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  1. #301
    The Insane Reeve's Avatar
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    Quote Originally Posted by Tinykong View Post
    I was referring to the 16th amendment. Income and wages haven't always been the same thing, and (this is borderline conspiracy theory, so tread lightly) some people feel that the IRS doesn't have the authority to tax wages (money earned while in the employ of another person) but only income (money earned as a profit from a business.)
    Well that's not one I'd heard before. Has it been challenged and taken to the Supreme Court before? That would clarify it pretty simply I'd think. BRB, checking.

    Edit: On first blush, Bowers v. Kerbaugh Empire Co. says:

    After full consideration, this court declared that income may be defined as gain derived from capital, from labor, or from both combined, including profit gained through sale or conversion of capital.
    Also:

    In Commissioner v. Glenshaw Glass Co., 348 U.S. 426 (1955), the Supreme Court laid out what has become the modern understanding of what constitutes 'gross income' to which the Sixteenth Amendment applies, declaring that income taxes could be levied on "accessions to wealth, clearly realized, and over which the taxpayers have complete dominion." Under this definition, any increase in wealth — whether through wages, benefits, bonuses, sale of stock or other property at a profit, bets won, lucky finds, awards of punitive damages in a lawsuit, qui tam actions — are all within the definition of income, unless the Congress makes a specific exemption, as it has for items such as life insurance proceeds received by reason of the death of the insured party,[31] gifts, bequests, devises and inheritances,[32] and certain scholarships.[33]
    Last edited by Reeve; 2013-02-05 at 07:59 PM.
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  2. #302
    Quote Originally Posted by Wildtree View Post
    I am sorry, those are dreamers.. The constitution doesn't provide any way how a country can function without taxes?
    The people with such believe need to look at the times applicable for the constitution.. At that time "taxes" meant, that everyone had to surrender a percentage of their harvest etc. to the crown. And there was usually little return, other than being allowed to live on the Kings land. Land owners been the aristocrats. Not the common man. That's why some things are in the constitution.
    The need to use wealth from all citizen accordingly to create a country, and to build an infrastructure still exists in free countries as well.
    No one would give away any money at all, if it was based on free will. A country cannot be built from donations. Not gonna happen.
    I never said the government was supposed to function without taxes, I said that some people feel wages were not intended to be taxed, but only business profits and commerce (sales tax, etc.)

    ---------- Post added 2013-02-05 at 07:59 PM ----------

    Quote Originally Posted by Reeve View Post
    Well that's not one I'd heard before. Has it been challenged and taken to the Supreme Court before? That would clarify it pretty simply I'd think. BRB, checking.
    I seriously doubt it has been. I recall hearing the opinion on a documentary/TV show about taxes, whether or not it has any real validity I don't know.

  3. #303
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    Quote Originally Posted by Tinykong View Post
    I never said the government was supposed to function without taxes, I said that some people feel wages were not intended to be taxed, but only business profits and commerce (sales tax, etc.)

    ---------- Post added 2013-02-05 at 07:59 PM ----------



    I seriously doubt it has been. I recall hearing the opinion on a documentary/TV show about taxes, whether or not it has any real validity I don't know.
    Yeah, check above. That's only 2 cases, but it's very firmly established in those and more cases that incomes applies to wages and salaries as well.
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  4. #304
    Moderator Endus's Avatar
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    Quote Originally Posted by Tinykong View Post
    Depending on your interpretation of the Constitution, some people believe wages were never intended to be taxed.
    The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.

    The 16th Amendment's pretty darned clear. It's not dependent on "interpretation"; it explicitly states that Congress can tax incomes.

    As for the legitimacy of Amendments to begin with, Article 5 of the Constitution is what explicitly allows for it.

    The only people arguing that the Constitution doesn't allow for income taxes are grossly ignorant as to what the Constitution actually says, and are attacking that document, not defending it.

  5. #305
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    Quote Originally Posted by Endus View Post
    The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.

    The 16th Amendment's pretty darned clear. It's not dependent on "interpretation"; it explicitly states that Congress can tax incomes.

    As for the legitimacy of Amendments to begin with, Article 5 of the Constitution is what explicitly allows for it.

    The only people arguing that the Constitution doesn't allow for income taxes are grossly ignorant as to what the Constitution actually says, and are attacking that document, not defending it.
    His issue with it is the definition of income (or rather the issue of the detractors he's referring to), but that has been clarified many times by federal courts and the Supreme Court.
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  6. #306
    Moderator Endus's Avatar
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    Quote Originally Posted by Tinykong View Post
    I was referring to the 16th amendment. Income and wages haven't always been the same thing, and (this is borderline conspiracy theory, so tread lightly) some people feel that the IRS doesn't have the authority to tax wages (money earned while in the employ of another person) but only income (money earned as a profit from a business.)
    "From whatever source derived".

    Wages are clearly defined as "income" under tax law. Those people simply do not understand the basic terminology they're arguing about. And it doesn't matter anyway, since the only people who get to decide what the Constitution really means is the Supreme Court, and they've been clear about the 16th.

    ---------- Post added 2013-02-05 at 03:04 PM ----------

    Quote Originally Posted by Reeve View Post
    His issue with it is the definition of income (or rather the issue of the detractors he's referring to), but that has been clarified many times by federal courts and the Supreme Court.
    Yeah, that got posted as I was writing my response, hence this addendum

  7. #307
    Quote Originally Posted by Endus View Post
    The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.

    The 16th Amendment's pretty darned clear. It's not dependent on "interpretation"; it explicitly states that Congress can tax incomes.

    As for the legitimacy of Amendments to begin with, Article 5 of the Constitution is what explicitly allows for it.

    The only people arguing that the Constitution doesn't allow for income taxes are grossly ignorant as to what the Constitution actually says, and are attacking that document, not defending it.
    People's sticking point is that income hasn't always been defined as profits derived from labor and capital (as defined above) and that the Supreme Court has used that definition because it's in the government's best interest to keep taxing wages. Remember, I prefaced this by saying it's borderline conspiracy theory.

  8. #308
    Since the Supreme Court get's to decide what's constitutional why does it matter? Even if it was ruled un-constitutional, all they need to do is pass another amendment...

  9. #309
    Quote Originally Posted by Endus View Post
    "From whatever source derived".

    Wages are clearly defined as "income" under tax law. Those people simply do not understand the basic terminology they're arguing about. And it doesn't matter anyway, since the only people who get to decide what the Constitution really means is the Supreme Court, and they've been clear about the 16th.
    I don't agree with the thinking, I was just offering it as an example of what some people think about taxes.

    Call me cynical, but I wouldn't be surprised if tax law was written specifically to include a wages, which at the time may or may not have intended money earned from labor, and that the Surpreme Court later upheld it because it's in the government's best interest. Wouldn't be the first time the government was being self serving. :shrug:

  10. #310
    Moderator Endus's Avatar
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    Quote Originally Posted by Tinykong View Post
    People's sticking point is that income hasn't always been defined as profits derived from labor and capital (as defined above) and that the Supreme Court has used that definition because it's in the government's best interest to keep taxing wages. Remember, I prefaced this by saying it's borderline conspiracy theory.
    And the point is, that's the Supreme Court's Constitutional duty, to do so.

    You can dislike the Supreme Court's decision, and campaign to have them revisit the issue, but if you're claiming that it's not legitimate, you're anti-Constitutional and anti-American, and need to be honest about that rather than hiding under a false flag of patriotism.

    Edit: I know you're not supporting it, I'm just delivering an attack on those who do, since they tend to try and act as if they're the patriotic "true Americans" while attacking the very Constitution they claim to be "defending".

  11. #311
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    Quote Originally Posted by Tinykong View Post
    I don't agree with the thinking, I was just offering it as an example of what some people think about taxes.

    Call me cynical, but I wouldn't be surprised if tax law was written specifically to include a wages, which at the time may or may not have intended money earned from labor, and that the Surpreme Court later upheld it because it's in the government's best interest. Wouldn't be the first time the government was being self serving. :shrug:
    It's possible, but it's irrelevant, since we designed the system to let SCOTUS make those calls.
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  12. #312
    Quote Originally Posted by Endus View Post
    And the point is, that's the Supreme Court's Constitutional duty, to do so.

    You can dislike the Supreme Court's decision, and campaign to have them revisit the issue, but if you're claiming that it's not legitimate, you're anti-Constitutional and anti-American, and need to be honest about that rather than hiding under a false flag of patriotism.

    Edit: I know you're not supporting it, I'm just delivering an attack on those who do, since they tend to try and act as if they're the patriotic "true Americans" while attacking the very Constitution they claim to be "defending".
    A lot of these people call themselves "Tax Patriots," which is kind of ironic.

  13. #313
    Moderator Nicola's Avatar
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    Ugh, never knew taxes in US were so stupidly complicated, and is being argued about so much... Hurray for not having to care about taxes <3

  14. #314
    Quote Originally Posted by Niberion View Post
    Ugh, never knew taxes in US were so stupidly complicated, and is being argued about so much... Hurray for not having to care about taxes <3
    Our tax code is beyond complex, I doubt there is anyone who really understands it completely.

  15. #315
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    Quote Originally Posted by Tinykong View Post
    Our tax code is beyond complex, I doubt there is anyone who really understands it completely.
    Eh, the part of it that I need to understand in order to file my taxes properly is pretty simple. But then I don't have enough possible deductions to total more than the standard deduction, which really simplifies things.
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  16. #316
    Quote Originally Posted by Reeve View Post
    Eh, the part of it that I need to understand in order to file my taxes properly is pretty simple. But then I don't have enough possible deductions to total more than the standard deduction, which really simplifies things.
    If you use the standard deduction, you can probably fill out the forms in less than 15 minutes.

    If you don't...hope you like word puzzles and logic games. My parents itemize, and their tax packets look like a home mortgage application.

  17. #317
    Quote Originally Posted by Endus;20111218
    Check the first graph here; [URL
    http://en.wikipedia.org/wiki/Wealth_inequality_in_the_United_States[/URL]
    You'll note that it's observing the percentage of income in the top 1% of earners. You'll also note that the last time it spiked as high as it is currently was just before the Great Depression.
    Wealth inequality kills economies at the macro level, so that the few at the top can improve their own micro performance.
    Sorry for quoting from page 13, but I'm just catching up on the thread for the day.

    Anyways, I agree with what you said in the post, and would like to combine the graph you linked, with the tax rates for the same years:
    (Graph Endus linked).

    Here's the tax graph:
    (The Green isn't that important at this moment, focus more on the red and blue lines, and a lot more on the red than the blue).

    Notice the correlation between the two graphs, and then use history to look at economic prosperity for the time periods.

    Tax rates on the rich being low: Led to some sort of financial crisis, depression, or repression.

    Tax rates on the rich being high: In general, economic prosperity was a lot better than it was when taxes on the rich were low.

    On another note, after being a bit more educated in how the economy works, and taxes, how the hell is Reaganomics (aka trickle down economics)a good system to use? (Isn't there a political group, that would prefer to use it?
    "Then we have found, as it seems, that the many beliefs of the many about what's fair and about the other things roll around somewhere between not-being and being purely and simply." - Plato: Republic

  18. #318
    Quote Originally Posted by Reeve View Post
    My grandfather is a self-made man. He was born to a poor family in a poor neighborhood with 5 siblings, an absentee father, and a drunkard mother. He went on to graduate high school, which was not that common in his neighborhood, joined the Navy, fought in the Korean War, and went to college on the GI Bill. Got himself a job in chemical sales, eventually opened up his own chemical company and retired with a few million dollars, which he was able to invest well.

    He worked his ass off to get where he did, but even he will tell you that he didn't get there without a lot of luck.

    I consider myself extremely lucky to have been brought up by good parents who themselves had a middle class/upper middle class upbringing. I've benefited in my own knowledge/education from their knowledge/education. I think it was a lot easier to learn when I had a college educated father who wasn't afraid to answer any of my questions and help me work through the answers. I've also benefited by having a mother who knows business and has taught me how to present myself in the business community. She continues to advise me well to this day.
    Then your grandfather is the definition of what we should be able to achieve with hard work and I applaud and respect him for it. I also am glad he admits luck played a large part of it as well.

    But you also have to pay attention to what taxes he paid then compared to what taxes they get away with paying now and looking at what was considered minimum wage then compared to what we make now. If minimum wage paid as little then compared to what it does now after inflation and if the taxes were setup the same and if jobs out there refused to hire Americans so much and the ones they did hire they hired at part time with below adequate wage while sending much of their jobs overseas and all this other crap, how much harder do you think he would have had it and how far do you think he would have been able to rise?

    But overall, your grandfather has every right to call himself a self made man more than any billionaire I have ever seen on television and definitely more than any actor or athlete who won a job in the entertainment lottery and you should proud too.

  19. #319
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    Quote Originally Posted by Fugus View Post
    Then your grandfather is the definition of what we should be able to achieve with hard work and I applaud and respect him for it. I also am glad he admits luck played a large part of it as well.

    But you also have to pay attention to what taxes he paid then compared to what taxes they get away with paying now and looking at what was considered minimum wage then compared to what we make now. If minimum wage paid as little then compared to what it does now after inflation and if the taxes were setup the same and if jobs out there refused to hire Americans so much and the ones they did hire they hired at part time with below adequate wage while sending much of their jobs overseas and all this other crap, how much harder do you think he would have had it and how far do you think he would have been able to rise?

    But overall, your grandfather has every right to call himself a self made man more than any billionaire I have ever seen on television and definitely more than any actor or athlete who won a job in the entertainment lottery and you should proud too.
    Given the specifics of his story, he probably would have still been able to get into sales and be successful, but it's much harder to start up a new chemical company today than it was in the 70's, as his children discovered. I think he probably would have been able to go from poor to middle class, and maybe upper middle class, but he probably never would have been wealthy in today's world.
    Go and tell my baby sister
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  20. #320
    Quote Originally Posted by Reeve View Post
    Given the specifics of his story, he probably would have still been able to get into sales and be successful, but it's much harder to start up a new chemical company today than it was in the 70's, as his children discovered. I think he probably would have been able to go from poor to middle class, and maybe upper middle class, but he probably never would have been wealthy in today's world.
    Maybe, but you also have to take into account that the wages haven't kept pace with inflation since 1981 and making the wages we consider decent now would barely considered minimum wage back then. I figure the Navy and GI Bill would both be doable. The job in chemicals would be a duel with the devil though as most now require previous experience and none want to hire and even interning can be hard as hell to get as an option, have even seen an intern position before that required a masters degree to even start as an intern a while back, it has just gotten insane unless he did chemicals while in the Navy. But assuming he got in, he would probably get paid decent, less than he would have gotten back then, but decent.

    Overall, I would say he would have gotten up to middle class, upper middle class if he got lucky, but any attempts he made at opening his own business would have been torpedoed with the huge price and amount of paperwork it would take to open one in this day and age, creating a huge barrier of entry, along with the established players doing everything legal and otherwise to make sure he stayed a small player at best while they attempted to crush him. Could see him just starting and getting sued into bankruptcy over some patent infringement case for something he is working with that had a patented applied for 9 years prior by a troll company but they delayed its approval till 3 weeks ago waiting for someone to actually use it or many of the processes requiring stuff that stuff that a company has patented and only license it out at steep prices.

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