NYT debunks "America: From Freedom to Fascism"

David Cay Johnston, a respected New York Times reporter on tax issues, has debunked "America: From Freedom to Fascism," a crackpot anti-tax documentary that has been treated respectfully in mainstream press reviews:

Mr. Russo, the narrator, asserts that every president since Woodrow Wilson and every member of Congress has perpetrated a hoax to tax people's wages and issue them dubious currency. All of the federal income tax revenue, the film says, goes to these bankers to pay interest on the national debt, even though by the broadest measure the federal government's interest payments are less than 40 percent of the individual income taxes, according to an examination of every federal budget since 1995...

Near the film's beginning Mr. Russo says, and others appear on screen asserting, that the Internal Revenue Service has refused every request to show any law making Americans liable for an income tax on their wages.

Yet among those thanked in the credits for their help in making the film is Anthony Burke, an I.R.S. spokesman. Mr. Burke said that when Mr. Russo called him asking what law required the payment of income taxes on wages, he sent Mr. Russo a link to documents, including Title 26 of the United States Code, citing the specific sections that require income taxes be paid on wages. Title 26 says on its face that it is law enacted by Congress, but Mr. Russo denied this fact...

Arguments made in court that the income tax is invalid are so baseless that Congress has authorized fines of $25,000 for anyone who makes them. But even though the penalty was quintupled, from $5,000, it has not deterred those who assert this and other claims that Congress and the courts deemed "frivolous arguments."

The film also states repeatedly that people are tricked into paying income taxes because no law makes them liable for taxes. The tax code uses the word impose, whose definition includes the concept of liability, courts have held in published decisions...

Mr. Russo also said that "Congress has no authority to tax people's labor." Article I, Section 8 of the Constitution begins with the phrase "The Congress shall have the power to lay and collect taxes."

Only three limitations are placed on that power, none of which bars a tax on wages. One limitation, however, was a requirement that taxes be "apportioned among the several states."

The 16th Amendment repealed apportionment, but Mr. Russo says in the film that the 16th Amendment was never properly ratified and thus a tax on wages is unconstitutional. This claim has been made in various forms by thousands of tax protesters since 1913, and so far their batting average with the courts is .000.

And by the way, Aaron Russo, the director, producer, and writer of the film, has "more than $2 million of tax liens" filed against him by the IRS, New York and California. But according to Johnston, he says the liens "were not relevant to his film." Right...

Comments

[John Anhakt]

You obviously haven't completely watched the film or enjoy lying. There are several cases that tax protestors have won against the government. Several are mentioned in the film itself. I provide a link to one mentioned in the film itself.

I'd suggest that you watch the films you review.

[Marion Delgado]

John Anhakt:

You are in error on several counts.

Mr Nyhan is not reviewing the video. He's passing on a refutation of the thesis of the video by expert tax reporter David Cay Johnston - one of the strongest critics of the IRS in print. I'd suggest you read the weblog posts you attack before attacking them.

Johnston's a meticulous researcher, as anyone critiquing the IRS and the tax code has to be. It's not that long a video, my guess would be that Johnston watched the whole thing. I did, for instance.

The point that "There are several cases that tax protestors[sic] have won against the government" is only correct if you specify that you are not talking about tax resisters, who have won no cases at all. This sentence is accurate:

This claim has been made in various forms by thousands of tax protesters since 1913, and so far their batting average with the courts is .000.

The defendent in the case you cited, Joe Banister always pays his mandated income tax. He advises others on not doing so. In the case you cited, Banister was acquitted by a jury of conspiracy to defraud. Banister's arguement was that his assistance was privileged, because at the time he was a member of the federal tax bar--he has since been disbarred.

The person Banister was advising and assisting, Walter Thompson, was not so lucky:

On April 13, 2005, in Sacramento, CA, Walter A Thompson was sentenced to serve 72 months in prison and fined $7,500 following his conviction in January for two counts of filing false claims for refunds, filing a false amended individual income tax return, ten counts of willfully failing to deduct, withhold, collect and pay over income and social security taxes from his employees.

Banister and his attorney tossed tax protester and resister Thompson over the side to save Banister's hide. The example you cite proves that the person who doesn't pay taxes does indeed get prosecuted. The person helping him try to evade taxes may get off. Even other tax protesters despise Banister and his arguments (which are also Russo's, for the most part), making it doubly odd that you would cite that case at all

The 16th amendment was ratified validly. The Constitution was not written for imaginary worlds, but for the real one where law operates, full of good faith efforts and reasonable man standards. Congress and the courts and the state legislatures involved all said so, at the time. Nor was it notable as an amendment for the path it took to ratification. It's simply that not all amendments make the elites angry. When they do, they'll throw the kitchen sink at it. The other arguments Russo uses are well summed up here:

It's an anti-tax movie. And it repeats every false quotation and pseudo-fact current in the IRS-haters' handbook

[Javier Del Coronado]

I'm glad somebody’s cleaning the air of this pollution. This nonsense ranks right up there with those eliminate your debt scams. I wouldn't be surprised if those guys were sending that video to their victims.

I hear Russo’s movie may hit theaters, I should get into the “eliminate your debt” business if that happens.

[bwahahaha]

That's funny. Really. you should really try to win that fifty grand. I'm waiting!

I wouldn't expect anyone named after a noise to do so. :) "Let us cleanse the air of this pollution!" Geez, Pontificate on, wonderboy. Wear a bow-tie for us next time you wanna do a Tucker Carlson impersonation.

[cheyenne]

This person is completely wrong... The NYT is obviously getting worse with its writers. Fortunatley I don't buy their magazine anyways, but the point is why is our government paying intrests back to these banks. This is what i want to know? In the constitution is states that only the legislative branch has the right to coin money.... when did they get the right to give their power away... I always went to the Federal Reserve bank, and it says that they are a "independent entity within the government." And that people do own stocks in this bank, but they cannot be traded or sold. That seems pretty suspicious to me. This guy should be ashamed of what he is doing writing an article like this. He is not American, and he doesn't care about our civil liberties.

[john beck]

cheyenne i totally agree with you and i think we should take some steps to make it better .

[Chris Salvato]

"John Anhakt:

You are in error on several counts.

Mr Nyhan is not reviewing the video. He's passing on a refutation of the thesis of the video"

While, within the first sentence of the page, this statement proves inconclusive.

"David Cay Johnston, a respected New York Times reporter on tax issues, has debunked "America: From Freedom to Fascism," "

I find it interesting that you suggest that John read the weblog post when it does not appear that you have done so yourself. The writer himself asserts that Johnston has debunked America: From Freedom to Fascism, described directly afterward as a crackpot anti-tax documentary. Not a debunking of the thesis, but of the documentary.

An abridged version of the quote, within the rules of the english language, is as follows.

"David Cay Johnston, a respected New York Times reporter on tax issues, has debunked...a...documentary"