Fair tax

moneymonger · Feb 29, 2008

I am right in the middle of reading "Fairtax
The Truth" and a question struck me:has there ever been a legitimate court challenge to the progressive income tax from the standpoint of
denial of equal protection under the law? We know that current tax code is riddled with many different subsidies that are afforded to
disparate groups of citizens based on unique disposition. If your particular situation meets
certain criteria, you get a tax subsidy. If your
situation does not meet any standard or criteria, you do not. The equal protection clause clearly defines that all citizens are to be treated equally and does not make an exception for tax law.
Case At point: I am currently self-employed and have a business that is organized as a Sub-chapter -S corporation. My neighbor makes
about the same in w-2 earned wages that I do.
Since I can define the bulk of my income as "dividend" and not as w-2 earned income, I am afforded special savings under the tax code.
My neighbor, who is no less a good citizen than I, is not entitled to the same "better treatment"
under the tax code than I am.
Does this not create a crises in terms of equal protection as applied to the tax code? It does seem to me that this inherent "inequality" built
into the progressive tax code makes it ripe for legal challenge. Further, it can be argued that
this inherent lack of equal treatment has over time created a sort of "caste" system within
our society.

futures_shark · Feb 29, 2008

Quote from moneymonger:

...has there ever been a legitimate court challenge to the progressive income tax from the standpoint of
denial of equal protection under the law?

I understand where you're coming from and agree but what is the text of the law you are citing that gives equal protection. I would guess that the text of the law in question is written in a way to deny it's use for this purpose.

moneymonger · Mar 1, 2008

I understand the equal protection clause to be an all encompassing mandate-to which all law must comply.

futures_shark · Mar 1, 2008

mandate from whom? if there is no written law then there is nothing to be tried in a court of law.

nutmeg · Mar 1, 2008

Similiar situation recently with the tax rebates. I thought at first it was for those who filed a tax return or worked would be eligble for a rebate, the lion roars to includes everyone who breathes.

Equality is on the horizon, perhaps.

futures_shark · Mar 1, 2008

where did you read this? Last I read you were required to file a 2007 return by 4/15/08 to receive the refund.

nutmeg · Mar 1, 2008

Sorry, I defer to you. I don't know how the situation ended up. I only caught the arguements that some people felt left out and the rebate was unequal to certain citizens.

AlmostGotIt · Mar 1, 2008

Quote from moneymonger:

has there ever been a legitimate court challenge to the progressive income tax from the standpoint of denial of equal protection under the law?

this might be a good place to start if you really want to know:

http://www.irs.gov/pub/irs-utl/friv_tax.pdf

moneymonger · Mar 1, 2008

Quote from futures shark "mandate from whom? if there is no written law then there is nothing to be tried in a court of law."

The equal protection clause of the US constitution.

futures_shark · Mar 1, 2008

Quote from moneymonger:

Quote from futures shark "mandate from whom? if there is no written law then there is nothing to be tried in a court of law."

The equal protection clause of the US constitution.

SO you're talking about the 14th amendment?

Amendment XIV

Section 1. All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the state wherein they reside. No state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any state deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws. 

I understand the point you are making but I do not think this clause would be useful in that context. The most glaring omission here is that the clause is referencing the states, not the federal government.

If you want to read about a real case that the IRS lost then check out

http://truthattack.org/

Tom Cryer, an attorney in Louisiana was tried by the IRS for failure to file for 2000 & 2001. He won and his actual court documents and notes are available on the website. I have verified the outcome of the case through PACER**

The main point of his argument is that wages and fees collected in return for services rendered are not "net income" but "Gross Income". For example, If I give you $100 of my time & life and you give me $100 bill there was no net gain for me.

**
Public Access to Court Electronic Records (PACER) is an electronic public access service that allows users to obtain case and docket information from Federal Appellate, District and Bankruptcy courts, and the U.S. Party/Case Index via the Internet.