File Copy
No. 76-1696 

In The Supreme Court Of The United States 

October Term, 1976 

David C. Hakim, PETITIONER

v.

Commissioner of Internal Revenue 

PETITION FOR IMMEDIATE GRANTING OF A WRIT OF CERTIORARI AND MISCELLANEOUS MOTIONS TO THE UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT

 

David C. Hakim
Petitioner in Pro Se

21245 Prestwich
Harper Woods, MI  48225
Phone:  (313) 884-****

 

TABLE OF CONTENTS.  

Statement of the case and issue presented 

Jurisdiction  

Summary or the complaint:

l)  The investment tax credit (I.R.G. Section 46)
2)  Percentage depletion (Section 611,613, 6l3A)
3) The Domestic International Sales Corporations' deferral of income
4) The stepped up basis of property acquired from a decedent (Section 1014 and 1032)  
5) The capital gains exclusion (Section 1201 and 1202) 

Argument:

Standing to sue
The Problem
Common features of the alleged unconstitutional tax preferences
Specific effects of the alleged unconstitutional tax preferences
Due Process, equal protection, and the taxing power

Conclusion: 

Appendix:

Copy of the petitioner's prior Supreme Court petition (No. 76-270)
Order of dismissal of the Court of Appeals
Order of dismissal of the U. &. District Court
Affidavit of service of this petition  

CITATIONS 

Constitutional Provisions:

  Firth Amendment
  Article I, Section 8 [1] 

Statutes & Court Rules:

I.R.C. Section 46
I.R.C. Section 48(c)
I.R.C. Section 61
I.R.C. Section 61(a) 
I.R.C. Section 63
I.R.C. Section 163
I.R.C. Section 167
I.R.C. Section 611
I.R.C. Section 612
I.R.C. Section 613
I.R.C. Section 613A
I.R.C. Section 991
I.R.C. Section 995
I.R.C. Section 1014
I.R.C. Section 1015
I.R.C. Section 1023
I.R.C. Section 1032
I.R.C. Section 120
I.R.C. Section 1201(a)
I.R.C. Section 1201(b)
I.R.C. Section 1202
I.R.C. Section 1302
28 U.S.C.. 1254

Rule 20, U.S. Supreme Court  

Cases :

Aaron v. Cooper, 358 U.S~ 1 (1958) 
Baker v. Carr
, 369 U.S. 186, S. Ct. 691, 7 L.Ed. 2d 663 (1962)
Bolling v. Sharpe
, 347 U.S.497
Brushaber v. Union Pac. R. R.,
240 U.S. 1, 17, 36 s. ct. 236, 60 L.Ed. 493 (1916)
Coit v. Green
, 404 U.S. 97 (1971)
Flast v. Cohen
, 392 u.s. 83 (1968) 
Frothingham v. Mellon
, 262 U.S. 447 (1923)
Green v. Connally
, 330 F. Supp. 1150 (1971) 
Green v. Kennedy
, 309 F. Supp. 1127
Knowlton v. Moore
, 178 U.S. 41 (1900)
Marbury v. Madison
, 5 U.S.137
Pollack v. Farmers' Loan & Trust Co
., 157 u.s. 429, 158 U.S. 601
R. v. Barker
, 3 Burr. 1265 (1762)
Thornton v. Attorney General Of Canada
, 43 D.L.R. 3d 1 (1974)
Traux v. Corriigan
, 257 U.S. 312  

Miscellaneous:

Bancroft, George, History of the Constitution of the United States (1884)
Fried, et al, Setting National Priorities: The 1974 Budget (Washington:  Brookings Institution, 1973)
Pschman, Joseph A. & Okner, Benjamin A., Who Bears the Tax Burden? (Washington:  Brookings Institution, 1974)
Seldes, George, Great Quotations (N.Y.: Pocket Edition, Nov. 1972)
Schumacher, E. F., Small is Beautiful, (New York:  Harper & Row, 1973)
Special Analysis, Budget of the United States Government, Fiscal Year 1976, Office of Management and Budget
Stern, Phillips M., The Rape of The Taxpayer, (New York: Random House, lnc., 1974)
Surrey, Stanley S., Pathways to Tax Reform, (Mass: Harvard University Press, 1974)
Tax Reform Studieff and Proposals
, U.S. Treasury Department  (Joint Publication, Committee on Ways and Means of the U.S. House of Representatives and Committee on Finance of the U.S Senate, 91st Congress, First Session, published February 5, 1969)
Wall Street Journal
, Midwest Edition, Vol. LVI  (#146) 5-10-76; Vol. LVII (#17) 11-5-76

 

IN THE. SUPREME COURT. OR THE.. UNITED· STATES:

No. ______________________________ 

David C. Hakim, Petitioner

v.

Commissioner of Internal. Revenue

 

PETITION FOR IMMEDIATE GRANTING OF
A WRIT OF CERTIORARI AND
MISCELLANEOUS MOTIONS TO
THE UNITED STATES COURT OF APPEALS
FOR THE. SIXTH CIRCUIT 

STATEMENT OF THE CASE AND
ISSUE PRESENTED

 

  On August 20, 1976, this petitioner prior to judgment. in the Court of Appeals filed before this Court a PETITION FOR IMMEDIATE GRANTING OF CERTIORARI AND MISCELLANEOUS MOTIONS, No. 76-270, which petition was denied on November 1, 1976. 50 L. Ed. 2d. 300.

  On March 3, 1977, subsequent to the: above named petition, the United States Court of Appeals for the Sixth Circuit dismissed this petitioner's appeal, calling it "frivolous and completely without merit".

  Now is recapitulated and incorporated by reference each and every part or such prior petition to this Court to enjoin the operation of five tax prefer­ences alleged by this petitioner to be arbitrary exercises of the taxing power and therefore unconstitutional under the Fifth Amendment Due Process Clause of the United States Constitution. 

 

JURISDICTION

 

Jurisdiction is permitted under 28 U.S.C. 1254 and Rule 20.  See; Aaron-v. Cooper, 358 U.S. 1, 13 (1958).

 

SUMMARY OF THE COMPLAINT

 

1 - The Investment Tax Credit (I.R.C. Section 46).  

The above section sets forth a maximum 11% credit, against the income tax for qualified invest­ment in depreciable or amortizable property which is used as an in­tegral part in a business. The tax credit generally may not ex­ceed .. $25,OOO.OO plus 50% of the tax liability over that amount.  

1) 
It should be noted that if the alleged unconstitutional sections are held unconstitutional, ordinary income would result from the application of Sections 61(a.) and 63; the basis of property inherited :from a decedent would be its adjusted cost, from section 1012.

The dollar loss for the preferences other' than section 1014 and 1023 is supported by "Table F-l, Tax Expenditure Estimates by Function "', Special Analysis Budget of the United StatesGovernment, Fiscal Year 1976, 108-9; for section 1014 and 1023 is an estimate from material in Surrey, Stanley S., Pathways to Tax Reform, n. 53 to Ch VI, p. 351.

 2)    
Percentage Depletion (I.R.C. Sections 611, 613 and 6l3A)

The above sections, 611 and 613 are the controlling sections (Section 6l3A is cont~8ent upon their continuation) permitting percentage depletion (as opposed to cost depletion, which is. section 612, and is similar to depreciation). Section 611 is the enabling section, whereas section 613 permits a flat per­centage deduction of a maximum of 50% of the taxable income from the sale of property com­puted without the deduction for depletion. The property for which depletion is allowed is that property generally known as natural resources which are extracted from the earth.

Section 6l3A, enacted after the proceedings in the U. S. District Court, limits the per­centage oil depletion allowance only to “independent producers and royalty owners” and to a maximum output of 1,600 barrels daily, (1400 in 1978). Depletion for gas producers is similarly limited.

3)
The Domestic International Sales Corporations' (DISCs) "deferral" of income (I-R.C. Sections 991 and 995).

Section 991 is the enabling act to permit the preferential treatment accorded corporations which meet the qualifications of a DISC, which is a type of domes­tic corporation whose income is predominately (95% or more)derived from export sales and rentals. Section 995 sets forth the deferral or effectively eliminates from taxation 50% of the income of a DISC, which deferred income is taxed to the shareholder, usually the parent cor­poration, only which is distributed, when a shareholder sells his stock, or when the corporation no longer qualifies as a DISC.

4)
The Stepped-Up Basis of Property Acquired, from a Decedent (I.R.C~ Sections 101~ and 1023).

The above section 1014 as supplemented by section 1023, added by the extremely complex Tax Reform Act of 1976, also enacted after the proceedings in District Court, steps up the basis of most property of a decedent passing away after December 31, 1976, to its fair market value on that date.

The above preference is especial­ly discriminatory in that present appreciation of property remains un­taxed by the income tax law, whereas the accumulation of wealth from ordinary income is subject to the income tax as the wealth is accumu­lated.

It is interesting to note that despite the unification of the estate and gift tax law under the Tax Reform Act off 1976, Congress allowed section 1015 of the Code to continue the taxation to the donee of the difference between the amount realized upon sale and the donor's adjusted basis.  

5)
The Capital Gains Exclusion (I.R.C. Sections 1201 and 1202).

The above sections set forth two alternative methods ot taxa­tion of the excess o£ the gain or the appreciation realized upon the sale or exchange of generally pro­perty held for investment purposes for a period longer than nine months (as amended by the Tax Re­form Act of 1976, the mandatory holding period will increase to twelve months in 1978) less any loss realized on property held less than the mandatory holding period. Section 1201(a) provides a 30% rate of taxation on the net capital gains of corporations, and l201(b) provides for individuals a rate of 25% on the net capital gain to $50,000.00 ($25,000.00 for married individuals filing separate returns).  Section 1202 permits the exclusion of 50% of the net capital gain from gross income for individuals. 

ARGUMENT 

1)  Standing to Sue.

Whenever this Court in civil rights cases has been faced with the problem of standing and the con­science of the Court compelled it to act, it invariably responded with the following:

The very essence of civil liberty certainly consists in the right of every in­dividual to claim the pro­tection of the laws, whenever he receives an injury. MarbuB v. Madison, 5 U.S. 137, 163.  

Certainly this case can be compared with Baker v. Carr, 369 U.S. 186, S.Ct. 691, 7 L. Ed. 2d 663 (1962), another case alleging discrimination (in the equality of a citizen's vote). Therein Mr. Justice Brennan stated that' a person has standing , if he has alleged "such a personal stake in the outcome of the contro­versy as to assure that concrete adverseness which sharpens the pre­sentation of issues upon which the court so largely depends for
illumination of difficult constitutional questions"' and a constitutional limitation upon legislative action.

Isn't justice to this petitioner as a taxpayer, obviously in combina­tion with the will of the majority in our nation to control excesses of Congress, at least as important as the equality of his vote?  But this petitioner need not end his argument on standing with the pre­ceding, for this Court has stated, in Flast v. Cohen, 392 U.S., 83 (1968) that a taxpayer "may or may not have the requisite personal stake in the outcome of the issue he seeks to litigate, depending upon the circumstances of the case".
392 U.S., p. 101.  And Justice ­Laskin of the Supreme Court of Canada, in Thornton v. Attorney General of Canada, 43 D.L.R. 3d 1 (1974), wherein was attacked the constitutionality of the Official Languages Act, R.S.C. 1970, c. 0-2 of the Parliament of Canada, states the following:

...  It would be strange and, indeed, alarming, if there was no way in which a question of an alleged excess of legislative power, a matter traditionally within the scope f the judicial process, could be made the subject of adjudication.  43 D.L.R. 3d., p. 7.

.........................................
The question of constitutionality of legislation has in this country always been a justicable question.  Ibid., at 11. 

Furthermore, after considering many tax decisions involving tax ex­penditures, such as Frothingham v. Mellon (1923) 262 U.S. 447, and its "considerable modification"; by Flast v. Cohen, supra, Justice Laskin on page 18 or Thornton sets forth the following: 

Lord Nansfield... looked upon the writ of mandamus as a public remedy which "was introduced to pre­vent disorder from a fail­ure of justice, and defect of police. Therefore it ought to be used upon all occasions where the law has established no specific remedy, and where in just­ice and good government there ought to be one."  R. v. Barker (1762), 3 Burr. 1265 at p. 1267, 97 E.R., 823. The expansion of the declaratory action, now well established would with a consequent denial of its effect­iveness if the law will recognize no one with standing to sue in relation to an issue which is justiciable and which strikes directly at constitutional authority.  

2)  The Problem.  

On December 11, 1968, the Honorable Henry H. Fowler, Secretary of the Treasury, commented. upon the inequities in the tax laws, wherein low income families are faced with for them is a heavy tax burden, whereas many individuals with income of $1 million or more pay the same effective rate of tax as do the latter; that "our social and economic needs can better be served through direct measures out­side the tax system, rather than by tax credits and other forms of incentives."  Tax Reform Studies and Proposals, U. S. Treasury Department (Joint Publication, Committee on Ways and Means of the U. S. House Of Representatives and Committee) 

Furthermore, in 1975 it was acknowledged by the Honorable William E. Simon, Secretary of the Treasury, that increasingly burdensome taxes are "so high that the average worker has difficulty making ends meet," and that "our economy is suffering from a reduction in the purchases of homes and consumer durable goods... The principal buyers of (such goods) are the middle income classes."

Obviously there is a tre­mendous need for government revenue (the government cannot continue to forever print paper money to pay for its debts with­out our nation suffering the consequences). And with the need of further government revenue so great, and the middle class already so overburdened by taxes, it is obvious that such revenue must come from those most able to pay their fair share. "Wel­fare" for the wealthy, tax
expenditures, preferences, or loopholes, must be eliminated; otherwise, the taxpayer revolt that-is already sweeping the country could become so much worse that the income tax may lose viability as the fairest source of revenue for the govern­ment.

3)  Common Features of the Alleged Unconstitutional Tax Preferences.  

A. They do not and cannot benefit those outside the tax system who are acting in a manner consistent with the unrealized philosophical principles behind their enactment. Surrey, Stan­ley S., Pathways to Tax Reform (Mass.:  Harvard University Press, 1974) at 134 (hereafter referred to as Surrey).,

B. They are worth more to the high income taxpayer than to the low. Ibid.

C. They benefit taxpayers by pay­ing them for doing what they would anyway!  Because of this there is no adequate measure of achievement possible. Ibid.

D. They bring about unfair com­petition within industries by being a source of revenue to those whose live­lihood is not directly dependent upon the success in terms of the profit­ability of the enterprise. Surrey, p.138.

E. They acknowledge the risk in certain .endeavors and discriminate in favor of them, dis-acknowledging that there is inherent risk in any human endeavor, even in the work of the com­mon laborer.

F. They keep the tax rates high by constricting the tax base: and there­by reducing revenues. Ibid., at 139.

G. They require the Internal Rev­enue Service to regulate programs that other agencies should. Ibid., at 144.

H. They conflict with other laws designed to maintain our democratic institutions, such as the Anti-trust laws.
I. They breed more inequities by giving powerful lobbyists a focus. The will of the people is thereby further perverted by clandestine Congressional committee action. Stern, Phillip M., The Rape of the Taxpayer (New York:  Random House, Inc., 1974) pp. 307-319 (Hereafter referred to as Stern).  

4)
Specific Effects of the Alleged Unconstitutional Tax Preferences.

A. The Investment Tax Credit.

The investment tax credit hastens the replacement of men's jobs with machines, and with discriminatory treatment ag­ainst used machinery and equipment (Code Section 48(c)), natural resources are more easily depleted.

B. Percentage Depletion.

The above deduction discriminates ag­ainst most other industries and even against industries in the same field (such as energy production) Tax Reform Studies and Proposals, U. S. Treasury Department, supra, at 426.  An allow­ance or deduction can in effect be bought from a business to whom the allowance has absolutely no direct benefit. Stern at 247-248.  There is risk in any enterprise (for example, inventions may become obsolete), and generally there is no write off of pro­fits as there is in the favored enter­prise. And furthermore, this tax pre­ference discriminates against industries that recycle natural resources and encourages their depletion, thereby denying them from future generations.

C. The DISC Deferral of Income.

The above preference initially enacted to grant similar benefits to domestic­ally based corporations as were provided to American foreign based corporations, actually discriminates against the latter corporations and also violates international trade agree­ments to which the United States is a party. "DISCs' Validity Is Challenged by GATT Panel," Wall Street Journal, Vol. LVII, No. 17, Fri., Nov. 5, 1976, p. 7. Only the larger corporations can afford the legal fees needed to create and continue DISCs. Stern, p. 273.  Furthermore, the preference:

(1) Gives foreign nations tools and machines they cannot use. Schumacher, E. F., Small is Beautiful (New York:. Harper & Row, 1973) at 57 (Hereafter referred to as Schumacher).

(2) Is not needed if the U.S.. adopted sound economic policies. Ibid at 55-6.

(3) Encourages the rapid depletion of the national resources of other nations, which in exchange receive a technology which creates mass unemployment of their inhabitants. Schumacher at 7.

D. The Stepped-Up Basis ot Property Acquired from a Decedent.

The estate tax should already be considered a preferential ­tax, permitted by Code section 102(a), for otherwise inherited property could be considered income to the recipient under Section 61. The estate tax is further loaded with so many ­preferences that it taxes large estates with expert estate
planning at such a minimal rate that the estate tax provides only about 2% of federal revenues. Stern at 325, 327. And when Congress enacted Section 1023, it created a highly complex pro­vision which presently permits the avoidance of taxation of the appreciation of property acquired from a deceased, when supposedly the estate tax and gift tax have been unified. Such preference furthermore causes grave economic distortions by creating a con­dition which promotes immobility of funds to avoid the payment of taxes. Stern at 113-4.

E. The Capital Gains Exclusion.

It wasn't enough that Section 1001 (a) was enacted to avoid the annual reporting of the appreciation of property, equivalent to a deferral of taxes or an interest free loan. Congress further enacted the above preference or expenditure which

(1) Benefits only one tax­payer in ten. Stern at 95.

(2) Creates a meaningless distinction between qualified property. Stern at 102. (See also Section 1245).

(3) Is further supplemented by the deduction of interest on loans to purchase qualified assets under section 163, accelerated deprecia­tion under section 167, permissible treatment of the proceeds as capital gains even if received in installments, and the five year income averaging provision of section 1302.

Because of the above, preferential capital gains treatment has been called the "greatest cause of complexity as well as unfairness in our tax system." (Stern at 102).

 5)
Due Process, Equal Protection, and the Taxing Power.  

From the days of the Pilgrims to the present, equal protection has been part of the historical prin­ciples of the American people. Liberty has been defined as the absence of arbitrary action wherein no class is to be preferred over another and the right of revolution recognized by at least the State of New Hampshire if class preference occurred. Article 10, Right of Revolution, in the New Hampshire Bill of Rights, 1784, (quoted in Great Quotations Compiled by George Seldes, New York: Pocket Book Edition, 1972 at p. 448). Al­though the United States Constitution did not initially have a Bill of Rights, it was stated in 1788 by Delegate Parsons of Massachusetts that "No power is given to Congress to infringe on anyone of the natural rights of the people." Bancrof't, George, History of the Constitution of the United States (1884), 388.

The United States Supreme Court has recognized the principle of equa­lity in Traux v. Corrigan, 257 U.S. 312, 331, and Bolling v. Sharpe, 347 U.S. 497, 499-500, as inherently contained within the 5th Amendment Due Process Clause: "No person shall be... dep­rived of life, liberty, or property, without due process of law."

The income tax act of 1894 was held unconstitutional in part because it was held to be discriminatory ag­ainst professional persons, tradesmen, and other employed persons. Pollack v. Farmers Loan & Trust Co., 157 U.S. 429, 158 U.S. 601 at 637, and quoted in Brushaber v. Union Pac. R. R., 240 U.S. 1, 17, 36 S. Ct. 236, 60 L. Ed. 493 (1916). The Sixteenth Amendment provides that "Congress shall have the power to lay and collect taxes on in­come, from whatever sources derived'" (emphasis added). The progressive rate structure was stated to be "more just and equal than a proportional one."  Knowlton v. Moore, 178 U.S. 41, 109 (1900). And Mr. Chief JusticeWhite in Brushaber, supra, recognized that there might develop a case where, although there was a seeming exercise of the taxing power, the act com­plained of was so arbitrary as to constrain to the conclusion that it was not the exertion of taxation but a confiscation of property; that is, taking of same in violation of the Fifth Amend­ment; or, what is equivalent thereto, was so wanting in basis for classification as to produce such a gross and patent inequality as to inevitably lead to the same conclusion. 240 u.s. at 24-25.

Yet perhaps the closest case to this is Green v. Kennedy, 309 F. Supp. 1127, which enjoined the granting of exempt status under section 50I(c)(3) to private schools maintaining racially dis­criminatory admissions policies and that contributions to such schools would no longer be tax deductible (The subsequent affirm­ation of Green v.Kennedy, Green v. Connally, 330 F. Supp. 1150 (D.D.C. 1971) was affirmed mem. sub nom Coit v. Green, 404 U.S. 97l [I97l] )

 

CONCLUSION  

[T]he general expenses of govern­ment should be distributed among persons on the basis of ability to pay. [T]axes should be pro­gressive -- that is, high-income people should pay a larger frac­tion of their income in taxes than low-income people, because people with high-incomes give up luxuries to pay taxes while those with low-incomes give up necessities. [T]he poor should pay no taxes, since by definition they have less than enough money to buy the bare essentials and no way of contributing to the general costs of government. Accordingly, the ideal tax would be a progressive income tax from which the poor were exempt.Fried, et aI, Setting National Priorities: The 1974 Budget (Washington: Brookings Institution, 1973), at 45-6. 

Unfortunately, the above is not the present situation, for many of the very rich arrange their financial affairs so they pay little to nothing for what they receive from their nation, whereas many of the poor pay a tax rate of 25% or higher. Pechman, Joseph A., and Okner, Benajmin A., Who Bears the Tax Burden? (Washing­: Brookings Institution, 1974) at 59.

Even though wealth is the product of labor, the earnings of the laborer are taxed more heavily than the pro­perty of the wealthy through the retention of the alleged unconstitutio­nal tax preferences.,

Some state that a "lack of in­centive" would result if the wealthy are required to pay their fair share. Certainly this argument works both ways. However, since the average effective tax rate of the wealthy is presently only 26% (Stern at 12), the probable effective rate of' 40% without the continuing legality of the preferences under attack should not be viewed as confiscatory, since obviously the wealthy benefit more from our social system than do the poor.

However, even James Madison in the earliest days of our Republic recognized that the self interests of the wealthy tend to trample upon the rules of justice with respect to the apportionment of taxes upon the various forms of property. James Madison, The Federalist, No. 10 quoted  in Great Quotations, op. cit., p. 904.
Perhaps then, we have reached that moment in history referred to in the folowing quotation, also by James Madison:

We are free today sub­stantially, but the day will come when our Republic will be an impossibility because wealth will be concentrated in the hands or the few. A Republic cannot stand. upon bayonets, and when the day comes, when the. wealth of the nation will be in the hands of a few, then we must rely upon the wisdom of the beet elements in the country to readjust the laws of the nation to changed conditions. Quoted in the New York Post, as quoted by Great Quotations op. cit. 976.

Whether we survive as a nation may depend in large measure upon this Court recognizing that it is the element referred to in the above quotation. It should not shirk its responsibility for "Never for a moment should [government] be left to irresponsible action."  George Washington, as quoted in Great Quotations, op. cit., 455.

Therefore, this Court for reasons as set forth above and previously, should find that a substantial Con­stitutional issue exists by the plaintiff's allegation that Internal Revenue Code Sections 46, 611, 613, 613A, 991, 995, 1014, 1032, 1201 and 1202 are arbitrary exercises of the taxing power and are unconstitutional under the 5th Amendment Due Process Clause and the Article I, Section 8, [l] General Welfare Limitation with their inherent equal protection limitation and the requested in­junction should be issued or this cause should be remanded to the United States District Court for the convening of the requested Three Judge Court.  

RESPECTFULLY SUBMITTED,  

DAVID C. HAKIM, Plaintiff

 

 

APPENDIX

 

_______________________________

 

IN THE
UNITED STATES SUPREME COURT  
OCTOBER TERM, 1975  

No. 76-270  

DAVID C. HAKIM, Petitioner 

v.  

COMMISSIONER OF INTERNAL REVENUE SERVICE,
Respondent 

PETITION FOR IMMEDIATE GRANTING OF CERTIORARI AND MISCELLANEOUS MOTIONS  

The petitioner requests certiorari before final judg­ment in this cause as permitted by 28 V.S.C. sections 1254(1), 2101(e) and sets forth the following in support of such request:


1) That this suit in equity for the convening of a Three Judge District Court under 28 U.S.C. 2282, 2284, to enjoin Internal Revenue Code provisions consisting of the investment tax credit, the percentage depletion deduction, the domestic international sales corporation's deferral of income, the stepped up basis (to its fair market value at the date of death or alternate valuation date) of property acquired from a decedent, and the capital gains exclusion of income, on the grounds that such tax preferences are arbitrary exercises of the tax­ing power and are, therefore, unconstitutional under the Fifth Amendment Due Process Clause and the Article I, Section 8 [11 General Welfare Limitation,. was filed in early 1975 in the United States District Court for the Eastern District of Michigan, No. 5-70334. The alleged loss to the government and consequently to the people of the United States due to such preferences wherein the wealthy can avoid paying their fair share of taxes, con­sequently creating a condition of involuntary servitude upon this petitioner (plaintiff) and others similarly situated, was estimated to be twenty-six billion dollars ($26,000,000,000.00) yearly; 

The tax preferences that are alleged in the plaintiff's complaint and analyzed by his brief and reply brief for the Court of Appeals are briefly explained on pages 3 - 5 of the complaint and are summarized below: 

The irreparable injury allegations on pages 2 - 3 of his complaint were stated to be that this plaintiff, being a member of the middle class, is subject to the duty of paying more than his fair share of taxes because he does not benefit from such preferences; that his taxes would be approximately one thousand dollars less per year if the alleged discriminatory provisions were eliminated and the progressive rate structure adjusted accordingly to yield the same amount of revenue currently obtained. He also alleged that he believes such tax preferences to be a violation of the mores of his nation as embodied in his Federal Constitution (or. to be a viola­tion of public policy). Therefore, a further argument against the validity of the alleged unconstitutional tax preferences implicitly contained in the plaintiff's complaint is that they are per se discrim­inatory, that they inherently violate public policy whether or not the taxpayer benefiting from them is a member of the wealthy class.  

2) That on October 21, 1975, United States District Judge Thomas P. Thornton denied this petitioner's mo­tion for a Three Judge District Court and dismissed the action upon hearing of the defendant's motion to dis­miss, stating in his order that this plaintiff did not allege a substantial constitutional issue;  

3) That an amended notice of appeal to the United States Court of Appeals for the Sixth Circuit, No. 76-1009, was filed timely under 28 U.S.C. section 1291 on November 24, 1975, with the cause docketed shortly thereafter and with all required briefs filed be­fore April, 1976;  

4) That on or about June 1, 1976, this petitioner filed an amended motion for temporary and perman­ent injunctions and expedited hearing by the Court of Appeals, which motion was denied on June 24, 1976 

5) That to this date the hearing on the merits of this cause by the Court of Appeals has not been scheduled.

Wherefore, assuming the truth of this plaintiff's allegation that the above named preferences are uncon­stitutional exercises of the taxing power, there is con­sequently a daily loss of approximately seventy million dollars ($70,000,000.00). Now then this petitioner (plaintiff) requests the United States Supreme Court to assume immediate jurisdiction because of the excep­tional importance of this action, to determine that this plaintiff raised a substantial issue by his pleadings, and:  

1) To issue a temporary injunction, and/or to grant and to expedite the hearing and afterwards to issue a permanent injunction to restrain the operation of the aforementioned tax preferences, or 

2) To remand this cause to the United States District Court for the Eastern District of Michigan for the immediate convening of a Three Judge District Court under 28 U .S.C. sections 2282,2284, or to the United States Court of Appeals for the Sixth Circuit under 28 U.S.C. section 1291 for the immediate convening of its usual Three Judge Court.

 

DAVID C. HAKIM, Petitioner in pro se

___________________________________________________________________________________________________________________

Appeals or the United States District Court for the Eastern District of Michigan, it is requested that the Court issue the requested temporary injunction first.

 

No. 76-1009
UNITED STATES- COURT OF
APPEALS FOR THE SIXTH CIRCUIT

 

DAVID C. HAKIM,
Plaintiff-Appellant,  

v.  

COMMISSIONER OF INTERNAL REVENUE
Defendant-Appellee

 

ORDER  

BEFORE: PHILLIPS, Chief Judge, PECK
and LIVELY, Circuit Judges 

Upon examination of the
record and briefs, the Court con­cludes
that this appeal is frivolous
and completely without merit. The
appeal is dismissed. Rule 9, Rules
of the Sixth Circuit.  

ENTERED BY ORDE:R OF THE COURT

 

John P. Hehman,
Clerk
 

Filed March 3, 1977

_______________________________

 

 

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

DAVID C. HAKIM,
Plaintiff,  

v.  

COMMISSIONER OF INTERNAL REVENUE
Defendant

 

CIVIL ACTION 5-70334  

ORDER
 

This cause having come on before the Court upon defendant's Motion to Dismiss, and the Court having read the filed briefs and hearing argument thereon, and being fully advised in the premises, the Court finds that the plaintiff does not have standing pursuant to the requirements established by Flast v. Cohan, 392 U.S. 83, (1968):
 

NOW, THEREFORE, IT IS HEREBY ORDERED AND ADJUDGED that the plaintiff has not raised a substantial constitutional issue, and it is not necessary to convene a three-judge court:
 

IT IS FURTHER ORDERED that since plaintiff does not have standing the plaintiff's Complaint is dismissed with prejudice.
 

THOMAS P., THORNTON
United States District Judge

ENTERED:  OCT 21 1975  

CERTIFICATE OF SERVICE OF PETITION FOR IMMEDIATE GRANTING OF A WRIT
OF CERTIORARI AND MISCELLANEOUS MOTIONS TO THE UNITED STATES
COURT OF APPEALS FOR THE.
SIXTH CIRCUIT  

It is hereby certified that three copies of the Petition for Immediate Granting of a Writ of Certiorari and Miscellaneous Motions to the United States Court of Appeals for the Sixth Circuit, including an appendix, was ­served by mailing in the United States Mail , with postage prepaid., on May 5, 1977, to:

Solicitor General
Department of Justice
Washington, D.- C~ 20530

David C. Hakim

Petitioner in Pro Se