America: Freedom to Fascism is a 2006 American film by filmmaker and activist Aaron Russo, covering a variety of subjects that Russo contends are detrimental to Americans. Topics include the Internal Revenue Service (IRS), the income tax, Federal Reserve System, national ID cards (REAL ID Act), human-implanted RFID tags, Diebold electronic voting machines, globalization, Big Brother, taser weapons abuse, and the use of terrorism by the government as a means to diminish the citizens' rights.
The film has been criticized for its promotion of conspiracy theories, its copious factual errors, and its repeated misrepresentations of the individuals and views it purports to criticize.
Federal Reserve System issues and interviews in the film The film examines the genesis and functions of the Federal Reserve System. The film asserts that the Federal Reserve System is a system of privately held, for profit corporations, not a government agency, and that the Fed was commissioned to print fiat money on behalf of the federal government, at a fee ultimately paid for by the personal income tax (through service on bond interest). The film also refers to the fact that the United States dollar is not backed by gold, and states that this means the dollar has no real backing other than future income tax payments. Consequently, the film states that Federal Reserve Notes represent debt instead of wealth.
The film argues that the Federal Reserve System manipulates what is sometimes referred to as the business cycle of economic expansion and retraction by putting new notes into circulation to increase the ease of obtaining credit, which devalues the currency, then compounds inflation by increasing interest (prime) rates. The movie argues that this manipulation is responsible for a 96% devaluation of American currency, since it was made possible to increasingly sever the link with gold backing by the Federal Reserve Act of 1913. The film says that this process of creating new money and adding it to the money supply is known as debasement and is a cause of inflation. In this way, the film concludes that the Federal Reserve System simultaneously controls the supply of money and its value.
The central thesis of the film may be that this monetary policy is the strongest form of governance that has ever existed, and is central to the unconstitutional, global power ambitions of the interests that supposedly control the Federal Reserve System.
The film also asserts that the private interests are controlling the Federal Reserve System, and have been for generations. The film proposes that most Americans are kept ignorant of how the Federal Reserve operates through actions of corrupt politicians and an increasingly centralized media. By using what the film calls legalistic and economic "mumbo-jumbo” terms such as 'monetizing the debt' or ‘adjusting monetary policy for increased fluidity of credit’, these interests, according to the film, conceal the true actions of the Fed behind veils of legitimacy. Interviews are conducted with several organizations and elected legislators who support these views.
An argument made in the film is that there is no reason why the Federal Reserve System should have a monopoly on the U.S. money supply. The film asserts that "America got along just fine before the Federal Reserve came into existence." This leads the film to the question of why the Federal Reserve System was created.
The film contends that the U.S. Congress has no control or oversight over the Fed, and hence has no control over the value of U.S. money. The film argues that Congressional control over the value of money is required by Article 1, Section 8 of the United States Constitution. The phrase in question (clause 5) states that the United States Congress shall have the power "To coin Money, regulate the Value thereof, and of foreign Coin..."
The film includes a call to action to abolish the Federal Reserve. In 2007, The Boston Globe stated that Congressman Ron Paul, "says he doesn't agree with all the film's arguments, but he says the film had 'a huge impact' on the support his campaign is drawing", a reference to Paul's presidential bid at that time.
Federal income tax issues and interviews in the film Through interviews with various individuals including former IRS agents, Russo sets forth the tax protester argument that, "there is no law requiring an income tax", and that the personal income tax is illegally enforced to support the activities of the Federal Reserve System.
One of the listed stars of the film, Irwin Schiff, was sentenced on February 24, 2006 to 13 years and 7 months in prison for tax evasion and ordered to pay over $4.2 million in restitution.The sentence resulted from convictions on multiple counts of filing false tax returns for the years 1997 through 2002, aiding and assisting in the preparation of false tax returns filed by other taxpayers, conspiring to defraud the United States and income tax evasion. Schiff is currently serving his sentence. In pre-sentencing documents filed with the court, Schiff's lawyers had argued that he had a mental disorder related to his beliefs about taxation.In Schiff's objection to the prosecutor's presentence report, Schiff's lawyers stated that Schiff "suffers from severe mental problems" (see p. 2, Defendant Schiff's Objections to the Presentence Report, docket entry 373, Feb. 14, 2006, United States v. Schiff, case no. 2:04-cr-00119-KJD-LRL, U.S. District Court for the District of Nevada), and cited the results of a competency examination of Schiff conducted by Dr. Daniel Hayes to the effect that Schiff's conduct was "being driven by his mental illness." (p. 2, Id.). Initially, the film portrays Schiff as a tax expert, though his qualifications and those of many other individuals in the film are not mentioned. Later in the film, Russo reveals that Schiff has been imprisoned.
Schiff appears in the film for another reason as well. The filmmaker lampoons Judge Kent Dawson's reaction to Schiff's defense. The film alleges that the judge "denied Irwin the ability to prove to a jury that there was no law requiring Americans to file an income tax return. He denied Irwin the right to attempt to prove to a jury there was no law ... by stating, 'I will not allow the law in my courtroom.'" At 0:48:28 of the film, Russo introduces the judge and his statement.
Under the U.S. legal system, the general rule is that neither side in a civil or criminal case is allowed to try to prove to the jury what the law is. For example, in a murder case the defendant is not generally allowed to persuade the jury that there is no law against murder, or to try to interpret the law for the jury. Likewise, the prosecution is not allowed to try to persuade the jury about what the law is, or how it should be interpreted. Disagreements about what the law is; are argued by both sides before the judge, who then makes a ruling. Prior to jury deliberations, the judge, and only the judge, instructs the jury on the law.For examples of application of this rule in tax cases, see United States v. Ambort, 405 F.3d 1109, 2005-2 U.S. Tax Cas. (CCH) paragr. 50,453 (10th Cir. 2005); United States v. Bonneau, 970 F.2d 929, 92-2 U.S. Tax Cas. (CCH) paragr. 50,385 (1st Cir. 1992); United States v. Willie, 91-2 U.S. Tax Cas. (CCH) paragr. 50,409 (10th Cir. 1991).
Another listed star, Vernice Kuglin, was acquitted in her criminal trial for tax evasion in August 2003.United States v. Kuglin, docket entry 39, case no. 2:03-cr-20111-JPM, United States District Court for the Western District of Tennessee, Memphis Div. (dated Aug. 8, 2003, entered Aug. 13, 2003). This means she was not found guilty of a willful intent to evade income taxes. (A conviction for tax evasion requires, among other things, proof by the government that the defendant engaged in one or more affirmative acts of misleading the government or of hiding income.) Kuglin's acquittal did not relieve her of liability for the taxes.David Cay Johnston, "Mistrial Is Declared in Tax Withholding Case," Nov. 27, 2003, The New York Times, at . Kuglin entered a settlement with the government in 2004 in which she agreed to pay over $500,000 in taxes and penalties.Kuglin v. Commissioner, United States Tax Court, docket no. 21743-03; 2004 TNT 177-6 (Sept. 13, 2004), as cited at ; and Daily Digest, Memphis Daily News, April 30, 2007, at . On April 30, 2007, the Memphis Daily News reported that Kuglin's Federal tax problems continued with the filing of a notice of Federal tax lien in the amount of $188,025. The Memphis newspaper also stated that Kuglin has "given up her fight against paying taxes, according to a Sept. 10, 2004, Commercial Appeal story."
The preview clip for the film includes assertions contradicted by official government publications regarding the activities and nature of such institutions as the Internal Revenue Service and the Federal Reserve System.Regarding Federal income tax, see Article I, section 8, clause 1 of the United States Constitution, the Sixteenth Amendment, and various provisions of Title 26 of the United States Code defining gross income and taxable income, imposing the tax on the taxable income of individuals and imposing obligations to file the related tax returns, including , , , , , , and . At one point in the film (playback time 1:33:37) an individual named Edwin Vieira asserts that "The definition of income in the Constitution was given in the Eisner versus Macomber case. And it turns on gains or profits that are made from some activity. So the Supreme Court has rules. Income is not wages. It's not labor. It's gain from corporate activity." The Vieira quotation does not disclose the fact that neither the U.S. Supreme Court nor any other Federal court has ever ruled that wages are not income or that income means only gain from corporate activity. The terms "wage" and "salary" do not appear in the text of Eisner v. Macomber, 252 U.S. 189 (1920).
Constitutional arguments
Fifth Amendment
Russo's argument using the Fifth Amendment goes as follows: Premise 1: The government can criminally prosecute someone and put one in jail for information one puts on one's 1040 tax form. Premise 2: The fifth amendment says no one can be compelled to incriminate oneself. Conclusion: Since filing a 1040 incriminates oneself, filing a 1040 therefore violates one's fifth amendment rights.
Though the second premise is not completely correct, the main source of error lies in the first premise. If one truthfully reports the amount of one's income, one does not incriminate oneself in the commission of a crime.United States v. Schiff, 612 F.2d 73, 83 (2d Cir. 1979)United States v. Sullivan, 274 U.S. 259, 263, 264 (1927) However, falsely reporting one's income is itself the commission of a crime. Put another way, the fifth amendment protects one from incriminating oneself if testifying truthfully will incriminate oneself in the commission of a crime. It does not offer a provision for lying.United States v. Wong, 431 U.S. 174, 97 S.Ct. 1823, 52 L.Ed.2d 231, No. 74-635 (1977) "...the Fifth Amendment privilege does not condone perjury. It grants a privilege to remain silent without risking contempt, but it 'does not endow the person who testifies with a license to commit perjury.'"
The fifth amendment does, however, allow oneself to avoid disclosing the source of the income if doing so would incriminate oneself in the commission of a crime.United States v. Brown, 600 F.2d 248, 252 (10th Cir. 1979), cert. denied, 444 U.S. 917 (1979). While that may be the case, a person is still required to report the amount of all income on his or her federal tax return.
Sixteenth Amendment