New York Times ‘Refutes’ Russo Film?
Analysis of David Cay Johnston’s Critique of “America: Freedom to Fascism”

by Tim Wallace

The July 2006 Times article, written by David Cay Johnston, is entitled “Facts Refute Filmmaker’s Assertions on Income Tax in ‘America’”, suggesting that Johnston and the Times actually invoke “facts” to counter what must be mere “assertions” raised in Russo’s film.

But in reality, Johnston and the Times have once again (perhaps unwittingly) recorded for posterity how far statists in the “mainstream” media will go to protect the self-serving parasites who call themselves the federal government.  A bit of critical analysis betrays Johnston’s “facts” to be far less than what he wants them to seem, rendering his 1400+ word screed scarcely the “refutation” it presumes to be.  Yet the issues raised in Russo’s film remain by and large untouched by Johnston’s assault, as they are well corroborated — with real facts — either in Russo’s film or from other readily available sources, as will be shown here.

Consider The Source

The Times has long been a pillar of acquiescence to the big-government agenda that long ago hijacked the American republic.  Like most of the self-styled “mainstream” media outlets, the Times may occasionally take issue with the government over various lesser issues (especially if “conservatives” are involved), but in general turns a blind eye to Washington’s ever-expanding, unaccountable, bureaucratic bloat — including its taxing apparatus.

Ever-greater government intervention in peoples’ lives, business, and property — both foreign and domestic — is often endorsed^[1] by the Times, with nary a thought as to what the American founders really intended, what the Constitution really permits, or what Americans really want today.

Nor is it a secret that the article’s author, David Cay Johnston, has long been a proponent of the American "income tax" and a self-appointed judge of anyone who challenges it.^[2]  Johnston wrote a book ostensibly showing that the “income tax” doesn’t tax the very rich enough, and leaves “the rest of us” to pay the difference.  But if he were really concerned about “the rest of us,” one can’t help wondering why he consistently rejects out-of-hand any and every challenge (legal or otherwise) to the IRS’s “interpretations” of law and coercive methods of confiscating private property from the general public.  (I think the technical term is “prejudice.”)  Derisively labeling “tax cheat” anyone who questions the statutory basis for the IRS’s fleecing of America, Johnston offers no evidence that he himself has personally analyzed the law itself.  That smells a lot more like toeing a (bipartisan big-government) party line than standing up for “the rest of us.”

David Cay Johnston and the New York Times strongly advocate the “income tax” as purportedly administered by the IRS — especially its use to “soak the rich” solely on the basis of their possessing or acquiring (regardless of how justly) more private property than someone else.  It only seems fair to ask, then, how Johnston or the Times could reasonably be expected to apply objective critical analysis of the facts and the law pertaining to any question or controversy regarding the “income tax” as administered by the IRS.  (All indications are plainly that they don’t.)

All that to say: Consider the source!

“Frauds” versus “Facts”

In his third paragraph, Mr. Johnston's article states:

“But examination of the assertions in Mr. Russo’s documentary, which purports to expose ‘two frauds’ perpetrated by the federal government, taxing wages and creating the Federal Reserve to coin money, shows that they...collapse under the weight of fact.”

Now Mr. Johnston and the New York Times have asserted right up front that the two key assertions of the Russo film will “collapse” under the weight of certain “facts” supposedly alleged in the Times article.  In other words they’ve asserted that the taxing of average Americans’ wages and the Federal Reserve are not frauds, and they’ll cite “facts” that demonstrate as much.  Let’s see if they do...

Changing the Subject for Starters

“Many of the reviews in major newspapers have accepted as having some factual basis the film’s main contention, that the government illegally extracts income taxes, even though every court that has ever ruled on these issues has upheld the constitutionality of the income tax.” [emphasis added]

No matter what Johnston means by “these issues,” the Russo film specifically (and repeatedly) addresses whether typical Americans are subject to the “income tax” (as administered by the IRS) according to positive public law^[3] — not the general “constitutionality” of the “income tax.”  There’s a great disparity between the question asked and the answer given.  Johnston and the Times commence their “refutation” by effectively changing the subject from “what does the law actually say?” to “courts say income tax is constitutional.”

To spell it out as plainly as possible:

Russo asks:	Johnston answers:
“What specific statute subjects  typical Americans to the income  tax and the IRS?”	“The courts have upheld the  constitutionality of the income tax.”

Why not just answer the question?

Just like the government folks interviewed in the film, apparently neither Johnston nor the Times can produce that specific — and conspicuously elusive — law sought as evidence by Mr. Russo (you know, the one law that would settle the whole matter once and for all?), so they misdirect Times readers’ attention to “constitutionality” court rulings instead.

And this is how they “collapse” the assertions in Russo’s film?

Let’s be clear on this:  An assertion that “every court that has ever ruled on these issues has upheld the constitutionality of the income tax” is not the same as producing the statutory “law” that allegedly subjects the typical American to the “income tax”.

Let’s be even more clear on this:  An assertion that “every court that has ever ruled on these issues has upheld the constitutionality of the income tax” does not “collapse” the notion that “the government illegally extracts income taxes” from typical Americans.  What would “collapse” that notion?  Why, a citation of the relevant — but conspicuously elusive — statutory law, of course!

Johnston is using a straw man “fact” to misdirect attention away from the issue raised by Russo — not to refute or “collapse” it.  Johnston has side-stepped the question of exactly what specific statute renders the average Americans’ private sector pay subject to the “income tax”.  The only things “collapsing” (so far) are the combined credibility of Mr. Johnston and the Times.

Kill the Messenger!

“Not mentioned in the film is that Mr. Russo has more than $2 million of tax liens filed against him by the Internal Revenue Service, California and New York for unpaid federal and state taxes. Mr. Russo declined to discuss the liens, saying they were not relevant to his film.”

You’ll have to decide for yourself how relevant those alleged liens are.  But in the absence of a specific statutory law that renders Mr. Russo’s earnings subject to the “income tax” in the first place, an IRS lien sounds more like fraudulent, coercive confiscation than rule-of-law and justice for all.

(State “income tax” statutes typically piggy-back on their federal counterparts, so if no federal statute makes Aaron Russo’s pay subject to the “income tax,” it stands to reason that no piggy-backed State “income tax” would lawfully apply to Mr. Russo’s increase in private property.)

Johnston’s mention of various “tax liens filed against” Mr. Russo only puts a finer point on Mr. Russo’s question:  Where exactly is the law that makes most Americans’ (e.g., Mr. Russo’s) pay subject to the “income tax” in the first place?  If that law cannot be plainly cited by persons professing to be intimately familiar with American income tax law, on what lawful basis are any “tax liens filed against” Mr. Russo, or anyone else, for that matter?

Smoke and Mirrors

“All of the federal income tax revenue, the film says, goes to these bankers to pay interest on the national debt, even though by the broadest measure the federal government’s interest payments are less than 40 percent of the individual income taxes, according to an examination of every federal budget since 1995.”

The closest thing in the film to Johnston’s straw man “quote” is:  “After interest payments and government waste, not one penny collected from the tax on your labor pays for the services you expect from the government”. [emphasis added]  Russo plainly did not assert in the film that “all of the federal income tax revenue goes to these bankers to pay interest on the national debt,” as Johnston falsely contends.

But in the end it matters less to ask how much “income tax” pays the national debt as it does to ask:  1) why we have a national debt — in the trillions — in the first place (did The People even have a chance to vote on that?), and 2) what the truth about the “income tax” is.  Johnston and the Times appear less concerned with such mundane matters as these than they are with giving the appearance of “refuting” the words they’ve surreptitiously put in Russo’s mouth.

More Messenger Smearing

“The documentary includes interviews with a host of people who are presented as experts, scholars and whistle-blowers. All deny the legitimacy of the income-tax laws, including Irwin Schiff, now serving his third prison term for tax crimes.”

The relevancy of Irwin Schiff’s being in prison for “tax crimes” is brought into question by the Russo film’s documentation of Schiff’s trial judge (US District Judge Dawson) arbitrarily disallowing as “irrelevant” decisions of the United States Supreme Court.  (Dawson should go down in history for remarking “I will not allow the law in my court room” and [to the jury] “You must follow the law as I give it to you”.)  Being sent to federal prison by a federal court that deliberately refuses to consider federal Supreme Court decisions can hardly be called an act of justice — but that’s obviously irrelevant to Johnston and the Times (among others).

Larken Rose, who is also featured in Russo’s film, just finished serving a one-year sentence at the whim of a similar kangaroo court, where his defense was deliberately crippled by the government prosecution team’s key player, US District Judge Michael Baylson.  Like Irwin Schiff, Larken Rose — in a federal court of law — was not allowed to cite the complete basis of his defense in statutory law.

Why Not Just Cite the Law?

“The cornerstone of Mr. Russo’s case is whether any law requires Americans to pay income taxes on wages.”

It is particularly noteworthy that neither Johnston, nor the Times, nor any of the “experts” they trotted out, proved capable of citing such a law.  Johnston’s article afforded them all an excellent opportunity to prove that the “income tax” as administered by the IRS is not a fraud, and shut the mouths of Russo and the rest of the Tax Honesty movement, just by citing the elusive law.  Instead, they spent all their energy and column space on playing word games and trying to make other people look bad:

The Truth about Title 26, including the history and the law behind the “Income Tax” has been well documented in Cracking The Code, a book by Peter Hendrickson. We don’t sell it, but he does.

“...Anthony Burke, an I.R.S. spokesman...said that when Mr. Russo called him asking what law required the payment of income taxes on wages, he sent Mr. Russo a link to documents, including Title 26 of the United States Code, citing the specific sections that require income taxes be paid on wages.”

That's all well and good, but Mr. Burke failed to show whose wages are subject to the “income tax” (and whose are not), as defined in any of the sections of Title 26.  (Title 26 is full of “sections”.)  Mr. Burke could generally “cite sections” until the cows come home, but if he hasn’t identified the section, paragraph, and specific text indicating that typical Americans are subject to the IRS’s “income tax”, then he has failed to positively answer the question in good faith.

More Smoke and Mirrors

“Title 26 says on its face that it is law enacted by Congress, but Mr. Russo denied this fact.”

No such “denial” appears in the film.  I’ve watched it multiple times.

“‘Title 26,’ Mr. Russo said in an interview last week, ‘is not the law, it is I.R.S. regulations and to be a law it has to be passed by Congress.’  Mr. Russo added that he had studied the matter closely and was confident that he had the facts.”

Did Mr. Russo actually say that?  Mr. Johnston conveniently (and conspicuously) failed to cite any documented reference to his quote of Russo, so naturally we have no means of confirming or disputing his claim about what Russo said based on evidence on record.  What interview?  Where was it published or broadcast?  Johnston simply doesn’t say.

“The film also states repeatedly that people are tricked into paying income taxes because no law makes them liable for taxes.”

Mr. Johnston and the Times fail repeatedly to put this notion to rest by citing the law that “makes them liable.”  If the law exists, it shouldn’t be a difficult thing for a self-styled tax expert like Johnston to cite it, and do away with the controversy.  But he doesn’t.

“The 16th Amendment repealed apportionment...”

This is an outright falsehood.  In fact, the 16th Amendment did no such thing.  No federal court decision or subsequent legal analysis supports Mr. Johnston’s claim.  The Amendment could not have “repealed apportionment” without explicitly repealing or modifying Article 1, Sections 2 and 9 of the U.S. Constitution (which it did not do). ^[4]  According to the U.S. Supreme Court itself, the 16th Amendment gave Congress “no new taxing power.” ^[5].

“To buttress the claim that the 16th Amendment is invalid, the film displays a quotation from a federal district judge, James C. Fox.  But the transcript from which the judge’s words were taken shows that while he spoke those words, they were in the context of laying out issues and that the conclusion he reached was the opposite of the words quoted.

“Judge Fox, the transcript shows, concluded that no court would accept any argument that the 16th Amendment was not properly ratified and therefore invalid.”

As a matter of fact, anyone who reads the full 26-page transcript (available here) will see that Judge Fox did not reach an “opposite conclusion” from what he said on the record, as quoted by Russo:  “I think if you were to go back and try to find and review the ratification of the 16th Amendment, which was the internal revenue, income tax, I think if you went back and examined that carefully, you would find that a sufficient number of states never ratified that Amendment. ... I think I’m correct in saying that actually the ratification never really properly occurred.”

Judge Fox also said that over “a long course of history” the Amendment has been treated for so many years as if it had been properly ratified, and that for that reason no court would treat it as anything but “part of the Constitution of the United States.”  But he did not “conclude” the “opposite” of his own statement about the Amendment’s alleged ratification, as the transcript unambiguously shows — quite to the contrary of Johnston’s claim.

Why Not Just Cite the Law? (Part 2)

“The film includes a brief interview with Sheldon Cohen, who was I.R.S. commissioner in the Johnson administration.  Mr. Cohen said Mr. Russo used editing that ‘twists my views’ to create a false impression.  Mr. Russo said he considered the assertion laughable.”

The assertion is indeed laughable.  Mr. Cohen boldly asserted that “you’re liable because the law says that you’re liable, and the [lower] courts say the law says you’re liable” — yet he couldn’t actually cite “the law” specifically, and when Russo asked about supporting Supreme Court decisions, Cohen responded with “You've caught me unprepared.”

Unprepared?

It’s not as if Aaron Russo buttonholed Sheldon Cohen on the street.  The date of their meeting and its subject were established in advance.  Since when does a former IRS Commissioner and current IRS General Counsel (i.e., lawyer) need to “prepare” before he can cite the law and Supreme Court decisions in support of the “income tax”?

Then, when Russo offered, “I'll come back,” Cohen immediately responded, “I don’t want to do that,” suggesting maybe there’s really nothing to “prepare.”  If this account of the conversation is inaccurate (i.e., “twisted”), it would behoove Mr. Cohen (and the federal government) to show exactly which of his views were “twisted” — and exactly how.

Perhaps the most laughable of Mr. Cohen’s assertions is what he said in response to Russo’s query as to why a Supreme Court decision a “silly argument.”  Sheldon Cohen’s response:  Because it’s “inapplicable” [to the IRS].  No explanation was furnished by either Sheldon Cohen, the IRS, David Johnston, or the New York Times, as to why the IRS is “immune” to Supreme Court rulings, or how such “immunity” was lawfully acquired by the IRS.

It’s worth noting that Mr. Cohen asserted that “you're liable because the law says that you're liable...the Supreme Court has so held,” and then called a Supreme Court decision (cited by Russo) “a silly argument...because it's inapplicable.”  Mr. Cohen didn’t explain where he got the authority to decide where Supreme Court decisions are valid and where they are mere “inapplicable silly arguments.”

So according to Sheldon Cohen, former IRS Commissioner and current IRS General Counsel, the IRS is immune to United States Supreme Court rulings ... because he says so.

“Despite hundreds and perhaps thousands of tax protesters [sic] going to prison, and many more losing their homes and life savings, the movement appears today to be more widespread than ever.”

Perhaps this is because the government’s well-documented bureaucratic and judicial suppression of the truth about the “income tax” is raising the ire of ever-increasing numbers of Americans.

As used here by Mr. Johnston, the term “tax protester” is largely misleading.  The most learned folks in the Tax Honesty movement don’t actually describe themselves as protesting a tax — their beef is with the way the “income tax” is arbitrarily misapplied, often with the gentleness of a runaway steamroller, by the IRS, their buddies in Justice Department, and federal judges.

If “mainstream” media pundits like David Cay Johnston are really puzzled that increasing numbers of Americans would oppose the government’s abject disregard for genuine justice, maybe it’s because “mainstream” media pundits like David Cay Johnston think “rule of law” and “justice” are code words for whatever the government happens to be doing at the moment.

Send in the Clowns

“Ms. MacNab, who has testified before Congress, said that at each of the trials prosecutors showed how the accused took out of context sections of the law and court decisions while ignoring other sections, including those shown to them by I.R.S. agents.”

How very convenient and “objective” for Ms. MacNab, a Bethesda, Maryland, financial planner (i.e., who makes a living telling people to pay taxes)^[6] that she can spout such impressive general conclusions after observing only a handful of selected tax trials.

There’s no question that a number of baseless “income tax” theories circulate among the American public, or that ill-prepared, ill-advised Americans do indeed fall victim to them.  Very likely, these are what comprised the handful of “trials” JJ MacNab has observed.  But the most dangerous, fraudulent, and baseless of “income tax” theories circulating among the American public seems to be the one documented in Mr. Russo’s film — the one perpetuated by the government, the media, and the “tax profession” (i.e., the likes of JJ MacNab).

“‘People who are drawn into this movement just refuse to acknowledge facts that show their beliefs have no basis in fact,’ she said. ‘Most of them have failed, their business has failed, their marriage has failed, and instead of taking responsibility for it they want to blame the government.’”

Mr. Johnston and the Times quaintly conclude what they headlined as the “collapsing” of Mr. Russo’s mere “assertions” with “facts” by trotting out disparaging generalizations of Tax Honesty advocates, based on the subjective opinions of someone whose livelihood depends in large part on the on-going administration of the “income tax” according to IRS policies and methods, rather than according to the law as written.

Am I the only one who sees the irony in this?

Conclusion

Still waiting for the “collapse” promised in Johnston’s third paragraph?  Don’t hold your breath.  He promised “facts” too, but most of what he delivers fails to qualify for that category.

David Cay Johnston and the New York Times utterly failed to effectively rebut the documented facts asserted in Aaron Russo’s film.  All they really did was attack Russo’s character, play word-games, and generally muddy the waters as best they could.  Why?  Perhaps because in typical “mainstream media” fashion, whenever an establishment institution (such as the “income tax”) is at stake, everything but the truth will suffice in the fight to preserve control for those who wield it.

David Cay Johnston and the New York Times may not like the issues raised by Aaron Russo’s film, but they obviously haven’t “refuted” them with “facts” as Johnston’s article promised to do.  (Straw man arguments, changing the subject, and misquoting your target don’t count as “facts”.)

This abject failure to perform as promised can only mean one of two things:  Either David Cay Johnston and the New York Times are inept, or they haven’t the necessary “facts” at their disposal.  Or both. 

Notes