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How the American Republic became a Managerial State
The United States Constitution was revolutionary. "A republic," Benjamin Franklin is reported to have said, "if you can keep it." They couldn't.
By Bruce Pardy | July 16, 2026
It wasn't supposed to be this way. The United States was the land of the free. Limited government. Checks and balances. Separation of powers. The Bill of Rights. But America has instead become a managed society. Its government dominates the lives of its people. How did it go wrong? Lots of bad steps helped to transform the American republic into a managerial state. Here are eleven of the moments that sent the ship off course.
1. Residual powers: The "necessary and proper clause", 1788
The first American constitution, the Articles of Confederation, didn't last long. Written in 1777 but not fully ratified until 1781, the Articles created a weak federal government. It had a legislature but no executive or judicial branch. It lacked the power to enforce laws or raise money to maintain a military. Under it, the individual States ran the show. Under Article 2, the federal government had only those powers "expressly delegated" to it. In 1787, the Constitutional Congress scrapped the Articles to start again.
But opinions split. Federalists such as Alexander Hamilton wanted a strong central government. Thomas Jefferson warned that centralized power represented a threat to the liberty of the people and the autonomy of the States.
The second constitution, the one that stuck, was ratified in 1788. Section 8 of its first Article enumerated the powers of the federal government. "The Congress shall have the power to ..." But was the list exhaustive? Did the federal government have only those powers expressly delegated, as in the Articles of Confederation? Or did the new constitution give the federal government open-ended, residual powers? Clause 18 of the section contained the most important clue. It authorized Congress to make all laws "necessary and proper" to executing its mandate.
"Necessary and proper" could have meant essential to fulfilling its responsibilities in those areas explicitly listed. But according to Hamilton, the clause gave Congress the authority to pass laws that it regarded to be in the national interest. When Hamilton proposed the creation of a national bank to deal with revolutionary war debt, a power not listed in Article 1, President George Washington eventually agreed.
The tenth amendment, passed in 1791, could have put the genie back in the bottle. Powers "not delegated to the United States by the Constitution," it reads, "nor prohibited by it to the States, are reserved to the States respectively, or to the people." That could have meant the federal government had no residual or implied powers. But the section omits the key word: expressly. Article 2 of the Articles of Confederation said the federal government had only those powers expressly delegated. The Tenth Amendment does not use that word. The "necessary and proper" clause delegates powers to the federal government that are not express but implied. That clause is the federal government's blank check. Had the Tenth Amendment said "expressly" delegated, it might have altered the course of American government.
2. Untouchable civil servants: Pendleton Act, 1883
Almost a hundred years later, in 1881, President James A. Garfield was assassinated by one of his own campaign workers. An angry attorney from Illinois named Charles J. Guiteau shot him in the stomach. Jeffrey Tucker tells the story:
3. Medical hegemony: The Flexner Report, 1910
It might seem odd to include a report about medical schools in this list. But in 1910, a report on medical education helped to not just transform but capture the medical system in North America. "Medical Education in the United States and Canada", was written in 1910 by Abraham Flexner. The Carnegie Foundation commissioned it. The American Medical Association (AMA) supported it. John D. Rockefeller funded it. Flexner's ostensible mandate was to enquire into the quality of medical education. His report savaged medical institutions that were not based on allopathic science and pharmaceutical drugs. It attacked their legitimacy, reputation and funding. Many were forced to close. Rockefeller arranged millions of dollars in grants to medical schools, research facilities and hospitals that embraced the report's recommendations.
Allopathic medical treatment came to be regarded as the only legitimate kind of medical care. Alternative approaches to healthcare, such as naturopathy, homeopathy, and osteopathy, were marginalized. The medical profession became a cartel. Competition for the pharmaceutical industry was stamped out. The Flexner Report helped to create a top-down, standardized system of healthcare in North America. Institutional authority, not patient autonomy or informed consent, was its dominant feature. Governments and professional bodies enforce that system to this day. More than a century after the Flexner Report, COVID-19 policies would reflect its principles and confirm its lasting influence.
4. Professional expert class: Woodrow Wilson and the Federal Reserve, 1913
The Pendleton Act weakened political control over rank-and-file federal employees. Woodrow Wilson, sometimes called the first progressive president, took things a step further. Long before he became the President in 1913, Wilson published an essay called "The Study of Administration". In it, he asserted that in a complex society, government administration should be regarded as a professional discipline. Public officials are an expert class in pursuit of the common good. They should be allowed to operate above the political fray.
When he came to office, Wilson put this theory into practice. Congress had already established the Interstate Commerce Commission (ICC) and Board of General Appraisers, whose heads could not be removed except for cause. Through legislation and executive orders, Wilson created more federal agencies with the power to act independently. Among them were the Federal Reserve and the Federal Trade Commission. The Federal Reserve, created in 1913, wasn't just a government bank, but a policy and regulatory institution. With extensive powers including the ability to set interest rates, regulate banks, and act as lender of last resort, the Federal Reserve acquired the mandate to manage the economy.
In 1935, in Humprey's Executor v United States, the Supreme Court confirmed that commissioners of independent agencies could be dismissed only for cause, removing them from direct presidential control. That precedent stood until June 29, 2026, when the Court overturned Humphrey to allow President Donald Trump to fire Commissioner Rebecca Kelly Slaughter from the FTC without cause. The majority opinion found that the FTC exercises executive power. Therefore, said the judgment, its commissioners are subject to removal at the pleasure of the President, in accordance with the separation of powers established in the Constitution.
5. Funding the managerial state: Income taxes and the 16th Amendment, 1913
Before 1913, only death was inevitable. The federal government had levied income taxes before, during the Civil War. But the Supreme Court, in its 1895 decision in Pollock v Farmers' Loan & Trust, insisted that federal income taxes had to be "apportioned among the states," as the First Article of the Constitution states.
That meant that taxes collected from a state with five per cent of America's population were limited to five per cent of the total tax revenue. That prevented the federal government from taxing American citizens on their individual wealth. The 16th Amendment, proposed in 1909 and ratified in 1913, authorized Congress to tax income without apportionment. Congress wasted no time in reinstating a federal tax on incomes over $3,000. The progressive federal income tax system was born.
Please go to substack to continue reading.
________
Editor's note: In the section above on "5. Funding the managerial state: Income taxes and the 16th Amendment, 1913," it was explained how the 16th Amendment overturned the Supreme Court's Pollock ruling and enabled unapportioned federal income taxation. However, a significant and longstanding controversy exists over whether the 16th Amendment was ever properly ratified. Despite the official declaration in 1913 that the required three-fourths of the states had approved it, substantial evidence, drawn from legislative records, discrepancies in wording across state resolutions, and procedural irregularities, suggests that the ratification process failed to meet constitutional standards. The intent in highlighting this is to question the legal foundation of the modern progressive income tax system itself: if the 16th Amendment was not validly ratified, then the federal government's power to impose direct taxes on individual incomes without apportionment rests on shaky (or nonexistent) ground, with profound implications for the growth of the managerial state.
In a landmark research effort, Bill Benson, working with Red Beckman, personally visited the archives of all 48 states involved in the ratification process and gathered over 17,000 certified and notarized documents. Their exhaustive investigation revealed numerous procedural defects, including missing ratifications, altered language, and failure to meet constitutional requirements, leading them to conclude that the 16th Amendment was never properly ratified. The findings were meticulously documented in their book The Law That Never Was. Benson has spent over two decades fighting to present this evidence to the American public, enduring significant personal sacrifice including imprisonment. His case, that went to the U.S. Supreme Court, centers on First Amendment protections for disseminating this information rather than tax evasion, highlighting the government's attempt to suppress discussion of these ratification irregularities.
It has been demonstrated there is a profound misunderstanding of the IRS and its origins. The 16th Amendment was never properly ratified, rendering the federal income tax system instituted in 1913 unlawful from its inception. Not one cent of IRS collections flows into the U.S. Treasury; instead, it services interest payments to the Federal Reserve, a private banking cartel. Rather than tweaking a fraudulent system, Congress should abolish the IRS entirely and replace it with nothing, informing the bankster cartel that their investment has failed. The notion of "restoring confidence" in this tax regime is absurd when the foundation itself is constitutionally invalid and unlawful, the system deserves abolition, not reform.
A letter dated 24 June 2025 is a strongly worded formal complaint addressed to the IRS Commissioner, accusing the IRS, the Department of Justice, and lower federal courts of perpetrating a decades-long constitutional fraud and sedition against the American people. The author claims that these agencies have unlawfully enforced the federal personal income tax as a non-apportioned direct tax under the 16th Amendment for over 50 years, in direct violation of the Supreme Court's rulings in Brushaber (1916) and Moore v. United States (2024), which affirm that the income tax is an indirect tax under Article I. It urges the Commissioner, President Trump, and at the time the letter was prepared Attorney General Pam Bondi to recognize this alleged fraud and take corrective action.
What we can conclude then, is the IRS (and its counterpart "Internal Revenue Service") is not a legitimate federal agency but a foreign privateering organization with roots in medieval Church tax collection, the Inquisition, and Civil War-era piracy, operating under color of law as part of a long-running international racketeering and fraud scheme orchestrated by the Vatican, the British Crown, and complicit U.S. Congress that didn't properly ratify the 16th Amendment. The current federal income tax system is unconstitutional, voluntary only, and contradicted by dozens of Supreme Court cases (such as Brushaber, Pollock, and Stanton) that allegedly prove income taxes are indirect and limited, with no lawful authority to impose a direct, unapportioned tax on labor or earnings. The consequences are the ongoing pillaging of the American people to fund wars and redistribution schemes, with Congress unwilling to restrain its own "bill collectors." The continued public inaction makes ordinary citizens accomplices to this fraud and treason, urging them to awaken and take action to dismantle the system.
There is a customizable "Red Line Letter" template designed to challenge IRS enforcement actions by highlighting alleged procedural flaws, lack of authority, and personal liability for IRS officers. The polite but firm letter is intended for individuals facing IRS harassment, liens, levies, garnishments, or related property tax claims. It should be sent to the involved IRS officers, bank CEOs, the Social Security Administration, and the State Commissioner of Natural Resources. The template is available in both PDF and editable Word format and includes red instructions for personalization. Assistance for those in duress: If you are currently facing IRS pressure, you may download the templates from the provided links, carefully follow the customization instructions, and consider consulting a licensed tax attorney or legal professional before sending any documents, as effectiveness can vary significantly and improper filings may worsen your situation.
The first American constitution, the Articles of Confederation, didn't last long. Written in 1777 but not fully ratified until 1781, the Articles created a weak federal government. It had a legislature but no executive or judicial branch. It lacked the power to enforce laws or raise money to maintain a military. Under it, the individual States ran the show. Under Article 2, the federal government had only those powers "expressly delegated" to it. In 1787, the Constitutional Congress scrapped the Articles to start again.
But opinions split. Federalists such as Alexander Hamilton wanted a strong central government. Thomas Jefferson warned that centralized power represented a threat to the liberty of the people and the autonomy of the States.
The second constitution, the one that stuck, was ratified in 1788. Section 8 of its first Article enumerated the powers of the federal government. "The Congress shall have the power to ..." But was the list exhaustive? Did the federal government have only those powers expressly delegated, as in the Articles of Confederation? Or did the new constitution give the federal government open-ended, residual powers? Clause 18 of the section contained the most important clue. It authorized Congress to make all laws "necessary and proper" to executing its mandate.
"Necessary and proper" could have meant essential to fulfilling its responsibilities in those areas explicitly listed. But according to Hamilton, the clause gave Congress the authority to pass laws that it regarded to be in the national interest. When Hamilton proposed the creation of a national bank to deal with revolutionary war debt, a power not listed in Article 1, President George Washington eventually agreed.
The tenth amendment, passed in 1791, could have put the genie back in the bottle. Powers "not delegated to the United States by the Constitution," it reads, "nor prohibited by it to the States, are reserved to the States respectively, or to the people." That could have meant the federal government had no residual or implied powers. But the section omits the key word: expressly. Article 2 of the Articles of Confederation said the federal government had only those powers expressly delegated. The Tenth Amendment does not use that word. The "necessary and proper" clause delegates powers to the federal government that are not express but implied. That clause is the federal government's blank check. Had the Tenth Amendment said "expressly" delegated, it might have altered the course of American government.
2. Untouchable civil servants: Pendleton Act, 1883
Almost a hundred years later, in 1881, President James A. Garfield was assassinated by one of his own campaign workers. An angry attorney from Illinois named Charles J. Guiteau shot him in the stomach. Jeffrey Tucker tells the story:
[Guiteau] was furious because he believed, due to his work for the [Garfield] campaign, that Garfield would give him a job in the new administration. But none was forthcoming. It was revenge. Garfield died of the wounds months later. It was a shocking thing. Congress immediately got to work figuring out how to prevent the next assassination. They had the theory that they needed to end the system of patronage in government so that way people wouldn't get mad and shoot the president. Not a very good theory but this is how politics works. The result was the Pendleton Act that created a permanent civil service. The new president, Chester Arthur signed the bill in 1883. It was done: the administrative state was born. Under the Pendleton Civil Service Reform Act, certain federal civil servants would no longer serve at the pleasure of the president. The Act initially applied to only about 10 per cent of the positions in the federal government, but its coverage grew rapidly. Today the president cannot appoint or dismiss most federal government employees. But the Pendleton Act and its successors did not end cronyism in the federal service. Instead, it shifted appointment powers from the president to the heads of departments and agencies.In a republic, the power belongs to the people, if not directly, then at least through their elected representatives. The Pendleton Act legislated the opposite idea: government employees are not subject to the approval of the people's president. If the president does not have the power to appoint and dismiss, how do the people? The answer is that they do not.
3. Medical hegemony: The Flexner Report, 1910
It might seem odd to include a report about medical schools in this list. But in 1910, a report on medical education helped to not just transform but capture the medical system in North America. "Medical Education in the United States and Canada", was written in 1910 by Abraham Flexner. The Carnegie Foundation commissioned it. The American Medical Association (AMA) supported it. John D. Rockefeller funded it. Flexner's ostensible mandate was to enquire into the quality of medical education. His report savaged medical institutions that were not based on allopathic science and pharmaceutical drugs. It attacked their legitimacy, reputation and funding. Many were forced to close. Rockefeller arranged millions of dollars in grants to medical schools, research facilities and hospitals that embraced the report's recommendations.
Allopathic medical treatment came to be regarded as the only legitimate kind of medical care. Alternative approaches to healthcare, such as naturopathy, homeopathy, and osteopathy, were marginalized. The medical profession became a cartel. Competition for the pharmaceutical industry was stamped out. The Flexner Report helped to create a top-down, standardized system of healthcare in North America. Institutional authority, not patient autonomy or informed consent, was its dominant feature. Governments and professional bodies enforce that system to this day. More than a century after the Flexner Report, COVID-19 policies would reflect its principles and confirm its lasting influence.
4. Professional expert class: Woodrow Wilson and the Federal Reserve, 1913
The Pendleton Act weakened political control over rank-and-file federal employees. Woodrow Wilson, sometimes called the first progressive president, took things a step further. Long before he became the President in 1913, Wilson published an essay called "The Study of Administration". In it, he asserted that in a complex society, government administration should be regarded as a professional discipline. Public officials are an expert class in pursuit of the common good. They should be allowed to operate above the political fray.
When he came to office, Wilson put this theory into practice. Congress had already established the Interstate Commerce Commission (ICC) and Board of General Appraisers, whose heads could not be removed except for cause. Through legislation and executive orders, Wilson created more federal agencies with the power to act independently. Among them were the Federal Reserve and the Federal Trade Commission. The Federal Reserve, created in 1913, wasn't just a government bank, but a policy and regulatory institution. With extensive powers including the ability to set interest rates, regulate banks, and act as lender of last resort, the Federal Reserve acquired the mandate to manage the economy.
In 1935, in Humprey's Executor v United States, the Supreme Court confirmed that commissioners of independent agencies could be dismissed only for cause, removing them from direct presidential control. That precedent stood until June 29, 2026, when the Court overturned Humphrey to allow President Donald Trump to fire Commissioner Rebecca Kelly Slaughter from the FTC without cause. The majority opinion found that the FTC exercises executive power. Therefore, said the judgment, its commissioners are subject to removal at the pleasure of the President, in accordance with the separation of powers established in the Constitution.
5. Funding the managerial state: Income taxes and the 16th Amendment, 1913
Before 1913, only death was inevitable. The federal government had levied income taxes before, during the Civil War. But the Supreme Court, in its 1895 decision in Pollock v Farmers' Loan & Trust, insisted that federal income taxes had to be "apportioned among the states," as the First Article of the Constitution states.
That meant that taxes collected from a state with five per cent of America's population were limited to five per cent of the total tax revenue. That prevented the federal government from taxing American citizens on their individual wealth. The 16th Amendment, proposed in 1909 and ratified in 1913, authorized Congress to tax income without apportionment. Congress wasted no time in reinstating a federal tax on incomes over $3,000. The progressive federal income tax system was born.
Please go to substack to continue reading.
________
Editor's note: In the section above on "5. Funding the managerial state: Income taxes and the 16th Amendment, 1913," it was explained how the 16th Amendment overturned the Supreme Court's Pollock ruling and enabled unapportioned federal income taxation. However, a significant and longstanding controversy exists over whether the 16th Amendment was ever properly ratified. Despite the official declaration in 1913 that the required three-fourths of the states had approved it, substantial evidence, drawn from legislative records, discrepancies in wording across state resolutions, and procedural irregularities, suggests that the ratification process failed to meet constitutional standards. The intent in highlighting this is to question the legal foundation of the modern progressive income tax system itself: if the 16th Amendment was not validly ratified, then the federal government's power to impose direct taxes on individual incomes without apportionment rests on shaky (or nonexistent) ground, with profound implications for the growth of the managerial state.
In a landmark research effort, Bill Benson, working with Red Beckman, personally visited the archives of all 48 states involved in the ratification process and gathered over 17,000 certified and notarized documents. Their exhaustive investigation revealed numerous procedural defects, including missing ratifications, altered language, and failure to meet constitutional requirements, leading them to conclude that the 16th Amendment was never properly ratified. The findings were meticulously documented in their book The Law That Never Was. Benson has spent over two decades fighting to present this evidence to the American public, enduring significant personal sacrifice including imprisonment. His case, that went to the U.S. Supreme Court, centers on First Amendment protections for disseminating this information rather than tax evasion, highlighting the government's attempt to suppress discussion of these ratification irregularities.
It has been demonstrated there is a profound misunderstanding of the IRS and its origins. The 16th Amendment was never properly ratified, rendering the federal income tax system instituted in 1913 unlawful from its inception. Not one cent of IRS collections flows into the U.S. Treasury; instead, it services interest payments to the Federal Reserve, a private banking cartel. Rather than tweaking a fraudulent system, Congress should abolish the IRS entirely and replace it with nothing, informing the bankster cartel that their investment has failed. The notion of "restoring confidence" in this tax regime is absurd when the foundation itself is constitutionally invalid and unlawful, the system deserves abolition, not reform.
A letter dated 24 June 2025 is a strongly worded formal complaint addressed to the IRS Commissioner, accusing the IRS, the Department of Justice, and lower federal courts of perpetrating a decades-long constitutional fraud and sedition against the American people. The author claims that these agencies have unlawfully enforced the federal personal income tax as a non-apportioned direct tax under the 16th Amendment for over 50 years, in direct violation of the Supreme Court's rulings in Brushaber (1916) and Moore v. United States (2024), which affirm that the income tax is an indirect tax under Article I. It urges the Commissioner, President Trump, and at the time the letter was prepared Attorney General Pam Bondi to recognize this alleged fraud and take corrective action.
What we can conclude then, is the IRS (and its counterpart "Internal Revenue Service") is not a legitimate federal agency but a foreign privateering organization with roots in medieval Church tax collection, the Inquisition, and Civil War-era piracy, operating under color of law as part of a long-running international racketeering and fraud scheme orchestrated by the Vatican, the British Crown, and complicit U.S. Congress that didn't properly ratify the 16th Amendment. The current federal income tax system is unconstitutional, voluntary only, and contradicted by dozens of Supreme Court cases (such as Brushaber, Pollock, and Stanton) that allegedly prove income taxes are indirect and limited, with no lawful authority to impose a direct, unapportioned tax on labor or earnings. The consequences are the ongoing pillaging of the American people to fund wars and redistribution schemes, with Congress unwilling to restrain its own "bill collectors." The continued public inaction makes ordinary citizens accomplices to this fraud and treason, urging them to awaken and take action to dismantle the system.
There is a customizable "Red Line Letter" template designed to challenge IRS enforcement actions by highlighting alleged procedural flaws, lack of authority, and personal liability for IRS officers. The polite but firm letter is intended for individuals facing IRS harassment, liens, levies, garnishments, or related property tax claims. It should be sent to the involved IRS officers, bank CEOs, the Social Security Administration, and the State Commissioner of Natural Resources. The template is available in both PDF and editable Word format and includes red instructions for personalization. Assistance for those in duress: If you are currently facing IRS pressure, you may download the templates from the provided links, carefully follow the customization instructions, and consider consulting a licensed tax attorney or legal professional before sending any documents, as effectiveness can vary significantly and improper filings may worsen your situation.
One of the biggest institutional problems with the IRS is that despite all this that has been outlined herein, the average IRS employee is largely ignorant of or indifferent to fringe legal arguments, such as claims that the 16th Amendment was never properly ratified, that the IRS is an illegitimate foreign or private entity, or that income taxes are voluntary/unconstitutional. In a practical sense they are order followers. They perform their roles by applying established statutes, regulations, and court precedents that have repeatedly upheld the federal income tax system. Most view their work as routine administration and enforcement within a lawful framework, prioritizing operational duties, compliance processing, audits, and collections over constitutional scholarship or historical ratification debates. Like many federal bureaucrats, their primary motivations center on job security, stable pay, benefits, and pensions rather than ideological engagement with tax protester theories, which courts have consistently deemed frivolous.
Every concerned American should begin a serious and urgent personal education regarding their true legal relationship to the IRS and the federal income tax system, drawing from the historical, constitutional, and judicial evidence presented in the above linked essays. Understanding the longstanding controversies surrounding the 16th Amendment, the nature of the IRS as a private collection entity, the distinctions between direct and indirect taxation, and the implications of key Supreme Court rulings is essential to protecting your rights and property. This information is shared solely for educational purposes under the protections of the First Amendment to the United States Constitution and is not intended as legal advice; readers are strongly encouraged to consult qualified licensed professionals and conduct their own thorough research before taking any action.
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This is what you would expect with the Federal Reserve in operation:
The richest Americans have never controlled this much wealth:
— The Kobeissi Letter (@KobeissiLetter) July 16, 2026
The wealth of the top 0.00001% of Americans is up to a record ~12% of US national income.
National income measures the total income earned across the economy, including wages, business profits, and investment income.… pic.twitter.com/QwRV6Jkn7X
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