Constitutional Taxation vs. The Franchise System

Constitutional Taxation vs. The Franchise System: Why They Needed Your Consent

Constitutional Framework Creates Severe Restrictions

Constitution creates restrictions on federal taxation making it nearly impossible to tax private Americans directly. Instead of changing Constitution, they found way around it by converting you from private American into federal franchisee.​​

Two Types of Taxes Only

Constitution recognizes only two types: Direct taxes and indirect taxes.​​

Article I, Section 2, Clause 3: “Representatives and direct Taxes shall be apportioned among several States…according to their respective Numbers”.​​

Article I, Section 9, Clause 4: “No Capitation, or other direct, Tax shall be laid, unless in Proportion to Census or Enumeration”.​​

Supreme Court: “Mandates of Constitution require taxation, if imposed by direct taxes, be apportioned among States according to representation, and if imposed by indirect taxes, be uniform in operation”.​​

Direct Taxes: Constitutional Limitation

Direct tax is like property tax on house—you can’t pass burden to someone else. Same principle applies to income taxes on private wages.​​

Constitutional requirement: If California has 10% of U.S. population, must pay 10% of total direct tax bill. Every person in California would pay exact same dollar amount regardless of income. This makes progressive taxation (higher rates for higher income) completely unconstitutional.​​

Pollock Case: Supreme Court Strikes Down Income Tax

1895 landmark case Pollock v. Farmers’ Loan & Trust Co. struck down first federal income tax because it was direct tax on private property (your labor) not apportioned among states according to population.​​

Court made crystal clear: “Nothing can be clearer than what constitution intended to guard against was exercise by general government of power of directly taxing persons and property within any state through majority made up from other states”.​​

This decision never overruled—Pollock case remains good law today. This explains why all geographical definitions in IRC limit themselves to federal territory.​​

Indirect Taxes: Taxes You Can Avoid

Indirect taxes like sales tax on cigarettes—you can avoid by not buying cigarettes. Constitution allows these excise taxes on activities and privileges, but must be uniform throughout United States.​​

Critical difference: You can choose not to smoke and avoid cigarette taxes. But you cannot choose not to earn living without starving. That’s why income taxes on private labor must be direct taxes requiring apportionment.​​

The 16th Amendment Deception

Most people think 16th Amendment gave Congress unlimited power to tax income—completely wrong.​

What it actually says: “Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among several States, and without regard to any census or enumeration”.​​

What 16th Amendment actually did: Clarified income taxes on certain activities could be treated as indirect taxes (excises) rather than direct taxes, thus avoiding apportionment requirement. But only income from activities Congress has power to regulate—meaning federal activities, federal employment, federal franchises.​​

The Franchise System Solution

Constitutional workaround: Congress can’t tax your private labor directly, but can tax privilege of federal employment.​

Solution was elegant: Convert as many Americans as possible into federal employees or federal franchisees, then tax privilege of federal employment. Tax becomes constitutional because it’s excise tax on federal privilege, not direct tax on private property.​

How States Were Captured

Under Buck Act 4 U.S.C. §§ 105-111, federal territorial governments (not constitutional states) given authority to enforce federal tax laws within federal enclaves located within state borders.​

State officials, wanting federal money, voluntarily agreed to act like federal territories so they could enforce federal tax laws and get cut of revenue. They formed private corporations with federal tax ID numbers and signed “Agreement on Coordination of Tax Administration” (ACTA) agreements with federal government.​

Why Constitutional Arguments Don’t Work

When you walk into “state court”: You’re in federal administrative tribunal operated by federal municipal corporation (your “State of [Name]”). Judge is administrator in Executive Branch, not Judicial Branch.​

These corporate courts only have jurisdiction over federal employees and federal franchisees. Can’t hear constitutional issues because they’re not constitutional courts. They’re franchise courts existing to administer federal programs and collect federal revenue.​

The Corporate Government Structure

Under 28 U.S.C. § 3002(15)(A), “United States” means “federal corporation”. Government you’re dealing with isn’t constitutional government described in founding documents. It’s private corporation that went bankrupt in 1933 and was reorganized under corporate law.​

By 1971, every state government in Union formed private corporations and ceased to seat original jurisdiction government officials. What you think is state government is actually federal municipal corporation operating under franchise agreements with federal corporation.​

The Enforcement Mechanism

Federal judges have massive financial conflict of interest preventing them from ruling fairly on tax issues. Since 1939, federal judges pay income tax on salaries, creating direct financial incentive to rule in favor of IRS.​

Every time they rule against IRS, they’re ruling against own financial interests. This creates criminal conflict of interest under 18 U.S.C. § 208 and 28 U.S.C. §§ 144, 455.​

Two Parallel Systems

Constitutional System: Based on natural law, constitutional limitations, protection of private rights. Limited to private Americans who don’t participate in federal franchises.​

Corporate Franchise System: Based on statutory law, administrative regulations, management of federal benefits. Applies to federal employees and federal franchisees.​

Franchise system isn’t violation of Constitution—it’s clever workaround using Constitution’s own limitations to expand federal power. By converting private Americans into federal franchisees, they transformed direct taxes (unconstitutional) into excise taxes on federal privileges (constitutional).​

Why This System Works

Genius is it’s technically constitutional because participation is voluntary. No one forces you to get Social Security Number. No one forces you to file tax returns. No one forces you to claim statutory citizenship.​

But they create massive incentives and presumptions making non-participation extremely difficult. They hide true nature of system by using words sounding like everyday English but having specific legal meanings excluding most Americans.​

Constitution wasn’t violated—it was bypassed. Instead of changing Constitution to allow unlimited taxation, they created parallel corporate system operating alongside constitutional system. Most Americans volunteer into corporate system without realizing what they’re doing.