February 3, 1934 - Editorial - Profits or No Profits, by George Lorimer
So much of the discussion of profits is wordy and meaningless. There has been, in the past, an excessive amount of ill-gotten, of racketeering, gains. There have been foolish and reckless gains, destructive of national character and the very machinery by which society conducts its affairs. As far as possible, these must be prevented in the future, and their eradication means not the destruction but rather the saving of the profits of economics.
But the thoughtless, half-baked, radical theories of eliminating profits, the constant talk of curbing profits, whether deserved and earned or not, if carried to their logiccal conclusion, mean the melting away of all sources of taxation and the consequent absorption by government of all industry and commerce to the point of a complete socialistic state. Manifestly there can be no taxes without gains to tax, and if gains are finally banished altogether as wicked, government, having no other revenue, must itself own and operate everything. (pg. 22)
Comments: Lorimer could not foresee that, thanks to a continuing docile Congress, soon FDR and his Brain Trust would begin directly taxing the labor of American workers. Lorimer knew that the income tax was only designed to tax the gains and profits of business activity. In fact, the Supreme Court made this very clear in the case of Eisner v. Macomber in 1920. In this case the court stated that there must be a gain or a profit for there to be income to tax. Today people's minds have been conditioned to think that the money they are paid for providing their labor is income in the legal sense of the word. Ask yourself: What profit is there in a human being laboring for their bread? For example, the owner of an automobile factory may use the labor of hundreds of employees to produce the automobiles that he sells. After selling the automobiles produced, the owner of the factory subtracts his costs from what came in from the sales. The money paid to the workers is part of that cost, and may be the biggest cost he has. At any rate, the money in excess of his costs are his gain, or profit, and that is "income" in the legal sense of the word. Here we see income derived from using labor, but that doesn't give the rulers in government the power to directly tax the labor of the workers and treat them like wage-earning slaves who only get the allowance their masters choose to give them. What we see is that the government, the media and the press have all worked together over the years to transform the mentality of the people to make them think that their labor can be legally taxed; and if we look around us we can see that they've done an excellent job. It's not necessary for government to own and operate everything if they can exercise a taxing power that has no limitations.