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More on Goebbels

(originally launched into cyberspace on 02/04/2008)

Dear Subscriber,

Normally I wouldn't care much what some extortion apologist has to
say, but since David Cay Johnston pretends to be a "reporter," and
since his propaganda appears in the New York Times, it's worth
pointing out, not only how biased he is, but also how dishonest he

Regarding calling Wesley Snipes a "coward," in an effort to goad
him into answering the questions of a government propaganda hack,
David Cay Johnston said: "I said it and I make no apologies for my
reporting techniques, which I lecture on widely and always draw a
large audience." Well, it's nice to know that lots of other people
apparently also want to know how to be obnoxious buttheads. So I
guess that makes it okay.

But, to be fair, being an obnoxious butthead isn't as bad as being
dishonest. So is Mr. Johnston at least an honest butthead? I'll
report; you decide. Mr. Johnston just sent the following summary of
his stated position (or should I say, "frivolous section 61 tax
fraud scheme"?) in an e-mail to someone, who forwarded it to me:

"Just what do you believe given that Article I, Section 8 of the
Constitution ("The Congress shall have the power to lay and collect
taxes...) and Internal Revenue Codes sections 63 (all income is
gross income) 61 (gross income less deductions and exemptions is
taxable income) and Section 1 (a tax is hereby imposed on the
taxable income...followed by charts of incomes and taxes due) have
been upheld by the courts without exception since 1913?" [David Cay

So Section 61 means that "all income is gross income," and Congress
can tax anything it pleases? Does he actually believe that? Aside
from pointing out that Mr. Johnston got Section 61 and 63 reversed,
at the moment I won't give any comments of my own regarding Mr.
Johnston's stated position. I would, however, like to pass on some
comments from various U.S. Supreme Court justices and regulation-
writers at the IRS and Treasury:

1) “It is elementary law that EVERY statute is to be read in the
it cannot be interpreted as extending beyond those matters which it
was within the constitutional power of the legislature to reach.”
[McCullough v. Virginia, 172 U.S. 102 (1898)]

2) "It should be noted, too, that the court, speaking of the extent
of the TAXING power, used these cautionary words (p. 541): There
are, indeed, certain VIRTUAL LIMITATIONS, arising from the
principles of the Constitution itself." [Bailey v. Drexel
Furniture, 259 U.S. 20]

3) "And while [the federal income tax] cannot be applied to any
income which Congress HAS NO POWER TO TAX [citations omitted], it
is both nominally and actually a general tax." [William E. Peck &
Co. v. Lowe, 247 U.S. 165 (1918)]

4) “‘From whatever source derived,’ as it is written in the
Sixteenth Amendment, DOES NOT MEAN from whatever source derived.”
[Wright v. United States, 302 U.S. 583 (1938) (dissenting opinion)]

5) "The tax imposed by chapter 1 is upon income. Neither income
exempted by statute OR FUNDAMENTAL LAW, nor expenses incurred in
connection therewith, other than interest, ENTER INTO THE
COMPUTATION OF NET INCOME as defined in section 21." [26 CFR 39.21-
1, Meaning of net income (1956)]

6) "Certain items of income specified in section 22(b) are exempt
from tax and may be excluded from gross income. These items,
however, are exempt only to the extent and in the amount specified.
No OTHER items may be EXCLUDED from gross income EXCEPT (a) those
items of income which are, UNDER THE CONSTITUTION, NOT TAXABLE BY
THE FEDERAL GOVERNMENT;..." [26 CFR 39.22(b)-1, Exemptions;
exclusions from gross income (1956)]

7) "Among the items entering into the computation of corporate
earnings and profits for a particular period are all income
exempted by statute, income NOT TAXABLE BY THE FEDERAL GOVERNMENT
UNDER THE CONSTITUTION, as well as all items includible in gross
income under SECTION 61 or corresponding provisions of prior
revenue acts." [26 CFR 1.312-6(b)]

8) "To the extent that another section of the Code or of the
regulations thereunder, provides specific treatment for any item of
income, such OTHER provision shall apply NOTWITHSTANDING SECTION 61
and the regulations thereunder." [26 CFR 1.61-1]

9) "For purposes of this section, the gross income to which a
specific deduction is definitely related is referred to as a 'CLASS
OF GROSS INCOME' and may consist of one or more items (or
subdivisions of these items) of gross income ENUMERATED IN SECTION
61, namely: (i) Compensation for services, including fees,
commissions, and similar items; (ii) Gross income derived from
business; (iii) Gains derived from dealings in property; (iv)
Interest; (v) Rents; (vi) Royalties; (vii) Dividends;... [more
items listed]." [26 CFR 1.861-8(a)(3)]

"See... paragraph (d)(2) of this section which provides that a
CLASS OF GROSS INCOME may include EXCLUDED income." [26 CFR 1.861-

I and many other having been quoting all of the above for years. So
did Mr. Johnston never NOTICE these citations, or did he simply
choose to ignore evidence which destroys his neat little
misinterpretation of the law? I don't think he's unobservant enough
for it to be the former. I do, however, believe he's intellectually
dishonest enough for it to be the latter.


Larken Rose