IPFS Vin Suprynowicz

The Libertarian

Vin Suprynowicz

More About: Vin Suprynowicz's Columns Archive

OF RATS AND SINKING PONZI SCHEMES

Last time, visiting Congressman Jack Spratt, D-S.C., ranking minority member of the House Budget Committee, was assuring us that allowing government managers to invest the Social Security “Trust Fund” in the private stock market to gain a “better rate of return” (as he would propose, in preference to President Bush’s proposal for small, privately owned, individual retirement accounts) would not result in that level of public-private “partnership” in the management of the nation’s major corporations which Benito Mussolini pioneered in Italy 80 years ago, indulging the inventor’s prerogative and dubbing the whole scheme “fascism.”

But meantime, what about Rep. Spratt’s assertion that Social Security is “mandatory” -- offered a bit heatedly when I asked him what would happen to all his schemes if younger workers simply refused to keep paying?

“I don’t think it was voluntary to start with, in 1935, but I have no question today it is absolutely mandatory,” Rep. Spratt told me on March 29. “There is no doubt in my mind that if you don’t send in your Social Security taxes there will be tax liens filed against you.”

Actually, official government Web sites tell us there are some 5 million American workers not participating in Social Security.

Go to www.ssa.gov/pubs/10023.html and read the 26th line, which answers the question “Must my child have a Social Security Number?”

The answer now reads “No. But it is a very good idea to apply for a number right after your baby is born. Getting a Social Security number for your newborn is voluntary.”

As recently as 2003, it read: “No! Getting a Social Security Number for your baby is strictly voluntary.”

Now go to www.cjmciver.org/sapf/ and click on “Second response from the SSA.”

There, you will find a letter dated Nov. 18, 1997 from Charles H. Mullen, associate commissioner in the Office of Public Inquiries of the Social Security Administration, reading in part:

“This is in response to your recent letter about the Social Security Number (SSN).

“The Social Security Act does not require a person to have an SSN to live and work in the United States, nor does it require an SSN simply for the purpose of having one. However, if someone works without an SSN, we cannot properly credit the earnings for the work performed. ...”

Federal officials consistently refuse to specify what statutory law requires people to apply for a Social Security number, and when this is required. The application for an SSN is done on a form SS-5. The Office of Management and Budget (OMB), pursuant to the Paperwork Reduction Act of 1980, has indicated that the filing of the SS-5 is “required to obtain or retain a benefit.”

One can’t “apply” to be subject to the laws against rape or murder, of course. If you have to “apply” for something, clearly it’s not mandatory -- it is, as the law says, only “required” if one wants to “obtain or retain a benefit,” just as one is only “required” to apply for a permit to occupy a camp site in a national park if one actually intends to go camping there.

With what crime would a young person be charged if she were born at home, schooled at home, and began working in her teen years at jobs that paid only cash, signing a form whenever requested to the effect that she has opted never to apply for any “benefit” under Social Security, Medicare, Medicaid, etc., or to “participate” in any of these schemes -- that she neither has nor wants a 9-digit Social Slave number?

An employer (with an EIN) is indeed required to ask for a number to complete (without compensation) federal tax-collection paperwork. But if the employer finds the employee has no such number, the employer need only submit the forms to the IRS with a statement that a number was requested but not received. This procedure is specifically laid out in 26 CFR 301.6109-1(c).

How then can the government functionaries (though never under oath) tell us the tax is mandatory?

Because it is -- in those island territories where the Congress has plenary jurisdiction, not subject to the constitutional restriction that “No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or Enumeration herein before directed to be taken” (Article I, Section 9), a requirement which has been found to bar a direct federal graduated wage or income tax, and which the Supreme Court in the Brushaber and Baltic Mining cases correctly ruled had not been affected by the purported enactment of the Sixteenth Amendment, which does not seek to repeal the above cited section, but only guarantees that any income tax must be an indirect excise, not a “capitation or direct tax.”

You can look it up. Title 26, United States Code, Chapter 21, “FEDERAL INSURANCE CONTRIBUTIONS ACT,” Sec. 3121 (b). defines “Employment” as “any service ... performed ... (I) within the United States, or (II) on or in connection with an American vessel or American aircraft ...”

But how does the Act then define “the United States”? It directs us at Sec. 3121(e)(2) that “For purposes of this chapter ... the term ‘United States’ when used in a geographical sense includes the Commonwealth of Puerto Rico, the Virgin Islands, Guam and American Samoa.”

No other locations are named. Nor are we or the courts or the executive free to “infer” that the authors “must have” meant “... as well as the 48 states,” since the U.S. Supreme Court in Gould v. Gould, 245 US 151, ruled: “In the interpretation of statutes levying taxes it is the established rule not to extend their provisions by implication beyond the clear import of the language used, or to enlarge their operation so as to embrace matters not specifically pointed out. In case of doubt, they are construed most strongly against the government and in favor of the citizen.”

So the FICA law is perfectly constitutional in requiring compliance by the occupied Samoans and Puerto Ricans, according to its own definitions. But its mandatory provisions have never applied to those of us who live and earn wages in the continental United States (being protected by the Constitution from any such tyranny); we’re simply in the Matrix, swallowing our blue pills, happily asking if we may please, please be allowed to take part in a nifty withholding & benefits scheme which is not mandatory for us -- cheerfully volunteering by filing our W-4 “Requests for Withholding.”

No federal court will or ever has allowed the top Treasury lawyers to be placed under oath and asked to explain why the FIC Act doesn’t say “and the 50 states, those being Alabama, Alaska,” etc., if that’s what it means, and why on earth the law has never been amended to so read, despite legal scholars assiduously pointing out this devious little anomaly for 70 years.

Furthermore, even if participation in the “Social Security” intergenerational income-transfer Ponzi scheme were currently mandatory, then-Treasury Secretary William Simon warned in an article in the Nov. 3, 1976 Wall Street Journal that “The future prospects of the system as we know it are grim.”

Because the Trust Fund “has not been allowed to grow to more than a fraction of the required size” for long-term solvency (a situation which has never been rectified), “When the current workers retire, they will be completely dependent upon future workers for their benefits,” Secretary Simon warned, 29 years ago. “Their position is even more vulnerable, should anything go wrong with this delicate balance. ... Each generation has the power through the electoral process to refuse to pay.”

Did you catch that? The Treasury Secretary of the United States said each succeeding generation has “the power ... to refuse to pay.”

“If the next generation were to refuse to pay the retired population would be helpless,” Secretary Simon concluded.

I would argue not only that this becomes more likely as taxes go up and benefits are reduced (whether through an older retirement age, or through means-testing, or by whatever method), but that it could also happen de facto, whether or not a vote is allowed, through the mechanism of more and more young people simply performing more and more of their labor (Online, perhaps) in the untaxed “gray market.”

This -- not fear of enemy terrorism or evil drug dealers -- is precisely why the federal government is now dragooning everyone from bank tellers to supermarket clerks to pawnbrokers into the uncompensated government spy service, trying desperately to track the movement of any sum of cash or valuables worth more than $5,000 (in some cases, more than $2,500), introducing “Suspicious Financial Transaction Reporting Forms” and going so far as to create the new crime of “structuring” to nab anyone who goes from supermarket to supermarket, buying multiple $900 money orders on the same day.

They’re afraid the rats are getting ready to abandon their sinking Ponzi schemes.

This, in the end, is what the Bush Republicans have seen, and what the Berkley-Spratt Democrats refuse, in their fingermail-digging panic, to acknowledge.

One way or another, the game is almost up.


www.BlackMarketFridays.com