“IT was not until the late 1990’s, when the Internal Revenue Code was digitized (and thus made searchable) that it became possible to decipher its deliberately confusing and misleading construction. Only then could complete searches be done of all 3,413,780 or so words (not counting regulations) for every incidence of ‘liable’, ‘imposed’, ‘income’, ’employee’, and dozens of other key or misleading terms — checking every reference, exception, definition and source. Only then could it be established that, as written, the laws behind the code and the taxes that they impose technically comply with the Constitution, just as all the judges have said over the years.

“But the same analysis also reveals that, as written, these laws don’t apply to most of the receipts of most private citizens. Indeed, the two things are interdependent — the former couldn’t be true unless the latter was also true.

“What you will learn as you read this book is that specific Constitutional limitations on the federal government’s power to tax do shape related law, and have generated a coherent Supreme Court doctrine which clearly and soundly answers the question of what is taxable “income”.  Both the statutes and the doctrine acknowledge the exemption of the vast majority of private-sector receipts from that taxing power’s reach.” [bold added]

Pete Hendrickson, Cracking the Code, the Fascinating Truth about Taxation in America

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