Taxes and the New World Order

A free and vigilant people should never have tolerated this for a minute. The income tax is an inherently communistic tax, because one of the prerequisites of freedom is a sphere of privacy. And if you destroy the material foundations of that sphere of privacy, you have destroyed the possibility of freedom. - Alan Keyes

Banjamin Frankin wrote, "Our new Constitution is now established, and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes."

There are two kinds of taxes: direct taxes and indirect taxes. Any other name applied to any tax still leaves the renamed tax as a direct tax or an indirect tax. Whether they bear the name vat tax, sales tax, poll tax, duty, impost, excise, capitation, flat, stamp, or whatever other name, they nevertheless all remain either a direct tax or an indirect tax.

A direct tax is one paid directly to the government by the persons on whom it is imposed. Examples include some income taxes, some corporate taxes, and transfer taxes such as estate (inheritance) tax and gift tax. An indirect tax or "collected" tax (such as sales tax or value added tax (VAT)); is one which is collected by intermediaries who turn over the proceeds to the government and file the related tax return. In U.S. constitutional law, direct taxes refer to poll taxes and property taxes, which are based on simple existence or ownership. Indirect taxes are imposed on rights, privileges, and activities. Thus, a tax on the sale of property would be considered an indirect tax, whereas the tax on simply owning the property itself would be a direct tax.

Article I, Section 9 of the U.S. Constitution requires that direct taxes imposed by the national government be apportioned among the states on the basis of population.

Up until the early 1800's, our government was funded primarily by indirect taxes on alcoholic beverages, carriages, sugar, tobacco products, property, sales and corporate bonds. Then came the War of 1812 and all of the war associated expenses. There was an income tax proposed during the War of 1812, but was defeated. Instead, taxes were added onto luxury consumer goods. In 1817, all internal taxes were abolished and tariffs on imported products were the only funding the government received.

The actual taxing of income began in 1861 with the Civil War when the Congress passed a 3% tax on all net income above $600 a year . Other taxes were added such as inheritance tax and sales and excise taxes to fund the war effort. The income tax was rescinded after the war in 1872.

Income taxes were enacted at various times until 1894, but were not imposed after 1895 after an 1894 tax act was found to be unconstitutional (Pollock v. Farmers' Loan & Trust Co.). In 1894 Congress passed an income tax act very similar to the current income tax law. That law was challenged on the basis that a tax on income is a direct tax, the United States Constitution requires direct taxes to be apportioned, and the act passed by Congress was not apportioned. The United States Supreme Court agreed and held the income tax act was unconstitutional in Pollock v. Farmer's Loan & Trust Co., 157 U.S. 429, aff. reh., 158 U.S. 601 (1895).

The Populist Party "demanded a graduated income tax" in their 1892 platform, as did the Socialist Labor Party in 1887. The Democratic Party, led by William Jennings Bryan, advocated the income tax law passed in 1894, and proposed an income tax in their 1908 platform. President Taft proposed a constitutional amendment in an address to Congress to allow federal income taxes on individuals and an excise tax "upon the privilege of doing business as an artificial entity and of freedom from a general partnership liability enjoyed by those who own the stock" on June 16, 1909. The resolution proposing the Sixteenth Amendment was passed by the Sixty-first Congress and submitted to legislatures of the several states on July 12, 1909.

It was difficult for Congress to impose a national income tax that applied to all forms of income until the 16th Amendment was passed by Congress in 1909 and purportedly ratified in 1913. The Amendment, which overrules the effect of Pollock, essentially means that when imposing an income tax, the Congress may impose the tax on income from any source without having to apportion the total dollar amount of tax collected from each state according to each state's population in relation to the total national population. As a result, after the Sixteenth Amendment, no Federal income taxes are required to be apportioned, as per the U.S. Constitution, regardless of whether they are direct taxes (taxes on income from property) or indirect taxes (all other income taxes).

The United States Revenue Act of 1913 also known as the Tariff Act or Underwood Tariff (ch. 16, 38 Stat. 116, October 3, 1913), imposed the first federal income tax following the ratification of the Sixteenth Amendment and lowered basic tariff rates from 40% to 25%. This act provided for the reinstitution of a federal income tax as a means to compensate for anticipated lost revenue because of the reduction of tariff duties. The incomes of couples exceeding $4,000, as well as those of single persons earning $3,000 or more, were subject to a one percent federal tax. Further, the measure provided a progressive tax structure, meaning that high income earners were required to pay at higher rates.

The men who wrote the U.S. Constitution knew by experience and from their forefathers that whenever in history a nation had a central direct power of taxation or central cartel banking, that tyranny always followed. It might take half a century, but as power corrupts, absolute power corrupts absolutely.

"I sincerely believe, with you, that banking establishments are more dangerous than standing armies; and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale." - Thomas Jefferson.

The U.S. Constitution reflects our contempt of hierarchies and our certain knowledge that each and every hierarchy in all history inevitably became corrupt. The American genius was the systems of checks and balances and competition which keep institutions honest and incorruptible. These ideas and ideals created the greatest economic engine in history.

The two types of taxation were intended by our forefathers to serve exclusive and separate jurisdictions in absolute, with direct taxation local and close at hand leaving no possibility of federal tax tyranny. Direct taxation carries the power to destroy, so our forefathers insisted on direct taxation for local government. The feds are only permitted indirect taxation so that private property would not be at risk to a corruptible central body and would, thusly remain sacred.

The Federal Reserve and the U.S. Dollar
The Federal Reserve creates inflation when it issues US dollars backed by government debt. Since 1913, when the Federal Reserve was created by Congress, your money has lost 96% of its purchasing power due to inflation. The more "money" the Federal Reserve creates - the less your Federal Reserve "money" will buy. From 1913 to 2001 the national debt grew to $6 trillion in 88 years. In the next three years it climbed to $7 trillion dollars in 2004. In just one year it climbed sharply to over $8 trillion dollars. The acceleration of the national debt is alarming. The corresponding loss of your purchasing power may also accelerate in the near future.

There was and is a conspiracy.
As soon as direct federal tax was legislated with the 16th Amendment to the Constitution, hundreds of bureaus and agencies, federal departments, sprung up, all of which cost money. All these organs, duplicated the function of the state organs and their jurisdictions and, thus, are illegal or at least utterly contrary to the intentions of the founding fathers, and the massive costs of this idiocy are the cause of most of our miseries, debts and deficits.

Because the payment of tax has been made compulsory and enforced by a coercive police and justice system, it can be viewed as institutionalized violence equivalent to theft. And, to add insult to injury, tax protester constitutional arguments that assert that the imposition of the income tax in the United States violates the United States Constitution, have themselves been deemed unlawful (or frivolous) by the IRS, punishable by a $5,000 frivolous tax return penalty imposed under Internal Revenue Code section 6702(a). In addition, under the United States Supreme Court ruling in Cheek v. United States, a defendant in a tax evasion prosecution who has made arguments that the Federal income tax laws are unconstitutional may have the arguments turned against him (or her). Such arguments, even if based on honestly held beliefs, may constitute evidence that helps the prosecutor prove willfulness, one of the elements of tax evasion.

A Central Bank

You cannot fully understand the awesome power to collect taxes from it's citizens without understanding the inter-relatedness of the Federal Reserve System.

There were numerous attempts in the 1880's to create a central bank in America - most of these attempts point back to the Rothschilds. It is interesting that both the original American banking houses that represented Rothschild - August Belmont and the Erlangers - funded the North and the South respectively during America's Civil War. Abraham Lincoln saw the power play behind this masquerade as one bank was seemingly played against the other. The invisible hand underneath was never seen by the multitudes. Lincoln did see it, for he had resisted the pressure to create in America a central private bank that would print its money. He also spotted the "divide-and-conquer" movement where the North was pitted against the South with both sides financed by the same money elite.

Abraham Lincoln battled for the right of Congress and the Treasury to hold the awesome power of coining money. He knew that to surrender this power to private banks was ultimately to surrender the sovereignty of America. Adams and Jefferson had warned of this all along. Defying the hidden bankers, Lincoln issued the greenbacks. Interestingly, Lincoln was soon assassinated.

"The money power preys upon the nation in times of peace & conspires against it in times of war. It is more despotic than monarchy, more insolent than autocracy, more selfish than bureaucracy. It denounces, as public enemies, all who even question its methods or throw light upon its crimes. I have two great enemies, the Southern Army in front of me & the financial institutions at the rear, the latter is my greatest foe.
- President Abraham Lincoln

J. P. Morgan Forty years later John Pierpont Morgan created the Panic of 1907 where the stock market fell nearly 50% from its peak in 1906, the economy was in recession, and there were numerous runs on banks and trust companies.

Early in 1907, Jacob Schiff of Kuhn, Loeb and Co., in a speech to the New York Chamber of Commerce, warned that "unless we have a Central Bank with adequate control of credit resources, this country is going to undergo the most severe and far reaching money panic in its history."

The primary cause of the Panic of 1907 was a retraction of loans by some banks that began in New York and soon spread across the nation, leading to the closings of banks and businesses. Complete ruin of the national economy was averted when J.P. Morgan stepped in by organizing a team of bank and trust executives who redirected money between banks, secured further international lines of credit, and bought plummeting stocks of healthy corporations.

Morgan gained numerous holdings, as well as his bid to be the Rothschild's number-one American agent. J.P. Morgan's real feat and service to Rothschild in the Panic of 1907 was that he created a mood in America to believe that a central bank would prevent such a panic from occurring again and thus became receptive to a central bank. The severity of the downturn was such that it eventually pressured the United States Congress to accept the proposal by a group of bankers to pass the Federal Reserve Act (or Glass-Owen Bill), essentially a blueprint of the Nelson W. Aldrich plan that had been defeated in Congress earlier.

Senate Republican leader and financial expert Nelson Aldrich headed the National Monetary Commission set up following the Panic of 1907. Aldrich set up two commissions — one to study the American monetary system in depth and the other, headed by Aldrich himself, to study the European central-banking systems and report on them.

Centralized banking was met with much opposition from politicians, who were suspicious of a central bank and who charged that Aldrich was biased due to his close ties to wealthy bankers such as J.P. Morgan and his daughter's marriage to John D. Rockefeller, Jr.

In 1910, Aldrich and executives representing the banks of J.P. Morgan, Rockefeller, and Kuhn, Loeb, & Co., secluded themselves for 10 days at Jekyll Island, Georgia. The executives included Frank Vanderlip, president of the National City Bank of New York, associated with the Rockefellers; Henry Davison, senior partner of J.P. Morgan Company; Charles D. Norton, president of the First National Bank of New York; and Col. Edward House, who would later become President Woodrow Wilson's closest adviser and founder of the Council on Foreign Relations. There, Paul Warburg of Kuhn, Loeb, & Co. directed the proceedings and wrote the primary features of the Federal Reserve Act.

This bill allowed a group of bankers to create, buy the shares, and own the Federal Reserve System in 1913. Morgan's own bank, The Morgan Guaranty Trust, was allowed to be among the inner circle of primary owners of the Federal Reserve.

Despite the importance of the Jekyll Island meeting, it remained a secret to both the public and the government until journalist Bertie Charles Forbes wrote an article about it in 1916, three years after the Federal Reserve Act was passed.

The Federal Reserve Act called for the creation of 12 private regional Federal reserve banks acting as fiscal agents for the U.S. Treasury each with its own branches, board of directors and district boundaries, and the System was to be headed by a seven member Federal Reserve Board made up of public officials appointed by the President. Also created as part of the Federal Reserve System was a 12 member Federal Advisory Committee and a single new United States currency, the Federal Reserve Note.

Rep. Charles Lindbergh Sr., the most vocal opponent of the bill and a member of the House Banking and Currency Committee, who on the day before the Federal Reserve Act was passed told Congress:

"This is the Aldrich bill in disguise…The worst legislative crime of the ages is perpetrated by this banking bill…The banks have been granted the special privilege of distributing the money, and they charge as much as they wish…This is the strangest, most dangerous advantage ever placed in the hands of a special privilege class by any Government that ever existed. The system is private...There should be no legal tender other than that issued by the government…The People are the Government. Therefore the Government should, as the Constitution provides, regulate the value of money." (Congressional Record, 1913-12-22)

President Wilson named Warburg and other prominent experts to direct the new system, which began operations in 1915 and played a major role in financing the Allied and American war efforts. Warburg was the only appointee asked to appear before the Senate, whose members questioned him about his interests in the central bank and his ties to Kuhn, Loeb, & Co.'s "money trusts".

With virtually all the banks on the brink of collapse, President Roosevelt succeeded in establishing the Federal Reserve Board as the authority in banking. Independent banks were not forced to join the Federal Reserve System. But those that did not found they could not transact business through any member bank.

The central bank can inflate the currency; it can reallocate funds to distressed areas through loans; and it ccan create money out of thin air through the use of "fractional banking." The central banking system now determines interest rates for virtually every bank in the country. A change in the reserve requirement or discount policy will affect the lives of every American, regardless of their economic status.

The Power of the Purse

The Federal Reserve Act has resulted in the creation of the most powerful monopoly that exists in the United States today. Not only is it powerful, but there is no greater nor more tyrannical combine (except possibly the IRS). They have powers that no other body in this country has in matters of bank trade within their jurisdiction. They have powers which are autocratic in themselves and in their exercise.

Its very existence is contrary to our constitution and the original intent of our founding fathers. This combined with our central governments' theft of the right to direct taxation from our local governments, has created financial slaves of American citizens, stripped of rights once protected by the original constitution.

The actions of The Federal Reserve Board have proven to be the first cause in the death of our economy. The stop-&-go monetary policy created by these institutions makes business conditions unpredictable & thus inhibits investment & productivity. They have also been proven susceptible to political pressure for cheaper credit. When governments control a money supply, even indirectly, they have always throughout history abused that power. Inflationary creation of base money serves to enlarge the governments command over real resources in a way hidden from the people. The wealth-redistributive power of money injections makes it suitable for use as a vote-buying tool. It should be obvious: The monetary disorders of nations can only be caused by their existing monetary authorities, especially in the absence of any real competition, competition, which is the only force which keeps commercial action honest.

The assumption that government has an inherent role in money & banking, (apart from setting standards, as they do with inches and feet, ounces and pounds, minutes and hours) is as preposterous as believing they have a place competing with any private business. In history when banking was most stable it was closest to pure laissez-faire operation. Whenever a nation was growing well, was creative, inventive, & productive you will find a banking system very close to free-enterprise competitive banking. Having politicians & bureaucrats in charge of the money supply is like having Dracula in charge of a blood bank. The banking systems of the western world are the complete & only cause of recessions, inflations, 'stagflations' depressions, panics & runs.

Benjamin Franklin made a visit to England in 1763 and while there he was asked to explain the prosperity of the colonies while on the other hand, England was suffering a bust, he replied: "That is simple. It is only because in the colonies we issue our own money. It is called 'Colonial Scrip' and it is issued in the proper proportions to the demands of trade & industry.

It was not very long until this information was brought to the Rothschild's Bank, and they saw that here was a nation ready to be exploited; here was a nation setting up an example that they could issue their own money instead of the money coming through the banks.

The Rothschild's Bank caused a bill to be introduced in the English Parliament, which provided that no colony of England could issue its own money. "Thus, they had to use English money. The colonies were compelled to discard their money and mortgage themselves to the Rothschild's Bank of England to get money. Then, for the first time in the history of The United States, money began to be based on debt. Benjamin Franklin stated that in one year from that date the streets of the colonies were filled with the unemployed.

The Relationship Between the Federal Reserve Act and the Federal Income Tax

"What is needed here is a return to the Constitution of the United States. We need to have a complete divorce of Bank and State. The old struggle that was fought out here in Jackson's day must be fought over again... The Federal Reserve Act should be repealed and the Federal Reserve Banks, having violated their charters, should be liquidated immediately. Faithless Government officers who have violated their oaths of office should be impeached and brought to trial. Unless this is done by us, I predict that the American people, outraged, robbed, pillaged, insulted, and betrayed as they are in their own land, will rise in their wrath and send a President here who will sweep the money changers out of the temple." - Congressman Louis McFadden