billion. That means we the taxpayers will be paying interest to the banks on at least $700 billion annually – this so that the
banks can retain the reserves to accumulate interest on ten times that sum in loans.
The banks earn these returns from the taxpayers for the privilege of having the banks’ interests protected by an all-pow-
erful independent private central bank, even when those interests may be opposed to the taxpayers’ -- for example, when
the banks use their special status as private money creators to fund speculative derivative schemes that threaten to col-
lapse the U.S. economy. Among other special benefits, banks and other financial institutions (but not other corporations)
can borrow at the low Fed funds rate of about 2%. They can then turn around and put this money into 30-year Treasury
bonds at 4.5%, earning an immediate 2.5% from the taxpayers, just by virtue of their position as favored banks. A long list
of banks (but not other corporations) is also now protected from the short selling that can crash the price of other stocks. 1
(31) It makes its own policies and is under little regulation by the US Government. It is a private bank that loans
all the currency at interest to the Government, completely consistent with the central banking model that the
country sought to escape from, when it declared independence in the American revolutionary war.
In a research document entitled “Is the Fed Held Accountable? An Empirical Investigation of
Congressional Oversight of Monetary Policy” done for a 2006 Annual Meeting of the American Political Science Associa-
tion, the question of The Fed’s controls and transparency were directly addressed in detail:
“Monetary policy constitutes an unusual area of legislative oversight for two reasons. First, the standard means of legisla-
tive control of bureaucrats—i.e., budgetary appropriations—is absent, as the Fed controls its own budget. Second, the
scope for any oversight outside Congress is severely constrained by both the relative lack of transparency of monetary
policy making (notwithstanding the trend toward greater transparency over the last twenty years) and the lack of available
channels for interest group lobbying...” 2
An Alan Greenspan’s FOMC comment makes it pretty clear:
“We are an independent central bank in that our decisions are not subject to reversal by any other agency of government.
Our existence and ability to function, however, are subject to acceptance by a public and a Congress who exhibit decid-
edly asymmetric propensities in favour of policy ease. 3 The vague notion of “acceptance by a public and...Congress” will
be explored below.
On the Fed’s website, they say the following about oversight and accountability:
“The Federal Reserve is subject to oversight by Congress. Board governors and staff testify before Congress frequently to
discuss issues within the Federal Reserve’s purview...” 4
- The notion that testimony before Congress relates to “oversight” is a stretch. With regard to these “testimonies”, Paul
Sherry in an article called “Greenspan: Financial Wizard if Oz”, stated:
“You may think that Congress - and therefore the people – can control him. But all lawmakers can do is call him to testify
periodically...The Hearings are an exercise in futility, not accountability, because Greenspan just obfuscates till everyone
is bored silly. You may think that the press can pin him down. In fact, we have no access to him. No press conferences or
interviews are allowed. The high priest is untouchable in his marble temple here on Constitution Avenue.” 5
The Fed also states:
“The Government Accountability Office (GAO) has broad authority to review and audit Federal Reserve activities.” 6
1
http://www.globalresearch.ca/index.php?context=va&aid=10489
2
http://www.allacademic.com//meta/p_mla_apa_research_citation/1/5/1/2/9/pages151292/p151292-1.php
3
Greenspan reported in the FOMC Transcript July 2/3 1996, Chappell, McGregor et al. 2005: 146
4
http://www.federalreserve.gov/monetarypolicy/bst_oversight.htm
5
Paul Sperry, “ Greenspan: Financial Wizard if Oz, Wordnetdaily, 2001
6
http://www.federalreserve.gov/monetarypolicy/bst_oversight.htm
-While it is true some “audits” have been conducted, complete auditing of the Federal Reserve has actually been a con-
tentious issue for many decades, for there are special audit protections which do not allow for a thorough investigation.
Congressman Ron Paul, in 2009, created the “H.R.1207 - Federal Reserve Transparency Act of 2009” bill which would
repeal these special audit protections for the Federal Reserve (31 USC 714 – Sec. 714) and calls for a full Government
Accountability Office audit of the central bank to be completed before the end of 2010 and submitted to Congress for
review. 1
As a final point, the Chairman of the Federal Reserve is not voted in - he is appointed, along with everyone else. It is un-
democratic as far as direct public participation.
“The Federal Reserve System is supervised by the Board of Governors. Located in Washington, D.C., the Board is a
federal government agency consisting of seven members appointed by the President of the United States and confirmed
by the U.S. Senate.” 2
(32) Now, going back to 1913, the Federal Reserve Act was not the only bill pushed through Congress for the
vested financial interests... They also pushed its partner...the Federal Income Tax.
The Federal Reserve Act was enacted December 23, 1913.
The United States Revenue Act of 1913 was signed into law on October 3, 1913. The 16th Amendment which was to al-
low for the Income Tax was introduced by Senator Nelson Aldrich, who, as noted prior, was also instrumental in passing
the Federal Reserve Act. 3 The relationship, or “partnership” between these two issues will be expressed more so as we
proceed.
(33) First of all the Federal Income Tax is completely unconstitutional as it is a direct un-apportioned tax and the
required number of states needed in order to ratify the amendment to allow the income tax, was never legally
met.
The case against the 16th Amendment ratification was made famous by a former IRS employee named Bill Benson. Ben-
son was an Investigator for the IL Department of Revenue and was responsible for investigating and assisting in prosecu-
tion of those violating the revenue and tax laws of the State of IL. This isn’t some “fringe” person, so please do not dismiss
the messenger. The fact is, he spent years traveling the US, going state to state to find the original documents relating to
the 16th Amendment. His conclusion was simple: Based on the official legal process that must be followed for an amend-
ment to legally become part of the US constitution, he found that not one state legally ratified the amendment. We are not
talking about misplaced periods and commas here, as many “debunkers” ignorantly claim. We are talking about words
and sentences and meanings changed and/or removed.
First some background:
In Article V of the US Constitution it states:
“The Congress, whenever two thirds of both Houses shall deem it necessary, shall propose Amendments to this Consti-
tution, or, on the Application of the Legislatures of two thirds of the several States, shall call a Convention for proposing
Amendments, which, in either Case, shall be valid to all Intents and Purposes, as part of this Constitution, when ratified by
the Legislatures of three fourths of the several States, or by Conventions in three fourths thereof...” 4
There is no disagreement about the passing of the Amendment in the House and Senate, but the final step was to get ¾
of the states to ratify it. This had to be done in a very strict way. In 1981, Edwrd F. Willett, Jr., Esq., Law Revision Counsel
for the US House of Representatives, revised and updated, “How our Laws Are Made”, Document No. 97-120, in which he
said in Chapter XX11:
“Each Amendment must be inserted in precisely the proper place in the bill, with the spelling and punctuation exactly the
same as it was adopted by the House. Obviously, it is extremely important that the Senate receive a copy of the bill in the
precise form in which it has passed the House”. 5
Also, Joshua Reuben Clark, Philander Knox’s (US Secretary of State at the time) Solicitor of the Department of State, the
US agency responsible in 1913 for seeing to it that an amendment to the Constitution was properly ratified, made it very
clear the understanding that the states were not allowed to change anything in a proposed amendment:
“Furthermore...under provision of the Constitution a legislature is not authorized to alter in any way the amendment pro-
posed by congress...” 6
1
http://www.opencongress.org/bill/111-h1207/show
2
http://www.newyorkfed.org/aboutthefed/fedpoint/fed46.html
3
http://en.wikipedia.org/wiki/Nelson_W._Aldrich
4
http://www.usconstitution.net/const.html
5
“How our Laws Are Made”, Document No. 97-120, Chapter XX11:
6
Joshua Reuben Clark , Letter to, Feb 15th 1913
As a third point, A proposed US Constitutional Amendment cannot violate a State’s Constitution. In other words, a state
would have to ratify its own constitution if it were to approve an amendment which was in violation of it.
Keep these three issues in mind: 1) The language must be precise and 2) The states cannot change anything. 3) The
Amendment cannot contradict a state’s existing constitution.
So, the official 16 Amendment reads as follows:
“The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportion-
ment among the several States, and without regard to any census or enumeration.”
Now, since there were 48 states at the time of the proposed 16th amendment, there would need to be a minimum of 36
states needed to ratify the amendment. According the US Government Printing office, 36 where ratified on Feb. 3, 1913
and 6 more a short time after, making it a total of 42 supposed ratifications. 1
The reality, as per Benson’s muti-year study and acquisition of 17,000 Officially Certified legal documents, it that every
state violated one or more of the 3 issues expressed above (language/state can’t change it/can’t contradict the state’s
constitution) and there was also evidence of fraud as well on the part of Philander Knox.
Let’s review 7 of the states that supposedly ratified the amendment and how they either rejected the Amendment outright,
or voided the process.
1) Kentucky
a) Violation of Kentucky’s State Constitution. (Section 56, 1913)
b) Official Published Journal show the votes of 9-yes and 22-no, even though Knox had it as a vote of yes-27 and 22-no.
c) Also, multiple words were changed and neither of the versions presented had the correct preamble
* There are about 10 other violations, but this is good enough.
2) South Carolina
a) Violation of Article X, Section 3 of the 1913 South Carolina state constitution.
b) Words were changed and removed, included the word “lay” was changed to “Levy”, (which have very different mean-
ings) and many others.
c) SC also failed to follow the guidelines for the return of a certified copy of the ratification.
* There are about 5 other violations, but this is good enough.
3) Illinois
a) The word “ enumeration” was changed to “renumeration”.
b) Original Preamble deleted
c) Did not follow IL guidelines of Article IV, Section 13 of the state constitution.
d) Failure to pass the joint resolution by a Constitutional majority in the House.
4) Mississippi
a) Preamble deleted; “From whatever source derived” (!) was deleted; “or” changed to “of”
b) The House violated the state constitution in failing to read the resolution the proper number times
c) Did not follow the strict guidelines for or the return of a certified copy of the ratification.
5) Oklahoma
a) Meaning of last phrase was reversed by changing “without regard to” to “from”.
b) Did not follow the strict guidelines for or the return of a certified copy of the ratification. (in fact, they never even sent
Knox a copy of it!)
c) Violation of Article V, Section 43 of the state constitution when executing the process.
6) Maryland
a) Had rampant word (about 29) and punctuation issues overall, including “power to lay” being deleted.
b) Did not follow the strict guidelines for or the return of a certified copy of the ratification.
c) Procedural violations of the Maryland state constitution.
d) The resolution was not printed, published or certified under the “great seal”, as required by the state constitution, Article
III, Section 30... and many others.
1
http://www.gpoaccess.gov/constitution/html/conamt.html
7) Georgia
a) Georgia senate DID NOT pass their resolution with the needed 2/3 majority.
b) Large numbers of errors and changes were present, including “source” into “sources” and “Lay” to “Levy”.
c) They also did not follow the strict guidelines for or the return of a certified copy of the ratification.
d) The processes for such work as mandated by the state constitution was not followed. 1
We are going to stop here, but please note that all of the states suffered the same problems. These are not trivial.
Amending the US Constitution is one of the most serious things Congress can ever do and it is critical it is done in an
exact and proper way. In many cases, in fact, the changes presented misleading ideas.
Given these 7 states denoted in violation of at least one of the three aspects we have denoted above, take the states who
supposedly ratified the amendment down to 35, making the 16th Amendment void here, for the sake of argument. In real-
ity, again, NOT ONE state properly and legally ratified the amendment.
For more information, please review Bill Benson’s monumental work: “The Law That Never Was”
As a final note, the “attack the messenger” mentality is often in full force when it comes to these issues. In Jan. 2008, a
permanent injunction was set up against Bill Benson who is now called a “tax cheat” or “con-artist”. He writes on his web-
site:
“On January 10, 2008, the Federal District Court in Chicago issued a permanent injunction against me on the grounds that
I was falsely telling people the 16th Amendment was not ratified. The Court refused to look at the evidence of the non-rat-
ification of the 16th Amendment, deciding that the facts necessary to prove my statement was true were “irrelevant,” What
has America come to when the government can accuse you of lying and prohibit you from presenting a defense in a so
called court of law? My attorney, Jeffrey A. Dickstein, will be filing an appeal to the 7th Circuit Court of Appeals. I urge you
to review the pleadings filed in this case so you can see for yourself the tyranny being practiced in our courts.” 2
(34) And this has even been cited in modern court cases.
“if you were to go back and try to find and review the ratification of the 16th amendment... if you went back and
examined that carefully, you would find that a sufficient number of states never ratified that amendment” -U.S.
District Court Judge, James C. Fox, 2003”
This statement is part of a larger statement:
“..I have to tell you that there are cases where a long course of history in fact does change the constitution, and I can
think of one instance. I believe I’m correct on this. I think if you were to go back and try to find and review the ratification of
the 16th amendment, which was the internal Revenue, Income Tax. I think if you went back and examined that carefully,
you would find that a sufficient number of states never ratified that amendment. … And nonetheless, I think it’s fair to say
that it is part of the constitution of the United States and I don’t think any court would ever … set it aside. Well, I’ve seen
that — I’ve seen somewhere a treatise on that. And I think it was — I think I’m correct in saying that actually the ratifica-
tion never really properly occurred… Yet nonetheless, I’m sure no court’s going to say that the 16th amendment permitting
income is void for any reason, although I wouldn’t mind filing for a rebate myself.” 3
There are two important points to consider here. The first is the basic admission that Fox agrees that “the ratification never
really properly occurred”. (this statement likely alludes to the Benson materials above.) The second is the immediate
disregard for the possible reality with the amazingly dismissive statement “I’m sure no court’s going to say that the 16th
amendment permitting income is void for any reason.”
(34) Second, at the present day roughly 25% of the average worker’s income is taken from them via this tax.
This % is based on:
1) The average income of the US citizenry, which in 2008 was $52,029 4
2) Along with the Tax Bracket Associated for a single status filer. The 25% bracket is between 34,000 and 82,400. 5
1
Bill Benson, The Law That Never Was, Constitutional Research, 1985
2
http://www.thelawthatneverwas.com/new/home.asp
3
Sullivan VS U.S http://commons.wikimedia.org/wiki/File:Sullivan_vs_US_03-CV-39.pdf
4
US Census http://quickfacts.census.gov/qfd/states/00000.html
5
http://www.moneychimp.com/features/tax_brackets.htm
(35) That means you work 3 months out of the year to fulfill this tax obligation. And where does that money go?
According to The Grace Commission Report of the 1980s “..100 percent of what is collected is absorbed solely
by interest on the Federal debt and by Federal Government contributions to transfer payments. In other words, all
individual income tax revenues are gone before one nickel is spent on the services which taxpayers expect from
their Government.”
SOURCE: The Grace Commission Report, 1984 1
(36) Today, the money Americans make working 3 months out of the year goes almost entirely to the interest fees,
charged for the debt based fiat currency. The fact is, the Federal Income Tax exists to feed to Federal Reserve /
Federal Government money machine, making sure the interest payments are always there.
The first issue to consider is that the US, before the 1913 Income tax, did not require such taxation to support the affairs
of the country. This is often forgotten.
Next, given the fiat nature of money today, it has been pointed out that the income tax likely isn’t needed to fund the gov-
ernment. Congressman Ron Paul has stated:
“Strictly speaking, it probably is not necessary for the federal government to tax anyone directly; it could simply print the
money it needs. However, that would be too bold a stroke, for it would then be obvious to all what kind of counterfeiting
operation the government is running. The present system combining taxation and inflation is akin to watering the milk: too
much water and the people catch on.” 2
Third, speculation that the Income Tax exists to “feed” the Fiat Currency machine know as The Federal Reserve, was
stated well by former IRS Fraud Investigator Joe Bannister:
“Officials of the US Government in power at the turn of the century, with intentions we may never be sure of, instituted
a process whereby the US Government could borrow an almost endless supply of fiat money to finance its operations.
In order to pay the interest on the debt resulting from the this endless supply of fiat money, the labor and future earning
potential of the American people was put up a “collateral” for the loan.” 3
This speculation is based on the understanding that the Federal Reserve Act was, in part, a collusion between the bank-
ing and political elite, which enabled a cartel power over the banking system and hence a monopoly on monetary regula-
tion and issuance. This is paired with the political interest to have seemingly “unlimited” amounts of money at the disposal
of government. One glance at the US Government’s current debt ($13+ trillion, 2010 ) and spending patterns show the
level of obvious abuse.
“According to the Congressional Budget Office, annual debt payments — currently about $200 billion — are set to sky-
rocket. CBO estimates that interest payments on the federal debt will total $916 billion by the year 2020.” 4
The income tax, since it is not needed to actually fund the government historically (See R. Paul quote above), and was
only used in times of war, illegally, before the 1913 Income tax was created through the 16th amendment, appears to
serve the role, in part, as a “guarantee” that the banks/countries giving loans will be paid their interest. This is not an un-
reasonable conclusion given the highly inflationary nature of the Fed System and the constant and growing need for larger
interest payments, historically. Inflation, Debt and Interest Debt is created to facilitate endless government spending, at
the expense of the “tax payer” and ultimately, their future, as the burden grows.
(37) And third, even with the Government claim as to the legality of the Income Tax there is evidently no statute-
no law in existence that requires you to pay this tax.
There have been numerous acquittals in the court system over the past few decades, with the argument that the person
challenging the IRS “cannot find the law”. The court system still does not recognize anything but the “claim”, however.
Title 26 of the Internal Revenue Code is cited as the law which requires one to file an income tax return. There is no argu-
ment regarding the validity of the IRS code being considered a legal document, nor the existence of Title 26. The problem
has to do with the “voluntary” nature of the issue and how the IRS Code “law” does not say it is mandatory for the
1
http://www.uhuh.com/taxstuff/gracecom.htm
2
http://www.devvy.com/notax.html
3
Joe Bannister “Investigating The Federal Income Tax: A Preliminary Report”, 1999, p 71 [ http://www.quatloos.com/bannister-
report.pdf ]
4
http://www.npr.org/templates/story/story.php?storyId=126413824
“average citizen” to file income tax returns. A detailed work on this issue was done by a man named Bill Conklin. Who
wrote a book called “Why No One is Required to File Tax Returns” 1
In this work he describes a series of court cases and rulings which revealed that the mandatory filing was unconstitutional
and the courts knew it. The cover for this unconstitutional reality came in the form of using the language of “voluntary”
within the code.
This type of effect is sometimes referred to a “color of law” which is “a legal term meaning ‘pretense or appearance of’
some right; in other words, ‘color of’, as in ‘color of law’, means the thing colors (or adjusts) the law; however, the adjust-
ment made may either be lawful or it may merely appear to be lawful.”
Mr. Conklin also offered a reward of $50,000 for years to anyone who could show:
1)What Statute in the Internal Revenue Code makes him liable to pay the income tax
2)How he can file a 1040 tax return with waiving his Fifth Amendment Rights. 2
In the conclusion of his work, Conklin summarizes with the following conclusions:
“If you have read this book carefully, you know the following concepts:
1. The Fifth Amendment is one clause of our Bill of Rights.
It stands for the proposition that individuals are not required or
compelled to give the government information that may be used against
them in criminal cases.
2. The IRS continually uses the word “voluntary” in relation
to the filing of income tax returns because they know that the Fifth
Amendment prohibits the government from requiring individuals to waive
their rights.
3. Individuals who voluntarily file tax returns freely give
the IRS information that may be used in a criminal case if the IRS
decides at any point in time to turn a civil investigation into a
criminal case.
4. The IRS has a “Miranda” type of warning in their Privacy
Act Notice. The purpose of the warning is to warn individuals who file
returns that the information may be used against them in a criminal
case.
5. Individuals who become aware that they are voluntarily
waiving their Fifth Amendment protected rights when they file tax
returns and who wish to quit waiving those rights, should seek
professional counsel, and then ask the IRS for an extensio