Federal Taxation in the United States:
A Biblical and Constitutional Perspective

by Gerald R. Thompson

Application of Principles of Taxation

Income Taxation
Property Taxation
Estate and Inheritance Taxation
Gift Taxation
Tax Exemption
Employment Taxation
Value Added Taxation (VAT)

The fourteen principles of biblical and constitutional law just stated are not to be considered exhaustive, but rudimentary. There are many other rules and corollaries of biblical and constitutional law which relate to federal taxation, but few as fundamental or germane as those stated here. Thus, what has been stated is sufficient for the purpose of laying a firm foundation upon which particular rules of federal tax policy may be built.

The next task is to construct the framework of a federal tax policy structure, that is, to outline the primary applications of these fundamental principles which give shape to the whole structure. Of necessity, many other applications which could be derived from these principles must be left to another time. Nor does space permit a detailed application of principles to any topic. The applications selected are intended merely to establish the primary pillars of a framework derived from a faithful adherence to biblical and constitutional principles.


In spite of continual protests against it, a federal income tax is neither unbiblical nor unconstitutional per se. Constitutionally, Congress has the enumerated power to levy income taxes both under Article I, Section 8 and the 16th Amendment. Regardless of whether it is direct or indirect, an income tax is at least capable of being levied in some fashion based solely upon the Article I power.

That the authority conferred upon Congress by Sec. 8 of article 1 . . . embraces every conceivable power of taxation has never been questioned, . . . [a]nd it has also never been questioned from the foundation, without stopping presently to determine under which of the separate headings the power was properly to be classed, that there was authority given, as the part was included in the whole, to lay and collect income taxes.151

It is also clear that an income tax is an indirect tax, because it attaches to sales transactions rather than to the mere status of being. The only way an income tax could be considered a direct tax would be to view all income as an attribute of property ownership. This would push the view of John Locke that personal labor is a man’s property to an extreme. More in keeping with constitutional principles is the view that income derived from personal labor is a sale of services, not a valuation of property. Therefore, under the law of direct and indirect taxation, an income tax is indirect and need only be uniform, not apportioned.

A contrary view would be very troublesome. If an income tax were really a direct tax, but did not need to be apportioned (as provided by the Sixteenth Amendment), it would destroy the two great classes of taxes established in the Constitution. Under this view, the income tax would fit into neither class, and be constrained neither by uniformity nor by apportionment.152 Accordingly, such an income tax would violate the law of direct and indirect taxation.

Whether the 16th Amendment was improperly ratified, or is in some other way defective, would seem to be irrelevant. The adoption of the 16th Amendment did not provide for a previously unknown substantive power of taxation.153 It merely negated the effect of a prior ruling of the Supreme Court which was contrary to the law of direct and indirect taxation. “There is no escape from the conclusion that the Amendment was drawn for the purpose of doing away for the future with the principle upon which the Pollock Case was decided.”154

As presently enacted, however, federal income tax laws run afoul of some fundamental principles of taxation, such as the law of spending authority. Although the federal income tax is not assessed for any single purpose, portions of the revenue raised thereby are appropriated and spent for impermissible purposes, such as education (contrary to the law of religious liberty) and charity (contrary to the law of love). This does not invalidate the income tax per se, but undoubtedly affects the rates at which income taxes are imposed to finance these impermissible purposes. That is, if Congress kept within its constitutional limitations on spending, income tax rates would drop.

Still, this does not vest each individual taxpayer with the right to protest Congressional spending by refusing to pay income taxes. Public officials have been given the authority to tax to pay their lawful debts. Due to the law of exaction, the claim that the income tax is voluntary155 is without merit, since every tax is compulsory by definition. The right way to protest as a taxpayer is to exercise the freedoms to vote, to lobby, and to run for public office. Tax cheating is not a lawful option.

As mentioned earlier, there is no express constitutional prohibition of a graduated income tax (the rule of uniformity is geographical only, not intrinsic). Nonetheless, a graduated rate structure arguably violates the Constitution, since the law of equality undergirds the common law system upon which the Constitution is based. A tax structure in which the rate of taxation varies with the level of income treats the poor differently than the rich, because all taxpayers do not have the legal opportunity to keep for themselves the same proportion of income after taxes as other taxpayers. Thus, progressive and regressive rate structures violate the rule of proportionality required by the law of equality.

Further, a direct result of the existence of a graduated rate structure is the division of taxpayers into classes (i.e., single, head of household, married filing jointly, and married filing separately) for the express purpose of treating them unequally. Were income taxed at a flat rate applicable to all taxpayers, these classifications and the disparate treatment of each would not be necessary. Accordingly, graduated rates produce inequality not only between the rich and the poor, but also between different kinds of taxpayers at the same income level. The existence of a graduated rate structure therefore implies that Congress has rejected “all men are created equal” as a legal rule binding on that body.


As indicated by the law of concurrent jurisdiction, the authority to own, use and control property has been given to the family governmental unit. Since this authority came from God, not public officials, the duty of stewardship which attaches to property ownership is moral only, and is not enforceable by civil government. Neither God nor the people have ever given public officials the right to superintend the family’s exercise of its authority. Yet, the imposition of a tax on the mere ownership of property unavoidably impairs the family’s rights before God to hold its property. In essence, every property tax presumes that the civil authority over property takes priority over the family’s authority, rather than viewing these jurisdictions as concurrent and coequal.156

All private property is the gift of God, not a creature of society,157 yet property taxation necessarily implies that a person can never truly own what God gave him. After all, taxable property can never be freed from the civil claim upon it. That is, the tax on specific property can never be fully satisfied. Property which is taxed is merely rented in perpetuity. This is particularly true whenever specific property is subject to forfeiture when the tax levied on it remains unpaid. When property forfeiture for unpaid taxes vests title in civil government, it is equivalent to an assertion that the only ultimate and true property owner is society. In other words, property ownership is viewed as a social privilege, not a private right. Accordingly, all property taxation is anti-private property, and is more suited to socialism than liberty.

Property taxation also violates the law of love, for mere ownership is neither a sale nor a contract. Accordingly, mere ownership involves no action which can be taxed. Further, property taxes at the state level are also generally levied for an impermissible purpose – the funding of state (public) education – which violates the law of service debt. Since the authority to educate children has also been given to the family,158 and public officials are precluded from teaching truth pursuant to the law of religious liberty, no government may lawfully support or establish the institutions known as public schools.

Historically, private property was regarded as among the unalienable rights of the people, particularly included in the phrase, “the pursuit of Happiness” in the Declaration of Independence. As stated by Chancellor James Kent, “The sense of property is inherent in the human breast . . .. Man was fitted and intended by the Author of his being . . . for the acquisition and enjoyment of property. It is, to speak correctly, the law of his nature.”159 Constitutionally, private property is among the unalienable rights secured by the law of constitutions, and is among the rights reserved to the people under the law of enumerated powers.160

All subjects over which the sovereign power of a State extends, are objects of taxation; but those over which it does not extend are, upon the soundest principles, exempt from taxation. . . . The sovereignty of a State extends to everything which exists by its own authority or is introduced by its permission.”161

Although this quotation from Chief Justice Marshall was in the context of examining a state’s power to tax a federal bank, it states a principle of broader scope. The principle is that a civil government cannot tax that which exists prior to, and apart from, civil society. It would be difficult to deny, therefore, that property taxation is anything other than the claim that private property is the creature of civil government put into practice.

A curious effect of the law of direct and indirect taxation is that actual property taxation under the Constitution is permitted, but strongly disfavored. Obviously, a tax on property ownership is a direct tax, because it attaches to a mere status of being, not an action. By design, an apportioned tax on all the property of the United States will result in the people of each state paying a different rate of tax compared to people in other states, because each state’s share of the total tax is apportioned on the basis of population, not property value. Consequently, any apportioned tax will be opposed by the states in which the rate will be highest, and difficult to pass through Congress.162 Historically, the unpopularity of direct taxation may be inferred from its negligible use.

Additionally, every direct tax levied subsequent to 1798 permitted each state to pay its apportioned share of the total tax on behalf of its people and collect the revenue in its own way.163 In such cases, the collection of property assessments by federal officials is abated. Thus, a constitutional mechanism has been allowed which permits the states to avoid all actual direct federal taxation of property. Surely this mechanism was part of the design of the Constitution to limit the ability of Congress to tax property in the United States.

Indeed, the only other form of direct tax (a capitation tax) has been so strongly disfavored in America that, to my knowledge, none has ever been enacted at the federal level. Unless one assumes the constitutional framers missed the obvious impact of what they wrote, it might be reasonable to assume that they knew direct taxes would be politically difficult, if not impossible, to assess. Perhaps they even intended to accomplish this result out of reverence for the law of nature.


When the federal estate tax was challenged before the U.S. Supreme Court in 1875,164 the issue at bar was whether an estate tax was a direct or indirect tax. The Court ruled that an estate tax was imposed upon the transfer of property rather than its mere ownership, and therefore was an indirect tax.165 This holding was justified on the basis that “the tax on income . . . cannot be distinguished in principle from a succession tax.”166 Having disposed of the direct tax question, the Court concluded that a federal estate tax was constitutional. This opinion was affirmed 46 years later, when Justice Holmes stated, “It is admitted, as . . . it has to be, that the United States has the power to tax legacies . . ..”167

But, the Supreme Court missed an important point. Just because a tax is found to be indirect does not make it automatically constitutional. The Court failed to recognize that, although estate and income taxes are both indirect, there is a fundamental distinction between the two. Income receipt by definition involves a sale, but the transfer of an estate, though having an economic effect, does not. As explained earlier under the law of love, the transfer of an estate is a gift, not a sale. Therefore, civil government lacks jurisdiction over the transfer of an estate or inheritance – there is no transaction which it can tax. Simply put, an estate tax violates the law of love.168

An estate tax also violates the law of concurrent jurisdiction because it impairs the family’s moral duty to pass property to the next generation, a duty enforceable, regulable, and taxable solely by God.169 As Chancellor James Kent has said, “The right to transmit property by descent, to one’s own offspring is dictated by the voice of nature.”170

The affection of parents towards their children is the most powerful and universal principle which nature has planted in the human breast; and it cannot be conceived, even in the most savage state, that anyone is so destitute of that affection and of reason, who would not revolt at the position, that a stranger has as good a right as his children to the property of a deceased parent.171

It would seem apparent that the imposition of an estate or inheritance tax contradicts the law of nature. It presupposes that the authority to pass an estate or inheritance, in the words of Chief Justice Marshall, exists by the government’s own authority or is introduced by its permission. Thus, it is no surprise that many of those judges who have upheld the validity of estate or inheritance taxes have done so, expressly or impliedly, on the basis that estate transfers are a creature of society, and not a God-given right, to wit:

The right to take property by devise or descent is the creature of the [civil] law and secured and protected by its authority. The legislature . . . may tomorrow, if it pleases, absolutely repeal the statute of wills and that of descents and distributions and declare that upon the death of a party, his property shall be applied to the payment of his debts and the residue appropriated to public uses.172

Accordingly, conventional wisdom no longer views the family’s authority to pass estates unimpaired by civil constraint as part of “the laws of nature and of nature’s God,” among the unalienable rights of the people secured by the law of constitutions and reserved to the people under the law of enumerated powers.


Obviously, the preceding analysis of estate and inheritance taxation applies to gift taxation. If inheritances and estates are beyond federal taxing authority because they are gifts, then all other forms of giving should receive the same legal treatment. Conversely, if inheritances and estates are taxable, then arguably at least some other gift transactions can also be taxed.

Historically, estates have been taxed in England and America for hundreds of years, yet no gift tax existed in either country until 1924. With the introduction of the federal gift tax by Congress, the perceived power to tax legacies was extended to its logical conclusion. In fact, the primary reason a gift tax was proposed was to prevent the circumvention of estate taxes by people who gave away their property before dying. This logical link between estate and gift taxes is still reflected today in the unified estate and gift tax credit under federal law.

When the gift tax was first challenged in the Supreme Court, the Court concluded that a tax levied on the donor of an inter-vivos gift was an indirect tax, thereby meeting all constitutional requirements.173 However, the Court did not acknowledge the unalienable right of people to transact gifts, stating that:

So far as the constitutional power to tax is concerned, it would be difficult to state any intelligible distinction, founded either in reason or upon practical considerations of weight, between a tax upon the exercise of the power to give property inter vivos and the disposition of it by legacy.174

It is ironic that the Court correctly stated this principle, yet came to a seemingly erroneous conclusion. The legal principles which make estate transfers immune from taxation also make all other gifts immune from taxation. It is true that there is no legal distinction between the validity of a gift tax and an estate tax. However, this correlation mitigates against the validity of either tax, not in favor of it.

In keeping with its nature, the gift tax is imposed upon the donor, not the donee, as a tax on the privilege of distributing wealth by gift.175 Yet, an interesting aspect of federal taxation overall is its inconsistent treatment of donors and donees. Gift receipts have historically been immune to income taxation because of the nearly universal recognition that the receipt of a gift is not income.176 However, a gift transaction cannot be the exercise of an unalienable right by the donee and at the same time the exercise of a mere privilege by the donor. Thus, one would expect the rule of law to require that gifts would be either taxable or tax-immune to donor and donee alike. If there is a rule of law which demands, or even permits, such disparity between donors and donees, I am unaware of it.

Consequently, gift transactions are regarded as taxable for gift tax purposes, but as non-taxable for income tax purposes. It may be argued that this disparate treatment is justified because the purposes of gift taxation and income taxation are different. Yet, even so, it is questionable whether any legal rationale remains under current federal law for exempting gift receipts from income taxation. After all, if gift transactions are taxable to any extent, then the exemption of gifts from income taxation is a mere privilege which Congress can remove whenever it wishes. However, if gifts are immune from income taxation as a matter of legal right, then no gift tax ought to be suffered which impairs this legal right. The crucial question is whether the taxability of gifts is to be determined on the basis of public policy (a mere privilege) or the rule of law (a legal right).


The inconsistent taxation of the donors and donees of gifts has not gone completely unnoticed. Some legal commentators have questioned whether there is any rational basis for exempting charitable organizations from the federal income tax.177 The reason for this questioning is the apparent lack of any economic difference between contribution receipts and sales receipts.178 But, this reasoning ignores the legal differences involved.

As the previous discussion indicates, the tax-immunity of gift receipts is a function of the nature of the transaction, not a function of who the donee is. Charitable organizations are exempt from income taxation on their contribution receipts not because they have been granted any special immunity by God or exemption by public officials, but because of the legal character of gift transactions. To tax the gift receipts of a charitable organization for any reason whatsoever, regardless of whether its activities comport with public policy, exceeds the lawful jurisdiction of government.

However, modern federal tax exemption laws have significantly departed from this simple model. First, exempt status permits charities to treat some business income the same as contribution receipts for income tax purposes. That is, business income which is related to an organization’s exempt purposes is not taxed, even though income from the same kind of activity would be taxable to non-exempt organizations.179 Second, federal law grants or recognizes exempt status only with respect to certain qualified organizations.180 The reason why these special exemptions have persisted seems to be that tax exempt status is not really based on law at all, but is derived from strictly political concerns which are promoted by special interest groups and lobbyists.

Contrary to the claims of some biblical expositors,181 the law of concurrent jurisdiction does not require that churches or other charitable organizations deserve special tax immunity or exemption. In other words, the fact that churches are governed directly by God rather than public officials does not support the claim for church immunity from taxation. If churches were exempt from taxation merely because they are governed exclusively by God, every individual and family could make the same claim, rendering every form of taxation void. Remember, there are four basic jurisdictions in society, not just two. Consequently, individuals, churches and families are each governed directly by God.

Further, individuals, churches and families are coequal. Just as none of them is ruled by civil government, so none is more or less an independent jurisdiction than the others. After all, it is the family, not the church, which has original dominion authority (the basis for all income production). Therefore, the best claim to tax exemption among the basic institutions can be made by the family, not the church. However, as required by the law of exemption, even the family’s claim to exempt status is invalid, since it is not a member of the civil household. Thus, the argument in favor of church immunity contradicts the law of concurrent jurisdiction, rather than affirming it.

Similarly, the law of equality requires that charitable organizations be treated the same as all other taxpayers. The basis upon which exempt organizations are selected for special tax status makes the federal government a respecter of persons. That is, exempt status is a function of who the taxpayer is (a person approach) rather than the nature of the activity involved (a purpose approach). Public policy, in this context, disfavors individuals compared to entities,182 and any group with an undesirable program or policy.183 Yet, there is no legal basis (apart from the whim of public officials) for treating individuals and charities differently with respect to either their income or contribution receipts.

The law of exemption provides that only members of the civil household are truly immune from taxation because of who they are. Most organizations exempt under federal tax laws, including private religious, charitable and educational organizations, are not of this description. Thus, the granting of exempt status to charities treats them as though they were part of the civil household, when their state charters regard them as private, not public, organizations. Yet, the law of tax exemption is self-enforcing in its own way.

A real cost of obtaining exempt status is that public officials can tell an exempt organization how to conduct its affairs and structure its government.184 This is to be expected, since that is the way all political subdivisions are governed. In other words, federal tax-exempt status is an acceptance by the charity of federal jurisdiction over some aspects of its own self-government. It is ironic that the people who most forcefully argue for the special status of churches on the basis of a claimed immunity in reality submit their churches to increased government intrusion whenever they promote the recognition of their special exempt status.

Hence, a charity which receives any business income, whether related or unrelated, has no claim to exemption from paying taxes on such income as a matter of legal right. In other words, the granting of tax exemption to qualified charities as to their related business income is a matter of legislative grace, which can legitimately be terminated at any time.

However, such legislative grace does a disservice to the law of love. Tax exemption is often defended on the basis that charities contribute services to society which other organizations are unable or unwilling to provide. Supposedly, exempt status compensates them for this activity. Yet, what charities give must be from love, not for a quid pro quo. Accordingly, exempt status negates, in part, the special nature of nonprofit activities as a form of public ministry (i.e., charity which expects nothing in return). Further, how can Congress decide to be gracious to charities, when that grace itself violates the fundamental laws of equality, jurisdiction and exemption?

A related question concerning tax-exemption is whether the donor of a charitable contribution is entitled (as a matter of right) to a deduction from income on account of the contribution. The key to this analysis is to realize that disallowing a charitable deduction is not the same as taxing the gift. The failure to grant a charitable deduction is not a tax on the giving of the gift, but merely a tax on the full income receipts of the donor, which is lawful.

All income received is income at the point of receipt, which is when the taxable event occurs. What a person does with his income after it is received is a matter of expenditure, not income. In other words, an income tax is essentially a tax on gross income receipts, not a tax on net income after personal expenses. If public officials were obliged to grant a deduction from income for every expenditure governed exclusively by the law of love, little income would remain to be taxed.185 Thus, a charitable deduction from income is also a matter of legislative grace.

The question is whether public officials have the authority to be gracious in this way. Necessarily, Congress must restrict deductions to only certain kinds of gifts. Otherwise, gifts to spouses and children would virtually eliminate all individual taxable income. Hence, deductions are allowed only for gifts made to qualified charities. However, as discussed earlier, the distinction between gifts made to organizations and individuals is based on politics, not law. Gifts to individuals, which follow the biblical model for giving,186 end up being treated unequally.


Employment taxes (including self-employment taxes) are not unlawful per se, at least to the extent they are measured by wage income derived from the sale of personal services. Contrary to the claims of some income tax protestors, taxes measured by wage income do not constitute a levy on the mere exercise of labor. Not all labor services produce wage income. To the extent a person sells his labor services for money, his compensation is taxable. Wages represent only the commercial value of personal services as determined by the laborer and his hirer, not the intrinsic value of labor.

Although the manner in which employment taxes are imposed is lawful in theory, it must be recognized that in America they are expended strictly for non-civil purposes, i.e., old age, survivors and disability insurance, commonly called social security (FICA and SECA)187 and unemployment compensation (FUTA).188 On the one hand, these purposes may be viewed as purely charitable. Social security and unemployment benefits are not paid by reason of any quid pro quo the recipients furnish to the government, but because of the perceived need for public officials to promote the general welfare of the nation. This, of course, runs afoul of the law of spending authority. On the other hand, it may be argued that recipients of such benefits have a contractual right, based on prior taxes paid, to receive such benefits. However, no such contract really exists. There is no direct relationship between benefits eligibility and prior taxes paid. Further, Congress is at complete liberty to modify the benefits levels and eligibility requirements. However, even if such a contract existed, it would merely make the government an insurance carrier, which serves no arguable constitutional purpose pursuant to any enumerated power.

In addition, the Federal Unemployment Tax Act provides for a credit against the unemployment tax based upon contributions to state unemployment funds, which funds are established pursuant to state laws approved by the federal Secretary of Labor.189 In this way, the federal government sits as a judge over state legislation in violation of the law of federalism.

Nor do I doubt the authority of the federal government and state government to cooperate to a common end, providing each of them is authorized to reach it. But such cooperation must be effectuated by an exercise of the powers which they severally possess, and not by an exercise, through invasion or surrender, by one of them of the governmental power of the other. . . . [Under the unemployment tax act] the federal government . . . sits . . . as lord paramount, to determine whether the state is faithfully executing its own law – as though the state were a dependency under pupilage and not to be trusted.190


The value added tax, or “VAT,” enacted in Great Britain and other European nations,191 has been proposed for adoption in the U. S. in order to partially replace income and payroll taxes,192 and is sometimes likened to a federal sales tax. This characterization would be fine if it were accurate, for there is no prohibition against a federal sales, or excise, tax on interstate commerce. Excises are among the indirect taxes which Congress is authorized to “lay and collect.” But, a VAT is of a substantially different nature.

The VAT is a tax paid by a business on the increase in the market value of its products or services resulting from the business’ production activities. This increase in market value – value added – is equal to the costs the company incurs for the labor and capital it uses. The base of the VAT – the amount on which the tax rate is applied – is the firm’s gross payroll plus its gross profits.193

In other words, a VAT is imposed on the costs incurred by an enterprise, not its income. The economic theory underlying a VAT is that these costs represent a burden imposed on the economy for the use of some of society’s resources which “are not simultaneously available for any other use by anyone else.”194

One major component of taxable costs is the cost of labor, as measured by gross payroll. This aspect of a VAT is structured similarly to the employer’s portion of current federal employment taxes. However, the VAT is not an employment tax. That is, the actual incidence, or reason, for the tax is not the income value of personal services (i.e., wages). Rather, the tax incidence is an economic burden said to be imposed on the economy. Gross payroll just happens to be the barometer for measuring this economic burden.

However, this poses some problems. First, the economic burden is imaginary, not real. The fact that one enterprise ties up certain resources does not mean that any other business could, would, or should use those same resources. Second, and more fundamentally, the economic theory runs contrary to the laws of private property and family dominion. Since when does society have a legal claim to the business use of private property or employment relations? Thus, although taxes may be levied against gross wages in some circumstances, in the case of a VAT, it is unrelated to the reason the tax is imposed in the first place.

The problem is compounded with respect to the computation of capital costs incurred for purposes of the VAT. The so-called labor burden on the economy is at least measured by the cost of actual payroll, but the cost of capital is not measured by any actual cost at all. Instead, a firm’s gross profits (a private asset) are viewed as a cost to the economy (a social liability). Further, it is the latter which is being taxed, not the former.

A VAT on this purported cost suffers some of the same defects as the VAT on gross payroll. First, a firm need not actually expend its gross profits on capital, to have those profits added to the VAT base. Gross profits are simply deemed to be available for paying capital costs, even if actually used to pay interest on debts, dividends or even charitable contributions. Consequently, the capital cost is merely imputed, not actual. Second, it is difficult to imagine how any valid principle of law would regard a private asset as a social cost cognizable by public officials. Whatever happened to the laws of concurrent jurisdictions and enumerated powers?

Consequently, a VAT imposes an individual tax to pay for a systemic burden, the actual value of which is imaginary, not real, and which is unrelated to the results obtained by the computational methods employed. Further, a VAT on capital costs is measured at least in part by transactions which involve no sale, such as contributions. Thus, a VAT violates the law of love.

It is this last point which spells danger for all charitable organizations. Since the VAT is applied to a tax base which need not either be derived from sales nor expended for purchases, it applies equally well to charitable organizations as it does to profit seeking businesses.195 In other words, to the extent any charity has contribution receipts which exceed applicable costs, the charity is viewed as having gross profits subject to the VAT. Under this perverted view of economics, it is irrelevant how an organization derives its revenues, whether by sale or gift, since the social burden is the same for both. In essence, a VAT applied to charities is no different than a tax on contribution receipts, and it is for this reason most dangerous. In short, biblically and constitutionally, a VAT has little to commend itself.


A biblical and constitutional perspective of federal taxation in the United States comprehends a single world view of taxing authority. The biblical law of delegated authority is mirrored in the constitutional law of enumerated powers. The law of federalism is analogous to the law of concurrent jurisdiction. Similar parallels exist between the laws of service debt and spending authority, and the laws of love and religious liberty. The law of no taxation without representation is the counterpart to the law of exaction. And, the law of constitutions secures the law of nature’s God, the law of the Bible.

The biblical and constitutional principles of law work together to carefully define the jurisdictional limits of federal authority, both in a positive and a negative sense. On the one hand, federal jurisdiction extends to sales and the power to use force against wrongdoers. On the other hand, federal jurisdiction does not extend to unalienable rights and other duties owed exclusively to God by the people. The failure to consider federal authority in the context of the multiple governments instituted among men (self-government, family government, church government, and civil government) inevitably leads to a loss of liberty for the people.

The basis of each of these governments is rooted in accountability to God. If America’s government were one of men, and not of laws, there could be no objective legal standard to which all are held accountable, and therefore no guarantee of liberty. Thus, to deny the authority of the Bible as the revelation of a legal framework upon which our nation is founded, is to deny our rights as freemen.

Previous:   Constitutional Principles of Taxation


*   Copyright © 1986, 2006 Gerald R. Thompson. Used with permission.
   151.    Brushaber, supra note 136, 240 U.S. 1, at 12, 13.
   152.    Id., at 11, 12.
   153.    Brushaber, supra note 136, 240 U.S. 1, at 11.
   154.    Brushaber, supra note 136, 240 U.S. 1, at 18.
   155.    Irwin Schiff, How Anyone Can Stop Paying Income Taxes. (Hamden: Freedom Books, 1982).
   156.    DeMar, supra note 35, at 137-138. “No governmental agency is given biblical directives to tax the land because the state possesses no land to tax. . . . A tax on property (land) is a sign of oppression and tyranny.” Id. Accord, Rushdoony, Politics, supra note 51, at 334-335. “[A] land tax destroys the independence of every sphere of government and makes each and every sphere subordinate to the state. . . . A tax on the land therefore is a tax against God.”
   157.    See, Genesis 1:26-28. See also, James Kent, Commentaries on American Law (New York: O. Halsted, 1827; reprint ed., Baton Rouge: Claitor’s Publishing Division, 1827), II:318-320.
   158.    Deuteronomy 4:9-10; 6:6-9; Psalm 78:5-6.
   159.    Kent, supra note 157, at II:317-318.
   160.    See, U.S. Constitution, Amend. V.
   161.    McCulloch, supra note 90, 17 U.S. at 429.
   162.    See, supra note 139.
   163.    Supra note 138.
   164.    Scholey, supra note 140.
   165.    Id. The estate tax was held to be a levy upon “the right to become the successor of real estate upon the death of the predecessor.” Id., at 347.
   166.    Id., at 347, 348.
   167.    New York Trust Co., v. Eisner, 256 U.S. 345 (1921), at 348.
   168.    This analysis also holds true for state inheritance taxes. It makes no difference whether the tax is imposed upon the testator’s right to devise property or the heir’s right to inherit property. The character of the transaction remains the same.
   169.    Numbers 26:53-56; Proverbs 13:22; 19:14.
   170.    Kent, supra note 157, at II:263. See also, John Locke, Two Treatises of Government (New York: The New American Library, Inc., 1965), II:Sec. 190. “Every Man is born with . . . A Right, before any other Man, to inherit, with his Brethren, his Father’s Goods.” Id.
   171.    St. George Tucker, Blackstone’s Commentaries (Philadelphia: William Birch & Abraham Small, 1803; reprint ed., Buffalo, N.Y.: Dennis and Co., 1965), III:10 fn. 3.
   172.    Eyre v. Jacob, 55 Va. (14 Gratt.) 422 (1858), at 430.
   173.    Bromley, supra note 140.
   174.    Bromley, supra note 140, 280 U.S. 124 (1929), at 137.
   175.    26 U.S.C. Sec. 2502(d).
   176.    26 U.S.C. Sec. 102.
   177.    See, e.g., Henry Hansmann, “The Rationale for Exempting Nonprofit Organizations from Corporate Income Taxation.” Yale Law Journal 91 (1981): 54.
   178.    Id.
   179.    26 U.S.C. Sec. 501(a), Sec. 511 et seq.
   180.    26 U.S.C. Sec. 501©).
   181.    Supra note 51.
   182.    26 U.S.C. Sec. 501.
   183.    Bob Jones University v. U.S., 461 U.S. 574 (1983), at 275. “[E]ntitlement to tax exemption depends on meeting certain common-law standards of charity – namely, that an institution seeking tax-exempt status must serve a public purpose and not be contrary to established public policy.” Id.
   184.    26 U.S.C. Sec. 501. See, e.g., Regs. Sec. 1.501©)(3)-1.
   185.    For example, a working husband may give substantially all of his income to his homemaker wife to buy household necessities. Such a gift is governed exclusively by the law of love, yet it cannot be seriously argued that the gift negates the taxability of the husband’s income.
   186.    See, Matthew 25:34-46. Jesus said, in essence, “To the extent you give to the least of these my brothers, you give to me.” He did not say, “To the extent you give to a nonprofit tax exempt charitable organization, you give to me.” Giving to a recognized charity is not a precondition to giving to the Lord’s work.
   187.    26 U.S.C. Sec. 3101, et seq.
   188.    26 U.S.C. Sec. 3301, et seq.
   189.    26 U.S.C. Sec. 3302-3304.
   190.    Steward Machine Co., supra note 2, 301 U.S. at 611-613, Sutherland, J., dissenting.
   191.    See, A. R. Prest, Value Added Taxation. The Experience of the United Kingdom (Washington, D.C.: American Enterprise Institute for Public Policy Research, 1980). See also, Eric Schiff, Value-Added Taxation in Europe (Washington, D.C.: American Enterprise Institute for Public Policy Research, 1973).
   192.    Norman B. Ture, The Value Added Tax. Facts and Fancies (The Heritage Foundation, 1979).
   193.    Ture, supra note 192, at viii.
   194.    Id., at 11.
   195.    Id.