Paul Ryan lies on FoxNews and no one calls him out!
Paul Ryan was on FoxNews this morning [the 8AM hour] and once again he has lied about his tax reform plan, saying that under his plan and its simplification, the American People would be able file their tax returns on a post card. The truth is, the American people will still have to determine what is and is not “taxable income” under his plan, and this is the gimmick used by Congress to grant preferences and exclusions, and select winners and losers. And for one to determine what their “taxable income” is under Paul Ryan’s alleged tax reform, will still require full knowledge of what is taxable income and the reams of pages Congress uses to define “taxable income”.
Perhaps someday one of our friends at FoxNews will ask Paul Ryan, what are the characteristics which define taxable income under his "tax reform"? Of course, this question was succinctly answered many times by our Justice system, e.g., in Eisner v. Macomber 252 U.S. 189, 206 (1920), a case challenging a tax on "income" the Court states the following:
"In order, therefore, that the clauses cited from article 1 of the Constitution may have proper force and effect, save only as modified by the amendment, and that the latter also may have proper effect, it becomes essential to distinguish between what is and what is not 'income,' as the term is there used, and to apply the distinction, as cases arise, according to truth and substance, without regard to form. Congress cannot by any definition it may adopt conclude the matter, since it cannot by legislation alter the Constitution, from which alone it derives its power to legislate, and within whose limitations alone that power can be lawfully exercised.
The fundamental relation of 'capital' to 'income' has been much discussed by economists, the former being likened to the tree or the land, the latter to the fruit or the crop; the former depicted as a reservoir supplied from springs, the latter as the outlet stream, to be measured by its flow during a period of time. For the present purpose we require only a clear definition of the term 'income,' [252 U.S. 189, 207] as used in common speech, in order to determine its meaning in the amendment, and, having formed also a correct judgment as to the nature of a stock dividend, we shall find it easy to decide the matter at issue.
After examining dictionaries in common use (Bouv. L. D.; Standard Dict.; Webster's Internat. Dict.; Century Dict.), we find little to add to the succinct definition adopted in two cases arising under the Corporation Tax Act of 1909 (Stratton's Independence v. Howbert, 231 U.S. 399, 415 , 34 S. Sup. Ct. 136, 140 [58 L. Ed. 285]; Doyle v. Mitchell Bros. Co., 247 U.S. 179, 185 , 38 S. Sup. Ct. 467, 469 [62 L. Ed. 1054]), 'Income may be defined as the gain derived from capital, from labor, or from both combined,' provided it be understood to include profit gained through a sale or conversion of capital assets, to which it was applied in the Doyle Case, 247 U.S. 183, 185 , 38 S. Sup. Ct. 467, 469 (62 L. Ed. 1054)."
As you can see, defining what is and what is not taxable income requires a taxpayer to deduct all necessary expenses and outlays from gross receipts in order to arrive at taxable income. Income from a business which was wholly illegal was held subject to income tax in United States v. Sullivan, 274 U.S. 259. Nevertheless, it was necessary to determine what that income was, and the cost of an illegal purchase of liquor was subtracted from proceeds of the illegal sale of the liquor in order to arrive at the gain from the illegal transaction which were subjected to a tax in that case.
And, in Sullenger vs. Commissioner, 11 T.C. 1076 (1948) the Court allowed the business owner [who made illegal purchases of meat] to deduct the cost of meat purchased at a higher price then set by the Office of Price Administration, a World War II price control agency, which he then resold for profit. The “income” from those sales was being taxed which was at issue in the case. The Court went on to cite Sullivan and concluded: “No authority has been cited for denying to this taxpayer the cost of goods sold in computing his profit, which profit alone is gross income for income tax purposes.”
So, what is the cost of goods sold by a wage earner? Is it not his/her time, labor, skills, the cost of travel to and from work, etc? The value of which must be deducted from gross receipts in order to arrive at an alleged profit or gain?
Shouldn't a working person be allowed to deduct transportation costs to and from work in calculating their profit or gain? How about the costs involved with providing the necessities of life or medical expenses which a wage earner incurs when making their labor possible? Shouldn't a wage earned be allowed to deduct these costs from gross receipts in calculating his/her profit or gain?
How about the eight hour of life which a working person invests in earning a wage? Is this not to be considered as their property and a capital outlay, the value of which must be deducted from gross receipts in order to arrive at an alleged profit or gain?
Do we now see one of the reasons why Paul Ryan’s “tax reform” is still capricious, arbitrary and an immoral system of taxation, and why the power to lay and collect taxes calculated from incomes must be withdrawn from Congress' hands?
“The property which every man has in his own labor, as it is the original foundation of all other property, so it is the most sacred and inviolable. The patrimony of the poor man lies in the strength and dexterity of his own hands; and to hinder him from employing this strength and dexterity in what manner he thinks proper, without injury to his neighbor, is a plain violation of this most sacred property.” ___ Butchers’ Union Co. v. Crescent City Co., 111 U.S. 746 (1884)