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Inflation is NOT theft?

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myhumangetsme posted on Sun, Mar 18 2012 12:55 PM

I was wandering throughout the blogosphere and came across a blog post from J.F. Catalán where he comments on a point raised by Daniel Kuehn about inflation being theft (in commenting on an article from the Atlantic).

Daniel's pertinent comment first:
 

"Banks and bondholders get cheated, because their loans are repaid with inflated coin. Similarly, people with fixed savings, such as retirees, get punished for their thrift. President Grover Cleveland, a warrior against inflation (in his day, brought about by cheap silver), rightly likened a debasement of the currency to theft." This is an irresponsible set of sentences. Nobody has property rights associated with a stable value of money. [Emphasis mine] Everyone makes transactions with the understanding that the value of money changes - CERTAINLY banks and bondholders do. This is absolutely, unequivocally not "theft".

And Catalán's concurrence:  

Exactly. Inflation ought to be judged based on its consequences.

...

Austrians know that stabilizing the value of money is impossible.  Targeting a price level does not accomplish a stable exchange value of money.  The value of money is always in terms of other economic goods, and the value of money will constantly be changing: this is a function of changing preferences, expectations, and plans/actions.  As long our economy is a money one characterized by the pricing process, then the value of money will always be shifting.

If government-induced inflation is theft, then it is theft when someone affects prices in such a way that it reduces your purchasing power with regards to the relevant good.

The moral argument against inflation is a bad one. Stick with the consequentialist one.

Am I misunderstanding the exchange here, or did I just completely waste my time reading Inflation Is Theft?

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Live_Free_Or_Die:

This statement is inaccurate.  Since I only need one citation to discredit the assertion....  Time Dollars.

From wikipedia page on Time-based currency:

To this day, Time Banks in the U.S. must avoid setting any monetary worth on their Time Dollars, lest it become taxable income to the IRS.

Here is a better source for why they are not currently taxable.  Anyway, the reason they are not taxable now is because the IRS does not consider it to be equivalent to money or barter as defined by the IRS.  I'll copy and paste some specifics from the link:

Section 6045(c)(3) of the Code defines the term “barter exchange” as any organization of members providing property or services who jointly contract to trade or barter such property or services.

Section 1.6045- l(a)(4) of the Income Tax Regulations states that the term “barter exchange” means any person with members or clients that contract either with each other or with such person to trade or barter property or services either directly or through such person. The term does not include arrangements that provide solely for the informal exchange of similar services on a noncommercial basis.

As explained below, we conclude that X is not a barter exchange within the meaning of section 6045(c)(3) because X’s operations provide a means for the informal exchange of similar services on a noncommercial basis and do not result in the creation of contractual rights and obligations among members (or between members and X) for the exchange of property or services.

So, I do not see how this Time Dollar contradicts Clayton.

Live_Free_Or_Die:

In your example you are using the intellectual property of USA, Inc. as a unit of account or measurement (ie $, dollars).  Under the Constitution, USA, Inc. has power of seigniorage over the dollar.  If I trade you one apple for one orange who incurs a tax liablity and why?  Furthermore, under what law am I obligated to disclose this hypothetical trade to anyone?

See here for barter and tax implications.  But I'll quote for everyone's ease:

In the United States, Karl Hess used bartering to make it harder for the IRS to seize his wages and as a form of tax resistance. Hess explained how he turned to barter in an op-ed for The New York Times in 1975.[18] However the IRS now requires barter exchanges to be reported as per the Tax Equity and Fiscal Responsibility Act of 1982. Barter exchanges are considered taxable revenue by the IRS and must be reported on a 1099-B form. According to the IRS, "The fair market value of goods and services exchanged must be included in the income of both parties."

So, in your scenario, it is the government that would require both parties to report the exchange of the apple and orange.  However, the government doesn't really care about little exchanges, as it would cost far too many resources to keep track of and collect taxes on little exchanges.  The government would only go after someone bartering if that is how they conducted business in general or if they did very large trades where the government would be losing tax revenue.

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@Clayton

I was going to begin my response with "I'm sure Clayton will respond with a better answer", but then I decided against it.

It turns out I would have been right. yes

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That is awesome.  I love it.

Would docile slaves have any impact on risk or prices in slave trade?  If there are 1,000,000 slaves and 10,000 masters why would those people be enslaved?

FEAR

GETS SHIT DONE

COURAGE

ENDS THIS SHIT

Edit:  I better make sure I put my IP claim on that.  I wouldn't want any IP Freeloaders taking advantage of a freebie.  Ideas are hard damn work.

Copyright 2012 LFoD, All Rights Reserved.  ROFLOL

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the reason they are not taxable now is because the IRS does not consider it to be equivalent to money or barter as defined by the IRS.

So, I do not see how this Time Dollar contradicts Clayton.

So let me get this straight... If the FED, ahem IRS, deems something to be money or non-money regardless of whether or not it is used by human beings for trade that automatically makes something money or not money?  Is that the Austrian position on say.... Ben Bernake regarding gold?

Talk about a non-argument....

So, in your scenario, it is the government that would require both parties to report the exchange of the apple and orange.

Instead of the wiki here is a link containing the exact text of the legislation:

http://history.nih.gov/research/downloads/PL97-248.pdf

Perhaps you would be so kind to indicate the exact section of legislation you refer to in order to substantiate the reporting requirement you assert on this hypothetical apple and orange trade.

So, in your scenario, it is the government that would require both parties to report the exchange of the apple and orange.  However, the government doesn't really care about little exchanges, as it would cost far too many resources to keep track of and collect taxes on little exchanges.  The government would only go after someone bartering if that is how they conducted business in general or if they did very large trades where the government would be losing tax revenue.

I just want to add for purposes of what IS or what IS NOT taxed, enforcement arguments are irrelevant.  Under the concept of law a thing IS taxed or it IS NOT taxed.  Clearly the most important part of taxation law is identifying the thing to be taxed unless of course everything is lawfully taxable regardless of the law.

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Live_Free_Or_Die:
So let me get this straight... If the FED, ahem IRS, deems something to be money or non-money regardless of whether or not it is used by human beings for trade that automatically makes something money or not money?  Is that the Austrian position on say.... Ben Bernake regarding gold?
 
Talk about a non-argument....
This is not at all my point.  It does not matter what the Austrian position on money is.  What matters  is what the IRS/State wants to tax.  If the IRS says that for tax purposes, they will not consider time dollars to be money, then for tax purposes the IRS will not consider time dollars to be money.  Austrians and Bernanke have nothing to do with it.  
Live_Free_Or_Die:
Instead of the wiki here is a link containing the exact text of the legislation:
 
http://history.nih.gov/research/downloads/PL97-248.pdf
 
Perhaps you would be so kind to indicate the exact section of legislation you refer to in order to substantiate the reporting requirement you assert on this hypothetical apple and orange trade.
Okay, here it is:
 
SEC. 31 1.  RETURNS OF BROKERS. 
(a) GENERAL  RULE.- 
(1) RETURNS.-Section 6045 ( r e l a t ing t o   r e t u r n s  of  brokers) i s  
amended to read a s  follows: 
"SEC. 6045. RETURNS OF BROKERS. 
"(a)  GENERAL  RULE.-Every  person  doing business  a s   a  broker 
shall, when required by t h e  Secretary, make  a r e turn,  in accordance 
with such regulations a s  t h e  Secretary may  prescribe, showing t h e  
name   and  address  of  each  customer, with  such details regarding 
gross proceeds and such o t h e r  information  a s  t h e  Secretary may by 
forms o r  regulations require with respect to such business. 
"(b) STATEMENTS  TO BE FURNISHED  TO CUSTOMERS.--EV~~Y  perSon 
making a r e t u r n  under subsection ( a )  sha l l  furni sh to each customer 
whose  name   is  set  for th  in  such  r e t u r n   a  wr i t t en  s t a t ement  
showing- 
"(1) t h e  name   and address of t h e  person making such r e t u r n ,  
and 
"(2) t h e   information shown on  such  r e t u r n   with respect  t o  
such customer. 
The  wr i t t en  s t a t ement  required  under t h e  preceding sentence shall 
be  furnished to  t h e   customer  on  or before J a n u a r y   31 of  t h e  year 
following  t h e  calendar y e a r  for which  t h e  r e t u r n   under subsection 
( a )  was made. 
"(c) DEFINITIONS.-For purposes of thi s  section- 
"(  1)  B R O K E R . - T ~ ~   t e r m  'broker'  includes- 
"(A) a dealer, 
"(B) a b a r t e r  exchange, and 
"(C) a n y  other  person  who (for a consideration) regularly 
a c t s   a s  a  middleman with respect  t o  property  o r  services. 
"(2) CUSTOMER.-The t e r m   'customer'  means  a n y   person for 
whom t h e  broker h a s  transacted a n y  business. 
"(3) BARTER  EXCHANGE.-The t e r m   'ba r t e r   exchange'  means 
a n y  organization of members providing property o r  services who 
jointly  contract  t o   t r a d e   or  b a r t e r  such property  or services." 
(2)  P ~ N ~ ~ ~ y . - P a r a g r a p h   (1) of  section  6678 ( r e l a t ing to pen- 
a l t y   for  f a i lur e   t o   furnish certain  s t a t ement s )  is  amended- 
( A )  by inserting "6045(b)," a f t e r  "6044(e),", and 
(B) by inserting "6045(a)," a f t e r  "6044(a)(l),". PUBLIC LAW 97-248-SEPT.  3, 1982  96 STAT. 601 
(b) BARTER  EXCHANGE  TREATED  AS  THIRD-PARTY  RECORDKEEPER.- 
Pa r agr aph (3) of section 7609(a) (defining third-party recordkeeper)  26 USC 7609. 
is amended by s t r iking out "and"  a t  t h e  end of subparagraph (El, by 
s t r iking out t h e  period a t  t h e  end of subparagraph (F)  and inserting 
in  lieu  thereof  "; and",  a n d   by  adding  a t   t h e   end thereof  t h e  
following new subparagraph: 
"(GI  any ba r t e r   exchange  (as  defined  in  section 
6045(c)(3))." 
(c) EFFECTIVE  DATES.-  26 USC 6045 
(1) SUBSECTION  ( a )  .-The  amendments made by subsection ( a )   "Ote. 
sha l l  t a k e  effect on t h e  d a t e  of t h e  ena c tment  of t h i s  Act, except 
that- 
(A)  regulations relating to reporting by  commodities and 
securities brokers sha l l  be issued under section 6045 of  t h e  
Int e rna l   Revenue  Code  of  1954 ( a s  amended  by  thi s   Act) 
within 6 months a f t e r  t h e  da t e  of t h e  enactment of thi s  Act, 
a n d  
(B) such regulations shall not apply to transactions occur- 
ring before J a n u a r y  1, 1983. 
(2) SUBSECT~ON  ( b )  .-The  amendments made by subsection (b) 26 USC 7609 
shall  apply to summonses served  a f t e r   December  31,  1982
Live_Free_Or_Die:
I just want to add for purposes of what IS or what IS NOT taxed, enforcement arguments are irrelevant.  Under the concept of law a thing IS taxed or it IS NOT taxed.  Clearly the most important part of taxation law is identifying the thing to be taxed unless of course everything is lawfully taxable regardless of the law.
I agree with this.  I was merely pointing out why you may not have been aware of barter exchanges being taxable.  After all, if it is rarely enforced, then why would someone believe it is taxable?
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Ok... I said this:

No, it's not just a matter of convenience... Federal Reserve Notes are the only duty-free medium of exchange

was inaccurate.

You replied:

So, I do not see how this Time Dollar contradicts Clayton.

It is well established Time Dollars are used as a... in Clayton's words.... a "medium of exchange."

It is well established Time Dollars are duty free.

Is this a serious conversation?

So you come back with:

What matters  is what the IRS/State wants to tax.  If the IRS says that for tax purposes, they will not consider time dollars to be money, then for tax purposes the IRS will not consider time dollars to be money.

What does what the IRS deems money have ANYTHING AT ALL to do with whether something is a medium of exchange?  As you POINTED out the IRS is in the TAX COLLECTING business not the business of deeming what IS or IS NOT a "medium of exchange".

Time Dollars are 1) a "medium of exchange" and 2) duty free.

What is the argument?  Federal Reserve Notes are not the only duty free medium of exchange.

Next, regarding:

SEC. 31 1.  RETURNS OF BROKERS.

That is a citation from the USA, Inc. Code.  In your reply you cited specifially a Wiki entry and highlight this excerpt:

However the IRS now requires barter exchanges to be reported as per the Tax Equity and Fiscal Responsibility Act of 1982.

I provided a link to that Congressional Act and asked for the specific section you were referring to.  Instead of citing something from the specific Act of Congress you come back and cite U.S. Code.

There is a problem here.  If this conversation is going to make an appeal to authority then we are going to have to get into the nitty gritty of this alleged authority.  You just don't get to cite Acts of Congress and then only refer to U.S. Code in the fine details.  You are going to have to link the U.S. Code to a specific Act of Congress and to justify how an Act of Congress becomes codified. 

Codification in the United States

In the United States, acts of Congress, such as federal statutes, are published chronologically in the order in which they become law — often by being signed by the President, on an individual basis in official pamphlets called "slip laws," and are grouped together in official bound book form, also chronologically, as "session laws." The "session law" publication for Federal statutes is called the United States Statutes at Large. Any given act may be only one page, or hundreds of pages, in length. An act may be classified as either a "Public Law" or a "Private Law."

Because each Congressional act may contain laws on a variety of topics, many acts, or portions thereof are also rearranged and published in a topical, subject matter codification. The official codification of Federal statutes is called the United States Code. Generally, only "Public Laws" are codified. The United States Code is divided into "titles" (based on overall topics) numbered 1 through 51. Title 18, for example, contains many of the Federal criminal statutes. Title 26 is the Internal Revenue Code.[2]

Even in code form, however, many statutes by their nature pertain to more than one topic. For example, the statute making tax evasion a felony pertains to both criminal law and tax law, but is found only in the Internal Revenue Code.[3] Other statutes pertaining to taxation are found not in the Internal Revenue Code but instead, for example, in the Bankruptcy Code in Title 11 of the United States Code, or the Judiciary Code in Title 28. Another example is that the national minimum drinking age, not logically found in Title 27, Intoxicating liquors, but in Title 23, Highways, §158.

Further, portions of some Congressional acts, such as the provisions for the effective dates of amendments to codified laws, are themselves not codified at all. These statutes may be found by referring to the acts as published in "slip law" and "session law" form. However, commercial publications that specialize in legal materials often arrange and print the uncodified statutes with the codes to which they pertain.

In the United States, the individual states, either officially or through private commercial publishers, generally follow the same three-part model for the publication of their own statutes: slip law, session law, and codification.

http://en.wikipedia.org/wiki/Codification_%28law%29

Getting back to my original question...

Would you be so kind to indicate the exact section of legislation you refer to in order to substantiate the reporting requirement you assert on this hypothetical apple and orange trade?

http://history.nih.gov/research/downloads/PL97-248.pdf

Regarding:

USA, Inc.

Allow me to make a citation from the U.S. Code...

28 USC § 3002 - Definitions

(15) “United States” means—

 (A) a Federal corporation;
 
You tell me dude, WTF?
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gotlucky replied on Thu, Mar 22 2012 10:27 AM

@Live_Free_Or_Die

Time dollars are duty free because the US government does not feel it is worth pursuing.  One of the links I provided earlier stated:

The IRS has issued three local rulings that Time Dollars are tax exempt. They have given three reasons for this status.

1. An hour is always an hour, regardless of what is offered
2. They are backed only by a moral obligation and are not legally binding
3. Their purpose is charitable.

The state has determined that Time Dollars are not worth taxing.  The decision was made because Time Dollars are used by relatively few people for the purpose of charity, and they do not create legally binding contracts.  If Time Dollars ever caught on and were used by a significant portion of the population, then the state would revoke this status.

Here is an analogy:

Technically, the Catholic Church is a business.  It provides a service, collects revenue, pays its employees, etc.  However, the State declares that for the purposes of taxation, the Catholic Church is not a business, and it will not be taxed.

Technically, Time Dollars are a medium of exchange.  People can trade them for services.  However, the State declares that for the purpose of taxation, Time Dollars are not money because they are used for charity.  In order for the State to enforce this, they have declared that Time Dollars are not legally binding and that no one can sue because someone didn't honor the contract when using them.  In other words, if you pay me in Time Dollars, and I don't provide a service, you cannot sue me.

If Time Dollars were to ever be used by enough people outside of charity, the State would revoke this status.  Furthermore, I do not see how you citing Time Dollars contradicts Clayton's point.  His point was:

Clayton:

No, it's not just a matter of convenience... Federal Reserve Notes are the only duty-free medium of exchange. If I buy your car for $5,000, that $5,000 is income for you but the car is not income for me and does not have to be reported as income for tax purposes. But if I buy your car for 5 gold pieces, the transaction is a barter transaction and both parties must report the items in the exchange as income to the IRS at the "fair market value." Suddenly, the car becomes taxed.

While it is true that you may claim his first sentence to be false, that does not disprove the rest of the paragraph at all.  I do not see how the fact that Time Dollars exist (for the purpose of charity!) disproves that barter exchanges are in fact taxable.  All it shows is that there are some barter exchanges that are not taxable.  And I have demonstrated (with sources no less!) that if Time Dollars were used to evade taxes on a large enough scale, the State would revoke this status.  But, again, Time Dollars do not contradict Clayton.

Live_Free_Or_Die:

What does what the IRS deems money have ANYTHING AT ALL to do with whether something is a medium of exchange?  As you POINTED out the IRS is in the TAX COLLECTING business not the business of deeming what IS or IS NOT a "medium of exchange".

Time Dollars are 1) a "medium of exchange" and 2) duty free.

What is the argument?  Federal Reserve Notes are not the only duty free medium of exchange.

That response that you have quoted was a direct response to:

Live_Free_Or_Die:

 

So let me get this straight... If the FED, ahem IRS, deems something to be money or non-money regardless of whether or not it is used by human beings for trade that automatically makes something money or not money?  Is that the Austrian position on say.... Ben Bernake regarding gold?

Talk about a non-argument....

As I stated, when it comes to the IRS, it does not matter what Austrian theory states.  What matters is what the IRS states.  If the IRS were to state that coupons are money, and that coupons will now be taxable, then the IRS will tax coupons.  It doesn't matter what they are meant to do, if the IRS says that for its purposes, A is money and B isn't money, then for the purposes of the IRS, A is money and B isn't.

Live_Free_Or_Die:

 

Next, regarding:

 

SEC. 31 1.  RETURNS OF BROKERS.

 

That is a citation from the USA, Inc. Code.  In your reply you cited specifially a Wiki entry and highlight this excerpt:

 

However the IRS now requires barter exchanges to be reported as per the Tax Equity and Fiscal Responsibility Act of 1982.

 

I provided a link to that Congressional Act and asked for the specific section you were referring to.  Instead of citing something from the specific Act of Congress you come back and cite U.S. Code.

There is a problem here.  If this conversation is going to make an appeal to authority then we are going to have to get into the nitty gritty of this alleged authority.  You just don't get to cite Acts of Congress and then only refer to U.S. Code in the fine details.  You are going to have to link the U.S. Code to a specific Act of Congress and to justify how an Act of Congress becomes codified. 

I'm a little confused here.  The quote I provided was from the source you provided me.  If you did not feel that the link you provided was a proper source, then I'm not sure why you provided it.

Live_Free_Or_Die:

 

Getting back to my original question...

Would you be so kind to indicate the exact section of legislation you refer to in order to substantiate the reporting requirement you assert on this hypothetical apple and orange trade?

http://history.nih.gov/research/downloads/PL97-248.pd

Well, as I said, I quoted from the above source that you provided.  I found my quote by hitting "control + F", which is the "search document" function in most web browsers.  Then I typed "barter" into the search box.  I was provided with only 2 results, though I actually saw that the word barter did appear at least 3 times, which suggests the search function for that document is not perfect.  However, I'm sure you can repeat these steps to find the quote I provided in my previous post.

Live_Free_Or_Die:

 

Allow me to make a citation from the U.S. Code...

 

 

28 USC § 3002 - Definitions

(15) “United States” means—

 (A) a Federal corporation;
 
You tell me dude, WTF?
This may not have been directed at me, but I will respond anyway.  This seems to be hypocritical.  Earlier, you stated that it doesn't matter what the State/IRS says.  Just because they claim something isn't money doesn't make it so, you claimed.  But now you are claiming that the State can call itself a corporation?  Well, just because the State calls itself a corporation doesn't make it so...

 

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Clayton replied on Thu, Mar 22 2012 12:55 PM

Time Dollar, Ithaca Hours, Bitcoins, etc. are play-monies, they are not serious alternatives to FRNs... they retain all the bad attributes of FRNs (fiat, unbacked, inflationary, etc.) without the brand-value. I was not trying to say there is nothing at all whatsoever which can be exchanged without inducing a tax burden. My point is that none of the recognized alternatives to fiat money (gold, silver, etc.) can be used as money without incurring additional tax burden vis-a-vis FRNs due to barter tax and capital gains tax on inflationary valuation.

That's leaving aside the fact that the US government will simply act extra-legally or retroactively change the rules once it realizes an oversight. There is no meaningful alternative to FRNs in the territorial US. To say otherwise is either stupid, ignorant or evil. Inflationary policy would be impossible without the money monopoly. This inflationary policy hurts the would-be saver by forcing him to incur risks beyond those associated with secure storage of money in order to protect the value of his assets.

Clayton -

http://voluntaryistreader.wordpress.com
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You tell me dude, WTF?

Find me a single, practicing lawyer (in corporate law) who will agree with your statement, "The United States government is a corporation." The definitions section of USC 28 does not in any way, shape or form imply that the United States government is a corporation. I mean, it's patently circular - a Federal corporation is chartered by the Federal government, so who wrote the charter that created the Federal corporation called "the US government"???

This is on a par with the "your birth-certificate is traded on the stock exchange" crap.

Clayton -

http://voluntaryistreader.wordpress.com
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Federal Reserve Notes are the only duty-free medium of exchange.

While it is true that you may claim his first sentence to be false

Was that hard?  But then you have to go off the deep end and state...

that does not disprove the rest of the paragraph at all.

Obviously if the first sentence is false the rest of it can not stand as true if Time Dollars are substituted.  But let me skip that obvious point and address the rest of the paragraph as written.

If I buy your car for $5,000, that $5,000 is income for you but the car is not income for me and does not have to be reported as income for tax purposes. But if I buy your car for 5 gold pieces, the transaction is a barter transaction and both parties must report the items in the exchange as income to the IRS at the "fair market value." Suddenly, the car becomes taxed.

If there is even exchange of property what is the basis for gain?  For the less astute reader on law I shall clarify that point.  In a previous post I indicated an alleged tax liability is incurred when their is a witness you receive income.  I used an employer example and a W-2.  For purposes of discussion let it be assumed neither party claims a loss for the hypothetical transaction of 5 gold pieces for a car.  The contract explicity states the 5 gold pieces are an even exchange of property for a car. 

1.  Who gained?

2.  What is the basis for gain?

3.  Who witnessed gain occurring in order to have standing to make a claim there was a gain?

If there is no gain there is no revenue.  If there is no revenue there is no income.  No income, no tax.

What matters is what the IRS states.

Again, if we are going to have a conversation using appeals to authority (which I am ok with), what matters is what Congress states so long as Acts of Congress conform to the Constitution of the United States of America.  Under this system ignorance of the law is not an excuse.  All citizens have a duty and obligation to cure their ignorance of the law.  It is the duty of each citizen acting in a state of non-ignorance to observe lawful legislation that conforms to powers delegated in state or federal constitutions and disregard unlawful legislation that does not.

If we want to get really technical the federal government denied the IRS is an agency of the United States in Diversified Metal v. IRS.  If we are arguing on authority I could care less what the IRS states or any other entity that is not an agency of the United States.  If we really want to get technical Larry Becraft did some excellent research on the subject:

Many years ago, I tried to find within the Internal Revenue Code the section which created your agency, the Internal Revenue Service, but I was unable to find it. I then decided to locate other sources of information regarding how the Internal Revenue Service was established and what I found was nothing short of amazing.

In 1972, an Internal Revenue Manual 1100 was published in both the Federal Register and Cumulative Bulletin; see 37 Fed. Reg. 20960, 1972-2 Cum. Bul. 836, a copy of which is attached for your convenience. On the very first page of this statement published in the Bulletin, the following admission was made:

"(3) By common parlace [sic] and understanding of the time, an office of the importance of the Office of Commissioner of Internal Revenue was a bureau. The Secretary of the Treasury in his report at the close of the calendar year 1862 stated that 'The Bureau of Internal Revenue has been organized under the Act of the last session...' Also it can be seen that Congress had intended to establish a Bureau of Internal Revenue, or thought they had, from the act of March 3, 1863, in which provision was made for the President to appoint with Senate confirmation a Deputy Commissioner of Internal Revenue 'who shall be charged with such duties in the bureau of internal revenue as may be prescribed by the Secretary of the Treasury, or as may be required by law, and who shall act as Commissioner of internal revenue in the absence of that officer, and exercise the privilege of franking all letters and documents pertaining to the office of internal revenue.' In other words, 'the office of internal revenue' was 'the bureau of internal revenue,' and the act of July 1, 1862, is the organic act of today's Internal Revenue Service."
This statement, which again appears in a similar publication appearing at 39 Fed. Reg. 11572, 1974-1 Cum. Bul. 440, as well as the current IRM 1100, essentially admits that Congress never created either the Bureau of Internal Revenue or the Internal Revenue Service. To conclude that "Congress thought it had created this agency" is an admission that even the government itself cannot even find anything which created either agency. The only office created by the act of July 1, 1862, was the Office of the Commissioner; neither the Bureau nor the Service was actually created by any of these acts.

I have no doubt that when employees of the IRS were researching its origins so that this statement could be included within IRM 1100, those employees must have performed a very thorough investigation. This obviously is the best position that your agency can develop regarding precisely how the IRS came into being. But besides the problem that these acts simply did not create either the Bureau or the IRS is the fact that these acts were repealed by the adoption of the Revised Statutes of 1873. Therefore, it would appear that your agency has never been created by any act of Congress, and this is a serious flaw.

At the state level, it is a well acknowledged rule that a duly constituted office of state government must be created either by the state constitution itself or by some legislative act; see Patton v. Bd. of Health, 127 Cal. 388, 393, 59 P. 702, 704 (1899)("One of the requisites is that the office must be created by the constitution of the state or it must be authorized by some statute"); First Nat. Bank of Columbus v. State, 80 Neb. 597, 114 N.W. 772, 773 (1908); State ex rel. Peyton v. Cunningham, 39 Mont. 197, 103 P. 497, 498 (1909); State ex rel. Stage v. Mackie, 82 Conn. 398, 74 A. 759, 761 (1909); State ex rel. Key v. Bond, 94 W.Va. 255, 118 S.E. 276, 279 (1923)("a position is a public office when it is created by law"); Coyne v. State, 22 Ohio App. 462, 153 N.E. 876, 877 (1926)("Unless the office existed there could be no officer either de facto or de jure. A de facto officer is one invested with an office; but if there is no office with which to invest one, there can be no officer. An office may exist only by duly constituted law"); State v. Quinn, 35 N.M. 62, 290 P. 786, 787 (1930); Turner v. State, 226 Ala. 269, 146 So. 601, 602 (1933); Oklahoma City v. Century Indemnity Co., 178 Okl. 212, 62 P.2d 94, 97 (1936); State ex rel. Nagle v. Kelsey, 102 Mont. 8, 55 P.2d 685, 689 (1936); Stapleton v. Frohmiller, 53 Ariz. 11, 85 P.2d 49, 51 (1938); Buchholtz v. Hill, 178 Md. 280, 13 A.2d 348, 350 (1940); Krawiec v. Industrial Comm., 372 Ill. 560, 25 N.E.2d 27, 29 (1940); People v. Rapsey, 16 Cal.2d 636, 107 P.2d 388, 391 (1940); Industrial Comm. v. Arizona State Highway Comm., 61 Ariz. 59, 145 P.2d 846, 849 (1943); State ex rel. Brown v. Blew, 20 Wash.2d 47, 145 P.2d 554, 556 (1944); Martin v. Smith, 239 Wis. 314, 1 N.W.2d 163, 172 (1941); Taylor v. Commonwealth, 305 Ky. 75, 202 S.W.2d 992, 994 (1947); State ex rel. Hamblen v. Yelle, 29 Wash.2d 68, 185 P.2d 723, 728 (1947); Morris v. Peters, 203 Ga. 350, 46 S.E.2d 729, 733 (1948); Weaver v. North Bergen Tp., 10 N.J. Super. 96, 76 A.2d 701 (1950); Tomaris v. State, 71 Ariz. 147, 224 P.2d 209, 211 (1950); Pollack v. Montoya, 55 N.M. 390, 234 P.2d 336, 338 (1951); Schaefer v. Superior Court in & for Santa Barbara County, 248 P.2d 450, 453 (Cal.App. 1952); Brusnigham v. State, 86 Ga.App. 340, 71 S.E.2d 698, 703 (1952); State ex rel. Mathews v. Murray, 258 P.2d 982, 984 (Nev. 1953); Dosker v. Andrus, 342 Mich. 548, 70 N.W.2d 765, 767 (1955); Hetrich v. County Comm. of Anne Arundel County, 222 Md. 304, 159 A.2d 642, 643 (1960); Meiland v. Cody, 359 Mich. 78, 101 N.W.2d 336, 341 (1960); Jones v. Mills, 216 Ga. 616, 118 S.E.2d 484, 485 (1961); State v. Hord, 264 N.C. 149, 141 S.E.2d 241, 245 (1965); Planning Bd. of Tp. of West Milford v. Tp. Council of Tp. of West Milford, 123 N.J.Super. 135, 301 A.2d 781, 784 (1973); Vander Linden v. Crews, 205 N.W.2d 686, 688 (Iowa 1973); Kirk v. Flournoy, 36 Cal.App. 3d 553, 111 Cal. Rptr. 674, 675 (1974); Wargo v. Industrial Comm., 58 Ill.2d 234, 317 N.E.2d 519, 521 (1974); State v. Bailey, 220 S.E.2d 432, 435 (W.Va. 1975); Leek v. Theis, 217 Kan. 784, 539 P.2d 304, 323 (1975); Midwest Television, Inc. v. Champaign-Urbana Communications, Inc., 37 Ill.App.3d 926, 347 N.E.2d 34, 38 (1976); and State v. Pinckney, 276 N.W.2d 433, 436 (Iowa 1979).

This same rule applies at the federal level; see United States v. Germaine, 99 U.S. 508 (1879); Norton v. Shelby County, 118 U.S. 425, 441, 6 S.Ct. 1121 (1886)("there can be no officer, either de jure or de facto, if there be no office to fill"); United States v. Mouat, 124 U.S. 303, 8 S.Ct. 505 (1888); United States v. Smith, 124 U.S. 525, 8 S.Ct. 595 (1888); Glavey v. United States, 182 U.S. 595, 607, 21 S.Ct. 891 (1901)("The law creates the office, prescribes its duties"); Cochnower v. United States, 248 U.S. 405, 407, 39 S.Ct. 137 (1919)("Primarily we may say that the creation of offices and the assignment of their compensation is a legislative function... And we think the delegation of such function and the extent of its delegation must have clear expression or implication"); Burnap v. United States, 252 U.S. 512, 516, 40 S.Ct. 374, 376 (1920); Metcalf & Eddy v. Mitchell, 269 U.S. 514, 46 S.Ct. 172, 173 (1926); N.L.R.B. v. Coca-Cola Bottling Co. of Louisville, 350 U.S. 264, 269, 76 S.Ct. 383 (1956)("'Officers' normally means those who hold defined offices. It does not mean the boys in the back room or other agencies of invisible government, whether in politics or in the trade-union movement"); Crowley v. Southern Ry. Co., 139 F. 851, 853 (5th Cir. 1905); Adams v. Murphy, 165 F. 304 (8th Cir. 1908); Scully v. United States, 193 F. 185, 187 (D.Nev. 1910)("There can be no offices of the United States, strictly speaking, except those which are created by the Constitution itself, or by an act of Congress"); Commissioner v. Harlan, 80 F.2d 660, 662 (9th Cir. 1935); Varden v. Ridings, 20 F.Supp. 495 (E.D.Ky. 1937); Annoni v. Blas Nadal's Heirs, 94 F.2d 513, 515 (1st Cir. 1938); and Pope v. Commissioner, 138 F.2d 1006, 1009 (6th Cir. 1943).

Since I have reached the conclusion that the IRS has never been created by Congress, I am asking you to provide to me the citation of any statute which really did create the IRS. Since this is a question of profound national importance, I request that you provide an answer to me within 20 days. Failing a response within that time period, I shall conclude that you cannot find any such statute and shall act accordingly.

.

Regarding:

Well, as I said, I quoted from the above source that you provided.  I found my quote by hitting "control + F", which is the "search document" function in most web browsers.  Then I typed "barter" into the search box.  I was provided with only 2 results, though I actually saw that the word barter did appear at least 3 times, which suggests the search function for that document is not perfect.  However, I'm sure you can repeat these steps to find the quote I provided in my previous post.

http://history.nih.gov/research/downloads/PL97-248.pdf[

Maybe the confusion is on my end.  Attempting to follow your directions I pulled up the pdf.  I have the search box in the bottom left of the screen and typed in "barter".  As you can see the box is red indicating no result.  Perhaps you could specify the page numbers and I will be happy to scroll to the correct page just in case my computer is not working properly or there is a user error on my end. 

This may not have been directed at me, but I will respond anyway.  This seems to be hypocritical.  Earlier, you stated that it doesn't matter what the State/IRS says.  Just because they claim something isn't money doesn't make it so, you claimed.

I said it doesn't matter what the IRS says is money or a medium of exchange.  Arguing on authority, I offer Article 1, Section 8.

The Congress shall have Power

To lay and collect

To borrow

To regulate

To establish

To coin

To provide

To promote

To constitute

To define and punish Piracies and Felonies committed on the high Seas, and Offenses against the Law of Nations;

To declare

To exercise

To make

The power to define appears to be a narrow power.  Allow me to use an analogy...

Who has authority over your name?  Are you able to call yourself whatever you want whenever you want or does someone or something have such authority over you?  If you decide to call yourself A today and B tomorrow do you cease to become A?  If I met you yesterday and addressed you as A today am I wrong?  Will you respond to being called A if you are now B?  If you respond to being addressed as A does that mean you are not really B?  Is naming oneself an act to define your identity? 

But now you are claiming that the State can call itself a corporation?  Well, just because the State calls itself a corporation doesn't make it so...

I am not debating whether the State CAN call itself a corporation.  I cited an example where the State DOES call itself a corporation since I got a "Dude WTF" to using "USA, Inc"....  There is a difference iiregardless of any sarcasm exhibited on my part.  Although I could really care less about this USA, Inc. thing since this is a major deviation to the topic at hand in the thread.

I am interested in the point I made in my original post.  The presumption in this thread about legal tender being forced.  I do not believe it is.  I will be happy to continue this appeal to authority conversation so long as the thing asserted can be substantiated in Congressional legislation.  If we are engaging in conversation for the pursuit of truth I firmly believe the truth of the matter shall be revealed.

Right now the conversation is lingering on the hypothetical orange and apple trade.  You have asserted there is a tax liablity because of an alleged obligation for citizens to disclose the trade of an apple for an orange to government.  I am unable to agree or disagree until there is evidence introduced Congress legislated on the matter.

 

 

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Find me a single, practicing lawyer (in corporate law) who will agree with your statement, "The United States government is a corporation." The definitions section of USC 28 does not in any way, shape or form imply that the United States government is a corporation. I mean, it's patently circular - a Federal corporation is chartered by the Federal government, so who wrote the charter that created the Federal corporation called "the US government"???

I did not create the U.S. Code.  Please explain why the United States being defined as a federal corporation is even in the code if it is patently circular?  What do I have to justify?  It is stated in the U.S. Code.  Since it is your WTF... you justify the Code and why such a definition exists.

What the hell does a lawyer have to do with anything?  Ignorance of the law is not an excuse.  Are you saying words don't mean what words mean and it is impossible for a citizen to comprehend the law he is expected to observe?  Give me a break with the lawyer BS.

This is on a par with the "your birth-certificate is traded on the stock exchange" crap.

What the hell is that?  Have I heard it?  Sure.  Is there any evidence to substantiate it?  None that I have seen.  It is written in the U.S. Code the United States is defined as a federal corporation.  You are comparing something that is written to something that is unwritten.  Not even close to par, what are you smoking?

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Time Dollar, Ithaca Hours, Bitcoins, etc. are play-monies, they are not serious alternatives to FRNs... they retain all the bad attributes of FRNs (fiat, unbacked, inflationary, etc.) without the brand-value. I was not trying to say there is nothing at all whatsoever which can be exchanged without inducing a tax burden. My point is that none of the recognized alternatives to fiat money (gold, silver, etc.) can be used as money without incurring additional tax burden vis-a-vis FRNs due to barter tax and capital gains tax on inflationary valuation.

That's leaving aside the fact that the US government will simply act extra-legally or retroactively change the rules once it realizes an oversight. There is no meaningful alternative to FRNs in the territorial US. To say otherwise is either stupid, ignorant or evil. Inflationary policy would be impossible without the money monopoly. This inflationary policy hurts the would-be saver by forcing him to incur risks beyond those associated with secure storage of money in order to protect the value of his assets.

Government is going to do what government wants to do and to say otherwise is stupid, ignorant, or evil.  I get it.  Hear it all the time.  Just admit it's perfectly ok if government wants your life and you will submit to government attempting to murder you.

It is not ok for government to take my life and I will not submit to it.  If government wants to take my life I will resist.  What chance does one individual stand against a couple million armed service members, several hundred thousand armed police, and nuclear weapons?  Despite terrible odds it doesn't matter, I will not submit to government taking my life.

You cite government as the problem?  I cite a belief people have that government can do what it wants to do is a problem.

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Live_Free_Or_Die:
 
Obviously if the first sentence is false the rest of it can not stand as true if Time Dollars are substituted.  But let me skip that obvious point and address the rest of the paragraph as written.
 
 
No, this is not obvious.  The rest of his paragraph does not hinge upon the first statement.  Remove the first statement and then read the rest of the paragraph.  Clayton claimed that both parties must report the barter exchange to the IRS as income.  Lo and behold, this is actually the case.  I will provide links later in my post.
 
Live_Free_Or_Die:
 
If there is even exchange of property what is the basis for gain?  For the less astute reader on law I shall clarify that point.  In a previous post I indicated an alleged tax liability is incurred when their is a witness you receive income.  I used an employer example and a W-2.  For purposes of discussion let it be assumed neither party claims a loss for the hypothetical transaction of 5 gold pieces for a car.  The contract explicity states the 5 gold pieces are an even exchange of property for a car. 
 
 
That behavior is not allowed by the IRS.  Obviously, anyone here who has basic understanding of Austrian Economics would agree with the idea that both parties benefit from the exchange.  But the IRS does not care.  They have this thing called "fair market value".  It needs to be reported with a different form, not a W-2.  Again, I'm going to provide links later in my post.
 
Live_Free_Or_Die:
 
1.  Who gained?
 
2.  What is the basis for gain?
 
3.  Who witnessed gain occurring in order to have standing to make a claim there was a gain?
 
If there is no gain there is no revenue.  If there is no revenue there is no income.  No income, no tax.
 
 
See above.
 
Live_Free_Or_Die:
 
Again, if we are going to have a conversation using appeals to authority (which I am ok with), what matters is what Congress states so long as Acts of Congress conform to the Constitution of the United States of America.  Under this system ignorance of the law is not an excuse.  All citizens have a duty and obligation to cure their ignorance of the law.  It is the duty of each citizen acting in a state of non-ignorance to observe lawful legislation that conforms to powers delegated in state or federal constitutions and disregard unlawful legislation that does not.
 
 
I am not talking about what ought to be.  I am talking about what is.  I do not care what is written in the Constitution of the United States because the US government does not care.  The State breaks the rules all the time.  What is important to the State are the rules that are enforced, written or unwritten.
 
Live_Free_Or_Die:
 
If we want to get really technical the federal government denied the IRS is an agency of the United States in Diversified Metal v. IRS.  If we are arguing on authority I could care less what the IRS states or any other entity that is not an agency of the United States.  If we really want to get technical Larry Becraft did some excellent research on the subject:
 
 
It doesn't really matter if there is no provision or law or statute or whatever that gives the IRS its power.  It exists and it has power.  It doesn't matter if it has Legitimate Authority or not.  It has power, so it has Authority.  If you would like to argue with the IRS about your taxes and what not, then I wish you luck.  But if the IRS wants to, it will steamroll you.  It does not matter if it has Legitimate Authority or not.
 
Live_Free_Or_Die:
 
Maybe the confusion is on my end.  Attempting to follow your directions I pulled up the pdf.  I have the search box in the bottom left of the screen and typed in "barter".  As you can see the box is red indicating no result.  Perhaps you could specify the page numbers and I will be happy to scroll to the correct page just in case my computer is not working properly or there is a user error on my end. 
 
 
The page number in the top left hand corner is "96 Stat. 600".  It starts near the bottom of the page.  You may have better luck if you open it in Adobe Reader.
 
Live_Free_Or_Die:
 
I said it doesn't matter what the IRS says is money or a medium of exchange.  Arguing on authority, I offer Article 1, Section 8.
 
 
It does not matter what the Constitution of the United States says.  The government clearly does not follow what is written.  The Constitution has no power, but the IRS has power.  So it is very relevant what the IRS claims about taxable mediums of exchange.
 
Live_Free_Or_Die:
 
Right now the conversation is lingering on the hypothetical orange and apple trade.  You have asserted there is a tax liablity because of an alleged obligation for citizens to disclose the trade of an apple for an orange to government.  I am unable to agree or disagree until there is evidence introduced Congress legislated on the matter.
 
 
I said earlier in this post that I would provide some links from the IRS.  Here they are:
 
And here is a link to a Forbes article called Do You Barter? The IRS Wants Its Cut.  It should help with an analysis of the previous links.
What is important to take away from this is that the US government does actually tax barter exchanges.  The State does not use its full resources to go after small barter exchanges, just as it does not go after yard sales and high school kids mowing lawns.  It just costs far too many resources to the State to enforce all of its rules.  But you can rest assured that if barter exchanges became a significant percentage of the US economy, the IRS would change its attitude and use its full powers to tax barter exchanges.
 
PS You will see the term collectible pop up in some of these pages.  The State/IRS considers gold to be a collectible.  So you may not necessarily see gold listed in these pages, but since gold is a collectible, it follows the rules of collectibles.

 

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I did not create the U.S. Code.  Please explain why the United States being defined as a federal corporation is even in the code if it is patently circular?  What do I have to justify?  It is stated in the U.S. Code.  Since it is your WTF... you justify the Code and why such a definition exists.

Actually, the WTF is yours, I just pointed it out - you said the US government is a corporation. Then you tried to substantiate with the definitions section of USC 28. Against my better judgment, I'll spell it out for you. A definitions section of a statute or contract spells out the "full meaning" of any shorthand words or phrases used in the statute or contract so as to remove the potential for confusion or vagueness in the language while preventing the text from being any more wordy and bulky than it already is. Hence, the def'ns section of USC 28 is simply saying, "whenever the words 'United States' are used in this section, understand it to refer to one of the following: 'a Federal corporation', 'an agency, department, commission, board, or other entity of the United States' or 'an instrumentality of the United States'." It is obvious that this definitions section is not even attempting to say "the US government is a corporation", leaving aside the absurdity of trying to infer that the US government is a corporation from the definition section of one of its own statutes.

This is only for the benefit of the lurkers since I don't waste time on DHS's paid disinfo trolls.

Clayton -

http://voluntaryistreader.wordpress.com
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PS You will see the term collectible pop up in some of these pages.  The State/IRS considers gold to be a collectible.  So you may not necessarily see gold listed in these pages, but since gold is a collectible, it follows the rules of collectibles.

I don't think this is true for bullion coins and bars... be careful about acting on your own advice when it comes to tax law. It is so easy to misunderstand the language of the tax code. Much of it is meant to be misunderstood.

Clayton -

http://voluntaryistreader.wordpress.com
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