Withholding-It S Commonsense Origins
ADDENDUM #27
WITHHOLDING-IT’S COMMON SENSE ORIGIN
& DECEPTIVE APPLICATION
In the early years of Franklin D. Roosevelt’s lengthy administration, his dedication to big government socialism became apparent in the so-called “New Deal” legislation that he proposed and implemented through a supportive and predominantly Democratic Congress in his first two terms-1932 through 1940. Having just been re-elected for his third term just one year prior to the start of WWII, FDR saw clearly in the winter of 1942 the necessity to promptly find a methodology to finance the immediate horrendous costs of the war. To do so, he proposed the so-called Victory Tax which Congress promptly passed into law despite the fact that it was blatantly unconstitutional as a direct, unapportioned tax imposed on the wages of working Americans. (See Chapters I and II of SUPER SCAM.) At this time, soon after Pearl Harbor, national patriotism avoided any concern or even discussion about the unconstitutionality of the tax. The Depression had ended and millions of Americans who were busily WORKING in war plants throughout the nation happily paid the Victory Tax in support of the war effort.
At war’s end several years later, the now well-known Victory Tax was deceptively and unobtrusively continued as what we know today as the income tax. Its application continues to be forcefully and unconstitutionally misapplied against the wages, salaries and other earnings of American state citizens to this day, despite the fact that there are numerous Supreme Court decisions proving the limited authority of the Sixteenth Amendment to tax only corporate and foreign profits and gains but not the wages, salaries and other earnings of American citizens.
In order to make continued, voluntary payment of the tax easier for people to pay, FDR engaged the services and support of Beardsley Ruml, the then-chairman of the Federal Reserve Bank of New York. Being aware of the average workers’ propensity to spend their paychecks as received, Ruml proposed a pay-as-you-go plan known today as our voluntary withholding system which is embodied in the W-4 Withholding Allowance Certificate. First, knowing that the due process clause of our Constitution’s Fifth Amendmentrequired all withholding to be voluntary, Ruml knew that every employees’ signature granting permissionto his/her employer for the withholding of tax had to be included on the W-4 Withholding Allowance Certificate in order to overcome the due process clause in the Fifth Amendment, so he included a line at the bottom of the W-4 Certificate where every employee had to sign in order to overcome the due process clause of the Fifth Amendment. Ruml also knew that, although many earlier Supreme Court decisions had ruled that the Sixteenth Amendment prohibited imposition of any income tax on the earnings of American state citizens, most Americans were totally unaware of that fact. He knew that, if the wartime VICTORY TAX was to be successfully continued, ignorance by the public of its limited application, which didn’t include their wages, needed to be sustained. In order to do so, Ruml needed to make withholding appear to be both mandatory and popular as it was during the recent war years. Voluntary participation in the withholding system would not only beencouraged, but successfully, required of employers everywhere who were told incorrectly that all their employees hadto complete and sign the Withholding Allowance Certificate. This devious and unlawful strategy continues to be successfully enforced everywhere, even today. Although, by law, the W-4 Withholding Allowance Certificate should include a simple option stating that the employee does not wish to participate in the withholding allowance plan at all, such an option is not present. Rather, the Certificate does at least contain Option #7 EXEMPT,deceptively leading the reader to assume that the tax imposed on his/her wages is both lawful and legal as well as mandatory, but they may be somehow “EXEMPT”. In order to avoid such confusion by the reader of the W-4 Certificate, it is obvious to this writer that, in order to be in conformity with due process, the Certificate should include a simple election option as stated above that the signer does not wishto participate in the voluntary withholding system at all. Fortunately, for those relatively few employees who are aware, from their own study, that the tax does not apply to them, they can, in fact, take advantage of this EXEMPT option for the purpose of rejecting all withholding, because, as non-taxpayers, they are, in fact, EXEMPT from the tax.
The unlawful, but compulsory use of the W-4 Withholding Allowance Certificate and the little known fact that the vast majority of American state citizens have no legal liability for payment of the income tax required Congress to enact Code Section 3402(n) in order for the authorization to be in conformity with the due process clause of the Fifth Amendment. Code Section 3402(n) reads as follows:
Employees Incurring No Income Tax Liability. Notwithstanding any
other provision of this section, an employer shall not be required to
deduct and withhold any tax under this chapter upon a payment of
wages to an employee if there is in effect with respect to such payment
a withholding exemption certificate (in such form and containing such
other information as the Secretary may prescribe) furnished to the
employer by the employee certifying that the employee—(1) incurred
no liability for income tax imposed under subtitle A for his preceding
taxable year, and (2) anticipates that he will incur no liability for
income tax imposed under subtitle A for his current taxable year. The
Secretary shall by regulations provide for the coordination of the
provisions of this subsection with the provisions of subsection (f).
The vast majority (meaning just about all) American state citizens can take advantage of their lack of liability for income tax in both the previous and current yearsin this Code Section in order to confirm their non-taxpayer legal status, and thereby, in accordance with its wording,confirm their eligibility to deny withholding entirely and collect their full paycheck.
Federal Reserve Chairman Ruml knew full well that, if working American citizens could be falsely convinced by IRS propaganda that they owed the tax, its regular weekly collection by the withholding method would greatly enhance participation. Withholding tables were printed by the IRS showing amounts that would intentionally require employers to withhold more money than was proportionally necessary for the employees’ pay scale. The IRS unlawfully required the filing of a return at year’s end in order for the employee to collect a “return” of the amount that had been over-withheld for payment of tax during the previous year. By completing an income tax return at year’s end, the employee would be unknowingly admitting, under the jurisprudential-establishedlegal doctrine of presumption that he was liable for an income tax that he had over-paid during the preceding year by the withholding method! Deceptive? Yes-deceptive indeed, but an effective strategy to achieve the desired result which surreptitiously brought the employee into the legal status of “taxpayer” merely by his filing of a tax return for his refund of his overpaid tax by withholding during the preceding year!
C. Fenner Goldsborough, Author-SUPER SCAM
480 Nottingham Rd.W.
Gaylord, MI49735-8919
(989) 448-8591
withhldcommonsense.020216
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