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How do states get away with income tax? I interpret 31 USC 3124 to say that states cannot tax US govt obligations. The USC clearly states that FRNs and USNs are among these US obligations. I live in Alabama. Can someone educate me on how the state of Alabama gets away with this?
That is a good question for this forum.
As I watch how the remedy found in the Fed Act applies to anywhere (Canada) it becomes clear that the remedy is described by the Bretton Woods Agreements, which came later. In the Constitution it is allowed for States to coin currency. However no State has chosen to do so.
What I am saying, and this is for the sake of striking up discussion, which is really how I learn around here, is that since Alabama recognizes the DOLLAR as well as Canada and the federal districts Title 26 applies. Remedy applies as well.
One item in support is how suitors in California get federal refunds just fine. Then the State which is to say the Tax Franchise Board, rather than the State Department of Revenue starts calling the return frivolous. The attorneys seem to know that tracking the process, including remedy back to Title 26 USC does not leave a convincing paper trail. - Frustrating.
Perhaps the obligation on the FRN only becomes a "government obligation" when its redeemed.
#1 Article 1 Section 8 Clause 5: The Congress shall have power; To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;
Clause 5 allows for coin, Clause 2 (To borrow Money on the credit of the United States) allows for USN's, gold and silver certificates of the past.
#2 McCulloch v. Maryland, 17 U.S. 316 (1819), "Although the Constitution does not specifically give Congress the power to establish a bank, it does delegate the ability to tax and spend, and a bank is a proper and suitable instrument to assist the operations of the government in the collection and disbursement of the revenue. Because federal laws have supremacy over state laws, Maryland had no power to interfere with the bank's operation by taxing it. Maryland Court of Appeals reversed."
So a state cannot tax monies issued directly from the Treasury via a bank acting as the agent for the Treasury. Those would be the monies described above issued directly by the Treasury via a bank. The state would also be prohibited from taxing you if you were receiving monies via a bank directly issued by the Treasury.
#3 Enter the Civil War and the National Banking Act and the first income tax acts.
These lead to Veazie Bank v. Fenno, 75 U.S. 533 (1869). Where it was stated: "Congress may restrain (TAX), by suitable enactments (26USC), the circulation as money of any notes not issued under its own authority. Without this power, indeed, its attempts to secure a sound and uniform currency for the country must be futile."
#4 Now enter the Federal Reserve that is partly public and mostly private.
Per McCulloch a state cannot tax a function of the U.S. government. In this case a bank issuing coin or notes that were issued by the Treasury. The bank is merely acting as the Treasuries agent/conduit. That is a public part of the Federal Reserve. HOWEVER the Fed may also issue FRN's or their electronic equivalent at its discretion (12USC411). Those ARE NOT issued by the Treasury and are outside the direct control of Congress.
SOOOO...per Veazie Bank Congress may restrain the issuance of those FRN's or any medium of exchange that it does not directly issue.
Also tying this together....Because the issuance of things that circulate AS MONEY but ARE NOT in fact money (which can only be produced by the Treasury), the states can also tax it because it is not infringing on a federal power satisfying the limitations set out by McCulloch.
What's in your wallet?
I got a piece of Organ grape root in mine.Quote:
Originally Posted by Brian
Those Bank punch lines are really something else.
How about the one " Your richer then you think".
Crack up every time I hear it.
Or the penguin ones talking about a mortgage. My conclusion on that one on why the bank decided to use penguins is that they are referring to their customers having bird brains.
On the wallet subject, once when I was arrested I over heard the cops say after I was handcuffed and in the back seat of the cop car and after they searched my truck that they couldn't find a wallet, "he has no wallet". This disturbed the cops big time. What does that tell you about "whats in your wallet".
One thing I can't understand from you guys south of me is you talk about filing income tax federally and for the state.
Does that mean you guys have to do separate filing or is it in a combined filing?
The provinces in Canada have nothing to do with income tax filings.
Speaking for my state (assuming the state you reside in even has a separate income tax). Your federal return forms the initial basis for the state income tax forms. In my state you actually attach a copy of the federal form to the state forms.Quote:
Originally Posted by walter
It is a separate filing for me in Alabama. The above poster is also correct. Alabama uses my fed return to help calculate the state return. According to my income, Alabama taxes my income at 4%.Quote:
Originally Posted by walter
They automatically presume someone to be 'concealing papers' (which is a Naval /maritime offense). Hiding funny quotes or scavenger hunt instructions in and the car could make things more entertaining.Quote:
Originally Posted by walter