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U.S. Federal Income Tax

Subjugation by taxation

Derived From means Return On Investment

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Income may be defined as the gain derived from capital, from labor, or from both combined,' provided it be understood to include profit gained through a sale or conversion of capital assets.
- Supreme Court.

Take $100 and purchase 4 hours of a mechanic's labor. Sell that same 4 hours of labor at the shop rate of $75 per hour. Gross receipt is $300. Subtract the expenses of Rent or mortgage; phone; electric; gas ($194).

$300 - $194 = $106
$106 -100 = $6
ROI = 6%

You started with $100. You invested it in labor. You've got your original $100 back plus 6% gain "derived" from labor.

Take $100 and purchase one hour of labor ($25); one circular saw ($50); and one thick large chunk of oak board ($25). Your employee works for one hour cutting up the board into wedgits door stops. You sell your entire stock of wedgits for $106.

$106 -100 = $6
ROI = 6%

You started with $100. You invested it in capital goods (the saw); labor; and raw material. You've got your original $100 back plus 6% gain "derived" from capital and labor. Your worker did not tear up your saw. You sell your saw for $25 (half of new price because it is used and depreciated.) you add this to your gross reciepts.

$106 + $25 = $131
$131 - 100 = $31
ROI = 31%

       This is gain derived from capital, and labor, including a profit gained through a sale or conversion of capital assets.

        In the case of making wedgits, a competitor is a corporation. You invest the $100 you have in purchasing a share of the corporate stock. The corporation's figures are exactly the same as yours were, only they are doing a larger volume of business. The corporation makes the same $106 on the original $100 just like you did. The corporation declares a dividend and sends you $6. You have just received a return on your investment of 6%. The corporation takes the other $100 and purchases two more hours of labor and two more oak boards. These sell for $212. The corporation declares a dividend and sends you $12 using the remaining $200 to purchase more labor and raw materials.

        You sell your single share of stock for $200. The new owner believes he will get dividends of $12 which means he gets a 6% ROI... Just like you did. You have just sold and converted your capital asset. You received a 100% ROI because of the appreciated value of the stock. In every example the ROI is the 16th Amendment income.

com·pen·sa·tion n. 2. Something, such as money, given or received as payment or reparation, as for a service or loss.
American Heritage Electronic Dictionary

Compensation for Labor ("payroll") is NOT a "return on investment".

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