capitations1 and land taxes. See id.at 571 (“[D]irect taxes, within the meaning of the Constitution, are only capitation taxes, as expressed in that instrument, and taxes on real estate.” (quoting Springer v. United States, 102 U.S. 586, 602 (1881))).

Judge Gould citing Springer v. United States as a source of authority with regard to the meaning of a “direct tax” as the phrase appears in our federal Constitution, and as understood by those who framed our Constitution and participated in its ratification process, is fundamentally and fatally flawed! That fatal flaw is found in Justice Swayne’s own words who delivered the written opinion in Springer v. United States. Justice Swayne states:

"The very elaborate researches of the plaintiff in error have furnished us with nothing from the debates of the State conventions, by whom the Constitution was adopted, which gives us any aid. Hence we may safely assume that no such material exists in that direction . . . "

Well, that safe assumption was factually wrong! In fact, there is sufficient evidence in the State ratification debates by our Founders which articulate the identifying characteristics which distinguish a direct tax from one which is indirect.

As an advocate in adopting the Constitution, James Wilson (who was a prominent delegate to the Constitutional Convention) pointed out during Pennsylvania’s ratification debates that:

“In this Constitution, a power is given to Congress to collect imposts [an indirect type of tax], which is not given by the present Articles of Confederation. A very considerable part of the revenue of the United States will arise from that source; it is the easiest, most just, and most productive method of raising revenue; and it is a safe one, because it is voluntary. No man is obliged to consume more than he pleases, and each buys in proportion only to his consumption." Elliots VOL II, page 467, Wilson

And this very characteristic identifying an indirect tax as a voluntary payment when buying articles of consumption, is again articulated, and more in depth during the Connecticut State Ratification debates by Oliver Ellsworth, who provides the following characteristics distinguishing a direct tax from one which is indirect.

January 7, 1788. [On this Power of Congress to lay Taxes.]

”Direct taxation can go but little way towards raising a revenue. To raise money in this way, people must be provident; they must constantly be laying up money to answer the demands of the collector. But you cannot make people thus provident. If you would do any thing to the purpose, you must come in when they are spending, and take a part with them. This does not take away the tools of a man’s business, or the necessary utensils of his family: it only comes in when he is taking his pleasure, and feels generous; when he is laying out a shilling for superfluities, it takes twopence of it for public use, and the remainder will do him as much good as the whole.”

Ellsworth goes on to note:

“The experiments, which have been made in our own country, show the productive nature of indirect taxes. The imports into the United States amount to a very large sum. They never will be less, but will continue to increase for centuries to come. As the population of our country increases, the imports will necessarily increase. They will increase, because our citizens will choose to be farmers; living independently on their freeholds, rather than to be manufacturers, and work for a groat a day.”

”On the other hand, direct taxes are not voluntary, nor, in general, are they avoidable. And with respect to direct taxes, the anti-federalist minority of the Convention of Pennsylvania warned that direct taxation “…is a tax that, however oppressive in its nature, and unequal in its operation, is certain as to its produce and simple in its collection; it cannot be evaded like the objects of imposts or excise …” ___ See Connecticut ratification debates Elliot’s VOL II, page 191, Ellsworth

So, a few characteristics which define an indirect tax are, it is voluntarily paid during the taxpayer’s consumption, and safe because no man is obliged to consume more than he pleases, and such a tax are costs added by government to things which individuals are free to acquired or reject, while direct taxes are those which are assessed to the individual by government, are oppressive, and not avoidable.

The bottom line is, to cite Springer v. United States as an authority to identify a direct tax, within the meaning of our Constitution, is to totally ignore our Founders’ articulated identifying characteristics which actually define and distinguish a direct tax from one which is indirect, and thus, deprives the people the intended protection requiring any direct tax to be apportioned.


JWK

If, by calling a tax indirect when it is essentially direct, the rule of protection [apportionment] could be frittered away, one of the great landmarks defining the boundary between the nation and the states of which it is composed, would have disappeared, and with it one of the bulwarks of private rights and private property. POLLOCK v. FARMERS' LOAN & TRUST CO., 157 U.S. 429 (1895) JUSTICE FULLER

.
I see the Landmark Legal Foundation has also filed an AMICUS CURIAE BRIEF in support of Mr. and Mrs. Moore


.


BTW, here is a great video in which the Moores explain their fight, a fight for truth, justice and the American Way!

.
.

SEE: Eight Groups Support Supreme Court Consideration of Moore v. United States

"The Moores’ Supreme Court challenge to an unprecedented tax—a tax which the government labels a income tax, but is actually a property tax—received a major boost on Monday. Eight different organizations filed briefs in support of Supreme Court consideration of the Moores’ case".

.

Here is a short summary of the case when it began. See: Charles and Kathleen Moore v. United States


.

"A Washington State couple challenged as unconstitutional a part of the 2017 tax reform law known as the Mandatory Repatriation Tax. This provision taxes U.S. citizens on certain accumulated foreign earnings of foreign corporations going back 30 years, even if the earnings have not been distributed. The husband and wife taxpayers, Charles and Kathleen Moore, argue that the tax violates the Constitution’s requirement that direct federal taxes must be apportioned among the states, as well as the Constitution’s prohibition on harsh retroactive taxation.

At issue are the Moores’ shares in a foreign company founded by a friend that provides agricultural equipment to underserved small farmers in India. The couple has owned the shares for over a decade. They have never received any income from the shares, because the company reinvested all its profits in its business. Normally, such profits are not considered income unless shareholders either receive dividends or sell the shares for a capital gain. The new law, however, attempts to tax these funds as income through a legal fiction, by simply declaring them to be taxable income".

.
Seems that the Department of Justice, on June 12th, 2023, filed a brief in opposition to the petition for a writ of certiorari in Moore v. United States.


Hopefully the Supreme Court will review this case. If they don't, there will no longer be any meaningful limit on the definition of "incomes" within the Sixteenth Amendment, and the protection requiring an apportionment of any direct tax will likewise be totally subjugated.

SEE:

Art. I, § 2, Cl. 3 "Representatives and direct Taxes shall be apportioned among the several States . . . "

Art. I, § 9, Cl. 4 "No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or enumeration herein before directed to be taken."


JWK


If, by calling a tax indirect when it is essentially direct, the rule of protection [apportionment] could be frittered away, one of the great landmarks defining the boundary between the nation and the states of which it is composed, would have disappeared, and with it one of the bulwarks of private rights and private property. POLLOCK v. FARMERS' LOAN & TRUST CO., 157 U.S. 429 (1895) JUSTICE FULLER

.
See: Supreme Court will decide whether Congress can tax wealth

Quote:

"The Supreme Court announced Monday it will weigh in on the constitutionality of wealth taxes by deciding whether Congress may require taxpayers to pay their share of earnings from a foreign company, even if they received no dividends or income. The case of Charles and Kathleen Moore, and their $14,729 tax bill, has garnered much attention on the right because of what it could mean if progressive Democrats take control of Congress."

Well, it seems we will finally get some clarity on the meaning of a "direct tax" and whether or not a direct tax, as in the Moore's case, must be apportioned.

JWK

If, by calling a tax indirect when it is essentially direct, the rule of protection [apportionment] could be frittered away, one of the great landmarks defining the boundary between the nation and the states of which it is composed, would have disappeared, and with it one of the bulwarks of private rights and private property. POLLOCK v. FARMERS’ LOAN & TRUST CO., 157 U.S. 429 (1895) JUSTICE FULLER