5/3/26: The Direct Tax

• What is the Direct Tax?
  • The Direct Tax is a tax on property or wealth
  • The Founding Fathers believed in taxing wealth primarily to provide for the common defence and promote the general Welfare.
• History of the Direct Tax:
  • The Declaratuion of Independence
    The last sentence:
    - And for the support of this Declaration, with a firm reliance on the protection of divine Providence, we mutually pledge to each other our Lives, our Fortunes and our sacred Honor.
  • The Articles of Confederation
    Article VIII.
    - All charges of war, and all other expenses that shall be incurred for the common defence or general welfare, and allowed by the united states in congress assembled, shall be defrayed out of a common treasury, which shall be supplied by the several states, in proportion to the value of all land within each state, granted to or surveyed for any Person, as such land and the buildings and improvements thereon shall be estimated, according to such mode as the united states, in congress assembled, shall, from time to time, direct and appoint. The taxes for paying that proportion shall be laid and levied by the authority and direction of the legislatures of the several states within the time agreed upon by the united states in congress assembled.
  • The U.S. Constitution
    Article 1
    - Section 8.
    -- The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;
    - Section 9.
    - No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or enumeration herein before directed to be taken.
  • The Direct Tax of 1798
    Section 1.
    - That a direct tax of two millions of dollars [$2 million] shall be, and hereby is laid upon the United States, and apportioned to the states respectively, in the manner following:
    -- To the state of New Hampshire, seventy-seven thousand seven hundred and five dollars, thirty-six cents and two mills. [$77,705.362] ... etc.
    Section 2 (AI simplified).
    - Upon each dwelling house (including outbuildings and up to 2 acres of land), tax is based on its value as follows:
    - $100–$500 → taxed at 0.2% (0.002 of value)
    - $500–$1,000 → taxed at 0.3% (0.003 of value)
    - $1,000–$3,000 → taxed at 0.4% (0.004 of value)
    - $3,000–$6,000 → taxed at 0.5% (0.005 of value)
    - $6,000–$10,000 → taxed at 0.6% (0.006 of value)
    - $10,000–$15,000 → taxed at 0.7% (0.007 of value)
    - $15,000–$20,000 → taxed at 0.8% (0.008 of value)
    - $20,000–$30,000 → taxed at 0.9% (0.009 of value)
    - Over $30,000 → taxed at 1.0% (0.01 of value)
    - Additionally, each enslaved person is taxed at $0.50.
• Why do we need a Direct Tax Act now?
  • To fund The Netanyahu/Trump (TNT) war in Iran.
  • To fund the proposed Trump administration's 2027 $1.5 trillion military budget
  • To pay the current interest and reduce the Nation Debt and future unfunded liabilities (5/3).
  • To support roughly one-third of future old-age Social Security benefits as was recommended by the original designers of the CES staff in 1934.
    - In 1939 Social Security was expanded into a general welfare program for spouses and dependent children of selected workers with no reduction in these workers old-aged benefits.
    -- General welfare benefits should be financed by general fund taxes.
    -- By 1939 Treasury Secretary Henry Morgenthau Jr. explicitly endorsed the Advisory Council’s idea that Social Security could, at least in part, draw on general federal revenues as a way to finance future costs (including expanded survivors and dependents benefits) without relying on very high payroll taxes and a huge reserve.
    --- Currently, general funds are funded primarily by taxes on labored-derived income rather than income from capital. .
• What activities have occurred to support a federal Direct Tax Act?
  • Pre-2026 Activities
    • Research began in March 2023 with a genealogical search of Founding Fathers and Founding Mothers to identify immigrant ancestors.
    • This research coincided with research into election and tax reforms.
    • On a family day trip from Cape Cod to Boston on July 7, 2024, we discovered our relative John Otis, Jr. He popularized "taxation without representation is tyranny."
      - A few days later the three interests in genealogy, election and tax reforms came together to rejuvenate the ElectoralCollege.Org website.
    • With the aid of AI, the new ElectoralCollege.org was launched on September 1, 2024, with the phrase "Dedicated to Exposing Corruption to Support Reform." It now supports reforms.
    • 2025 comments:
      - posted comments on several websites to propose taxing capital to support Social Security:
      -- professional experience as an author of an AICPA course in 1975 on Pension and Profit-Sharing Plans and as the technical reviewer on the IRA kindled an interest in Social Security and eventually reforming it to make it fair and simple.
      - initially supported raising the estate tax to support the old-age component of Social Security.
      - switched from an estate tax to a flat 30% capital gain tax on most liquid assets at death with a limited carryover basis for family business assets and an adjusted stepped-up basis for primary residences.
      - added a 30% capital gains tax on most tax-free savings accounts and especially on back-door Roth IRAs.
      -- major reforms are needed to limit, restrict, and disclose Roth IRAs
  • 2026 Activities
    • pre-March 26: posted comments on several websites to propose taxing capital to fund the Iran war and military spending.
    • March 23: registered the domain USDirectTaxAct.com.
    • April 1: presented to a governor of one of the 13 original states a Draft Proposal Letter: Direct Tax Act of 2026. This two-page letter specifically stated that each state would be obligated to raise revenue in proportion to its population.
    • April 12: presented to two local office holders, one a Democrat and the other a Republican, a copy of the letter.
    • April 21: downloaded data files to determine how property could be taxed to raise tax revenue for the state to meet its federal Direct Tax Act obligations.
    • April 30: received in the mail, the book "The Price of Liberty - Paying for American Wars from the Revolution to the War on Terror" by Robert D. Hormats.
    • April 30: activated the USDirectTaxAct.com website.
    • May 1: initiated links to the primary historical documents.
    • May 3: more detail on The Direct Tax of 1798 showing a progressive tax on dwelling houses.
    • May 3: Return to effort to create a sample data base of properties to implement a new Direct Tax Act. Expect to complete this effort by May 20.