Taxes: This or That

If someone came to you on Day 1 of your working life… or even now… what option would you choose?

Option 1:
The government will take out a small portion of your paycheck to help pay for services for you in the future (taxes). The services would include money for if you become unemployed, money for if you should you become disabled, and money for when you get old and want to retire (among other things, but let’s just go for these items).

Option 2:
The government does not take anything out of your paycheck (no taxes). If you fall on unfortunate times the government will not help you out – unemployed? Too bad. Disabled? Too bad. Want to retire? Hope you saved.

Option 1 offers you more of a safety net. However, Option 2 gives you more money up front to save, spend, and possibly invest and make more in the long run.

What would you pick?


8 Responses to “Taxes: This or That”

    6 March 2010 at 16:06

    Well, I would take Option 2, of course; but that would be because I have been taught, or learned myself: discipline, responsibility for my own actions, how to live within my means, how to invest wisely, and so on. Two major forces converge to make Option 1 the only Option. First – and the easiest one to dispose of – is that the federal government wants to handle our money for us, thank you very much, so that they have cash flow available with which to perform amazing stunts of making budgets appear balanced, programs appear to be funded, and various other Ponzi schemes. In essence, send us your money now, and we’ll figure out later how to pay for whatever it is we promised you.
    The second major force is, as you stated, Option 1 appears to offer a safety net to those who did not learn self discipline, and so on, and so on, and least of all how to invest wisely. So, lacking some, or all, of the talents necessary to secure their future, those folks hold their noses, or close their eyes, or worse – simply fail to understand, how much of their earned income they are giving away in order to have the safety net.
    {I’m not sure how many words I get to type here, but I think this subject relates to your recent posting on Social Security and Medicare Taxes, where you debated with Mr. Alan Scott about the ‘right’ of government to withhold those payments from one’s paycheck, and when it was he ‘gave them permission’ to do so. I would like to expand on that subject, but so as to not risk running out of space, I will cease and desist here, on this reply, and start a second one specifically on the subject of when and how permission was given.} Meanwhile, here’s another quote I hope you will enjoy:

    “By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.” – John Maynard Keynes

    6 March 2010 at 17:27

    In my second reply, as promised, I want to make a few observations about, let’s say, the ‘legality’ of your Option 1, as well as tying back to your question of Mr. Alan Scott, in the “Social Security and Medicare Taxes” blog – when did he cede power to the government to withhold those taxes ? I apologize, Sir, I don’t know your background so I may be telling you something you already know. But it is only my lack of knowledge that causes me to point this out; not my usual sarcasm. Everybody who works for the Man and receives a bona fide paycheck, is required upon employment to designate how much money they would like withheld from each paycheck toward income taxes. Withholding income taxes isn’t for the same purpose as withholding FICA taxes, which is what you are dealing with in this blog, but essentially the same thing is happening. By designating a withholding amount, you are agreeing that you owe income taxes on your earnings. The two differ in that the FICA withholding isn’t a number that you designate as to amount; the amount is automatically calculated. But I want to stick with the income tax withholding for now, because there is a very serious dispute over whether, in fact, the government is allowed to tax a man’s labor. I’m not going to be able to come up with all the background information I need to carry out this argument, nor would I have room to write it all down. But, in short, revenue needed to operate the government was to be generated only from tariffs or from what we would call today, capital gains taxes. To this day, you will not find any place in the IRS Rules and Regs, where it states that taxes are to be paid on income earned by a man’s labor. The 16th Amendment to the Constitution supposedly clarified or made law, that taxes could be levied on a man’s earnings from his labor. But again, to this day, there remains a dispute over whether or not the 16th Amendment was correctly validated. There is a high caliber professional tax attorney who will guide any individual who wishes to retain him, through the process of not agreeing to pay income taxes on labor. But he told me on the phone is the first thing you have to do, is NOT sign the income tax withholding certificate your intended employer gives you. Nice theory; but I have a strange feeling that you wouldn’t be working there if you didn’t sign the card. So while you may have the high legal ground, you won’t have the employment over which to argue the point. There are people actually buried in prison for refusal to pay tax on income earned for their labor. And there they will stay because no one will defend them. I digress slightly, but it is like trying to get somebody interested in pressing the birth certificate issue with Obama. Plenty of people who could either shed a lot of light on the cockroach, or carry on the court case, just won’t do so. I have no idea why. I can only assume it is for political expediency on their part. Rather try to win ten suits in the next two years, than spend two years trying to prosecute one suit. More fun to ridicule Orly Taitz because she didn’t go to Harvard, and she speaks with an accent. As far as I can tell from what little I have seen of her, she knows her stuff. But the rude imbeciles who speak to her spend all of their time talking instead of listening. Personally, I would hire her in a heartbeat if I needed a defense attorney. She is tenacious. But being PC is much more important today. Sorry, I got off the subject. I hope I still have enough room for another of my favorite quotes:
    “If you tell a lie big enough and keep repeating it, people will eventually come to believe it. The lie can be maintained only for such time as the State can shield the people from the political, economic and/or military consequences of the lie. It thus becomes vitally important for the State to use all of its powers to repress dissent, for the truth is the mortal enemy of the lie, and thus by extension, the truth is the greatest enemy of the State.” – Joseph Goebbels, Minister of Nazi Propaganda

  3. 6 March 2010 at 23:42

    First off, you do not have a character limit on here – at least not one that I have imposed or witnessed. So, post away. :)

    As for taxes… Yes, labor itself is not taxable, unless you engage in certain activities or enjoy certain privledges. The activies part is if you work for the government. The privledges part is if you participate in Federal programs such as SS, 401(k), etc. These two points are my sole opinion and I could be totally wrong.

    I argued with Alan Scott over if he allowed it. Of course you and him both argue that you are required to file W-4 for withholding. My answer to that is, yes absolutely you must fill out the W-4 if you wish to participate in the government programs. If you do not want to participate then you fill out a W-8BEN or something likewise.

    So the main problem arises then from ignorance. How many “employers” are going to accept that form, much less know how to process it. But at that point if they don’t know how, then that is not your problem. And if they refuse to process it, then I guess they are offering up legal advice for you huh?

    This is a severely condensed version, but I’ll start with that.

    7 March 2010 at 08:14

    Good – Thank you. I learned something I did not know – the existence of an alternate form, W8BEN. I have not been in the corporate workplace for ten years, and haven’t signed a W-4 since about 1974 when I got married. So I don’t know if this W8BEN is a new form (relative to my existence on the face of the earth) or whether it was available way back when dirt was invented. Nevertheless, your point is exactly the point: how many employers at the level at which they welcome you to the company and have you fill out all the same forms everybody else has filled out without complaining – and what the Procedure Manual from the Human Resources Dept. tells them NEED to be completed – will know this form exists, or be willing to find out for some smart-ass new employee. (Look kid – do you want to work here or not ? Are you sure you want to start your career with enemies in the H.R. Dept.?) All of that assumes, of course, that even the top levels of the H.R. Dept. know of such an option. On the other side of the coin, how many newly minted college seniors from liberal colleges – which is all of them except two – are even going to know that another option is available to them (unless Dad or Mum is an anti-tax attorney) ?

    On the third side of the coin (we’re using gov’t fiat money here, so it has as many sides as we say it does) even given that all parties named above are knowledgeable of the alternative – apparently NOT withholding either taxes or FICA (?) (Since I’m not familiar with the form, I don’t know what it applies to.) how many corporate structures – even the crooks themselves, like Goldlined Slacks – are going to tolerate such ‘insubordination’ from a newbie ? “Can’t let this little wimp think he has any rights that we don’t control.” So despite all the facts of law, and the philosophical ideals, in the end, reality takes over; and, as Mr. Alan Scott stated, more or less, how much time and effort can one person expend fighting the system ?

    My loving wife is fighting the current regime with everything she can, but no amount of letters, screaming phone calls, blistering emails or crying keeps the bastards Reid and Peloski from lying and scheming against the Constitution. Finally she breaks down and cries, “How can they do this to our country ?” To which I reply: These are desperate people cornered like rats. Nothing – nothing, is beneath them.

    (Thanks for letting me know there is no text limit.) R-J

  5. 7 March 2010 at 08:52

    @Rough Justice: Nobody knows about the W-8BEN form because of how it is labeled – It is labeled, “Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding.”

    This probably isn’t going to make much sense to you, but when it comes to taxation it is my belief that we are really “nonresident aliens.” More expansively, nonresident aliens to the “United States.” to expound more, nonresident aliens to the United States jurisdiction that was created in Section 1 of 14th Amendment.

    My proof? Read the court case Brushaber v. Union Pacific Railroad, 240 U.S. 1 (1916). You will have to read all of the case, not just the decision. In any case, Brushaber came to the court room and claimed this of himself.

    …a citizen of the State of New York and a resident of the Borough of Brooklyn, in the City of New York

    The wording is very particular in this instance. Most of us would say that we are a “US Citizen,” but not Frank Brushaber. The court averred (agreed) to what he said as for his citizenship status and never called him a “US Citizen.” Brushaber did lose his case, but that is not the point. The point is that first the US Supreme Court agreed that he was a “New York Citizen” and not a “US Citizen.” Secondly, the Treasury wrote TD 2313 in which they ended up calling him a “nonresident alien.”

    So what does this mean? It means that if you don’t want to be a “US Citizen” then you don’t have to be. This country was set up to have State power – if someone wanted to be a citizen of a State but not a US citizen, then they could. Not that they would be any less American – for general purposes a “non-citizen national” under 8 USC 1101(a)(21) – for taxation purposes a nonresident alien under 26 USC 7701(b)(1)(B).

    So to bounce back to the original topic… Option 1 is for people who want to be “US citizens”, “US persons”, “US residents”, or “nationals of the US.” Option 2 is for people who want to be State citizens, like Frank Brushaber.

    This is just a snapshot as there is more to why Brushaber lost, even though he was designating himself into Option 2. But for right now I am just going over citizenship and how it has played out in the courtroom for the purposes of taxation.

    7 March 2010 at 10:05

    Wow ! That is really interesting. Especially considering the current situation in these great states united, regarding states that are at least going through the motions in preparation to defy the federal government, or secede, if necessary. (I’m not optimistic that any of them will follow through, so I need to check into the Indian Reservation in South Dakota, I think, that has already seceded from the U.S., and see how they are faring these days.)

    Of course we both know that despite the fact that our laws were supposed to have been developed over time by precedent, any court right up the the Supreme Usurpers, will conveniently discount, forget, or deny reference to, any precedent they find inconvenient to the ruling they wish to make on the case at hand. So while I do, in fact, understand what you wrote, and see the connection of it to the FICA payroll deductions, I’m not sure I would want to stake my freedom on the Supreme Court recognizing a decision made in 1916.

    I’m not sure I see how you are connecting Section 1, Amendment 14 to this topic, though. In my simple mind, A-14,Sec 1 only says that states cannot make laws that are contradictory to federal laws, thereby imperiling the rights and immunities granted by the Constitution. This would have been vitally important to folks in 1868, when citizens of the recently ‘bashed back into the Union’ confederacy states believed they had reason to fear their state authorities more than the federal authorities. (Misplaced, as it turned out; but nevertheless, that was their perception at the time.) Today, the shoe doth resideth on the other foot, though; so I now fear that A-14,Sec 1 will be used against those states who pass laws exempting their citizens from federal mandates. So I’m not disagreeing with your points about ‘non-resident aliens’ as agreed to in the Brushaber case; I’m only confused about how A-14,Sec 1 establishes the ‘non-resident alien’ citizen. R-J

  7. 8 March 2010 at 17:50

    @Rough Justice:
    So if a court case is old, but NOT overturned… then it is void? I don’t understand.

    As for Amendment 14… what do you make of the “jurisdiction” part of it? What does it mean to be a part of a jurisdiction?

    9 March 2010 at 09:03

    Hey, man – Got your message and appreciate it. I will write back soon, but too many other distractions at the moment. R-J

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