Hendrickson - Cracking the code - The fascinating truth about taxation in America (2003) pdf
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from the Foreword to 'Cracking the Code- The Fascinating Truth About Taxation In America':
It was not until the late 1990’s, when the Internal Revenue Code was digitized (and thus made searchable) that it became possible to decipher its deliberately confusing and misleading construction. Only then could complete searches be done of all 3,413,780 or so words (not counting regulations) for every incidence of “liable”, “imposed”, “income”, “employee”, and dozens of other key or misleading terms-- checking every reference, exception, definition and source. Only then could it be established that, as written, the laws behind the code and the taxes that they impose technically comply with the Constitution, just as all the judges have said over the years.
But the same analysis also reveals that, as written, these laws don’t apply to most of the receipts of most private citizens. Indeed, the two things are interdependent-- the former couldn't be true unless the latter was also true.
What you will learn as you read this book is that specific Constitutional limitations on the federal government’s power to tax do shape related law, and have generated a coherent Supreme Court doctrine which clearly and soundly answers the question of what is taxable "income”. Both the statutes and the doctrine acknowledge the exemption of the vast majority of private-sector receipts from that taxing power’s reach.
However, you will also learn about a complex combination of craft, routine bureaucratic incoherence, and casual-- and not-so-casual-- corruption by virtue of which many people are led to inadvertently allow, and even participate in, the legal transformation of their untaxable earnings into taxable "income”. Such people are tricked into voluntarily and utterly unnecessarily enabling the diversion of a river of wealth from their own hands, usually never to be seen again.
Thanks to an unhappy coincidence of reiterations and amendments of the law, a series of complicated judicial rulings, and the passage of time and memories, the details of American tax law-- and the principles upon which it is based-- have come to be widely misunderstood. The opportunities presented by that reality have been seized upon, by those paid to maximize revenue flow to the government, to successfully construct an elaborate and deceptive tax scheme rooted in today’s Internal Revenue Code.
This scheme capitalizes on widespread public ignorance of general legal doctrine and rules of statutory construction. It practices a careful gauging of extraction levels to the tolerance limits of key demographic segments. It relies upon the concealment of the underlying actual-law-in-force behind the misleading words of the code, which is legally no more than ‘evidence of the law’, and not the law itself.
Fundamental to the scheme is designing that code to be so dauntingly and profoundly confusing as to force the vast majority of those against whom it’s directed to abandon even a pretense of personal comprehension. These targets are thus compelled to surrender their decision-making to the code’s administrative bureaucracy or a professional class of fixers and go-betweens-- the members of either of which are dependent on the scheme for their own earnings. Unsurprisingly, both assure any who ask that of course private-sector receipts are taxed under the law. If pressed, these experts will trot out carefully selected, out-of-context and ambiguous fragments of law calculated to convincingly suggest that what they claim must be in the law, somewhere. But somehow, they never manage to demonstrate exactly where. ‘Cracking the Code’ is going to provide that missing context, unravel the tangle of deceit and confusion, and make clear that not only is it not in there anywhere, what is in there is just the opposite.
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