# Think Tank > History >  1984: Grace Commission Report under Ronald Reagan showed IRS is a fraud that collects taxe

## donnay

*1984: Grace Commission Report under Ronald Reagan showed IRS is a fraud that collects taxes for the Banking Dynasties*
http://groups.google.com/group/total...764aa8d4c5e22?

"100% of what is collected is absorbed solely by interest on the Federal Debt ... all
individual income tax revenues are gone before one nickel is spent on the services
taxpayers expect from government."
-Grace Commission report submitted to President Ronald Reagan - January 15, 1984

Ronald Reagan was promptly shot after he dared to criticize the Fed, on the same day
that the Pope was shot. After recovering, he changed his mind and praised the Fed. About
seven US Presidents have been assassinated for not cooperating with the Transatlantic
Banking Dynasties (William Henry Harrison, poisoned, in 1841, Zachary Taylor, Lincoln,
Garfield, McKinley and John F. Kennedy 1963; 7 if FDR's poisoning is counted).

Most of us feel sick when we realize that Not one dime of IRS money goes to the US
Gov't, according to Reagan's Grace Commission: it all goes to pay interest on a bogus
debt to the Private Federal Reserve (FED), just to allow paper money to circulate as
"Federal Reserve Notes". The Federal Reserve is a private Corporation eventually owned
by the Rockefellers and Rothschilds Dynasties through intermediary agents, designed to
suck the capital dry from the U.S., as the Rothschilds do in Europe. Read Billions for
the http://www.deepinfo.com/email/Billions4Bankers.htm  Bankers, Debts for the People
More Links at DeepInfo.com on Jekyll Island http://www.deepinfo.com/more/jekyll.htm .

The final report of the 1984 Grace Commission, convened under President Ronald Reagan,
quietly admitted that none of the funds they collect from federal income taxes goes to
pay for any federal government services. The Grace Commission found that those funds
were being used to pay for interest on the federal debt, and income transfer payments to
beneficiaries of entitlement programs like federal pension plans.

These comments were presented at the Close of the Citizens' Truth-In-Taxation
Hearing.Washington D.C., February 27-28, 2002: IRS is a Trust
http://www.supremelaw.org/sls/31answers.htm  Headquartered in Puerto Rico Not a
Federal Agency The IRS is technically not an "agency" of the federal government, as that
term is defined in the Freedom of http://www.law.cornell.edu/uscode/5/552.html
Information Act and in the Administrative http://www.law.cornell.edu/uscode/5/551.html
Procedures Act. The governments of the federal territories are expressly excluded from
the definition of "agency" in those Acts of Congress. See 5 U.S.C. 551
http://www.law.cornell.edu/uscode/5/551.html (1)(C).  All evidence indicates that they
are a money laundry, extortion racket, and conspiracy to engage in a pattern of
racketeering activity, in violation of 18 U.S.C. 1951
http://www.law.cornell.edu/uscode/18/1951.html  and 1961
http://www.law.cornell.edu/uscode/18/1961.html  et seq. They appear to be laundering
huge sums of money into foreign banks, mostly in Europe, and quite possibly into the
Vatican. See the national policy on money laundering at 31
http://www.law.cornell.edu/uscode/31/5341.html  U.S.C. 5341 . Do federal income tax
revenues pay for any government services and, if so, which government services are
funded by federal income taxes? Answer: No. The money trail is very difficult to follow,
in this instance, because the IRS is technically a trust with a domicile in Puerto
http://www.supremelaw.org/authors/cooper/cooper.htm  Rico. See 31
http://www.law.cornell.edu/uscode/31/1321.html  U.S.C. 1321(a)(62). As such, their
records are protected by laws which guarantee the privacy of trust records within that
territorial jurisdiction, provided that the trust is not also violating the Sherman
Antitrust http://www.law.cornell.edu/uscode/15/1.html  Act.

"Like it or not, you are a slave. You admit you are a slave every April 15th!  That's
when you sign forms that "voluntarily" lay bare to the government the most private
details of your life! And few people realize the income tax is a slave tax. It can never
be compatible with the life of a free people". ALAN KEYES - Republican Nominee for
President, unfortunately, the only Republican willing to speak out along with Ron Paul.

Visit here...  Interest On The Debt! http://www.geocities.com/cmcofer/interest.html
...and gulp!

Sit down when you view it. People have fainted when they see the size of the Debt Hole
we're now in!

The "President's Private Sector Survey on Cost Control", commonly referred to as the
1984 Reagan "Grace Commission Report" reveals that 100% of the "income tax" collected is
applied against the interest of the national debt. The government operates on a deficit
that is created from nothing by the Privately Owned Fed (owned by the same folks who own
the major commercial banks) at interest, i.e. what could be created debt free and usury
free by the Treasury has been usurped by the Banking Dynasties who have been ruling the
World since ancient times. Taxes are a way of controlling, or manipulating the economy.
They also give people a faith in the funny money -- makes it Near and dear to them.
Balanced budgets and budget surpluses are a smoke and mirror trick. They sound really
good, playwell for the people, but are nothing more than panderings. I'm not going into
it, period, but if any should care to make the study, you will be at first incredulous,
then angered by the depths of deception under which the people of this country labor.

Even the inventor of the electric light, Thomas Edison, joined the fray in criticizing
the system of the Federal Reserve: "If our nation can issue a dollar bond, it can issue
a dollar bill. The element that makes the bond good, makes the bill good, also... It is
absurd to say that our country can issue $30 million in bonds and not $30 million in
currency. Both are promises to pay, but one promise fattens the usurers and the other
helps the people."

In President Lincoln's words (he was assassinated by the Banksters' agent) ""The
Government should create, issue, and circulate all the currency and credits needed to
satisfy the spending power of the Government and the buying power of consumers. By the
adoption of these principles, the taxpayers will be saved immense sums of interest."

"In a recent conversation with an official at the Internal Revenue Service, I was amazed
when he told me that 'If the taxpayers of this country ever discover that the IRS
operates on 90% bluff the entire system will collapse'". -Henry Bellmon, Senator (1969)

"Our federal tax system is, in short, utterly impossible, utterly unjust and completely
counterproductive [it] reeks with injustice and is fundamentally un-American... it has
earned a rebellion and it's time we rebelled". -President Ronald Reagan, May 1983,
Williamsburg, VA

"Our Income Tax system is a disgrace to the human race."  -Jimmy Carter, said in 1976 by
the then President-to-be

"Eight decades of amendments... to [the] code have produced a virtually impenetrable
maze... The rules are unintelligible to most citizens... The rules are equally
mysterious to many government employees who are charged with administering and enforcing
the law". -Shirley Peterson, Former IRS Commissioner, April 14, 1993 at Southern
Methodist University

"The wages of the average American worker, after inflation and taxes, have decreased 17%
since 1973, the only Western industrial nation to so suffer". -Martin Gross, author of
"The Tax Racket: Government Extortion From A to Z"
_____________________________

1. What is money?
http://www.evolutionaryjustice.com/i...SP_Booklet.pdf
... the creation of the Fractional (Federal) Reserve Banking system, the ... Grace
Commission report submitted to. President Ronald Reagan on January 15, 1984 " ...

2. Ronald Reagan - State of the Union 1985
http://reagan2020.us/speeches/state_...union_1985.asp

3. Ronald Reagan's Fourth Stateof the Union Speech - Wikisource

We're moving ahead with Grace commission reforms to eliminate and iA We'remprove ...
continue to cooperate with the Federal Reserve Board, seeking a steady policy ...

http://en.wikisource.org/wiki/Ronald...e_Union_Speech - 38k - Cached

9. Federal Reserve is a private corporation. The Department of the Treasury, which is on
the Internal Revenue ... Ronald Reagan, in a report to the Grace Commission in ...

www.freedomfiles.org/tax/biglies.htm - 7k -

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## LibertyEagle

I think I remember hearing that the whole issue of paying interest to the FED was a little misleading; that this money was refunded to the government.

I never looked into it more.

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## emazur

> I think I remember hearing that the whole issue of paying interest to the FED was a little misleading; that this money was refunded to the government.


That's correct - interest paid to the Fed is paid back entirely to the Treasury minus Fed operating costs, and sometimes the Treasury gets back more than they pay for some reason.  But this is a completely separate issue - the OP is talking about the income tax being used to pay the national debt and nothing else (I haven't looked into that myself).

But OP, please don't mention that JFK tried to take on the Fed, it makes the anti-Fed movement look bad b/c it's completely false: The JFK Myth. I highly doubt Reagan spoke out against the Fed - closest thing he did was form the Gold Commission and they were only able to get the Treasury to issue precious metal Eagles at absurdly low legal tender face values

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## KingNothing

Threads like this make me smile.  I love when people rattle off half truths, unsubstantiated claims and lies as if they were undeniable facts.

The problem is debt.  Debt must be financed.  Whoever holds debt, receives interest for doing so.  The US has so much debt, and in 1984 plenty of it was held by private entities who were not central banks, that it must tax its residents a substantial amount to service it.  Period.  Its not some secret Club of Rome or Vatican or 13 Families conspiracy.... running through Puerto Rico.  It's a too large government and a people who want something for nothing.

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## donnay

> That's correct - interest paid to the Fed is paid back entirely to the Treasury minus Fed operating costs, and sometimes the Treasury gets back more than they pay for some reason.  But this is a completely separate issue - the OP is talking about the income tax being used to pay the national debt and nothing else (I haven't looked into that myself).
> 
> *But OP, please don't mention that JFK tried to take on the Fed, it makes the anti-Fed movement look bad b/c it's completely false: The JFK Myth. I highly doubt Reagan spoke out against the Fed - closest thing he did was form the Gold Commission and they were only able to get the Treasury to issue precious metal Eagles at absurdly low legal tender face values*


*

*
Thanks for pointing that out.  I do remember G. Edward griffin talking about this.  I completely forgot about it.

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## heavenlyboy34

> Threads like this make me smile.  I love when people rattle off half truths, unsubstantiated claims and lies as if they were undeniable facts.
> 
> The problem is debt.  Debt must be financed.  Whoever holds debt, receives interest for doing so.  The US has so much debt, and in 1984 plenty of it was held by private entities who were not central banks, that it must tax its residents a substantial amount to service it.  Period.  Its not some secret Club of Rome or Vatican or 13 Families conspiracy.... running through Puerto Rico.  It's a too large government and a people who want something for nothing.


I also don't recall Lincoln opposing the national bank or Booth being a FED agent.

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## Zippyjuan

> "100% of what is collected is absorbed solely by interest on the Federal Debt ... all
>  individual income tax revenues are gone before one nickel is spent on the services
>  taxpayers expect from government."


Even under our higher debt today, this is not true. The 2009 budget on Wiki gives us some easy numbers to look at.  http://en.wikipedia.org/wiki/2009_Un...federal_budget

Income tax revenues for 2009 were $1.2 trilllion.  That year the debt was about $12 trillion and interest on the debt was $260 billion or 22 percent of all income tax revenues (the government also collects other taxes). IN 1984 (the year of the Grace Report) the US debt was $1.6 trilllion- only about ten percent of our current levels. http://www.treasurydirect.gov/govt/r...ebt_histo4.htm so even then it is highly unlikely that 100% of all tax revenues went to interest on the debt.  (I haven't yet found figures for how much of the 1984 budget was going to interest on the debt).

I did find mention that interest payments on the debt in 1984 were $110 billion.  http://www.cbo.gov/sites/default/fil...6/84doc29c.pdf


*AHA! Important update!*

Wiki has a slightly different version of the Grace Commission report which includes the bit between the dots- it is significant. 



> “With two thirds of everyone’s personal income taxes wasted or not collected, 100 percent of what is collected is absorbed solely by interest on the federal debt *and by federal government contributions to transfer payments*. In other words, all individual income tax revenues are gone before one nickel is spent on the services [that] taxpayers expect from their government."[4]


http://en.wikipedia.org/wiki/The_Grace_Commission

Transfer payment would include things like unemployment payments and things like Social Security and Medcaid. It did not say that interest on the debt alone took all money collected from income taxes. That would not have been true.  Add in all Federal govenment money for transfer payments to money spent on interest on the debt and it works.  Now that we have what was reallly said it makes sense.

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## Zippyjuan

> That's correct - interest paid to the Fed is paid back entirely to the Treasury minus Fed operating costs, and sometimes the Treasury gets back more than they pay for some reason.  But this is a completely separate issue - the OP is talking about the income tax being used to pay the national debt and nothing else (I haven't looked into that myself).


The Fed earns money in several ways. One is interest payments on securities they own which include US Treasuries.  They also currently hold a large amount of Mortgage Backed Securities they bought at the start of the economic crisis.   They also earn money when banks need to borrow from the Fed though their Discount window (usually overnight loans to balance their books-- loans outstanding vs reserves on hand- meeting their reserve requirements)- collecting interest on those loans.  They also get paid for handling other financial transactions (they are one of the largest check processing businesses in the country).  This year they returned over $70 billion to the US treasury. 

They made $2.8 billion off AIG bonds alone. 
http://money.cnn.com/2012/02/28/news..._aig/index.htm



> NEW YORK (CNNMoney) -- Remember those pesky mortgage-backed securities the Federal Reserve had to take off AIG's hands at the worst of the financial crisis?
> 
> The Fed just finished selling all of them, and their return on investment isn't too shabby. The sales of the $19.5 billion portfolio turned *a $2.8 billion profit for taxpayers.* 
> 
> 
> "The completion of the sale of the Maiden Lane II portfolio has resulted in significant gains for the public and marks an important milestone in the wind-down of the extraordinary interventions necessitated by the financial crisis," William Dudley, president of the New York Fed, said in a statement.
> 
> The New York Fed first indicated last year that it would put the so-called Maiden Lane II securities up for auction. It sold off the first piece of the pie to Credit Suisse (CS) in January. Goldman Sachs (GS, Fortune 500) bought another chunk and Credit Suisse bought the remainder of the portfolio, announced today.
> 
> And just who is buying the assets from Credit Suisse and Goldman Sachs? None other than AIG (AIG, Fortune 500) itself.





> Federal Reserve pays $77 billion to Treasury
> 
> Amid the financial crisis, the Fed nearly tripled its balance sheet through a variety of emergency measures. While questions remain about how the central bank will eventually unload all of those securities, at the same time, they've been a moneymaker for taxpayers. *The Fed recently announced it's turning over $77 billion to the Treasury for its 2011 earnings alone.*


(same link)

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## GeorgiaAvenger

Reagan was not shot the same day as Pope John Paul II

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## Zippyjuan

Reagan shot 3/13/81- 69 days or just over two months into his first term as president- three years before the Grace Commission report and four years before the cited State of the Union Speech in 1985. John Paul II was shot 5/13/81- two months after Reagan.

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## Fredom101

> Most of us feel sick when we realize that Not one dime of IRS money goes to the US
> Gov't,


Yes because we all know how responsible and benevolent our government is and are happy to pay the bureaucrats!

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## KingNothing

> Even under our higher debt today, this is not true. The 2009 budget on Wiki gives us some easy numbers to look at.  http://en.wikipedia.org/wiki/2009_Un...federal_budget
> 
> Income tax revenues for 2009 were $1.2 trilllion.  That year the debt was about $12 trillion and interest on the debt was $260 billion or 22 percent of all income tax revenues (the government also collects other taxes). IN 1984 (the year of the Grace Report) the US debt was $1.6 trilllion- only about ten percent of our current levels. http://www.treasurydirect.gov/govt/r...ebt_histo4.htm so even then it is highly unlikely that 100% of all tax revenues went to interest on the debt.  (I haven't yet found figures for how much of the 1984 budget was going to interest on the debt).
> 
> I did find mention that interest payments on the debt in 1984 were $110 billion.  http://www.cbo.gov/sites/default/fil...6/84doc29c.pdf
> 
> 
> *AHA! Important update!*
> 
> ...



Bump for facts getting in the way of absurd conspiracy theories.

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## emazur

> *AHA! Important update!*
> 
> Wiki has a slightly different version of the Grace Commission report which includes the bit between the dots- it is significant. 
> 
> http://en.wikipedia.org/wiki/The_Grace_Commission
> 
> Transfer payment would include things like unemployment payments and things like Social Security and Medcaid. It did not say that interest on the debt alone took all money collected from income taxes. That would not have been true.  Add in all Federal govenment money for transfer payments to money spent on interest on the debt and it works.  Now that we have what was reallly said it makes sense.


Nice job.  But I would imagine it's true that over the next two or three decades, interest on the debt will completely consume the income tax.  By 2025, ALL Federal revenue will be eaten up by entitlements and interest on the debt.  This chart doesn't specify what percentage of the revenue will be coming from income tax, but look at the huge difference between how much revenue is consumed now by interest on the debt and how much will be consumed by interest in 2040.  In 2040, it's about half of ALL federal government revenue, so if income tax is half or less than that revenue, than the Grace Commission claim will have been proven true
http://bipartisanpolicy.org/sites/de...0SUMMARY_0.pdf

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## Zippyjuan

In 2009, 45% of government revenues came from income taxes.  Social Security taxes (also a tax on income) accounted for another 37% of revenues. http://en.wikipedia.org/wiki/2009_Un...federal_budget If combined, they account for 82% (since Social Security is included in the entitlements payments figure). Depending on interest rates and what happens with the deficit in future years, the percent going to interest could be even higher by 2040.

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## emazur

> Depending on interest rates and what happens with the deficit in future years, the percent going to interest could be even higher by 2040.


Yes, that is actually mentioned in the linked PDF:



> These projections are based on fairly moderate assumptions about future interest rates. The nation’s outlook will grow far more ominous if America’s creditors lose confidence in the federal government’s commitment to address its debt problem – which will increase interest rates. A loss of confidence in the markets could also send the value of the dollar plunging overseas, which could trigger runaway inflation and still higher interest rates.
> Rising debt and rising interest costs could evolve into a “death spiral,” with the two feeding off one another in an ever-more vicious cycle. No one knows when such a catastrophe might occur, but no prudent nation would put itself at such risk.


2025 is a very scary number that is just around the corner.  I often mention it on this website and in my articles (see sig) but nobody seems to care.  If I was Ron Paul, I'd be using this to fear monger some votes my way and say that there will be no money left for national defense in just over a decade.  And until very recently, 2040 was when entitlements and interest were going to consume the entire budget. This is a GAO chart from 2007:

The figures of the charts weren't calculated by the same people, but I assume the huge difference of percent of interest comes from Bush's final 1.5 years, the bailouts, the stimulus, and the Obama deficits.

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