Of Rats and Sinking Ponzi Schemesby
Vin Suprynowicz
Last time, we promised to get to the assertion of visiting Rep. John Spratt, D-S.C., ranking minority member of the House Budget Committee, that Social Security is "mandatory" – an argument offered a bit heatedly when I asked him what would happen to all his schemes if younger workers simply refused to keep paying. "I don't think it was voluntary to start with, in 1935, but I have no question today it is absolutely mandatory," Rep. Spratt told me on March 29. "There is no doubt in my mind that if you don't send in your Social Security taxes there will be tax liens filed against you." Go to www.cjmciver.org/sapf/ and click on "Second response from the SSA." There, you will find a letter dated Nov. 18, 1997, from Charles H. Mullen, associate commissioner in the Office of Public Inquiries of the Social Security Administration, to a former police officer of my acquaintance, reading in part: "This is in response to your recent letter about the Social Security Number (SSN). "The Social Security Act does not require a person to have an SSN to live and work in the United States, nor does it require an SSN simply for the purpose of having one. However, if someone works without an SSN, we cannot properly credit the earnings for the work performed." Yes, an employer (with an EIN) is indeed required to ask for a number to complete (without compensation) federal tax-collection paperwork. But if the employer finds the employee has no such number, the employer need only submit the forms to the IRS with a statement that a number was requested but not received. This procedure is specifically laid out in 26 CFR 301.6109-1(c). How then can the government functionaries (though never under oath) tell us the tax is mandatory? Because it is – in those island territories where the Congress has plenary jurisdiction, not subject to the constitutional restriction that "No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or Enumeration herein before directed to be taken" (Article I, Section 9), a requirement which has been found to bar a direct federal graduated wage or income tax, and which the Supreme Court in the Brushaber and Baltic Mining cases correctly ruled had not been affected by the purported enactment of the 16th Amendment, which does not seek to repeal the above cited section, but only allows an income tax to be enacted as an indirect excise. You can look it up. Title 26, United States Code, Chapter 21, "FEDERAL INSURANCE CONTRIBUTIONS ACT," Sec. 3121 (b). defines "Employment" as "any service ... performed ... (I) within the United States ..." But how does the Act then define "the United States"? It directs us at Sec. 3121(e)(2) that, "For purposes of this chapter ... the term 'United States' when used in a geographical sense includes the Commonwealth of Puerto Rico, the Virgin Islands, Guam and American Samoa." No other locations are named. Nor are we or the courts or the executive free to infer that the authors "must have" meant "as well as the 48 states," since the U.S. Supreme Court in Gould v. Gould, 245 US 151, ruled: "In the interpretation of statutes levying taxes it is the established rule not to extend their provisions by implication beyond the clear import of the language used, or to enlarge their operation so as to embrace matters not specifically pointed out. In case of doubt, they are construed most strongly against the government and in favor of the citizen." No federal court will or ever has allowed the top Treasury lawyers to be placed under oath and asked to explain why the FIC Act doesn't say "and the 50 states, those being Alabama, Alaska," etc., if that's what it means, and why on earth the law has never been amended to so read, despite legal scholars assiduously pointing out this devious little anomaly for 70 years. Furthermore, even if participation in the "Social Security" intergenerational income-transfer Ponzi scheme were currently mandatory, then-Treasury Secretary William Simon warned in an article in the Nov. 3, 1976, Wall Street Journal that because the Trust Fund "has not been allowed to grow to more than a fraction of the required size" for long-term solvency. "When the current workers retire, they will be completely dependent upon future workers for their benefits. Their position is even more vulnerable, should anything go wrong with this delicate balance. ... Each generation has the power through the electoral process to refuse to pay." I would argue not only that this becomes more likely as taxes go up and benefits are reduced, but that it could also happen de facto, whether or not a vote is allowed, through the mechanism of more and more young people simply performing more and more of their labor (online, perhaps) in the untaxed "gray market." This – not fear of enemy terrorism or evil drug dealers – is why the federal government is now dragooning everyone from bank tellers to supermarket clerks to pawnbrokers into the uncompensated government spy service, trying desperately to track the movement of any sum of cash or valuables worth more than $5,000, introducing "Suspicious Financial Transaction Reporting Forms" and going so far as to create the new crime of "structuring" to nab anyone who goes from supermarket to supermarket, buying multiple $900 money orders on the same day. They're afraid the rats are getting ready to abandon their sinking Ponzi schemes.
Vin Suprynowicz [send him mail] is assistant editorial page editor of the daily Las Vegas Review-Journal and author of The Black Arrow. Copyright © 2005 Vin Suprynowicz |
