Corporate Deception: The Seller’s Tax

Posted: December 11th, 2012 by Militant Libertarian

by Clint Richardson

When we consider the revenue generation scheme called taxation, we have been generally manipulated into believing that these 100?s of taxes on our daily lives and the way we live them are necessary for the greater good, and that government in its altruistic disposition would never raise those taxes if it didn’t need that revenue to corporately function for the benefit of the “people”.

What a joke!

Government has allowed the addiction of the nation to nicotine, alcohol, MSG, and corn syrup, with its own blessed regulations.

Then, once the addiction sets in, in come the taxes. Let’s face it… the cigarette and alcohol tax is a tax on the purchasing of addictive drugs. Meanwhile, hemp/cannabis is still federally banned, even for its medicinal and manufacturing uses. While in several of the States, pot is now being sold and taxed legally.

The moral of the story: somehow, marijuana is only dangerous if government cannot regulate and tax it? And so government gives permission to the people to consume pot products and plants via a license or permit for people to conduct an illegal activity legally. And for this privilege of conducting the illegal act made legal by permission, the government creates bureaucracy and needs taxation to fund it.

Of course, government has also regulated the use of alternative fuels and energies, forcing the population into a collective dependency (addiction) upon oil and gasoline. California, for instance, among other taxes charges 2 cent per gallon state UST fee (gasoline and diesel), and a 2.25% state sales tax for gasoline, a 9.42% state sales tax for diesel, including local taxes, for an average total of $.32 per gallon.

In California, anywhere from 7-9 million gallons of gasoline are used on average per day. The taxation potential here is obviously great, at over $2 million in “gas-sales-tax” per day for governments.

Who pays the taxes?

Hint: It’s not the oil companies or the gas stations…

And now, the government has the audacity to tax people who are sick and need medical treatment, with the “pharmacuitical and medical device tax“, which will be passed on to sick and dying consumers by these corporations:

As part of the recently enacted Patient Protection and Affordable Care Act (“PPACA”) – known to most as Healthcare Reform Legislation, new taxes will be imposed on manufacturers of “branded prescription drugs” and most medical devices. These taxes are in addition to the fees already charged by the Food and Drug Administration (“FDA”) for review of full new drug applications for drugs and 510(k)’s and Premarket Approval Applications for medical devices. And unlike user fees, the taxes will not be paid to FDA but assessed by the Department of Treasury and paid to support health insurance coverage.

The Pharmaceutical Tax

Unlike the medical device tax, the new tax on pharmaceuticals is complicated at best, and convoluted at worst. It applies only to “branded prescription drugs”, which are defined as any product approved under Section 505(b) of the Federal Food Drug and Cosmetic Act (“FFDCA”) that bears an Rx legend required by Section 503(b) of the FFDCA; the only exception is an orphan drug approved only for orphan indications. Generic drug sales are excluded, as those drugs are approved under Section 505(j) of the FFDCA; Rx products approved under Section 505(b)(2), of FFDCA, although quasi-generic in nature, are, however, subject to the tax.

These fees will not be paid to FDA, but will be transferred by Treasury Department to the Federal Supplementary Medical Insurance Trust Fund set up by PPACA to support health insurance coverage. The tax will first be paid in 2012 for the year 2011. The law requires the payment date be no later than September 30th of each year, which is the Federal Government fiscal year end.

The fee computation is convoluted. It goes like this. The fee is calculated by determining first “the percentage of sales taken into account.” If the aggregate sales of a company’s “branded prescription drugs” are less than $5 million, the percent is 0%.  If between $5 million and $125 million, then it is 10%.  If between $125 million and $225 million, then it is 75%.  If more than $400 million, then it is 100%.  See Section 9008(a)(2) of the PPACA.  The fee is then calculated based on a company’s percent amount of all manufacturers “sales taken into account”, as that percent of an “applicable amount” for each year-which is as follows:

2011 – 2.5 billion

2012 – 2.8 billion

2013 – 2.8 billion

2014 – 3 billion

2015 – 3 billion

2016 – 3 billion

2017 – 4 billion

2018 – 4 billion

2019 – after – 2.8 billion.

See Section 9008(a)(4) of PPACA.  The “sales taken into account” are based on reporting by government agencies (HHS, Veterans Affairs and Department of Defense) to the Department of Treasury and by any other source available to them. There are no new reporting obligations on pharmaceutical manufacturers.  The fees are considered excise taxes treated under Section 275(a)(6) of the Internal Revenue Code. The law requires the Treasury Department to publish guidance “necessary to carry out the purpose of this Section”. Section 9008(i)…

There are numerous potential issues raised by the scheme, foremost among them is how a pharmaceutical company can verify the validity of the information on which the tax is based, since it is not self reported – but reported to Treasury by HHS, Veterans Affairs and the Department of Defense. In addition, the law states that if more than one person is liable for payment of a tax, all such persons are jointly and severally liable for payment of the tax. See Section 9008(d)(3).

(Source: http://www.fdalawblog.com/2010/04/articles/legislation/new-taxes-for-pharmaceutical-and-medical-device-manufacturersimportersdistributors/)

–?–

It’s bad enough that corporations purchase and manufacture goods at what are called “wholesale” prices without paying any taxation on those purchases. But this insult gets turned into injury when these same corporations then “resell” those goods to the people – and charge the people what is officially called a “sales tax”.

But in reality, a more accurately descriptive word for this so-called “sales tax” would be a “seller’s tax”.

You see, corporations have been dodging taxes for decades, utilizing the government approved forced collection of these “sales taxes” that they (the corporations, not the consumers) owe to federal, state, and local governments as the seller of products in exchange for U.S. Dollars, making the sales tax more of an “income tax” to be paid by the corporation selling the good or service, which is then legally passed along to the consumer.

It isn’t the tangible goods sold in these retail stores that are being taxed – it is the legal tender transaction; a tax for the “right” (privilege) to use the government’s (Federal Reserve’s) printed and copyrighted money (notes). For example, 10% of the metal or plastic that makes up the body or motor of an automobile cannot be taken for the tax of purchasing and acquiring the car. The same goes for an apple, a house, or any other product that gets bought or traded. Likewise, a “service” cannot be taxed, leaving only 90% of the service for the purchasers use. A home, for instance, cannot logically be left 10% unpainted to pay for taxation.

And so the usurious bankers we call government had to develop an alternative…

Thus, a currency in the form of U.S. Dollars (legal tender) was created to be used in all transactions, and a tax could then be applied when that monopolized currency was exchanged for the product or service. Since the product or service, as a tangible thing, cannot be quartered and picked apart to pay the tax, it should be obvious to anyone reading this that the “sales tax” only applies to the legally owned and bound currency that is used in the transaction to acquire the tangible product or service.

This means that the sales tax is actually a “seller’s” tax, as the entity that sold the tangible product or service is the entity receiving an income of U.S. Dollars – a taxable income based on copyrighted notes that require a fee in the form of a tax for their use. It’s kind of like the music industry, where record companies receive a royalties from the people for using its copyrighted songs. Every time the song is played (dollar is spent) a royalty (tax) is paid. And in less than one week, one single dollar bill can produce double or triple its face value in taxation. Think about that for a moment…

To make this even more clear, we can compare sales tax to the income or capital gains taxes…

Income or capital gains, as defined by the IRS code, is the gain of assets that are valued in legal tender – the U.S. Dollar. For instance, a 25% income tax of your wages of $50,000 will equal $12,500 in income tax. This is a tax on the dollars that were payed to you for your contracted services to someone or something else. And because corporations really have no other legal choice but to use the dollar as a wage, the monopolistic forced use of this legal tender comes with a price; a tax. Again the music industry can be compared to this system, where radio stations will only play certain songs and promote certain bands, creating a monopoly on whose product (songs) get played mainstream, thus insuring that only a select few record companies will receive those royalties. There is no real competition. Likewise, a capital gains tax on the sale of a stock is calculated by the value of U.S. Dollars earned upon the selling (cashing in) of your corporation stock in exchange for (valued in) legal tender U.S. Dollars – even if you never put your hands on those actual physical dollar bills.

The “sales tax” is levied upon the legal tender U.S. Dollar amount earned by the seller. In contrast, a tax is not levied upon the purchaser of that stock or product you sold, just as your original purchase of that stock or product before selling it was not a taxable transaction – because the stock certificate, product, or service itself cannot be cut in portions to pay tax, and the stock certificate itself and taking possession of it is not what was being taxed. The legal tender that was paid for that stock or product was taxed by government to the seller of the stock that you bought, paid in U.S. Dollars or their foreign equivalent valued in U.S. legal tender. This, again, is a “seller’s” tax.

No legal tender earned = no taxation.

This is why making gold, silver, or any other form of trade or a bartering tool a “legal tender” is one of the stupidest ideas I’ve ever heard in the “patriot” movement. The last thing anyone (but government) should want is to be forced to pay taxes on gold and silver.

Imagine buying gold bars or coins with U.S. dollars when gold is also considered a “legal tender”. The government could then tax both the gold and the U.S. Dollars used to pay for that gold as a double sales tax. So the gold would be taxed for the buyer and receiver of the gold, and the seller would be taxed for the receivership of U.S. Dollars.

Which “patriot” thought of that idea? I’d watch out for that dude…

So what about the regular old sales tax at a department store?

When you give a corporation your hard earned wages to pay for “sales tax”, for which you legally contracted with the United States to receive as legal tender for payment of your “employment”; the services you provide for a wage paid in legal tender U.S. Dollars – you are giving that corporation what is left over from the income and other taxation that was automatically withheld from your paycheck by government for your convenience. You are charged this income tax because you are receiving this copyrighted currency belonging to government as “income” instead of some non-taxable thing like walnuts or coal, whereas the person or corporation paying you that legal tender pays nothing for the privilege of using those U.S. Dollars. The corporation you work for sells the products or services of your labor as an employee while passing the tax on to its customers. Then, the corporation pays you with this tax-free money and pays no taxes for receiving your services as an employee. This actually makes you (as the employee) the seller, as you have sold your services to your employer in exchange for legal tender under contract. The only difference here is that the people “employees” of these corporations don’t have the “privilege” of  forcing their “employers” to pay that tax as a “sales tax” like corporations do to their customers. Quite the opposite really… as government has created a criminal punishment for “tax evaders” who lawfully do not wish to consent to that income or sales tax. Whereas, for corporations, government created laws that allow and support them in their tax evasion purposes, by “requiring” corporations to pass on and collect their own “seller’s tax” (tax on the dollars they earn) to the people (consumers of the corporation’s products). And these stores will even call the police if you refuse to pay the “sales tax” that is actually their own “seller’s tax” to pay! The people go to jail while the tax evading corporation continues to sell to consumers tax-free, by forcing its customers to pay the corporations own taxation on its income of legal tender earned.

And this is why I support “alternative” currencies and bartering…

The only way to break the stranglehold and price-fixing/over-pricing of a monopoly is to create alternative choices. If people had the choice of using a non-taxable piece of paper as opposed to a taxable piece of paper, things would be a lot different. Heck, it might even bring back that old concept of competition!

But instead, people get arrested and thrown in jail for doing that.

If for some reason this concept is lost on you, let’s prove the point.

The Web Site of the New York State Society of CPAs states:

“For example, in the Borders Online case, California required Borders Online to collect sales tax because, among other things, its customers were permitted to make returns at the separately owned and operated Borders bookstores located throughout California [Borders Online, LLC v. State Board of Equalization, 129 Cal.App.4th 1179 (2005)]. Even though the Borders bookstores were not typical sales agents and were not directly involved in the selling process, the court held that the ability of customers to make returns at physical locations in California assisted in the sales process. Accordingly, the court held that Borders bookstores were Online’s representatives for the purpose of selling goods in California. (Border’s) Online was assessed more than $150,000 in tax for prior periods based on its relationship with Borders bookstores.

(Source: http://www.nysscpa.org/cpajournal/2008/808/essentials/p48.htm)

Notice here that it was not each former individual consumer that was assessed a tax after they made their purchases, but was instead the true responsible party for the receiver of taxable legal tender – the corporation selling non-taxable physical products or services to consumers. Again, only the privilege of the use/acceptance of the dollar is taxed. Thus, because Borders Online received “legal tender” in exchange for its products, the “seller’s tax” was assessed to Borders Online – not the consuming people as customers – and the corporation is liable whether it “collects” the taxes from the people or not.

If Borders Online would have collected these taxes that Border’s itself owed from its sales as is usually the case, then Borders Online would have paid no taxes for its sales and for conducting business across the entire United States and indeed the world economy. So most corporations buy tax-free and then re-sell tax-free (by passing its seller’s tax onto the people and calling it sales tax).

The report also explains:

“Forty-five states and the District of Columbia impose a sales tax. If a business should have collected sales tax from its customers but did not, the business (and, in many cases, its owners) may be required to pay the tax on all taxable sales made in the state from the inception of the business activity in such state, plus interest and penalties…”

(Source above)

Now, the protagonist argument certainly could be made that the consumer would likely end up paying higher prices for products anyway as most corporations (sellers) would probably hike up their regular every-day prices in order to meet the taxation demand put on them by government. But that same detractor just might have forgotten about the concept of competition – of alternative currencies. For if a seller accepts gold, silver, copper, brass, seashells, sticks, stones, favors, or non-governmental tax-free alternative paper currencies in the first place, then the taxation game goes away altogether.

But government doesn’t much like that idea either, for competition would destroy its power of revenue generation called taxation.

And so, government has created the trap called “incorporation”, whereby people may incorporate their businesses in order to receive special tax-breaks, write-offs, and other government “benefits” – so long as they play along with the government extortion racket and force their customers to pay for the taxation revenue generation scheme of government. The incorporated people charge the other people for the taxes that the incorporated people owe to government, becoming the worst kind of assistants to tyranny.

History shows that when considering the disposition of people in slavery, the slave that does his master’s bidding and rules over the other slaves of his master’s plantation without consciousness becomes the more privileged house-slave, able to enjoy just a few more benefits than the other slaves. And so business owners have followed suit…

And to think, all of this could simply be avoided if the people and businesses of America would simply boycott the use of government’s two enslavement tools – State incorporation and the Federal Reserve Note.

Until then, when and indeed if the people ever collectively wake up to see their own enslavement to a copyrighted currency that they don’t ever own even while they possess it in their wallets and in their bank accounts, we people shall continue to pay the taxes that rightfully should be paid by corporations. And the people will continue to believe that the “national debt” is their own, instead of the government corporation who created it through its Federal Reserve banking scheme of usury by implied consent, even though it isn’t even the people’s money in the first place!

And corporations like General Electric will continue to pay no income taxes to support the countries and people it calls customers while earning billions in profits.

P.S… This writing is dedicated to all of the oxy-morons out there that think citizenship and a national currency somehow equals sovereignty for themselves as individuals.

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