Time: Tue Sep 16 20:52:31 1997
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	Tue, 16 Sep 1997 20:51:42 -0700 (MST)
Date: Tue, 16 Sep 1997 23:51:15 -0400
Originator: heritage-l@gate.net
From: Paul Andrew Mitchell [address in tool bar]
To: pmitch@primenet.com
Subject: SLS: Direct and Indirect Taxes: the great misunderstood

Dear Mike and others,

Chapter 13 from "The Federal Zone" is now an
Exhibit in a pleading filed in the case of
USA v. Knudson, available in the Supreme Law Libary --
at the URL just below my name here.  This
chapter goes into some detail, to analyze
many of the questions you raise here.  Many cases
have ruled that "income" has the same statutory
meaning that it had in the original corporation
excise tax.  See Eisner v. Macomber, for example.

The "income," which was the measure of the tax
to which Brushaber objected, was the dividend
he was expecting to receive from a "domestic"
corporation.  Here, Congress can tax profit
generation by a domestic corporation, because
Congress created that corporation in the first

However, Congress can only create a corporation
in its capacity as a legislature for the federal
zone;  it cannot create a "national" corporation,
because such an exercise would violate the
Tenth Amendment -- the several states reserved
their Right to create their own "domestic" 
corporations.  So, the key to understanding
a major part of this deception is to appreciate
the true legal meaning of "domestic";  it does
NOT mean "American";  it DOES mean "within the
federal zone, where Congress and ONLY Congress,
is the State Legislature (because there is no
Union state to compete with Congress there)."

The Union Pacific Railroad Company is such a
corporation.  Brushaber was wrong to allege,
in his original pleadings, that UPRR was 
"domestic" to Utah state;  Utah was a federal 
territory at the time the UPRR was first
created -- BY ACT OF CONGRESS!!  Thus, the 
30% tax (on Brushaber's dividend) was actually
a tax on the corporate privilege of generating
profit with limited liability;  the quantity of
income being taxed was merely the "measure" of
the tax, not the subject of the tax.  The "subject"
of that tax was the corporate privilege.  Congress
merely got to it before Brushaber did, because the
corporation, a creation of Congress, was the 
withholding agent made liable by the tax in question.

All of this is explained in much greater detail
in Chapter 13 of "The Federal Zone," which chapter
is now available in the Supreme Law Library.

/s/ Paul Mitchell

At 06:51 AM 9/16/97 -0700, you wrote:
>The Constitution speaks of two classes of taxes.
>Direct taxes:   These are simply taxes placed on a person.  Your property
>tax is placed on you, the property is just the measure of the tax.  A so
>called income tax is placed on you, the income is just the measure of the
>tax.  Any tax that you pay directly to the government is a direct tax.  The
>money witheld from your pay is sent in by your employer, however he is
>acting in the capacity of a tax collector for the goverment so it is still
>a direct tax.
>Indirect tax:  These are simply taxes placed on a product or it could be a
>service too.  When you buy a radio for example, it might include a tariff
>charge, an excise, and a sales tax, although you payed all these taxes when
>you purchased the radio, it is an indirect tax because you are not
>responsible for sending the money to the government someone else is. 
>Indirect taxes can be avoided just don't buy the product.  This tax is
>charged against some one or an entity other than the real payor of the tax.
> For example the sales tax, if I sell $1,000.00 of goods, and the tax is
>7%, then I owe the government $70.00, but the customers pay it not me. 
>Thus indirect.
>Before the passage of the 16th amendment, (which allowed taxation on income
>without apportionment) we had these two classes of taxes, direct and
>indirect.  Direct taxes had to be apportioned, did this amendment change
>this?  If so why did it not say so?  Why would the constitution be in
>conflict with itself?
>Income has more than one definition.  Here are two of them.
>1. Income = profit or gain
>2. Income = that which comes in
>Which definition was the sixteenth amendment referring to?
>Placing an income tax on a corporations profit is an indirect tax, as the
>consumers pay the tax when they purchase the goods.
>Placing an income tax on your wages is a direct tax as you pay it directly
>to the goverment.
>If you think that the sixteenth amendment gave congress the power to tax
>your labor the same as the power to tax corporate profits, then why do you
>not get to deduct all of those things that go into making up your product,
>like the corporations do?
>If your product is your labor, the cost of food, clothing, shelter,
>transportation, insurance on the car, DMV fees, taxes on your home,
>education, etc etc, are all part of the cost neccessary to create your
>product, then why don't you get to deduct these cost?
>The corporations do not pay taxes on those expenses neccessary to keep it
>in existence, they deduct all those cost, why shouldn't you be able to do
>the same?
>Here is the reason, we have been duped, the sixteenth amendment allowed for
>the taxation of corporation income without apportionment (not your wages),
>which is totally consistant with the original taxing clauses of the
>If I am right one of two possibilities exist, one the government is in
>violation of the Supreme Law of the land, two no law exist that requires us
>to pay taxes on our labor, we volunteer the payment.
>I can hear all the replies to this in my head now, some will go, hmmmm,
>some will say oh yea try it and you will go to jail, you tax protestor you.
> If I go to jail for refusing to be a slave, it is a small price to pay,
>especially considering the price our founders paid to give us our
>Constitution, and it's guarantees.  By the way involuntary servitude is
>also outlawed in this country by the Constitution.
>The Constitution is like a muscle in your body if you do not exercise it,
>it will atrophy and that is exactly what has happened to our freedoms.  Our
>founders have given us a shield against tyranny in government, if we do not
>use it, care for it, it will rust away, until our children, will not even
>possess it.
>To all of my former associates in slavery, when will you say I will be a
>slave no more, how much will the government have to take of your production
>for you to awaken and say, hey this is slavery? 

Paul Andrew Mitchell                 : Counselor at Law, federal witness
B.A., Political Science, UCLA;  M.S., Public Administration, U.C. Irvine

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