The building blocks of the law

There is no law that requires an American living and working within the 50 states for a private company to file a tax return and pay income taxes. ...I will say it again: there is no law, NO LAW, that requires an American living and working within the 50 states for a private company to file a tax return and pay income taxes. No law. Nada. Period. And the 16th Amendment didn't change anything. The IRS is a fraud and a sham.

Now, 99.9% of the people say I am a loon. Every year, you always take a chunk out of your paycheck and give it to the government. If you don't pay, the government will throw you in jail. But, did you find out what part of the law that requires you to pay in the first place? Guess what, there is no law! If you don't believe me, show me the law (or series of laws)! You can look for days and days, and you can't find it, because it isn't there.

Now, let's get something straight from the beginning: the IRC (or 26 USC) is completely legal and constitutional. I will say it again: the IRC (or 26 USC) is COMPLETELY LEGAL AND CONSTITUTIONAL. If the statutes aren't, the Supreme Court will strike the law down as being unconstitutional. But when you look at the law carefully, you realize that Title 26 AS WRITTEN fails to make the average American liable to file a tax return and pay income taxes. I am using tax avoidance, not tax evasion; there is a difference. Like I said in the previous paragraph, if you don't believe me, look at the law for yourself and prove me wrong!

Like I said before, 99.9% of the people think I am loco. But, the same 99.9% never look at the law to figure it out for themselves. Now, I can't prove a negative: I can't prove a fact that isn't there. But, what I can do is to trace a path in the law that shows you a lawful way that will prove for yourself you have been paying taxes all of your working life...for naught.

It all boils down to a 1917 US Supreme Court decision titled Gould v. Gould. In summary, Mr. and Mrs. Gould were divorced in 1909, and as such, Mr. Gould will pay Mrs. Gould $3,000 per month in alimony. In 1913, the 16th Amendment was ratified, and the IRS listed Mrs. Gould's alimony as "net income" (the same as "taxable income" now). In 1915, Mrs. Gould sued the IRS, claiming her alimony did not fall under "net income". The Supreme Court agreed with Mrs. Gould. The decision states:

"In the interpretation of statues levying taxes it is the established rule not to extend their provisions, by implication, beyond the clear import of the language used, or to enlarge their operations so as to embrace matters not specifically pointed out. In case of doubt they are construed most strongly against the government, and in favor of the citizen."

This decision still stands today, and it's an important decision, especially if you want to know what kind of tax you are required to pay (or don't pay). I want to go through the Internal Revenue Code (IRC, or 26 USC) keeping Gould in mind. The IRC is the only title that has to do with the income tax, so we only used sections in the following article (i.e., sections in this post are in Title 26).

Let's start at the beginning. In Section 1, subsections (a), (b), (c), (d), and (e), they all have the same wording. All five sections state, "There is hereby imposed on the taxable income...a tax", and the five subsections have to do with married, single, head of household, estate, trust, etc. In Section 3, it states, "In lieu of the tax imposed by section 1, there is hereby imposed for each taxable year on the taxable income of every individual...a tax". To an untrained eye, that means: that's it, game over; every income is taxed. You chop off your right arm and mail it to the IRS. But, in the Gould case, the Supreme Court said, "[I]t is the established rule not to extend...matters not specifically pointed out. In case of doubt they are contrued most strongly against the government, and in favor of the citizen." In sections 1 and 3, they say you are required to pay taxes on your "taxable income". The question is, "What's taxable income?"

When we scroll down to Section 63, its title is, "Taxable income defined". Here it is. It states, "[T]he term 'taxable income' means gross income minus the deduction allowed by this chapter". The next question is, "What's gross income?" We go backwards (imagine that!) to Section 61. Its title is, "Gross income defined". Good so far. Section 61 states, "[G]ross income means all income from whatever source derived, including (but not limited to) the following items:", and it lists some examples like compensation for services, interest, royalties, alimony, etc. To an untrained eye, that means "all income, including my income". You chop off your left arm and mail it to the Treasury Department. But, when you apply a Gould test, you realize all those examples are for gross income. A tax is based on taxable income, not gross income. There is no example on taxable income; there is just a vague term like "standard deduction", "basic standard deduction", "additional standard deduction", etc. Hummmm.

Also, Section 61 is strikingly similar to the 16th Amendment of the U.S. Constitution, and the Constitution is the "Supreme Law of the Land"; there's no law which takes precedence over the Constitution, including its amendments. Every Senator and Representative, executive and judicial, federal and state, took and oath to "preserve, protect, and defend the Constitution" before taking office. And recently (2006), in Murphy v. IRS [.pdf], the appeals court said, "The Supreme Court has held the word 'incomes' in the [16th] Amendment and the phrase 'gross income' in Section 61(a) of the IRC are coextensive." The "official government interpretation" of the 16th Amendment is that amendment gives Congress a new power to collect a direct income tax without apportionment, and the people bought it hook, line, and sinker (but there is no "direct" anywhere in the amendment--hummmmm). But, looking it in a Gould context, you would also interpret that the 16th Amendment could mean only that, in certain types of taxes (income taxes), Congress was prohibited from moving the tax to direct taxation, which requires apportionment (et al), and it should remain in indirect taxation, which doesn't. The 16th Amendment confers the government no new power to tax incomes. That fits in the wording of the 16th Amendment, doesn't it? And if it does, looking at it from Gould (which the Supreme Court decision still stands), it takes precedence over the government.

And it does. In 1895, the Supreme Court threw out the federal income tax as unconstitutional in Pollock v. Farmers' Loan & Trust Co.:

"In the matter of taxation, the Constitution recognizes the two great classes of direct and indirect taxes, and lays down two rules by which their imposition must be governed, namely: The rule of apportionment as to direct taxes, and the rule of uniformity as to duties, imposts, and excises [i.e., indirect taxes]."

In 1913, the 16th Amendment was (supposedly) ratified. In 1916, the Supreme Court decided on two cases: Brushaber v. Union Pacific:

"It is clear on the face of this text [16th Amendment] that it does not purport to confer power to levy income taxes in a generic sense, -an authority already possessed and never questioned, -or to limit and distinguish between one kind of income taxes and another, but that the whole purpose of the Amendment was to relieve all income taxes when imposed from apportionment from a consideration of the source whence the income was derived."

and Stanton v. Baltic Mining:

"[I]n saying this we are not here considering a tax...entirely beyond the scope of the taxing power of Congress, and where consequently no authority to impose a burden, either direct or indirect, exists. In other words, we are here dealing solely with the restriction imposed by the 16th Amendment on the right to resort to the source whence an income is derived in a case where there is power to tax"

Even the Treasury Department agreed (2nd indention):

"The provisions of the sixteenth amendment conferred no new power of taxation, but simply prohibited [Congress' original power to tax incomes] from being taken out of the category of indirect taxation, to which it inherently belonged, and being placed in the category of direct taxation, subject to apportionment." [Treasury Decision 2303]

and even a legislative draftman in the Treasury Department (1st indention):

"The income tax is, therefore, not a tax on income as such. It is an excise tax with respect to certain activities and privileges which is measured by reference to the income which they produce. The income is not the subject of the tax: it is the basis for determining the amount of the tax." [Congressional Record--March 27, 1943]

In 1918, the Supreme Court, in William E. Peck & Co. v. Lowe, agreed with the obvious:

"The Sixteenth Amendment...has no real bearing and may be out of view. As pointed out in recent decisions, it does not extend the taxing power to new or excepted subjects."

As recent as 1988, the Supreme Court, in South Carolina v. Baker, says the same thing again:

"The legislative history merely shows that the words 'from whatever source derived' of the Sixteenth Amendment were not affirmatively intended to authorize Congress to tax state bond interest or to have any other effect on which incomes were subject to the federal taxation, and that the sole purpose of the Sixteenth Amendment was to remove the apportionment requirement for whichever incomes were otherwise taxable."

You tell me what interpretation of the Sixteenth Amendment (the government or mine) would seem most accurate, according to the courts?

However, today, since the Tax Honesty message is spreading far and wide, the government has no choice but to strong-arm (i.e., apply terrorism to) the courts in order to hide the message. The text-book example of this is the aforementioned Murphy case. The basic outline of timeline is: 1) Murphy paid the tax to the IRS, and then sued it to get the tax refunded. 2) The 3-judge decision sided with Murphy, and it was a flawless decision. 3) The IRS wanted to appeal that decision in front of the entire court (i.e., en banc). Since that decision is so flawless, the full court and, if needed, the Supreme Court, had no choice but to deny the case and let the case stand. 4) After a while (i.e., after the government goons "talked" to the judges), the 3 judges decided to vacate the origional decision and rehear the case themselves. 5) The decision on the rehearing reversed the origional decision and sided with the IRS. 6) Murphy wanted to appeal the decision en banc, but it was denied. 7) Today, Murphy is waiting to petition the Supreme Court. I will bet that the Supreme Court won't hear the case, essentially backing Murphy to square one. We will wait and see.

Now, back to the income tax. Now, 99.9% of the tax preparers don't dive deeper than Section 61...if that. Most tax preparers are blind as you on tax law, and they rely on a chart or graph to enter how much you earned to find out how much tax you owe. Now, some tax preparers (but not all) are honest, but, like you, they are duped by what they have heard when growing up, in government schools, from your mom and dad (who are clueless as you), so as you enter the work force, you have a false belief that if you earned money, you have to give a part of it to the government. How wrong you are!

But back to tax law. Section 61, similar to the 16th Amendment, said "gross income" is all income, "from whatever source derived". But, the Supreme Court said the 16th Amendment gives Congress no new powers of taxation. Looking at it though a Gould lens, is there anything missing? What's source? Looking thousands and thousands of pages away from Section 61, you reach Subchapter N, named "Tax Based on Income From Sources Within or Without the United States". I finally found it! But, if you look inside Subchapter N, all you see is parts with titles that have to do with foreign income. Hummmm. The first section in Subchapter N is Section 861, titled, "Income from sources within the United States". I, and a vast majority of you, earned income exclusively within the United States, so this must be it. In Section 861 Subsection (a), it's entitled, "Gross income from sources within United States", and it reads, "The following items of gross income shall treated as income from sources within the United States:", and it lists items, including interest, dividends, personal services, etc. That's fine, but Section 1 states you are taxed on your "taxable income", not "gross income". In Subsection (b), it's titled, "Taxable income from sources within United States". Finally. It reads, in part, "From the items of gross income...there shall be deducted.... The remainder, if any, shall be included in full as taxable income from sources within the United States."

IF ANY??? But I thought if you earned income, then you have to pay taxes, regardless! But, in Section 861 Subsection (b), it phrases taxable income to include, "if any". And if you look at the law though the Supreme Court's Gould mandate, it must mean "if any", including "none". Hummmm. Where do we go from here? Let's go to the US Treasury's regulations. The regulations are the authoritative interpretations of what the statutes mean and how to apply them. The regulations are more tedious than the statutes. In each respective statute, there is a correlative regulation. If there is a Section 861 statute, there must be a Section 1.861 regulation.

In the beginning, in Section 1.861-1, it's entitled, "Income from sources within the United States". It's an outline of the section, including, "Categories of income", "Within the United States", "Without the United States", yada, yada, yada. No news here.

In Sections 1.861-2 through 1.861-7, they list certain items of income like interest, dividends, compensation of labor, etc. But, in Section 1.861-8, it's entitled, "Computation of taxable income from sources within the United States and from other sources and activities". There we go. In Subsection (a), it reads, in part, "This section provides specific guidance for applying the cited Code sections by prescribing rules for the allocation and apportionment of ["deductions"] of the taxpayer. The rules contained in this section apply in determining taxable income of the taxpayer from specific sources and activities under other sections of the Code, referred to in this section as operative sections. See paragraph (f)(1) of this section for a list and description of operative sections."

In other words, the rules in this section (the one that tells us how to compute taxable income from sources within the United States -- that's what we are looking for, after all, is it not?) apply in determining taxable income from activities covered by other sections of the Code which are called "operative sections". Go to paragraph (f)(1) to find "operative sections". So let's go to paragraph (f)(1).

Subsection (f) of 1.861-8 is entitled, "Miscellaneous matters". Sounds unimportant (or "frivolous"), right?

Wait and see!

Paragraph (1) is entitled Operative sections (the same as the beginning of this section). It states, "The operative sections of the Code which require the determination of taxable income of the taxpayer from specific sources or activities and which give rise to statutory groupings to which this section is applicable include this section describe below." In other words, there is a list on what is taxable.

Subparagraph (i) is, "Overall limitation to the foreign tax credit" (that's not me).

(ii) is [reserved].

(iii) is, "DISC and FSC [foreign] taxable income" (that's not me).

(iv) is, "Effectively connected taxable income. Nonresident alien..." (that's not me).

(v) is, "Foreign base company income" (that's not me).

(vi) is, "Other operative sections. The rules provided in this section also apply in determining-- (see below).

(A) is, "The amount of foreign source items..." (that's not me).

(B) is, "The amount of foreign mineral..." (that's not me).

(C) is [reserved].

(D) is, "The amount of foreign oil and gas..." (that's not me).

(E) is [reserved].

(F) is [reserved].

(G) is, "The limitation...incurred to the Virgin Islands" (that's not me).

(H) is [reserved].

(I) is, "The special deduction granted to China Trade Act corporations..." (that's not me).

(J) is, "The amount of certain U.S. source income...of a controlled foreign corporation..." (that's not me).

(K) is, "The amount of income from the insurance of U.S. risks under section 953(b)(5) (later).

(L) is, "The international boycott factor..." (that's not me).

and finally (M) is, "The taxable income attributable...under the section 607 of the Merchant Marine Act of 1936..." (that's not me).

In other words, of 18 separate choices, there is only one which is not concerning foreign commerce, and in (K), we look at Section 953. This section came from Part III (INCOME FROM SOURCES WITHOUT THE UNITED STATES) and Subpart F (Controlled Foreign Corporations), and there is no Paragraph (b)(5) in Section 953 in the IRC. What then?

There is the Internet! I can search the IRC and see what comes up. The page in this paragraph does that. I entered the search term, and the computer gave back the results. Do you know what familiar section I came up with?

In the search, the only regulation in the IRC which states both, "income that is exempt" and "income that is not...exempt" is Section 1.861-8T(d)(2).

Let's look at Section 1.861-8T. In Paragraph (d)(2), the only Subparagraph which taxes is not exempt is (iii), titled, "Income that is not considered exempt." It reads, "The following items are not considered to be exempt, eliminated, or excluded income and, thus, may have expenses, losses, or other deductions allocated and apportioned to them:"

(A) "In the case of a foreign taxpayer..." (that's not me, on both counts).

(B) "In computing the combined taxable income of a DISC or FSC and its related supplier, the gross income of a DISC or a FSC" (that's not me).

(C) "[T]he gross income of a possessions corporation [e.g., DC, Puerto Rico, Guam, Virgin Islands; US lands outside of the 50 states] for which a credit is allowed..." (that's not me).

(D) "Foreign earned income..." (that's not me).

What all it concludes is, so far, people like me don't have income taxes (under Subtitle A; read on).

And finally, let's look at Section 6012, titled, "Persons required to make returns of income". Now, that section is like many sections presented by the IRC (e.g. Section 1441, Section 1442, Section 1461, Section 6151, Section 6651, et al), and it is most sinister. I will give you an illustration. The imaginary section states, "People who are pregnant are required to do the following: (a) get 8 hours of sleep; (b) eat balanced meals; (c) do a moderate amount of exercise." Now, all three are healthy choices to live by, but by looking at the section, it excludes me, the rest of the male population, and female population who are not pregnant. Section 6012, Subsection(a) [titled "general rule"] states, "Returns with respect to income taxes under subtitle A shall be made by the following:". To an untrained eye, that means I have to file a tax return (e.g., Irwin Schiff). But, in looking at it closely, every section I mention except 6012 is from Subtitle A (see the previous paragraph). Thus, individuals in the beginning of this article don't have to file. That is also the case in Section 6072. If you do, you risk violating the more serious charges of Section 7201 and Section 7206. Besides, both the Fourth Amendment protects your "papers and effects" (e.g., your tax forms) against unwarranted confiscation, the Fifth Amendment protects yourself from self-incrimination, and the Thirteenth Amendment bars involuntary servitude.

Now, what do we know?

We are at the end of studying thoroughly the statues, as well as the regulations, and what is the final conclusion? The same as the beginning of my article: there is no law that requires an individual living and working within the 50 states for a private company to file a tax return and pay taxes. End of story. If this is not right, please show me the correct path through the law. ...I'm still waiting.

And, putting gas on the fire, if you are employed, look at Section 3402, titled, "Income tax collected at source". In Paragraph (a)(1), titled "In general", it states, "Except as otherwise provided in this section [see later], every employer making payment of wages shall deduct and withhold upon such wages a tax..." To an untrained eye, it means if I work for someone else, I have to deduct a part of my paycheck for taxes. But, in the beginning, it said, "Except as otherwise provided in this section". In Subsection (n) [in this section], titled "Employees incurring no income tax liability", it states, "Notwithstanding any other provision of this section, an employer shall not be required to deduct and withhold any tax under this chapter..." (geez! legaleese) ; in layman's terms, the law states (and all Americans are required to follow the law as written) you are not required to pay taxes if you post a "withholding exemption certificate" which states you incurred no liability to pay taxes last year, and you assume that you will incur no liability to pay taxes this year (see the previous paragraph). In other words, if it was me, I just write "Exempt" on my W-4 [.pdf] (#7), if you think you are required to fill out a W-4 to keep your job. And again, you are not required to fill out your 1040 [.pdf] (see the Fourth and Fifth Amendments 3 paragraphs earlier).

And about state income taxes, 9 states (Texas, New Hampshire, Florida, Washington, Nevada, Tennessee, Wyoming, South Dakota, and Alaska) don't have an income tax, but the rest do. However, there is an interesting concept about state income taxes, and here it is: all state income taxes are dependent on the federal income tax to levy a tax. In other words, if there is no federal income tax, there is also no state income tax. Now, I am not going to list 41 states just to prove my claim, but let's take Oklahoma (the state where I live) for example. Looking at the Oklahoma Statutes, Title 68, Section 2355 (titled Tax Imposed - Classes of Taxpayers), Subsection B, it states, "Individuals. For all taxable years beginning on or after January 1, 2008, a tax is hereby imposed upon the Oklahoma taxable income of every resident or nonresident individual, which tax shall be computed as follows:". What is Oklahoma taxable income? Backtrack two sections to Section 2353 (titled Definitions), Subsection 12 (in part), it states, "'Oklahoma taxable income' means 'taxable income' as reported (or as would have been reported by the taxpayer had a return been filed) to the federal government." Since I have no "taxable income" to report to the federal government, I have no "Oklahoma taxable income" to report either.

That's it. If you don't believe me, ask Larken Rose. He has his Taxable Income report [in PDF; it's long], a shorter course for those who are new to Section 861, and his videos, Theft by Deception and The 861 Evidence, which will lay out in video what I laid out to you. In 2005, he was charged with 5 counts of Section 7203, titled "Willful failure to file return, supply information, or pay tax". The section states, "Any person required under this title to pay any estimated tax or tax, or required by this title or by regulations made by authority thereof to make a return, keep any records, or supply any information". I'm not required under this title to pay anything in the aforementioned sentence (see pregnant people above). Anyway, the defense against any charge of "willfulness" is found in the Supreme Court decision Cheek v. United States:

"A good-faith misunderstanding of the law or a good-faith belief that one is not violating the law negates willfulness, whether or not the claimed belief or misunderstanding is objectively reasonable."

Now I have a specific defense to the charge of "willful failure to file...". What about charging him with (just) "failure to file..."? Rose admitted he hadn't filed nor paid since 1997. If the government charge Rose with "failure to file", that charge is a slam dunk! But, he was only charged with "'willful' failure to file"; (just) "failure to file" is not a crime. Why is that? If you sincerely don't know, the answer is posted at the beginning of this post. In 2003, Rose, with former IRS Revenue Agent Sherry Jackson, were guests on a radio show, The Peter Mac Show, talking about the misapplication of the federal income tax law, and the IRS refusing to talk about the evidence in the law. This hour long show [in mp3] is broken down into three segments: 1, 2, and 3.

If you want to look at the website of the pro-income tax advocates, there is no better website than Professor Jonathan Siegel's. Siegel is an attorney who teaches law at George Washington University. I have to say that Siegel has the best rebuttal (so far) for my argument (i.e., "there is no law..."). Of all Siegel's "Tax Protestor Myths" , it boils down to sections 1, 63, and 61, as does mine. In the middle of Siegel's page, he states, "So, between sections 1, 61, and 63, we see that the tax code passed by Congress imposses a tax on your taxable income, which includes all your income, from whatever source derived, less the deductions allowed by the tax laws [emphasis mine]. Coming from an untrained eye, that is a sound, well-reasoned argument. But when looking at a Gould decision (in the beginning), I add to the end of that, "...which equals nothing for the average American." After that (sections 6012, 6151, and 6072, listed earlier), that is a similie of a pregant man.

If you still don't believe Rose, Siegel, and me, believe the Treasury Department and the IRS. I called the Treasury Department, the IRS, and my Congressmen, twice. FOUR TIMES TOTAL! I asked them, "Where is the law...?" Surprisingly, I received an answer every time, but all I received was a form letter which doesn't answer my question, and said my question is "frivolous". If my question is frivolous, why doesn't the IRS (et al) have a form letter which includes an answer to my question? I even asked H&R Block, Tax Masters, and Jackson Hewitt--multiple times. Unsurprisingly, these so-called "reputable income tax companies" never called back. This trend is not only Rose and I, but a growing group of concerned American (mostly Christian) patriots and activists who have done the research and know the truth (like me), called the Tax Honesty Movement. One such patriot is former IRS Special Agent Joe Banister. Banister is the most noble, unpretentious, and honorable man I know. On a radio show, he tells his story from being a gun-toting IRS Agent to, after he found out the truth, quitting the agency, and later (with his attorneys), winning in court [in mp3] here.

Still not convinced, ask Bob Schulz. On July 19, 2004, approximately 550 people from nearly every state of the Union gathered in the ballroom at the National Press Club in Washington DC. They again, were there awaiting a formal response from high ranking federal officials to a May 10 letter respectfully requesting those officials to attend the July 19 meeting and to respond to the We the People's (I am a member of WTP) Petitions for Redress of Grievances regarding the government's violation of the taxing, war powers, privacy, and, most of all, the money clauses of the Constitution and the Bill of Rights (including questions like mine).

As has been its established practice, the government once more, chose to ignore WTP and their Petitions. The officials didn't send anyone to meet with WTP, to address the issues or to respond to the Petitions by at least letting WTP know when they would answer their questions. Not the President, not the Treasury Secretary, not Congress, not even Rep. Ron Paul: "The Taxpayers' Best Friend!" The definition of "taxpayer", found in Section 7701(a)(14) and Section 1313(b), states, "The term 'taxpayer' means any person subject to any internal revenue tax under the applicable revenue law." What about "The 'Nontaxpayers'' Best Friend ??? (from the IRS [.pdf] and from Dave Champoin)" The courts gave a definition of "nontaxpayer" in Long v. Rasmussen [1922] and again in Economy Plumbing & Heating v. United States [1972]:

"Revenue Laws [i.e., IRC or Title 26] relate to taxpayers, and not to nontaxpayers. The latter are without their scope. No procedures are prescribed for nontaxpayers, and no attempt is made to annul any of their rights or remedies in due course of law. With them [nontaxpayers], Congress does not assume to deal, and they are neither of the subject nor of the object of federal revenue laws."

In plain English, that means Congress can't pass any law concerning nontaxpayers; they can only pass laws concerning taxpayers. Are you angry yet? If Congress doesn't want to address WTP's concerns, then WTP will have no choice but to quit paying taxes until Congress does, like the 1774 Journals of the Continental Congress:

"If money is wanted by Rulers who have in any manner oppressed the People, they may retain it until their grievances are redressed, and thus peaceably procure relief, without trusting to despised petitions or disturbing the public tranquility."

That is the only pro-active, non-violent way of restoring the republic by bringing the government back under control of the people and our rule book--the Constitution of the United States of America.

And finally, as I write this, Aaron Russo just finished his documentary, America: Freedom to Fascism. His other films, which includes "Trading Places" (starring Eddie Murphy and Dan Aykroyd) and "The Rose" (starring Bette Midler) have received six academy award nominations. Russo has personally won both an Emmy and a Tony awards, and his films have also won a number of Golden Globe awards.

But his latest film is his masterpiece, because it is the truth. I haven't seen the movie yet, but I read articles by people who have seen it. Even Siegel rebutted the movie. He states, "Don't take your legal advice from Aaron Russo. That would be like taking medical advice from Tom Cruise. Not a good idea." First of all, Aaron Russo plays Aaron Russo in this movie; an average Joe, and Russo doesn't give legal advise. He just asked questions (that I ask), and the "pro-tax experts" can't answer Russo's questions. Siegel rebuts arguments the movie gave. Now I don't have the time to counter Siegel rebuttles, but again Siegel boils down to this (Siegel states it a lot), and again I say this. If Siegel repeats it ad nauseam, I can rebut at least two times!

But in this film, Russo prowls halls of government trying to get someone to show him the same law as I emailed the Treasury Department, IRS, and my Congressmen with. Former IRS Commissioner Sheldon Cohen (he should know!) couldn't answer Russo's questions. Cohen, on camera, admits the "tax statues only call for 'voluntary compliance'". Finally, Cohen abruptly ends the interview without answering Russo's question. Even Paul, Congressman from Texas, finally admits, "I can't site a law; no, I cannot" [1:09:06 into the film]. I believe this single, fact-filled, educational documentary about the steady erosion of our freedom, if seen by millions of Americans, has, by itself, the potential to develop the pro-active, non-violent, mass movement needed to achieve the primary strategic objective and turn this country around for liberty. As I write, the movie is pre-screening in select cities all around the country. America: Freedom to Fascism is tentatively scheduled for release nationwide July 28.

As more and more people start to realize the con-game played by the IRS, the same people will quit paying, and the IRS will be abolished by We the People. Like I said earlier, when this happens, only death will be the certainty in our lives.

"America: Freedom To Fascism" plays to a packed house

Before I go, everywhere the WTP Foundation sponsors Aaron Russo's latest film, "America: Freedom To Fascism", it is shown before a sold-out show, after a sold-out show, after a sold-out show; and at the end, "America:" receives a standing ovation every time.

Why is "America:" so popular? Watch the preview!

Permanent Portfolio

In passing of Harry Browne, I promised you I would explain his Permanent Portfolio investments as best as I can (Browne had a gift of making difficult things look easy, better than I can). After this, I will be leaving this blog (...for now), but I promised I would show his Portfolio, so here it is.

Now, you own and control your own money, and you will make your decisions with your money as you see fit. In other words, the ball is in your court. And thus, you will experience the consequences of your decisions. All I can to is offer a different view of looking at this. As I can explain best, Browne's Permanent Portfolio has two simple but commence sense rules. So here it goes.

Rule No. 1: we live in a financially uncertain world. As most financial experts tell you, they want to invest your money in their financial system. They tell you, "This will make you the most money", or "my financial products are the best", or "invest in my plan, and I can promise you won't go wrong." But, one principle is constant, and you don't hear it from the financial experts: we live in an uncertain world. Things change, and we don't know when things will change, or to what. All the actions of economic and financial indicators are the result of literally billions of people all around the world, making economic decisions, doing financial things, and it is impossible to gather all the data that would be necessary in order to know what's going to happen next in the market.

And even if you could assemble all the data in the world, it would be obsolete in a second. These billions of people have billions of independent, unpredictable minds. Let's face the truth: no human can forecast the future. No one. Like I said, we live in an uncertain world. So what are we going to do?

We accept uncertainty. So we invest our money in a fail-safe, fully balanced and diversified portfolio, called a "Permanent Portfolio" [PP]. We call it PP because once we set it up, it is permanent, we leave it alone; there is nothing to change. If you want to tinker around with your investments, set up two portfolios. The second we will name "Variable Portfolio" [VP]. The first is money you can not afford to lose; the second is money you can.

Browne compares the VP to a trip to Las Vegas. Let's say I want to play blackjack, or I want to play craps, or whatever, and I will sit aside $500 or some amount of money to play with. The best thing is I strike it rich, but there is a very unlikely chance I will be lucky (or the casinos will go broke). The worse (and probable) thing is I lose $500. But in advance, I already know there is that chance I will lose. Obviously I won't bet my life savings on a card or dice game. The VP is like a trip to Vegas; you invest money you can afford to lose. But, with money you can not afford to lose, you invest it in a PP. You can not bet on the future with it, you can not tinker with it; it is permanent. It's your money you can not afford to lose.

So what's in this PP. Like I said, the PP will be balanced and diversified. I don't know next year whether it will be prosperity, inflation, deflation, or recession. But I know one thing, the world will be in one of these four situations. There is no other. Now, there may be a transaction period from one to another, or there may be more than four climates, like stagflation or hyper-inflation. But all of these terms are variables of one of these four economic environments. And we need to be secure in whatever conditions may occur. Fortunately, there are certain investments that are tied to favor certain envirements.

In prosperity, stocks do well. In a time of prosperity, money is plentiful, and the people want to spend their money. The stock market will flourish in a time of prosperity. In prosperity, people have money and they are buying things, and thus, the price of stocks will go up.

In inflation, precious metals are strong. Precious metals, gold in particular, never change: an ounce of gold in the time of Christ will purchase the same amount as an ounce of gold today. Where there is inflation, there is more money in the marketplace, and the dollar is devalued. When the dollar isn't worth as much, prices will rise, including gold. In the 18th century, American money was backed by silver and gold. Now, money is backed by nothing (but a printing press).

The third economic environment is deflation. Stocks and gold do bad during deflation, but bonds do well. During deflation, interest rates will go down, and there is a basic rule about bonds: when interest rates go down, bonds will go up, and vise versa. In the '30s, the interest rates was 1%. Today, bonds would double or triple with interest rates at 1%.

Now, the one economic environment that there is no investment tied to it is recession, or period of tight money. But such a period is short. Recession means people don't have as much money that they are used to. So they have to sell things, and save (now personally, I think savings is smart economics, but that's besides the point). But, it is only at most 1 or 1 1/2 years before they revert to a different situation. Money market funds, or cash, are investments that are under one year (prosperity, inflation, and deflation may last 5 years or longer), and cash will do marginally well whatever the forecast may hold, so cash will tide the people over during recession. So stocks will do well during prosperity, gold will do well during inflation, bonds will do well during deflation, and cash will weather the storm during recession.

But, if just one investment will go up, then up to three investments will go down. That brings me to rule No. 2: in any period of time, investments that are doing well will have a greater impact on your portfolio than investments that are doing badly. Browne offers us an illustration. In 1970, you have $100 to invest, and you invest in the stock market. But a friend said you ought to diversify, so you will take $10 and purchased gold ($90 stocks, $10 gold; $100 total). Ten years later (1980), stocks will fall to $50 or so, but gold will have risen to $200 (20 times during the '70s). At the end of the decade, you have $50 worth of stocks, but $200 worth of gold ($250 total). The winning investment will have more pull than the losing investment, even though originally you have 90% in the losing and 10% in the winning.

So, we have 4 investments. How much in each? The answer: I simply don't know. Like I said, we live in an uncertain world. So, for me, we invest equally: 25% in stocks, 25% in bonds, 25% in gold, and 25% in cash. And we invest in it for the same amount money-wise every fixed amount of time [dollar-cost averaging]; invest a lot when the prices are low and invest a little when the prices are high. In that way, we'll stay ahead whatever the market shows.

Finally, you have to check on it once in a while (like a year or so). You may start the investments the same, but after time, your investments grow at different levels. Don't worry about this. But, if it gets to the point where one investment rises above 35%, or falls below 15% of the total, you have to rebalance your portfolio (buy some and sell some) and bring them back to 25%.

That's it. Easy, isn't it? When you prescribe the PP, after some time, you start to relax. You start to realize that these things are not going to affect the outcome of your portfolio in any significant way. Browne has a chart plotting his PP from 1970 to 2003, and it is a strait line going up. Also, he has a table where every year he showed his results. In 33 years, the PP has an average yearly gain of 9%. In the same 33 years, the PP only has a losing year only 4 times (1981, 1990, 1994, 2001), the most is 6.2% (the most gain is 36.7, back in 1979). He gives you some examples on what goes into the PP. Personally, the stocks, bond, and cash, I go with T. Rowe Price that copies what Browne taught (Equity Index 500, U.S. Treasury Long Term, U.S. Treasury Money). As for gold, I go with GoldMoney. However, you can use anyone that you want. Like I said, it's your money (i.e., you make the call).

That it. If you want to know more, read Browne's book, Fail-Safe Investing. It's short (176 pages) and cheap (around $10), but it gives in detail what I said in this post. After I saw the PP concept, I concluded that it makes perfect sense. It is safe, it is simple, and it is stable. Of all what Browne had taught me, the PP is the most powerful. Again, thank you Harry Browne...for everything, especially wisely investing my money.

Spreading 'democracy'

Speaking about spreading around "democracy" to brutal dictators (on a side note, democracy is not freedom, not by a long shot); President Bush, what about China?

Ideas on freedom

America is going downhill. With the war, the Patriot Act, the Real ID Act, the eroding away of our freedoms, the advocates of liberty might say, "I'm done." "It's over." "I'm through." All they can do is "reform" the system, even if they think they are doing it in a "free market way". The thought of making a true libertarian difference by "repealing" the welfare/warfare mentality is, in their mindset, a pipe-dream. In their minds, reform is the best bet.

Although it may be true, an equal number of people think there is another way than this. The vast majority believe that the two major parties share the same vision for America, and that vision is not for them. That society is what we should focus on. Sharing ideas with others, especially ideas on freedom, is the best bet for restoring moral principles of the libertarian philosophy to the people and the restoration of freedom to America.

Jacob Hornberger said it best: "Ideas matter--they have consequences--they move people to action." When an idea enters into someone else's mind, great things can happen. Consider when China, one of the most powerful governments in the world, imposed restrictions on the Chinese websites. Why did they control the Internet? China has all the guns and obedient solders who blindly obey orders on command. Why did they worry about citizens visiting "non-approved" websites? The Chinese know what I know: the power of truth and ideas. When an idea, especially ideas about freedom and liberty, simply entered into someone's mind and take hold, it can change the direction of the nation, and the Chinese government officials are scared to death!

And today, the free-flow of ideas are reaching warp speed, thank to the Internet. Before the Internet, if we want to spread ideas, we have to publish books or newsletters, or purchase time on the television or radio, or send letters-to-the-editors to the newspapers, or deliver speeches to small crowds. Now, when we finish our thoughts, we simply click on the "forward" button, and the thoughts on liberty are sent to unlimited amounts of people, for free.

So perish the thought of simply "reforming" the system. True libertarianism holds the key to our nation's future. And via the Internet, we will spread the truth far and wide, and reverse the direction of our country. Read Hornberger's article, and ask yourself: are spreading of ideas on freedom and liberty the key to the future?

South Dakota abortion ban

Earlier this week, there is a debate among both sides of the abortion issue in South Dakota. Pro life advocates are fighting with pro choice advocates, and vice versa. The fighting is centered on what will the state allow or don't allow on abortions. Governor Mike Rounds signed into law banning all abortions except when the life of the mother is in danger. The law will go into effect July 1.

Now, I am fuzzy on the pro life v. pro choice debate. But, on a constitutional basis, I am certain on this: on a national decision, Roe v. Wade is unconstitutional. There is no mention about "abortions" anywhere in the Constitution, and the Tenth Amendment says if it isn't in there, then we should leave it to the states. Now, on the pro choice side, there is a right to enjoy a zone of privacy in the Ninth Amendment, decided by Griswold v. Connecticut. On the pro life side, there is a right to life found in the Fifth Amendment. There can be an honest debate on the constitutionality of the matter, and the verdict can go either way. So, if there is any doubt, we should leave it to the states. If we have 50 state Roe v. Wade decisions, that is fine with me. If we have a law like the South Dakota abortion law, that is fine with me too. The Supreme Court should uphold South Dakota's law. Anyway, there is a third option besides keeping or aborting; adopting. But, it will take too much power out of the Supreme Court, so the decision is anybody's guess.

A famous anchorman sees it "the way it is"

Walter Cronkite, a famous anchorman for CBS, is telling the truth about the futile war on drugs. The war on drugs is a failure. Now I admit, drugs are bad, but the war on drugs is a lot, lot worse. The average innocent person will lose his/her rights, especially the rights found in the Fourth Amendment. The United States, the "land of the free", has the #1 prisoners per capita in all the world. And you know what? In the 30 years in which we have the "War of Drugs", drugs are more prevalent than ever. And most of all, you have a God-given right to ingest anything you want with YOUR body. It's yours and yours alone. Not mine, or anyone else. It's your body. And thus, you will pay the consequences of your actions, not me. My last post titled, "Even a police chief says the war on drugs is a complete failure" says it all. Now, Walter Cronkite is jumping on the bandwagon. He even offers a solution; the Drug Policy Alliance. But, certain individuals have been making themselves wealthy fighting the losing drug war. So, the war will continue indefinitely, until our country is headed for complete destruction.

Government intervention fails at everything, including immigration

Like Harry Browne's book, Why Government Doesn't Work implies, government fails at everything. Government produces unintended results. When federal officials pass a law outlawing something which has no victim (i.e., victimless crime, an oxymoron), that law is doomed to falter. When federal officials see it is failing, they don't repeal that law; on the contrary, they enact more laws to force the initial law to work. When they see this laws has failed, they pass even more laws to force the initial two laws to work. When they see that all three laws don't work...you get the picture. Finally, the federal officials pass enough laws to deprived the innocent private sector of its social and economic liberty, and the first law, and the sequential laws thereafter, failed to do what is expected.

The textbook example of this phenomenon is immigration. First, the federal officials pass a law forbidding immigrants to freely come here and work. Immigrants want to come here and work; else, they wouldn't come. American employers want to hire the immigrants; else, they would refuse to hire them. In other words, it is a victimless crime. But, the federal officials want to throw a wench in the supply-and-demand chain and pass laws forbidding the immigrants to work.

When it doesn't work, it angers federal officials. They can't believe the intervention didn't work as planned. So they pass new laws forbidding transportation and harboring immigrants. If the people don't want to transport immigrants around, they wouldn't do it. Again, this is a victimless crime. But this time, the feds say, it will work.

When it fails to work, it gets the feds mad. They cannot understand why the intervention didn't work. So they pass a law barring Americans to hire immigrants. But, like I said, Americans want to hire immigrants, and immigrants want to be hired; else, they would leave. But this time for sure, the feds say, they are confident it will work.

When it doesn't work, that is the last straw. Now, U.S. officials are requiring churches to check immigrant legal status before helping parishioners out. But, as always, the members of the church refused to check. In a tremendous act of moral and political courage, Cardinal Roger M. Mahoney has publicly announced he will violate this law. Mahoney obviously understands when man's laws conflict with God's second-greatest commandment (love thy neighbor), a Christian will have no choice: he must obey God's laws and reject the laws of man (as Peter and the other apostles instructed in Act 5:29). I wish the government should obey God's laws and to repeal bad immigration laws that defy the Word of God. That is the Christian thing (and America is supposed to be a nation of Christians) to do.

March 2

Three things happened in March 2; two sad, and one proud. First and foremost, Harry Browne passed away. He was 72. He actually died March 1, but a few hours from the 2nd. Now, I first heard about libertarianism in early 2002, so Browne was finished campaigning before I even heard of the concept. But I quickly realized the impact Browne had on the libertarian movement. He was President and Senior Political Analyst for the Free Market News Network, Director of Public Policy for DownsizeDC.org, contributor to LewRockwell.com, a friend of the Advocates of Self-Government, and a devoted champion of liberty. Also Browne was the only 2-time Libertarian Candidate for President. I personally am not fond of politics. I would rather be a staunch advocate of the libertarian philosophy. But, two men who are the staunchest advocates as me are the past three Libertarian Presidential Candidates: Michael Badnarik ('04) and Harry Browne ('96 and '00). And personally, Browne sold me on the concept of his Permanent Portfolio, which I will show it to you, for his sake. For the brief time I've known him, he would be truly missed.

Also, today would be the 80th birthday of Murray Rothbard. As I said about Browne, Rothbard passed away eight years before I thought of libertarianism, but what I have heard, Rothbard remained an icon in the lives of hardcore libertarians and voluntarists everywhere. Rothbard is in a class as Ludwig von Mises and Ayn Rand. With the advent of the Internet, Rothbard's legacy is no more than a few clicks away. Meanwhile, read what Roderick T. Long wrote on Rothbard's death in 1995.

Now, for some good news. In Texas, March 2 is an important day. Today, in 1836, fifty-eight Texans signed the Texas Declaration of Independence. I know I'm from Oklahoma, but I was born and lived the first six years of my life in Corpus Christi, my relatives lives in Dallas, and my best friend lives in Austin, and, except for OU, I would rather be in Texas today. Texas is the only state who, once before, lived as a sovereign nation. I can go on and on about Texas, but I will let Michael Badnarik tell you about the Declaration. Long live Texas!

The average citizen know the charaters of the Simpsons better than the First Amendment

I am usually downing government officials on this blog, but I'm downing the average citizens on this one. According to McCormick Tribune Freedom Museum, the average citizen knows better the charaters of the Simpsons' TV show (Homer, Marge, Bart, Lisa, and Maggie) than the rights listed in the First Amendment (religion, speech, press, assembly, petition). Only one in four can name more than one right in the First Amendment, but more than half can name more than one charaters of the Simpsons. The study found 22 percent could name all five charaters, but one in 1,000 could name all five rights. One in 1,000? Now, I admit I can name the First Amendment verbatim, but I can name all five rights enumerated.

The survey also misidentified what is in there (in the First). About 20% thought that "the right to own a pet" was in the First, as well as 38% thought that the First Amendment includes "the right against self-incrimination" (actually, the last one is found in the Fifth Amendment, but not the First). America is way uninformed than you realize.

But, the greatest danger to our freedom is what this article missed. Like I said about the Second Amendment, the Bill of Rights doesn't give you any rights, none whatsoever. The Bill of "Rights" is actually a bill of "restrictions" on the federal government. The first five words in the First Amendment says it plainly: "Congress shall make no law...". Not me nor you, but Congress. In fact, all 10 amendments give us no rights at all. The restrictions on our government means we would feel safe with our democracy! ...no, The Declaration of Independence, the Constitution, and all 27 amendments; there is no mention of "democracy" in there. In fact, in Art. IV, Sec. 4 in the Constitution, the Framers specifically said what kind of government we should have. Now, we are proud to have the greatest "democracy" in the world. This is best explained in James Bovard's latest, and I believe the best, book, Attention Deficit Democracy. Thomas Jefferson said about democracy, "A democracy is nothing more than mob rule, where 51% of the people may take away the rights of the other 49." Ben Franklin once said, "Democracy is two wolves and a lamb voting on what to have for lunch." I'm afraid, if we don't do something quick, America is going to fall. You had better be forewarned.

And the war keeps going

There is a distinct difference of mindsets between the mindset of the president and the mindset of the troops. The Zogby International/Le Moyne College poll found 72% of US troops said they should withraw within 2006, 29% said they should pull out immediately. And, the President faces an all time low for doing his job:


But, President Bush thinks we should "stay the cource" (what cource?) and "complete the mission" (what mission?), and thus, the war goes on, and on, and on, and...