They had a 13% stake in a company that supplies low cost equipment to small farmers in India. The couple has never received income from this stock because the company reinvests all of its profits in the business. So it’s essentially philanthropy that they’re doing. They’re trying to help small farmers in India. So when they make a profit, they put it back in the company, they buy more product, and they sell more farm equipment at low cost to small farmers in India.

So they reinvest all their profits back into the business. Historically, the IRS has not taxed shareholder earnings, quote, unquote. And you should put that in, quote, until they actually receive dividends or they sell their stock for capital gain. Yet after the Trump tax program and this mandatory repatriation tax was put in, they got a bill of $14,729, nearly $15,000 bill on their share of the company profits. They sued the government on the grounds of the IRS, violated the 16th Amendment.

They lost in federal district court, they lost in the 9th Circuit Court of Appeals, and now they’re at the Supreme Court. And this is what Stephen Calabrizi says. He says the Court of Appeals concluded that realization is not a precondition for income, in other words, actually receiving the cash. So the Moors could be taxed on unrealized gains and wealth. This is a wealth tax. It is subjective, because, again, in most cases, there’s going to be assets that are not easily determined in market value.

Again, the best example, this is your house. You go to these real estate websites, and they’ll try to give you some kind of an estimate thing. That’s total nonsense. You had one of these real estate companies was buying real estate based on their estimated values and everything. And obviously, they got it wrong. They went into a lot of red ink over that. Anyway. So the rationale is not limited to the Moors, and the rationale is not limited to any particular tax.

Investors might be taxed on their unrealized capital gains in their vanguard fund or in their stock portfolio, or homeowners might be taxed on the unrealized capital gains in their houses or their land. And so they’re calling on the Supreme Court to reverse this part of the Trump 2017 tax Code. To grasp the significance of this case, it’s necessary to remember that the original Constitution did not permit an income tax.

Then they, you know, again, we can talk about the. According to Article one, section nine, it was prohibited to have direct taxes on individuals. That was ignored by Abraham Lincoln, just like he ignored so much other aspects of the constitutional law. And they passed the first income tax in 1862, but it was phased out after the war. They passed another income tax law in 1894, but the Supreme Court struck it down that year.

No, you can’t do that. According to the Constitution. So then they played shenanigans and presumed that they had the 16th Amendment passed in 1909. They ratified it in 1913. And as part of that 16th Amendment, it says, the power to lay and collect taxes on income. But then the question was, what is income? And it was not wages. But in 1920, the Supreme Court ruled that an increase in the value of a stockholding in the absence of monetary dividend is not income.

In other words, the Supreme Court has already ruled on this back in 1920. So where is the real conservative position with this, with the Constitution? In that particular case, this is what the Supreme Court said. When they’re again talking about, okay, we got an income tax, so what is income? They said, mere growth or increment of value in an investment is not income. Income is a gain or profit in itself, of exchangeable value, proceeding from capital severed from it, derived or received by the taxpayer.

In other words, it’s something that you get from an investment somehow, and it’s something that you’ve actually received, because they already tried to do this once before. So something that you’ve actually received, and it’s something you receive from an income, from an investment. Notice that it didn’t say anything about wages there. And we didn’t have a wage tax until World War II. And just like they did in the Civil War, they put it in and said, it’s going to be a temporary tax.

Except afterwards, they didn’t remove it. And after the middle of the 20th century, we no longer had a government or a Supreme Court that cared what the Constitution said. And so the IRS has continued to send out their forms and say, thank you for participating in the voluntary tax system. And so it’s been that since we’ve been there, again, wages were not part of the 16th Amendment. I’ve seen tax protesters who push against the legitimate passage of, have questions about the legitimate passage of the 16th Amendment.

But regardless of that, wages were not included in that. And so any taxation of wages is really unconstitutional. Personally, it’s not a hill I’m going to die on, because when I first got involved in politics and liberty movement, saw a lot of people who got railroaded, they made a legitimate constitutional argument. And the judge says, I don’t care, you’re going to jail just like we see right now.

The January 6 up doesn’t matter. I don’t really care what your arguments are. I’m not going to listen to this, not going to debate you, you’re going to go to jail. And that’s what the situation is with the tax system. It’s completely illegitimate, but you’re going to go to jail if you fight it. And so now they’re extending this. They took an income tax and they usurped the authority to tax wages.

Now they’re going to usurp the authority to tax you on things, that money that you’ve not even received, and it really doesn’t matter. The Wall Street Journal says, well, is the Supreme Court going to step in there and tell Congress what they can and cannot tax? Well, the Constitution says what Congress can and cannot tax, that’s superior to any act or law that is passed by Congress. Congress can’t do something that they don’t have congressional authority to do and they don’t have the congressional authority to tax unrealized gain.

And the Supreme Court has already said that, but I think that they will probably pass it. I think it’s one of the reasons why they’re passing this army of IRS agents on to us as well, because we’re looking at the weaponization of finance. The David Knight show is a critical thinking super spreader. If you’ve been exposed to logic by listening to the David Knight show, please do your part and try not to spread it.

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