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Corporate America's Time Travel for the Working Class

By Allen J Duffis
Published: March 5, 2008

 
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The King is Dead, Long Live the King

Our forefathers came to this continent from England, they dreamed of forging a new life free of rule by king, religious persecution, unjust laws and overbearing taxation. And as the process grew, they wisely decided to forge a new kind of country as well. In fact, they felt so strongly toward achieving this end, they were willing to fight a long bloody war with the mother country to gain independence. Finally, in 1776 the great goal was achieved, and from the first thirteen colonies in this new land evolved the United States of America. Around the world the new country, and the radical concept behind it, became known as - the Great Experiment.

For the first time in history the, in realistic terms, the 'peasant status' was virtually abolished and the 'free citizen' came into being - owing nothing to the state but loyalty.. And the development and the institution of the Constitution of the United States with its Bill of Rights accomplished this deed. The incredible well thought out and crafted document (which in the beginning was not inclusive of slaves in the South - but did encompass free Blacks in the North) laid out the rights of the country's citizens to 'Life, Liberty and the Pursuit of Happiness.'

As part of this new freedom they decided to allow the engine of Capitalism to reign free, virtually unrestricted. This option was deliberately chosen so that all men could seek their worth to better themselves and their families. What they appear to not have taken into account was the resident 'evil' of greed that also disembarked with the first settlers at Plymouth Rock.

Looking back now in reference to all that has taken place in this country in the 20th century, perhaps they should have given a closer scrutiny and a careful a second thought to allowing Capitalism to assume the center stage of their new economic structure. At the time, however, no one envisioned a force that would become so powerful within American life, that in time it would grow in intensity to a point where it could and would influence social decision-making. No one foresaw the cancerous outgrowth of a type of individual, driven by a corrupt immoral philosophy dictating that .."more is better and too much was enough." And because of that critical oversight, taking almost 200 years to reach fruition, slowly and imperceptibly, something began to go terribly wrong.

Gradual Return of the Peasant Class

"All men are equal, but some are more equal than others." (Paraphrasing of George Orwell's - "Animal Farm")

I would love to enter a televised debate with someone on the Right over the plight of the diminishing Middle Class. Yes, I consider myself to be on the political Right, but for thinking people there are subtle distinctions within any classification, which is why I assume the political posture of - middle of the road. Therefore, what I would ask in such a debate is this one critical question, and I would take no quarter on a response: Is the Middle Class really diminishing or, far more frightening, are they becoming.... something else? And should the answer be yes (if it were to be truthful), my next query would be...."Who or what was responsible for this change?" The answer to that last question would have to be - 'The New American Aristocracy.'

This social grouping, constructed by the amalgamation of private and corporate wealth, have always existed as separate economic entities. But since the late 1970's they have found common ground to increase their coffers and, most importantly to them, protect their financial interests. They discovered that rather than simply influencing governmental decisions by investing in politics, they could instead actually - buy - the American government outright. And by the unification of their interests - that's just what they have done.

As the present presidential campaign season well proves, the cost of running for the office, or any other elective office, is incredibly high. So much so in fact, that despite the efforts and intent of the nation's founders, it has become virtually a millionaires market. And even though the Internet has entered the arena of fund raising, in time, the amounts necessary to run a successful campaign may eclipse what can be gained even by this new source.

Either you have your own private funding like Steve Forbes or Mitt Romney, or you sell your soul to gain it from wealthy backers and sources - which in turn are more like clients who, in the end, want and expect something. And five will get you ten, as the old saying goes, the something they want is diametrically opposed to the interests of your constituents.

If H.G. Wells "Time Machine" really existed, for certain the American Middle Class is in it and about to take the ride of their lives - back to the past. For as they dip their toes into the pool of 'change', that cold slimy feeling they will experience is the sensation of 'peasant-Dom' creeping toward a comeback on their watch.

It is the opinion of this author many who argue that the Middle Class is doing well and in no danger of disappearing from the American landscape, hide within themselves a deep dark terrible secret. They never believed in the Middle Class in the first place and, therefore, subconsciously, grant no moral right for such a social entity to exist. And the reasoning that drives that outlook is simply, for the Wealthy Class (private and corporate) - the Middle Class costs too much to maintain.

Think about that for a moment and then be completely truthful with your thoughts. Now ask yourself these few questions: do you know a wealthy or well off person who wants a Middle Class butler, housemaid, live-in cook or chauffeur? Of course not! This is why they seek to employ third world emigrants to care for their children, rather than trained Americans who require a livable wage. They want servants, which means they want those who work for them for the least amount of pay, and who will be truly dependent upon those jobs offered and because of this dependency be - servile. In other words, democracy be damned, in no way shape or form are they seeking to employ social equals.

It is for this reason Middle Class families who, at the end of World War ll, were capable of raising families with the earnings of of a single breadwinner, found themselves requiring two breadwinners at the beginning of the 1980's. This sad state has now deteriorated to a point where the Lower Middle Class requires three incomes in a family to make ends meet, and that trend is rapidly working it's way to the Upper Middle Class. And the reason for this state of affairs is that fully two thirds of the American Middle Class has been 'downsized.'

Which in turn brings us to this question: just how low must the American worker drop in his or her labor demands to satisfy the needs of industry and the corporate world? The answer to that burning question is thus: To a level just slightly above what it cost them to operate and maintain the average ATM machine. This means no medical care, no pensions, no vacation time, or in general, no quality of life issues to deal with. To do otherwise would restrict profitability, negatively affect the bottom line and simply - cost too much.

Welcome back to the New Peasant Class - formerly known as Middle Class America.

Excessive Wealth Breeds Compulsive Greed

There is something wrong with a system when an oil companies can post incredible and historic windfall profits, at the same time they post capital losses entitling them to 'tax cuts.' There is something wrong when insurers with lucrative profits can withhold almost 80 percent of their earnings, and measure their tax liability strictly based upon the remaining 20 percent - virtually guaranteeing a tax deferrable loss every time. There is something wrong when a pharmaceutical company can claim a 10 year amortization for the millions spent in research for the development of new drugs while, simultaneously, taking in billions from the sale of those same drugs. And there is most certainly something wrong when our elected government can be corralled into passing laws that prevent seniors who can't afford the American made drugs they require, from obtaining them from Canada or other countries where those same American manufacturers sell them at a major discount.

Such behavior is nothing less than acts of outright arrogance to the quality of life needs of the average American citizen, because to do otherwise would not be as profitable and simply - costs too much.

The Aristocracy is Alive, Long Live the Aristocracy

Somehow or other, in the last 200 yeas or so, the system as envisioned by the Framers of the Constitution to insure equality has been turned around, virtually 180 degrees to favor the wealthy. The Common Citizen en masse now pays a greater percentage of their earned wages for taxes as does the major American corporation. The key to understanding how this fraud takes place is to concentrate one's attention not to actual taxes paid out, but to corporate and wealth oriented write-offs and other tax deduction mechanisms.

The Common Citizen (with the limited exception of those owning small businesses) has access to only two major tax write-offs: family dependents and interest on a home mortgage. For the truth of the matter is that when your earnings are relatively small, based upon what you earn vs. what you must almost immediately expend to support the family unit, or simply oneself, what is left over is usually under the limit required for tax shelter investment.

Meanwhile, under the veil of cost cutting to allow competition in the world market, CEO's of multi billion dollar corporations are given huge pension packages that have run up to a . half billion dollars. At the same time these corporate executives rake in obscenely large salaries, as they go public to beg hardship in the world market and beg for federal assistance and tax relief for their companies - and get it. Yes, corporate welfare is real and, in the light of what is financially happening to the average working American, it is sleazy.

More than any other factor, however, this bogus government policy, practiced with zeal by our elected representatives in Washington, is responsible for the longevity of a 'myth.' That myth being - if we allow the wealthy to keep more of their money (be they corporate interests or private), in the end the common man will reap the benefits of their investment in the economy.

For those of you not familiar with the theory it is referred to as - Trickle Down. Therefore, I ask of the man and woman on the street, stressing to pay rent, food, electric, gas and medical bills- and not quite making it, do any of you down there feel wet as yet? No! I didn't think so.

It is imperative that the American worker remember before making any voting decision, these are the people that many in Federal power want to turn control over to of your Social Security. Medicare and Medicaid. They call it 'privatization.' Keep in mind at all times, these people referred to as the 'Private Sector' , knowingly sold you balloon mortgages you could never afford, credit card interest rates that have surpassed outright usury standards, education loans that are virtually impossible to pay off in your children's lifetime, and are closing in on the debut of $4 dollar a gallon gasoline. They do this as they whistle all the way to the bank to deposit their profits from your financial pain, and foreclose your home. Do you really think they can be trusted with such vital life support financial mechanisms of your very existence? I don't think so!

More and more, our federal governing structure in Washington is looking like the pieces on a chessboard and has the potential in time to become more than just a reflection (king, queen, ...etcetera..), rather than an elected democratic government. Like it or not, Mr. and Mrs. Average American, you are living under the growing power and control of the New Aristocracy who, by deliberate design, are the inheritors of the aristocracy that your forefathers fled from and escaped their stocks of control from in 1776. Welcome back, your minimum wage job is waiting.

Limits on Congressional Terms and Corporate Profits

It would appear that everything in this universe we inhabit is finite, with the notable exception of congressional term limits and corporate profits. Should there be limits ? Yes! Unfortunately, there are not as yet any and there are not likely to be any in the near future and, possibly, our lifetimes.

One must be reminded that at the beginning of our republic public service was just that, and those who served the country in such posts were paid very little. There was no incentive for one to make a career of public service for, indeed, such service was looked upon as a lowly calling. All of that changed in the late 1800's, just as the machine age was coming upon us and large manufacturing and railroading companies were being formed. From that point on the professional politician came into being, and the country has suffered for allowing that state to come about.

Therefore it should be noted that the Congress of the United States had little or no difficulty writing the 22nd amendment to the Constitution limiting the term of a president to two four year terms as follows:

Section 1. No person shall be elected to the office of the President more than twice, and no person who has held the office of President, or acted as President, for more than two years of a term to which some other person was elected President shall be elected to the office of the President more than once...

But that same Congress cannot bring itself to institute similar term restrictions upon its own offices? It can't be for the salary or even the benefits, which are disgracefully disproportionate, immoral and unconscionable. And since it is known fact that most of congress will leave office far wealthier than when they entered, just where does all of that wealth come from? Guess !

This of course brings to light the present corporate windfall profit debate and, again, guess who is doing the debating? Then try to guess why there has not been passed a successful bill to limit the windfall profits of the petroleum, natural gas and electricity industries? These bills are being stalled and buried in committees by the same people who brought you the new citizen restrictive but industry releasing Bankruptcy Laws and a pharmaceutical industry written Medicare and Medicaid bills: your elected representatives in Washington, both Republicans and Democrats alike.

Is the U.S. Tax Code Fair to the Common Citizen?

The answer to that question is not so easily defined. The framers of the Constitution, remembering the unfair taxing of the working man's wages under British rule, clearly wanted 'no tax levied' upon the earnings of the common man. But they also envisioned everyone carrying their own weight. At no time did they envision 'social services' of any kind. But like it or not that is how our country began to evolve after a time. Economically, our society was becoming very complex.

It then came to be that the initial plan of the forefathers, that all revenue to run the country should come solely from industry, began to run afoul of its own restrictions. And finally, the matter of financing the various wars that would come about, including the destructive economic impact of the American Civil War, would eventually lead us into some form of overall taxation of the masses and industry combined. This need brought forth the 16th Amendment:

The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several states, and without regard to any census or enumeration. It was written as follows:

"No capitation or other direct, tax shall be laid, unless in proportion to the census or enumeration herin before directed to be taken."

(Note: Capitation indicates a 'direct' uniform tax that is imposed upon each head or person.)

The question has now come down to a series of questions: should the working American man or woman be taxed on their wages? I say yes - because they have to pay for the social services they want and may require. A tax to archive such a want or requirement is just, as long as it is a fair tax.

The next question is: should companies and corporations be required to give pensions for a lifetime's labor? Again I say yes - if for no other reason other then they give such, quite generously, to their upper management. Not to do so for the lower caste worker would be a form of discrimination.

Finally, what about medical care? Should corporations not be required to make some form of contribution to the medical care of lower casts workers; those who have labored for them for some mandated number of years? Again I say yes - and again, if for no other reason than the fact that they do so for their upper management at retirement, quite generously.

So will the corporate world simply give in and comply with what is clearly fair, moral and just? Hell no! They'd rather fight to the end and resist with every senator and representative they can buy and thrown into the fray on their behalf, simply because in their eyes -fairness for the American worker costs too much!

The Honesty Factor

Working Class American's have one final card to play in the their quest for fairness and humane treatment in the workplace. It is a factor as crucial to the corporate world as patriotism is to a nation. They are totally dependent upon it, but in their quest for higher and higher profit margins appear to have totally overlooked or, possibly, taken for granted: That factor is - honesty.

Despite what many may believe due to purposeful inference from the corporate world as to their losses from workplace pilferage of goods and ideas, the American worker is the most honest in the world. So imagine what would happen if say tomorrow, they ceased being so? What if corporations had to suddenly invest in hordes of inter company spies and on site policing staff to keep careful track of inventory and company secrets? What if the attitude of the common worker became, 'do unto the company as they shall do unto me, but do it first?' In a sense it would be a form of revolution or, at the least, an ongoing de facto workplace revolt.

In other words, why should the American worker pledge such honesty to the companies they labor for, without a simple moral guarantee that they will be repaid for such honesty when they can no longer labor? After all, honesty is a two way street - isn't it? And for those who would cry out and protest that such action to cripple American industry would be unpatriotic - isn't patriotism also a two way street? I think so!

 

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EDITORIAL REFERENCE DATA

The Legal Foundations of the U.S. Income Tax

The history of income taxation in the United States began in the 19th century with the imposition of income taxes to fund war efforts. However, the constitutionality of income taxation was widely held in doubt until 1913 with the ratification of the 16th Amendment to the Constitution.

Article I, Section 8, Clause 1 of the United States Constitution assigns Congress the power to impose "Taxes, Duties, Imposts and Excises," but Article I, Section 9 requires that, "Duties, Imposts and Excises shall be uniform throughout the United States."

In addition, the Constitution specifically limited Congress' ability to impose direct taxes, by requiring it to distribute direct taxes in proportion to each state's census population. It was thought that head taxes and property taxes (slaves could be taxed as either or both) were likely to be abused, and that they bore no relation to the activities in which the federal government had a legitimate interest. The fourth clause of section 9 therefore specifies that, "No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or enumeration herein before directed to be taken."

Taxation was also the subject of "Federalist No. 33" penned secretly by the Federalist Alexander Hamilton under the pseudonym Publius. In it, he explains that the wording of the "Necessary and Proper" clause should serve as guidelines for the legislation of laws regarding taxation. The legislative branch is to be the judge, but any abuse of those powers of judging can be overturned by the people, whether as states or as a larger group.

The courts have generally held that direct taxes are limited to taxes on people (variously called "capitation", "poll tax" or "head tax") and property. All other taxes are commonly referred to as "indirect taxes," because they tax an event, rather than a person or property per se. What seemed to be a straightforward limitation on the power of the legislature based on the subject of the tax proved inexact and unclear when applied to an income tax, which can be arguably viewed either as a direct or an indirect tax.

Previous to the 16th Amendment

In order to help pay for its war effort in the American Civil War, the the United States government imposed its first personal income tax, on August 5, 1861, as part of the Revenue Act of 1861 (3% of all incomes over US $800; rescinded in 1872). Congress also enacted the Revenue Act of 1862, which levied a 3% tax on incomes above $600, rising to 5% for incomes above $10,000. Rates were raised in 1864. This income tax was repealed in 1872, but a new income tax statute was enacted as part of the 1894 Tariff Act.

At that time, the United States Constitution specified that Congress could impose a "direct" tax only if the law apportioned that tax among the states according to each state's census population.

In 1895, the United States Supreme Court ruled, in Pollock vs. Farmers' Loan and Trust Company, that taxes on rents from real estate, on interest income from personal property and other income from personal property (which includes dividend income) were direct taxes on property, and therefore had to be apportioned. Since apportionment of income taxes is impractical, the Pollock rulings had the effect of prohibiting a federal tax on income from property. Due to the political difficulties of taxing individual wages without taxing income from property, a federal income tax was impractical from the time of the Pollock decision until the time of ratification of the Sixteenth Amendment.

16th Amendment

In response to the Supreme Court decision in the Pollock case, Congress proposed the Sixteenth Amendment, which was ratified in 1913, which states the following:

The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.

The Supreme Court in Brushaber v. Union Pacific Railroad , 240 U.S. 1 (1916), indicated that the Sixteenth Amendment did not expand the federal government's existing power to tax income (meaning profit or gain from any source) but rather removed the possibility of classifying an income tax as a direct tax on the basis of the source of the income. The Amendment removed the need for the income tax on interest, dividends and rents to be apportioned among the states on the basis of population. Income taxes are required, however, to abide by the law of geographical uniformity.

Congress enacted an income tax in October of 1913 as part of the Revenue Act of 1913, levying a 1% tax on net personal incomes above $3,000, with a 6% surtax on incomes above $500,000. By 1918, the top rate of the income tax was increased to 77% (on income over $1,000,000) to finance World War l. The top marginal tax rate was reduced to 58% in 1922, to 25% in 1925, and finally to 24% in 1929. In 1932 the top marginal tax rate was increased to 63% during the Great Depression and steadily increased, reaching 94% (on all income over $200,000) in 1945. Top marginal tax rates stayed near or above 90% until 1964 when the top marginal tax rate was lowered to 70%. The top marginal tax rate was lowered to 50% in 1982 and eventually to 28% in 1988. During World War II, Congress introduced payroll withholding and quarterly tax payments.

According to Attorney Thomas Cryer, “[Working] is a God-given fundamental right that is protected under the Constitution and can’t be taxed any more than exercising freedom of speech.”

Cryer [LSU Law School, Baton Rouge, LA, J.D. 1973, Honor Graduate] has taken on the IRS and has won a precedent setting case. Cryer “argued that income is not necessarily any money that comes to a person, but rather categories such as profit and interest.” The article goes on to state that Cryer asserts that, “There’s no law making the average working man liable [for income taxes], there’s no law or regulation that allows the IRS to contend that earnings are 100 percent profit received in exchange for nothing, and the right to earn a living through any lawful occupation is a constitutionally protected fundamental right, and it is exempt from taxation.”

Attorney Cryer had asked the IRS to show him the legal authority that made him liable for the income tax, but the IRS did not respond.

Legal Challenges to the Income Tax Code

According to Attorney Thomas Cryer, “[Working] is a God-given fundamental right that is protected under the Constitution and can’t be taxed any more than exercising freedom of speech.”

Cryer [LSU Law School, Baton Rouge, LA, J.D. 1973, Honor Graduate] has taken on the IRS and has won a precedent setting case. Cryer “argued that income is not necessarily any money that comes to a person, but rather categories such as profit and interest.” The article goes on to state that Cryer asserts that, “There’s no law making the average working man liable [for income taxes], there’s no law or regulation that allows the IRS to contend that earnings are 100 percent profit received in exchange for nothing, and the right to earn a living through any lawful occupation is a constitutionally protected fundamental right, and it is exempt from taxation.”

Attorney Cryer had asked the IRS to show him the legal authority that made him liable for the income tax but the IRS did not respond.

In “The Law That Never Was,” author Bill Benson makes a convincing case that the 16th amendment was not legally ratified and that Secretary of State Philander Knox was not merely in error, but committed fraud when he declared it ratified in February 1913. The major findings for many of the states, strongly indicate that their ratifications were not legal and should not have been counted.” In the opinion of many, there is a major legal threshold issue, and that is, is there truly a legally ratified Sixteenth Amendment to the U.S. Constitution?

Render to Caesar the things that are Caesar’s, Mark Chapter 12 of the Bible says;
14: And when they were come, they say unto him, Master, we know that thou art true, and carest for no man: for thou regardest not the person of men, but teachest the way of God in truth: Is it lawful to give tribute to Caesar, or not?
15: Shall we give, or shall we not give? But he, knowing their hypocrisy, said unto them, Why tempt ye me? bring me a penny, that I may see it.
16: And they brought it. And he saith unto them, Whose is this image and superscription? And they said unto him, Caesar’s.
17: And Jesus answering said unto them, Render to Caesar the things that are Caesar’s, and to God the things that are God’s. And they marveled at him.

(Mark 12:14-17

 

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