Mr. Samples asserts the income tax is an indirect excise tax improperly imposed upon the labor of a natural person. That is, he believes wages received in exchange for labor become property, and it is therefore improper to impose an income tax on his property.
Mr. Samples’s theory is rejected by the Tax Court. His argument is frivolous for several reasons but mostly because “gross income means all income from whatever source derived.” 26 U.S.C. sections 61(a) and 61(a)(1).
The Court also grants the Service’s motion for a $5,000 section 6673(a) fine. The best part of the opinion is the following 32-year-old quote from Hatfield v. Comm’r, 68 T.C. 895, 899 (1977):
Many citizens may dislike paying their fair share of taxes; everyone feels that he or she needs the money more than the Government. On the other hand, as Justice Oliver Wendell Holmes so eloquently stated: “Taxes are what we pay for civilized society.” Compania de Tabacos v. Collector, 275 U.S. 87, 100 (1927). The greatness of our nation is in no small part due to the willingness of our citizens to honestly and fairly participate in our tax collection system which depends upon self-assessment. Any citizen may resort to the courts whenever he or she in good faith and with a colorable claim desires to challenge the Commissioner’s determination; but that does not mean that a citizen may resort to the courts merely to vent his or her anger and attempt symbolically throw a wrench at the system. ***
Mr. Samples’s argument sounds like a very twisted application of John Locke’s Theory of Labor. Locke theorized that when a person “mixes his labor with” the land, their labor becomes part of the land, and thus imparts land ownership to the laborer. But, as pointed out by the Tax Court, whether a person receives money or property in exchange for his labor, he has received income.