Utah Tax Commission Still At It

“Perhaps the sentiments contained in the following pages, are not yet sufficiently fashionable to procure them general favor; a long habit of not thinking a thing WRONG, gives it a superficial appearance of being RIGHT, and raises at first a formidable outcry in defence of custom. But the tumult soon subsides. Time makes more converts than reason.

“As long and violent abuse of power, is generally the Means of calling the right of it in question (and in Matters too which might never have been thought of, had not the Sufferers been aggravated into the inquiry) and as the King of England hath undertaken in his OWN RIGHT, to support the Parliament in what he calls THEIRS, and as the good people of this country are grievously oppressed by the combination, they have an undoubted privilege to inquire into the pretensions of both, and equally to reject the usurpation of either.”

COMMON SENSE, Thomas Payne

Preface.  The Utah State Tax Commission has for over a decade sought returns and payment for tax of which they have no jurisdiction.  This memorandum is written to accompany letters which I have and will be writting to them.  It is subject to change and additions as they come to mind.


This memorandum accompanies my inquiry into your pretensions concerning alleged taxes owed to the State of Utah. My views concerning my tax liability and reporting requirements for the years in question are founded upon sound principles espoused by the Supreme Court over the years. If they sound radical, it is only because the government has schooled us away from principles which founded this Nation and by repetition have led us into socialism. Never-the-less, when the respective states enter the Union, they are bound by the United States Constitution. (See Section 4 of the Enabling Act for the territory of Utah)

I wish that I could present these issues to you in a simple letter of one or at least two pages, however, this is not a simple matter. So that you won’t think that I am just another off-the-wall radical, it is essential that I support my conclusions with creditable sources remembering that, “Opinions are valueless as evidence without exploration of the underlying facts and rational showing the path from the facts to the opinion.” (U.S. v. R.J. Reynolds, 416 F. Supp. 316, 325)  Something the legal division of the Tax Commission fails to do.

Keeping this quote in mind, I would like to refer to a Utah case sent to me by the Tax Commission some years ago which involved Mike Jensen, a friend of mine.  Mike, basically told the Tax Commission the principle that I stand on, “I have no federal tax liability, therefore I have no State tax liability.”  In turning back that argument, Justice Stewart, supported his finding upon the admission that the Jensen’s received income from the business, and reasoned that since Mike Jensen had ‘income’ he had a federal tax liability, therefore had a State requirement to file under §59-10-502.   Justice Stewart makes a poor conclusion supported only by his ‘opinion’.  Stewart fails to explore “the underlying facts and rational showing the path from the facts to the opinion.”  The declaration by Mike that he had income has no bearing on his liability for either federal or state tax requirements.  The facts and rational showing the error in Stewart’s opinion would consume several pages, however, moving on, the Jensen case is not applicable in my case.  I have not stipulated that I made ‘income’ for tax purposes.  As you will see, the foundation for my status is entirely different than Mike’s.

It is hoped that you will see the foundation that I have established for my conclusion is sound, for it is upon this foundation that I have determined that I am not required to report or pay Utah State income taxes.  Although my sources mainly deal with the federal income tax, the State of Utah, by using the definition of income as contain in the federal statutes (Title 26 U.S.C.) is committed to all that the term implies.


“. . . [A]ll legislative powers appertain to sovereignty.”

Chief Justice John Marshall, M’Culloch v. Maryland

The basis for my status is firmly founded in the principle of “sovereignty”. I would stipulate as the Supreme Court has said;  “Taxation is a sovereign power in a state; . . . .” Dobbins v. The Comm. of Erie County, 16 Peters 435, 447 (1842)   See also Curry vs. McCanless, 307 U.S. 357, “The power to tax is an incident of sovereignty and is coextensive with sovereignty.”  Sovereignty meaning;  “It is the supreme power by which any citizen is governed and is the person or body of persons in the state to whom there is politically no superior. . . . By ‘sovereignty’ in its largest sense is meant supreme, absolute, uncontrollable power, the absolute right to govern.” ( Black’s Law Dictionary, 6th ed.)

The term “sovereign” itself comes from the concept taught in the European governments with their heritage of kings, queens, dictators and the like. It is not a term that is, or was compatible with our Republic as originally established. Nowhere can the term be found in the founding documents of this nation. Yet we have come to make it a part of our vocabulary, and use it without thought. Sovereignty is a concept inherent in the civil law.

“When we consider the nature and the theory of our institutions of government, the principles upon which they are supposed to rest, and review the history of their development, we are constrained to conclude that they do not mean to leave room for the play and action of purely personal and arbitrary power. Sovereignty itself is, of course, not subject to law, for it is the author and source of law; but in our system, while sovereign powers are delegated to the agencies of government, sovereignty itself remains with the people, by whom and for whom all government exists and acts. The government established by constitutions in this Union, although uncontrollable in their abuse of power, do not have the ‘right’ to govern. The officers of this government hold office as a ‘privilege’. The supreme power of government remains with the people.” Yick Wo v. Hopkins, 118 U.S. 356, 370

“There is no such thing as government sovereignty, or provided for, in our National Constitution. Under our form of government sovereignty is in the people collectively constituting the State, and not the body of men who, for the time being, are invested by them, with civil authority.” ( Moses Thacher on Civil Government )   The Supreme Court supports the statement by Moses Thacher saying, “Jurisdiction is a quality of the sovereign and the Federal Government has no inherent sovereign powers.” (Hodges v. U.S., 203 U.S. 1)

To quote former Chief Justice John Marshall:  “It is admitted that the power of taxing the people and their property is essential to the very existence of government, and may be legitimately exercised on the objects to which it is applicable, to the utmost extent to which the government may choose to carry it. The only security against the abuse of this power, is found in the structure of the government itself. In imposing a tax the legislature acts upon its constituents. This is in general a sufficient security against erroneous and oppressive taxation.

“It may be objected to this definition, that the power of taxation is not confined to the people and property of a State. It may be exercised upon every object brought within its jurisdiction.

“This is true. But to what source do we trace this right? It is obvious, that it is as incident of sovereignty;  and is co-extensive with that to which it is an incident. All subjects over which the sovereignty power of a state extends, are objects of taxation; but those over which it does not extend, are, upon the soundest principles, exempt from taxation. This proposition may almost be pronounced self-evident.”  M’Cullock vs. Maryland, 4 Wheaton 316 [1819]  This principle that taxation is an authority inherent in the sovereign has never been rebutted or over-ruled by any court.

If Chief Justice Marshall is not lying to us, and I do not believe that he is, the question to be addressed is not do I owe a tax; but is the State of Utah, in this relationship (state vs. individual), the sovereign? Or is the individual the sovereign?

In the same opinion, Chief Justice Marshall identifies the attributes that create a sovereign/subject relationship. He states:  “The sovereignty of a State extends to every thing which exists by; its own authority, or is introduced by its permission; . . . .” ( M’Cullock vs. Maryland)

Concerning the sovereignty in our Republic, in a decision handed down by the Supreme Court in the early years of our Republic, Justice Wilson stated;  “. . . For, in an instrument well drawn, as in a poem well composed, silence is sometimes most expressive.

“To the Constitution of the United States the term sovereignty, is totally unknown. There is but one place where it could have been used with propriety, but, even in that place it would not, perhaps, have comported with the delicacy of those, who ordained and established that Constitution. They might have announced themselves ‘sovereign’ people of the United States; but serenely conscious of the fact, they avoided the ostentatious declaration.”

Chief Justice Jay, in the same opinion;  “. . . It is remarkable that in establishing it, the people exercised their own rights, and their own proper sovereignty, and conscious of the plenitude of it, they declared with becoming dignity, ‘We the people of the United States, do ordain and establish this Constitution.’” (Oswald vs the State of New York, 2 Dallas 415)

“This belief in the sovereign power of political machinery is not born with men; they are taught it. And how are they taught it? Evidently by these preachers of universal legislative superintendence — by the pretensions of statesmen themselves — and by having seen from their childhood, all kinds of functions undertaken by government officials.” (Moses Thacher)

While the people delegate some of their sovereign powers to government, original sovereignty remains with the people.  “[W]hile sovereign powers are delegated to the agencies of government, sovereignty itself remains with the people.” Yick Wo v. Hopkins, 118 U.S. 356, 370

“In one sense, the term sovereign has for its correlative, subject, In this sense, the term can receive no application; for it has no object in the Constitution of the United States. Under that Constitution there are citizens, but no subjects. ‘Citizen of the United States*’. ‘Citizens of another State.’ ‘Citizens of different States.’  ‘A State or citizen thereof*’. The term, subject,occurs, indeed, once in the instrument; but to mark the contrast strongly, the epithet ‘foreign’* is prefixed. . . .  (p.456)

“. . .  The sovereign, when traced to his source, must be found in the man.”  (Chisholm v. Georgia, 2 U.S. 419, 458


Sovereign authority is essential to the operation of not only taxation by the government, but also the jurisdiction of the court system which operates under the civil law. The civil law is a system of laws which is distinguished from the common law. England ruled the colonies under the civil law. It was this system of law that the colonist despised. “They have subjected us to a jurisdiction foreign to our constitution . . . .” (Declaration of Independence) “It has indeed been said, that this extensive jurisdiction of the admiralty in the colonies was the subject of complaint at the time of the Revolution; and it is undoubtedly true, that the extension of the admiralty Jurisdiction beyond its ancient limits was, in some petitions and public documents, stated as one of the grievances of the colonies.”  Benedict on Admiralty, 7th Ed., vol 1, Jurisdiction, §72

Admiralty may have been cast out of the land as a result of the revolutionary war, but our legal system has successfully brought it back.  “The countries that earliest reduced the law of the sea to a system, and adopted codes of maritime regulations, having been countries in which the Roman or civil law prevailed, the principles of that great system of jurisprudence were incorporated with, and gave character to, the maritime law; and so much were pure reason, abstract right, and practical justice mingled in that system, and so important was it that the general maritime law should be uniform and universal, that, in England, where the common law was the of the land, the civil law was held to be the law of the admiralty, and the course of proceedings in admiralty closely resembled the civil law practice.” Benedict on Admiralty, 7th Ed., vol. 1, Jurisdiction, §15

Justice Johnson in writing his concurring opinion noted that it was “high time to check this silent and stealing progress of the admiralty in acquiring jurisdiction to which it has not pretensions.”  The only saving principle is that to be brought under the system, there must be an agreement, contract, stipulation, etc., as noted by Justice Johnson quoting from “Browne, 2 vol., p. 100, lays down the rule in these terms:  ‘The general rule, however, at present is that the admiralty acts only in rem, and that no person can be subject to that jurisdiction but by his consent, expressed by his entering into a stipulation. . . .”  Continuing on the Justice quotes “[i]n Keble’s Reports, p. 500, quoted by Browne, it is expressly said ‘that without a stipulation, the admiralty has no jurisdiction at all over the person.” Ramsay v. Allegree, 25 U.S. 611, 269 (1827)

An extensive discourse on the conflict between the civil law and the common law for control of the country was given by Justice Baldwin.  After describing the civil as a “jewel” in the royal crown of England, he concludes;  “It is therefore a self evident proposition, that the jurisprudence of the United States is not founded in the civil law, …” (U.S. Federal Court, “Bains vs. The James and Catherine,” 2 Federal Cases, 756 at 419 )

When the Constitution refers to the “supreme law of the land”, it is not referring to the civil law, but to the common law. It is interesting to note that the State of Utah has attempted to devolve the common law under HRS Title 76-1-105, bringing back Admiralty into the State.  “Common law crimes are abolished and no conduct is a crime unless made so by this code, or applicable statutes or ordinances.”  There are only two systems of laws, you either have the Common law, the law of the land or Admiralty, commonly known as the Civil law or law of the sea.

To be liable for any legislation developed under the Civil law, one must be made liable by entering into a stipulation, like a signed 1040 form admitting the liability or entering into a ‘privileged’ occupation created by the government.  This is why when several years ago the Tax Commission wanted me to provide the 1040 forms, because without them they had no stipulation of by liability.


Does the state have the authority to impose an income tax me? Notwithstanding the principle of sovereignty, where does the State of Utah get its authority to legislate? The only obvious answer is from the people. This being true, then what can the people give to the state? Again the answer is only to obvious.  This is found in the doctrine of ‘delegation of authority.’

“… The proper function of government, then, is limited to those spheres of activity within which the individual citizen has the right to act. … It cannot claim the power to redistribute money or property nor force reluctant citizens to perform acts of charity against their will. … No individual possesses the power to take another’s wealth or to force others to do good, so no government has the right to do such things either. The creature cannot exceed the creator.” (Ezra Taft Benson, “The Constitution, A Heavenly Banner,” p. 9)

Continuing from his address given several years earlier, President Benson adds;  “The individual citizens delegate to the (government) their unquestionable right to (lawful defence). (Government) now does for them only what they had a right to do for themselves — nothing more. . . .”

President Benson then uses the example;  “Suppose (individual) ‘A’ wants another horse for his wagon. He doesn’t have the money to buy one, but since (individual) ‘B’ has an extra horse, he decides that he is entitled to share in his good fortune. Is he entitled to take his neighbor’s horse? Obviously not! If his neighbor wishes to give it or lend it, that is another question. But so long as (individual) ‘B’ wishes to keep his property, (individual) ‘A’ has no claim to it.

“If ‘A’ has no power to take ‘B’s property, can he delegate any such power to the (government)? No! Even if everyone in the community desires that ‘B’ give his extra horse to ‘A’, they have no right individually or collectively to force him to do it. They cannot delegate a power they themselves do not have. This important principle was clearly understood and explained by John Lock nearly 300 years ago.

“For nobody can transfer to another more power than he has in himself, and nobody has an absolute arbitrary power over himself, or over any other, to destroy his own life, or take away the life or property of another.” Two Treatises on Government, II, p. 135; Op. cit., “The Constitution of Liberty,” p. 106-107

Several decades before Benson gave this address, the principle was set by Supreme Court Justice Chase; “There are certain vital principles in our free Republican governments, which will determine and over-rule an apparent and flagrant abuse of legislative power; as to authorize manifest injustice by positive law; or to take away that security for personal liberty, or private property, for the protection whereof the government was established. An act of the Legislature (for I cannot call it a law) contrary to the great first principles of the social compact, cannot be considered a rightful exercise of legislative authority.  The obligation of a law in governments established on express compact, and on republican principles, must be determined by the nature of the power, on which it is founded.  A few instances will suffice to explain what I mean. . . . ;

” “[A] law that makes a man a Judge in his own cause; or a law that takes property from A and gives it to B. It is against all reason and justice, for a people to entrust a Legislature with such powers; and, therefore, it cannot be presumed that they have done it. . . .

“With very few exceptions, the advocates of such laws were stimulated by ambition, or personal resentment, and vindictive malice.”  Calder v. Bull, 3 U.S. 386, 389 (1798)

Think carefully upon the words of Chief Justice Warren’s comments in Lucas vs. Forth-Fourth General Ass’m of Colorado, (377 U.S. 713 [1963]):  “As stated by this Court in West Virginia State Bd. Of Educ. v. Barnette, 319 U.S. 624, 638, ‘One’s right to life, liberty, and property . . . and other fundamental rights may not be submitted to vote; they depend on the outcome of no elections.’”  Justice Warren then adds,  “A citizen’s constitutional rights can hardly be infringed simply because a majority of the people choose that it be.” (p. 737)

“This means that the power of the majority is limited by those commonly held principles and that there is no legitimate power beyond them.” (Friedrich A. Hayek, The Constitution of Liberty)

“For, the very idea that one man may be compelled to hold his life, or the means of living, or any material right essential to the enjoyment of life, at the mere will of another, seems to be intolerable in any country where freedom prevails, as being the essence of slavery itself.” (Yick Wo vs. Hopkins, 118 U.S. 356, 370)

“It must be conceded that there are such rights in every free government beyond the control of the state.  A government which recognizes no such rights, which held the lives, the liberty, and the property of its citizens subject at all times to the absolute disposition and unlimited control of even the most democratic depository of power, is after all but a despotism. It is true it is a despotism of the many, of the majority, if you choose it so, but it is none the less a despotism.” (Loan Association vs. Topeka, 20 Wallace 655)

The powers delegated to government come from the people. As has been said time and time again, only those rights which the people possess can be given. No one has any right over another’s property, therefore, government has no “sovereign” powers over the property of the people.  “The right never existed, and the question whether it has been surrendered, can not arise.” (Chief Justice Marshall, Supreme Court decision, “M’Cullock vs. Maryland,” at p. 431)

In Frederic Bastiat’s commentary on The Law (1850), he contrasts the purpose of law in society in these words:  “If every person has the right to defend – even by force – his person, his liberty, and his property, then it follows that a group of men have the right to organize and support a common force to protect these rights constantly. Thus the principle of collective right – its reason for existing, its lawfulness – is based on individual right. And the common force that protects this collective right cannot logically have any other purpose or any other mission than that for which it acts as a substitute. Thus, since an individual cannot lawfully use force against the person, liberty, or property of another individual, then the common force – for the same reason – cannot lawfully be used to destroy the person, liberty, or property of individuals or groups. . . .

“. . . The law is the organization of the natural right of lawful defense. It is the substitution of a common force for individual forces. And this common force is to do only what the individual forces have a natural and lawful right to do: to protect persons, liberties, and properties; to maintain the right of each, and to cause justice to reign over us all.”


“[T]he sovereignty of the state, in the article of taxation itself, is subordinate to, and may be controlled by the constitution of the United States.”  M’Culloch v. Maryland,  p. 427

The State of Utah, as a condition of its admission into the Union, accepts the principles of the U.S. Constitution. One of these principles deals with taxation.  In Article I Section 8, clause 1 and Section 9, clause 4 of the Constitution one of limitations on the taxing power is that direct taxes shall be apportioned and indirect taxes are to be uniform.  The Court has stipulated that; “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.” (Brushaber v. Union Pac. R.R., 240 U.S. 1, 13 [1915]; Bromley v. C.I.R., 280 U.S. 124 [1922])

There are distinct differences between direct and indirect taxes. The U.S. Supreme Court has identified these differences:  “Direct taxes bear immediately upon persons, upon the possession and enjoyment of rights; indirect taxes are levied upon the happening of an event or an exchange.” (Knowlton vs. Moore,178 U.S. 41 [1899], p. 47)  In the Pollock Case [1894] the Court said this about direct and indirect taxes:  “. . . Ordinarily all taxes paid primarily by persons who can shift the burden upon some one else, or who are under no legal compulsion to pay them, are indirect taxes; but a tax upon property holders in respect of their estates, whether real or personal, or of the income yielded by such estates, and the payment of which cannot be avoided, are direct taxes.

“An excise duty is an inland impost, levied upon articles of manufacture or sale, and also upon licenses to pursue certain trades or to deal in certain commodities. (Cooley on Taxation)” (Pollock vs. Farmers’ Loan & Trust, 158 U.S. 601; New Neighbor v. W. Va. Worker’s Comp. Fund, 886 F. 2d 714 ; 4th Cir. [1989]; also Flint v. Stone Tracy, 228 U.S. 107 [1910])

The distinction between the two different classes of taxes is clearly explained in the above cited cases. The question now is: What class of tax, direct or indirect, does the federal and state income tax belong?  Taxes on income have always been sustained as excise taxes. (See Brushaber vs. Union Pac. R.R., 240 U.S. 1, [1915] a land mark decision on the income tax and the 16th Amendment).    “An ‘excise’ (which is what the income tax is), is a charge for the privilege of following an occupation or trade or carrying on a business.” (Words and Phrases; Sley System Garages vs. City of Pa., 5 A 2d 583)

“Excise taxes are of the indirect type, (Bank of Commerce & Trust Co. v. Senter, 260 S.W. 144, 147, 149 Tenn. 569; Scholey v. Rew, 90 U.S. (23 Wall.) 331, 346, 23 L. Ed. 99, citing Webst. Dict.; Patton v. Brady, 22 S. Ct. 493, 496, 184 U.S. 608, 46 L. Ed. 713) because they can be passed on while property taxes are of the direct type.  “The term “excise tax”, “license tax”, and “privilege tax” are synonymous and are used interchangeably to extent that they are all “indirect taxes” which are imposed upon the acts of persons, whereas a “direct tax” is one which is imposed upon persons themselves or upon property owned by them.” (Roberts v. City of Baton Rouge, 108 So. 2d 111, 121, 236 La. 521; Brushaber v. Union Pacific R.R. Co., supra; Flint v. Stone Tracy Co., 220 U.S. 107 (1910); Helvering v. Davis, 301 U.S. 619; Brandon v. State Revenue Commission, 186 S.E. 872; Monteith Bros. Co. v. Depart. Of Treasury of Indiana, 19 N.E. 2d 1010, 215 Ind. 428; Diefendorf v. Gallet, 10 P. 2d 307, 313, 51 Idaho 619; see Words and Phrases for other cited cases))

There seems to be some disagreement in the legal profession.  Most of the ‘lawyers, and those who are elevated to various degrees in the judicial seats, attribute the authority to impose the income tax on the Sixteenth Amendment as expressed by Utah’s Senator Hatch;  “However, at present, U.S. law requires individuals earning income in the United States to file and pay Federal income taxes. This power to collect tax on income arises primarily from the 16th Amendment to the Constitution . . . .”  However the Supreme Court identifies the Sixteenth Amendment in a different light.  “[T]he Sixteenth Amendment conferred no new power of taxation but simply prohibited the previous complete and plenary power of income taxation possessed by Congress from the beginning from being taken out of the category of indirect taxation to which it inherently belonged.” (Stanton v. Baltic Mining Co., 240 U.S. 103 [1916])

The nature of the excise tax is a key element in the principle of taxation … as “rights” are not the subject of an “excise” tax. The Supreme Court took on a controversy involving the Jehovah’s Witnesses. (Murdock vs. Pennsylvania, 319 U.S. 105, 115 [1942]) The subject in this case deals with a religious practice of the church. A practice which is not granted nor created by the state.  Although the Court confuses ‘rights’ and ‘privileges’, Justice Douglas, in his opinion, refers to this practice as a “privilege” granted by the Constitution. Government should remember that the Constitution does not grant rights or privileges to individuals. This document is a grant of power to organize the government, and is a limitation on their power or authority.

Note worthy comments by Justice Douglas include:  “The power to tax the exercise of a privilege is the power to control or suppress its enjoyment.” (p. 112; See also, Grosjean v. American Press Co., 297 U. S. 233 [1936]) “It is contended, however, that the fact that the license tax can suppress or control this activity is unimportant if it does not do so. But that is to disregard the nature of this tax. It is a license tax – a flat tax imposed on the exercise of a privilege granted by the Bill of Rights.  A state may not impose a charge for the enjoyment of a right granted by the Federal Constitution. . . . The power to impose a license tax on the exercise of these freedoms is indeed as potent as the power of censorship which the Court has repeatedly struck down.” (p. 113)  ; See also Miranda v. Arizona, 384 U.S. 436 at page 491; “Where rights are secured by the Constitution are involved, there can be no rule making or legislation which would abrogate them.”

“… Excises have been defined as taxes laid upon the manufacture, sale or consumption of commodities within the country, upon licenses to pursue certain occupations, and upon corporate privileges. . . ., it seems convenient to regard excises as including all internal taxes that are not property taxes, . . . So regarded, excises include income taxes.” (Herman vs. Baltimore, 189 Md. 191; 173 A.L.R. 1310, 1314)

In order to avoid a constitutional challenge as was in the Pollock case, the income tax, being an excise, is not imposed on income as such.  In a report prepared for Congress by F. Morse Hubbard, formerly of the legislative drafting research fund of Columbia University and former legislative draftsman in the Treasury Department, explains this in his report published in the March 27, 1943 edition of the Congressional Record-House, at pages 2579 et seq.  The first part of the Hubbard report is titled, The Income Tax is an Excise Tax, and Income is Merely the Basis for Determining it Amount. An excerpt from the report on page 2580 frames the nature of Federal Income Taxes:  “The sixteenth amendment authorizes the taxation of income from whatever source derived thus taxing investment income without apportionment among the several States. The Supreme Court has held that the sixteenth amendment did not extend the taxing power of the United States to new or excepted subjects but merely removed the necessity which might otherwise exist for an apportionment among the States of taxes laid on income whether it be received from one source or another. So the amendment made it possible to bring investment income within the scope of the general income-tax law, but did not change the character of the tax. It is still fundamentally an excise or duty with respect to the privilege of carrying on the activity or owning any property which produces income.

“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 tax.”  The court in New York followed this in saying; “In form, the tax is one upon the value of a privilege, and income is nothing but the measure.” (Portland Cement vs. Knapp, 230 N.Y. 48, 68)  Also echoed by the Supreme Court in Flint vs. Stone Tracy Co., 220 U.S. 107,165; “It is therefore well settled by the decisions of this court that when the sovereign authority has exercised the right to tax a legitimate subject of taxation as an exercise of a franchise or privilege, it is no objection that the measure of taxation is found in the income produced in part from property which of itself considered is non-taxable.”

The foundation set at this point is that (1) taxation is a power of a sovereign; (2) the government has no inherent sovereign powers; (3) sovereignty remains with the people who delegate certain sovereign authority to the government; (4) the income tax is an excise tax in the class of indirect taxes; and (5) excise taxes are not imposed upon income. Income is only the measure of the tax. (6) Excise taxes are imposed upon taxable events, privilege, and such.

(1) If the State is the “sovereign” in this action, what facts are present to support the claim? What am I doing that would be a result of State permission? What am I doing that is a result of the State’s creation?

(2)The income tax, being an “indirect” tax; why is it collecting the tax as you would a “direct” tax?

(3) By the State’s administration of the income tax laws one would believe that “income” is the object of the tax law. Is this true?

With this being true, take a moment to observe what the State of Utah is doing with its income tax laws. The State government is taxing the rights of the people of Utah, collecting a “direct tax” in opposition to the mandate of the U.S. Constitution.  In the first instance, it is important to understand just what the State is taxing.


It is contended by the federal government that the Sixteenth Amendment created a new and different type of tax, that although being direct, it was not subject to the conditions set out by the Constitution that all direct taxes are to be apportioned.

This contention was adequately addressed by the Supreme Court in the opinion of Justice White, (Brushaber v. Union Pacific R.R., 240 U.S. 1)  “We are of the opinion, . . ., that the confusion . . . arises from the conclusion that the Sixteenth Amendment provides for a hitherto unknown power of taxation, that is, a power to levy an income tax which although direct should not be subject to the regulation of apportionment applicable to all other direct taxes. . . .[T]he far-reaching effect of this erroneous assumption will be made clear . . ..

“[I]t results that the proposition and the contentions under it, if acceded to, would cause one provision of the Constitution to destroy another; that is, they would result in bringing the provisions of the Amendment exempting a direct tax from apportionment into irreconcilable conflict with the general requirement that all direct taxes be apportioned. . . This result instead of simplifying the situation and making clear the limitations on the taxing power, . . ., would create radical and destructive changes in our constitutional system and multiply confusion.

“From this in substance it indisputably arises, first, that all the contentions which we have previously noticed concerning the assumed limitations to be implied from the language of the Amendment as to the nature and character of the income taxes which it authorizes find no support in the text and are in irreconcilable conflict with the very purpose which the Amendment was adopted to accomplish. Second, that the contention that the Amendment treats a tax on income as a direct tax although it is relieved from apportionment and is necessarily therefore not subject to the rule of uniformity as such rule only applies to taxes which are not direct, . . ., is . . . wholly without foundation. . . .”

With this explained that the tax is not associated with the source. The purpose of the amendment was as the Congressional Research Service explains:  “The Supreme Court, in a decision written by Chief Justice White, first noted that the Sixteenth Amendment did not authorize any new type of tax, nor did it repeal or revoke the tax clauses of Article I of the Constitution, quoted above. Direct taxes were, notwithstanding the advent of the Sixteenth Amendment, still subject to the rule of apportionment and indirect taxes were still subject to the rule of uniformity. Rather, the Court found that the Sixteenth Amendment sought to restrain the Court from viewing an income tax as a direct tax because of its close effect on the underlying property.

“The Court noted that the inherent character of an income tax was that of an indirect tax, stating: “Moreover in addition the conclusion reached in the Pollock Case did not in any degree involve the holding that income taxes generically and necessarily came within the class of direct taxes on property, but on the contrary recognized the fact that taxation on income was in the nature an excise entitled to be enforced as such unless and until it was concluded that to enforce it would amount to accomplishing the result which the requirement as to apportionment of direct taxes was adopted to prevent, in which case the duty would arise to disregard form and consider substance alone and hence subject the tax to the regulation as to apportionment which otherwise as an excise would not apply to it.” (CONGRESSIONAL RESEARCH SERVICE REPORT FOR CONGRESS, FREQUENTLY ASKED QUESTIONS CONCERNING THE FEDERAL INCOME TAX, John R. Luckey Legislative Attorney, American Law Division, November 17, 1989 Revised March 13, 1992)

The preceding information from the government make it clear to this tax researcher that it is important to know what the State of Utah is taxing.


Just because the State legislature sits in session and passes laws, doesn’t mean that the laws passed create an obligation on every citizen. Legislation, as well as taxation is an inherent attribute of the sovereign. It is conceded that like the federal government, state governments are supreme within their sphere or domain. The purpose of constitutions is to define the limits of that domain, i.e., Article I Section 8, clause 17 outlines the legislative jurisdiction of the federal government. Outside of military bases, their jurisdiction within the states is limited to areas ceded to them by the state legislatures. Chief Justice Rhenquist stated:  “. . . Congress has plenary power over the District of Columbia and the territories. The grant of comprehensive legislative power over certain areas of the Nation, when read in conjunction with the rest of the Constitution, further confirms that Congress was not ceded plenary authority over the whole Nation.” (United States v. Lopez [1995]; See Justice Thomas’ opinion in the same case ; also Justice O’Connel in New York v United States, 505 U.S. _,_ [1992])

In essence, the legislative authority of Congress is plenary (full and complete) ONLY within its’ sphere of activity. (Dobbins v. Commissioner, 16 Peters 435; Pacific Ins. Co. v. Soule, 7 Wall 433; New York v. United States et al., 91-543)  “The legislative powers vested in Congress are specified and enumerated in the eighth section of the first article of the Constitution, . . ” (James Madison)  “The Government of the United States is a limited Government, instituted for great national purposes, and for those only.” (James Monroe)

Their authority is also limited by the natural rights of the people.  This last principle was mentioned by Supreme Court Justice O’Connel in the Lopez case:  “Congress exercises its conferred powers subject to the limitations contained in the Constitution. Thus, for example, under the Commerce Clause Congress may regulate publishers engaged in interstate commerce, but Congress is constrained in the exercise of that power by the First Amendment. . . .  The canon of construction which teaches that legislation of Congress, unless a contrary intent appears, is meant to apply only within the territorial jurisdiction of the United States, is a valid approach whereby unexpressed congressional intent may be ascertained.” (United States v. Lopez,  514 U.S. 549 [1995])

“There is no such thing in the theory of our national government as unlimited power of taxation in Congress. There are limitations of its powers arising out of the essential nature of all free governments; there are reservations of individual rights, without which society could not exist, and which are respected by every government. The right of taxation is subject to these limitations.” ( Loan Associates vs. Topeka, 20 Wall. 655; Parkersburg vs. Brown, 106 U.S. 487)

It would help a great deal is the State of Utah would specify just what it is taxing. Are you taxing my right to work? You seem to be taxing my employment earnings and any business venture. Are you taxing by “right” to live in the State? The statute in effect states that “any individual residing in the State, etc.” Is living in the State of Utah now a “privilege”?

By experience I have found that the states know that they can only regulate and tax privileges, therefore, they take what is a common right of all people and convert it into a privilege. Now they can tax and regulate.

As far as taxing the common law right of working, the Supreme Court is consistent when it stated:  “While the Court has not attempted to define with exactness the liberty thus guaranteed (by the 14th Amendment), the term has received much consideration and some of the included things have been definitely stated. Without doubt, it denotes not merely freedom from bodily restraint but also the right of the individual to contract, to engage in any of the common occupations of life, … The established doctrine is that this liberty may not be interfered with, under the guise of protecting the public interest, …” (Meyer vs. Nebraska, 262 U.S. 390,399-400)

“The right to follow any of the common occupations of life is an inalienable right; it was formulated as such under the phrase ‘pursuit of happiness” ….” (Butchers’ Union Co. vs. Crescent Union Co., 111 U.S. 746, 762)

“Since the right to receive income or earnings is a right belonging to every person, this right cannot be taxed as privilege.” (Jack Cole Co. vs. MacFarland, 337 S.W. 2d 453, 456 [1990])

Likewise, the courts are just as definite about the rights of individuals to live and enjoy property:  “Property, per se, has no rights, but the individual– the man — has three great rights, equally sacred from arbitrary interference: the right to life, the right to liberty, and the right to property. The three rights are so bound together as to be essentially one right. To give man his life, but deny him his liberty, is to take from him all that makes life worth living. To give him liberty but take from him the property which is the fruit and badge of his liberty, is to still leave him a slave.” (Justice George Sutherland, address to the New York Bar Association, Jan. 21, 1921)

“The individual, unlike the corporation, cannot be taxed for the mere privilege of existing. …., the individuals’ rights to live and own property are natural rights for which the enjoyment of which an excise cannot be imposed.” ( Redfield vs. Fisher, 292 P. 813, 819)

“The power to destroy which may be the consequence of taxation is a reason why the right to tax should be confined to subjects which may be lawfully embraced therein, even although it happens that in some particular instance no great harm may be caused by the exercise of the taxing authority as to a subject which is beyond its scope.” (Knowlton vs. Moore, 178 U.S. 41)

Property consists not only in land, cars and the like it also takes the form of labor, contracts of employment, wages or salaries earned, a trade or calling, and so on. (Legal Reference, C.J.S., section 12, pp. 181-182)

“The right [to labor] is as essential to the laborer as to the capitalist, to the poor as to the rich; for the vast majority of persons have no other honest way to begin to acquire property, save by working for money.” (Coppage vs. Kansas, 236 U.S. 1, 14)



“The United States shall guarantee to every State in this Union a Republican Form of Government, . . .”  U.S. Constitution, Article IV, Section 4


“The people of the State created, the people of the State can only change, its Constitution. Upon this power there is no other limitation but that imposed by the Constitution of the United States; that it must be of the Republican form.”  Chisholm v. Georgia, 2 U.S. 419


This section in the Constitution has important implications in formulating our foundation.  We have a problem in our Nation today as we tend to confuse the two systems of government; democracy and republicanism.  Madison, in his letter No. 14, addresses the same problem during the ratification of the Constitution.  “I remark here only, that it seems to owe its rise and prevalence, chiefly to the confounding of a republic with a democracy.  And applying to the former reasonings drawn from the nature of the latter. . . .

“. . . Under the confusion of names, it has been an easy task to transfer to a republic, observations applicable to a democracy only, . . .” (Federalist Papers)  Madison saw the advantage of a republic vs. a democracy as a republic best covers a wider expanse where a democracy operates directly from the people, which is more conducive to a smaller area.  In commenting on a ‘Republican form of government’, Wikipedia notes the following: “. . . one in which the powers of sovereignty are vested in the people and are exercised by the people, either directly, or through representatives chosen by the people, to whom those powers are specially delegated. Unlike the democratic form of government, in which the powers of sovereignty are vested in the whole body of free citizens, individuals retain sovereign prerogatives over their private property rights (absolute ownership) of their person, labor and property. . . .

Basic concept: The Republican form is based on the foundation that people are supreme, and governments are instituted to help secure their rights to life, liberty and property. Examples of sovereign prerogatives are the right to defend private property with deadly force, right of locomotion (freedom to travel) upon public roads and waterways, and free exercise of rights and powers.

Philosophical foundations:  The political philosophy of the classical republics, such as The Roman republic, Icelandic Commonwealth, and the Carthaginian Republic, have had a central influence on republican thought throughout the subsequent centuries. A number of classical writers discussed forms of government alternative to monarchies and later writers have treated these as foundational works on the nature of republics. Philosophers and politicians advocating for republics, such as Machiavelli, Montesquieu, Adams, and Madison, relied heavily on these sources.

Common misconceptions:  It is a common error to assume that a republic is synonymous with a republican form of government. Many are misled to assume that the republican form is merely a populist democracy limited by constitution. In fact, exercising political liberty (voting and holding office) requires one to step down in status, changing from the republican form to the democratic form. American citizens are assumed to have voluntarily accepted obligations and duties associated with democracy that are inapplicable to the people at large. For example, conscription, if compulsory, would be a violation of liberty and life. However, in American law, sovereign people are not subjects to or objects of such impositions – only citizens are obligated.

Another misconception is that elected officials in the legislature are representatives for the people at large. In fact, they can only represent constituents, i.e., citizens / voters who gave consent, thus power of attorney to bind them to obedience. In a republican form, the individual’s delegated representative who exercises power on his behalf, in defense of his life, liberty or property rights is not the legislature but the appropriate executive officer. A sheriff, if within a county, is his representative. Or an ambassador is his representative, if within a foreign nation.”

As opposed to a democracy, where the majority determine the course of government.  In a Republic, the elected officials, representing the people at large, are bound by the Constitution and principles formulated by the Declaration of Independence.  Supreme Court Justice Field expressed the principles of that declaration quite well; “As in our intercourse with our fellow men, certain principles of morality are assumed to exist without which society would be impossible, so certain inherent rights lie at the foundation of all action and upon a recognition of them alone can free institutions be maintained. These inherent rights have never been more happily expressed than in the declaration of independence, that new evangel of liberty to the people: “We hold these truths to be self-evident” — that is, so plain that their truth is recognized upon their mere statement — “that all men are endowed” — not by edicts of emperors, or decrees of Parliament, or acts of Congress, but “by their Creator with certain inalienable rights” — that is, rights which cannot be bartered away, or given away, or taken away, except in punishment of crime — “and that among these are life, liberty, and the pursuit of happiness, and to secure these” — not grant them, but secure them — ‘governments are instituted among men, deriving their just powers from the consent of the governed.’

“Among these inalienable rights, as proclaimed in that great document, is the right of men to pursue their happiness, by which is meant the right to pursue any lawful business or vocation, in any manner not inconsistent with the equal rights of others, which may increase their prosperity or develop their faculties, so as to give to them their highest enjoyment.” (Concurring in Butchers’ Union Co. v. Crescent City Co., 111 U.S. 746, 756, 757 (1884)

In a Republic the majority do not alway dictate the course the government should take, there are other principles that have weight, some of which have been mentioned, e.g.; the sovereignty of the people; delegation of authority; natural rights; territorial jurisdiction; all of these, among others, are limitations on the authority of governments in our Republic.

It is interesting to note that the Constitution does not declare a republican form of government for the Union, only the States.  It was evident at the time that the objects of the federal government were few and defined, dealing with external affairs of the Union, e.g., defense, foreign commerce, treaties, etc.  Of course it is evident that the federal government over the decades has expanded those duties, many of which have no foundation in the Constitution.

There was a comment made by President Pierce in his veto message to the Senate quoted by Justice McReynolds warning of the increase power of the federal government over the States.

“If the time shall ever arrive when, for an object appealing, however strongly, to our sympathies, the dignity of the States shall bow to the dictation of Congress by conforming their legislation thereto, when the power and majesty and honor of those who created shall become subordinate to the thing of their creation, I feebly utter my apprehensions when I express my firm conviction that we shall see ‘the beginning of the end. . . .  (p. 606)

“I can not but repeat what I have before expressed, that if the several States, . . . , shall be led to suppose, as, . . . , they will be, that Congress is to make provisions for such objects, the fountains of charity will be dried up at home, and the several States, instead of bestowing their own means on the social wants of their own people, may themselves, through the strong temptation which appeals to states as to individuals, become humble suppliants for the bounty of the Federal Government, reversing their true relations to this Union. (p. 607) (Steward Machine Co. v. Davis, 301 U.S. 548)

“Say not that this is revenge, call it rather the soft resentment of a suffering people, who, having no object in view but the good of all, have staked their own all upon a seemingly doubtful event. Yet it is folly to argue against determined hardness; eloquence may strike the ear, and the language of sorrow draw forth the tear of compassion, but nothing can reach the heart that is steeled with prejudice.”


Thomas Payne,

Author of “Common Sense”

Gallery | This entry was posted in admiralty jurisdiction, an enemy hath done this, civil law, Constitution, decaying america, Delegation of Authority, Federal income tax, Federal Jurisdiction, freedom, General, Letters to Utah Tax Comission, liberty, Socialism, Sovereignty, State Authority to tax, state's rights and tagged , , , , , . Bookmark the permalink.

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