A Brief History of Income Tax

A Brief History of Income Tax

The controversy surrounding the Sixteenth Amendment is one of my favorite topics when teaching United States Government. The course is designed to put the student in the role of a constitutional scholar, exploring many different viewpoints on the US Constitution. Every year a handful of Americans are jailed for refusing to pay income tax. Too often they cite various libertarian sources that claim the income tax is illegal; therefore conclude they do not have to pay. Let’s take a look at the controversy surrounding the amendment and the Federal Income Tax.
Is current Federal Income tax law illegal? Some opponents of income tax claim that the tax is unconstitutional because the Sixteenth Amendment was improperly ratified. Interestingly, this is partially a fact. The Sixteenth amendment was not ratified properly, but this does not mean that the federal income tax is unlawful, because the Sixteenth Amendment is not the source of the federal government’s power to impose income taxes.
Lets take a look at the constitution: Article I, Section 8, Clause 1 grants the federal government its power to impose taxes: The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States. That article is limited by Article I, Section 2, Clause 3: Representatives and direct Taxes shall be apportioned among the several States, and Article I, Section 9, Clause 4: No Capitation, or other direct Tax, shall be laid, unless in Proportion to the Census or Enumeration….
According to the Founders, any direct tax, such as a property tax, must be levied by the states, according to the rule of apportionment; the Federal Government may uniformly levy indirect taxes such as a duty or excise tax.
Lets skip ahead to 1894. In that year, the federal Income Tax Act of 1894 was passed. But that law was quickly struck down as unconstitutional. As worded, it failed to clearly identify the federal income tax as an indirect tax, and the court determined the 1894 income tax an illegal direct tax (remember the Congress is prohibited from imposing any direct tax). Soon thereafter, Congress sought to clarify the issue by passing an amendment to the Constitution. The Sixteenth Amendment was ‘adopted’ in 1913. It states: The Congress shall have the 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. Carefully note the wording: there is no mention of indirect or direct tax. As a result it’s widely accepted that the Sixteenth Amendment did not grant any new taxation power to Congress. It did not remove any power either. In the end it states only that the federal government can impose an indirect income tax. But even that is anticlimactic because the federal government always had this power.
Now lets look carefully at the definition of excise tax. First of all it’s a tax on transaction and that means it’s an indirect tax. Any tax on transaction is a tax on the privilege of doing something with property, rather than a tax on the property itself. So what’s a privilege? A privilege is any activity that represents value. Because income is a measure of the activity or privilege, it is used as the basis for determining the amount of the tax. We can see this principle in action each time we register an automobile. The excise tax collected by the town is a tax on the transaction of registering the vehicle. The value of the vehicle is the basis for determining the amount of tax.
Finally, the federal income tax is a tax on transaction, evidenced by income, making it an indirect tax, levied by the federal government legally and constitutionally. Beginning in the 1940’s The Sixteenth Amendment has been considered irrelevant to the legality of Federal Income Tax.


Copywrite Gary Kaszas 2009

Farmer's Fungus

Farmer’s Fungus

Micorrhizae (plural, pronounced my-cor-ry-zay) are soil fungi that live symbiotically with most plants, including almost all crops. They are incredibly important to healthy crops and provide yet another example why synthetic fertilizers cannot begin to rival nature.

The word itself is built from ancient Greek. Myco means “fungus” and rhiza means “root”. The words literally mean, “fungus-root”. Back in the 1920”s researchers began studying how plant roots interact with soil life. They noted that living fungal threads invade the young roots in plants. They learned this isn’t damage or disease. Its symbiosis. The fungus takes energy from the plant’s photosynthesis while the roots gradually digest the fungus providing nitrogen directly to the root system, while the digested proteins enter the sap as soluble nutrients.

In modern times research shows that only some micorrhizae invade the roots. Many form a sheath around the roots without penetrating them. The result is a fungal reservoir in the root zone providing a vast storage capacity for water and carbohydrate the plant can draw on. Powerful enzymes released by micorrhizae dissolve and make available hard to capture nutrients like phosphorus and iron and fifteen other nutrients necessary for plant growth. The list of benefits keeps going on. Colonization by micorrhizal fungi protects the plant from parasitic fungi and nematodes, and all the while they excrete antibiotic substances that protect the plant from disease. The filaments that make up micorrhizae improve the soil in other ways. Their sticky threads tighten up loose sandy soils and loosen up hard clay soils.

Its gets even more amazing folks. In the 1990’s research at Oregon State University showed that networks of micorrhizae connected trees of many different species. Birch trees growing in bright sunlight subsidized fir trees in the shade by sharing sugars through the micorrhizae network. A dominant tree can provide nutrients to seedlings, herbs and shrubs in its shade!

Unfortunately modern synthetic agriculture views fungus as an enemy. Broad-spectrum fungicides destroy the target disease and also the beneficial fungi needed for a healthy crop. Synthetic fungicides get washed off the plant and into the soil, or are applied directly to the soil as fumigants or in coated seed thereby destroying the micorrhizal network. The destruction is long lasting too, because it takes several years for the micorrhizae to grow back. All tillage practices change the soil and longer we work it the more we shift the soil balance from fungal to bacterial, and that’s not good for crops. This is why organic growers keep tillage to a minimum.

Micorrhizal fungi are now sometimes referred to as ‘farmers fungus’. The cost is only about $10-$20 per acre and the economic benefits outweigh the costs due to increased crop yield, and less expense in irrigation and fertilizer. One neat thing nowadays is that you can now purchase micorrhizae to inoculate your garden’s soil. The best information is found on the web. I did a quick search and it turned up hundreds of companies selling it by the packet. Although it’s a for-profit organization, check out www.micorrhiza.com It has a super description of micorrhizae application agriculture.

Cutworms

Cut Out the Cutworms

Working in the garden as a child I clearly remember my father pointing out a large clod of soil. He would flip it over and point out the cutworm hiding beneath. He would tell me that cutworms liked to hide there in the daytime. Come nightfall they would be actively feeding, and destroying the pepper and tomato transplants. The lesson was clear: I needed to do a better job cultivating otherwise all the cutworms in the world would soon call our garden their home.

The larvae or caterpillars of some moths are called cutworms because of the manner in which they cut down young plants as they feed. The adults are night-flying moths that feed on nectar, if they feed at all, and do no damage. It’s the larva that is the problem. They feed on plants by chewing through the stems of young seedlings and transplants. Their numbers vary greatly from year to year and, when numerous, can destroy as much as 75% of a crop. They are especially fond of cucumbers, squash, peppers and tomatoes but can do a number on corn and beans too.

Most cutworms pass the winter as partially grown larvae. Come spring they are already voracious feeders when transplants and seedlings are set out. Over wintering cutworms may live under garden debris, in clumps of grass and weeds or in earthen cells in the soil. As the weather warms in spring they remain hidden under debris, or in the soil, and emerge only at night to feed. Luckily there is only one generation per year. The moths crawl from their cocoon cases in the soil and climb up to the surface, following the tunnel made by the burrowing larva. If this tunnel is blocked, the fragile moth cannot escape the soil. The moths often seek out grassy or weedy areas to lay their eggs, and the larvae feed until cold weather and then hide for the winter in sheltered, dry places.

Now lets take a look at the many ways cutworms can be controlled organically. There are several methods of cultural control at your disposal, and if you use most of the methods throughout the gardening season you’ll get excellent results controlling these little critters. Always practice good garden sanitation: remove weed and debris piles. Avoid planting in freshly tilled sod. Till new garden spaces in late summer or early fall the year before planting. Cultivate shallowly (but frequently) throughout the season to destroy hiding places and injure or expose the cutworm to predators. Cultivate deeply in the fall to deeply bury the cocoons.

If diligent tilling and garden sanitation aren’t your thing you can get very good control by placing collars made from toilet paper or paper towel tubes around young plants. Bury the tube 1-2 inches deep and cut it to extend upward 3-4 inches. Organic chemical control works well with Bt spray (Bacillus thuringiensis). Bactur, Dipel, SOK-BT, and Thuricide are common brand names for Bt products.

Over the years I’ve encountered many other home made remedies for cutworms. I can attest that the following are not remedies at all: catching and placing toads in the garden, wrapping onion stems around the stems of transplants, placing rings of moist wood ashes around the plants, and placing a toothpick or 16d nail alongside each transplant stem.

Forget the nails and put you toothpicks away. Leave the toads alone and skip the granular insecticides (they don’t work) and the Bt spray. Keep your garden clean and cultivated and cutworms will be no bother to you or your crop.

Clearing the Land

Originally the land that comprises our farm was known as the Burchel farm. Roughly 250 acres straddling Currier Rd on the north and south sides. There were originally three Burchel farmsteads, each operated by one of three brothers. About 1920 one had a falling out with another and and changed his surname to Bertsel for differentiation. Di and I purchased the Bertsel section on the south side of Currier rd.
The real estate agent told us that nobody farms hillsides anymore. It's too costly. Did I mention that the real estate agent lives across the road in one of the old farm houses? It's another story. So there we were, living in a small two bedroom farmhouse built in 1898. Everything in this house was crooked, and still is. Our home reminds me of Charlie's house in The Chocolate Factory. But the Land! We now owned a hillside , 800 feet above sea level, facing eastward to the rising sun. We have a 'million dollar view' looking eastward. We can see most of Fort Fairfield, and a good portion of Carleton County, New Brunswick. About half the acreage is rich, deep silty loam and the remaining half the renowned caribou gravely loam. The only place in the world that caribou loam exists is a thin strip about ten mile wide along the Aroostook river between Fort Fairfield and Caribou, Maine. Caribou loam is potato soil. Prior to the 1930's this soil made fort Fairfield the potato capital of the world.
Obviously three priorities came to mind: Fix the house, Start clearing the field of brush, make a business plan. I sound like I had a super clear head for what needed to get done. Not! We had a vague idea where we wanted to go. I hired a guy to re-do the roof because it looked like a lot of it was going to fall off pretty soon. Here's a tidbit: I new very little of carpentry then and although I've improved a lot I'm still a lousy carpenter now. Although I didn't even own a tractor I could tell that brush was not supposed to be growing in fields where a crop would be planted eventually. I hired a local to bush hog the fields. As far as business planning was concerned I new nothing of it. Luckily northern Maine is an economic disaster zone so I found a lot of free help from the federally funded Northern Maine Development Commission.
The local guy I hired to mow the fields showed up three week late. He came barreling down the hill on an ancient tractor. At some point it had caught on fire but I could make out through the scorch marks 'McCormic Farmall'. I think it was a model 'C' dating from the 1940's. So my hired guy lines the tractor up and sets off mowing across the field. Sam and I watched excitedly from a window. He made one pass and then another. By the third pass he realized that he had forgotten to engage the mower. This was soon rectified, and with mower engaged my man started right for the wet spot I had pointed out weeks earlier. I ran for the door to shout a warning but it was too late. The farmall was silent. Its front wheels completely submerged in an ancient, but newly re-discovered cesspool. Since my plumbing was connected to a septic system I figured that at least 50 yeas had passed since that cesspool was actively connected to my plumbing. It's a wonder how long feces can stink.

Starting

It all started in 2001. Di and I moved to Aroostook County Maine with our 3 year old son Sam. We wanted out of the rat race. We dreamed of simplifying our lives, to release the our inner existentialist in hope that we could find a more authentic and meaningful life. There was no concrete plan. It sort of fell together. I landed a state job in Presque Isle, Maine. We put the house on the market and moved. That was the extent of the plan. We figured out the rest a little bit at a time.
Aroostook offered a endless farmland and wilderness. It's the size of Connecticut and Rhode Island combined but has a population of only 70,000. Just ten years earlier that population was 125,000. The decline due entirely to the closure of Loring AFB and the collapse of the farm economy. This produced a real estate depression. With a good state salary, we bought a little farm for $42,000. For the first time in ages we did not need two full time jobs to pay the bills. No more day care. For the first time since I was a teenager I started the daydream about living the good life (read The Good Life by Helen and Scott Nearing to understand our motivations http://en.wikipedia.org/wiki/Helen_and_Scott_Nearing). Our vague goals started to coalesce into plans: an organic farm specializing in fruit procuction. With a good business plan I could quit the day job in a few years.