Posted on 05/03/2005 3:16:24 AM PDT by RobFromGa
If the 16th Amendment was repealed the income tax would not be constitutional. But since a tax on services is a tax on one's fruit of labor, it would also be unconstitutional. A sales tax on services is really a tax on income, it just taxes gross receipts instead of net.
Your biggest gripe is that the fair tax taxes new homes.
LOL....OK, you got me there. It is my second biggest gripe.
And how is a tax on services Constiutional????
Why should an excise tax laid on the consumer of services provided by a business be any less constitutional than other enterprise that a business may engage in?
That is a question well settled long before the 16th amendment ever came around.
LICENSE TAX CASES, 72 U.S. 462 (1866)
- "It is true that the power of Congress to tax is a very extensive power. It is given in the Constitution, with only one exception, and only two qualifications. Congress cannot tax exports, and it must impose direct taxes by the rule of apportionment, and indirect taxes by the rule of uniformity. Thus limited, and thus only, it reaches every subject, and may be exercised at discretion."
Furthermore, the legal incidence of a federal tax laid with regard to the individual under the Constititution was one of the basic factors of why the constitution was even proposed.
A facit of the reach of the Constitution that both sides of the debate agreed existed:
James Madison, Federalist #39:
- "The difference between a federal and national government, as it relates to the OPERATION OF THE GOVERNMENT, is supposed to consist in this, that in the former the powers operate on the political bodies composing the Confederacy, in their political capacities; in the latter, on the individual citizens composing the nation, in their individual capacities. On trying the Constitution by this criterion, it falls under the NATIONAL, not the FEDERAL character;"
Anti-Federalist Papers #3 NEW CONSTITUTION CREATES A NATIONAL GOVERNMENT;
- There are but two modes by which men are connected in society, the one which operates on individuals, this always has been, and ought still to be called, national government; the other which binds States and governments together (not corporations, for there is no considerable nation on earth, despotic, monarchical, or republican, that does not contain many subordinate corporations with various constitutions) this last has heretofore been denominated a league or confederacy. The term federalists is therefore improperly applied to themselves, by the friends and supporters of the proposed constitution.
If the 16th Amendment should be repealed, a tax on services would be as unconstutional as a tax on income.
LOL, a tax on even wage income has never been considered unconstitutional before or after the 16th amendment.
Before ratification of the 16th Amendment:
Hylton v. United States(1796), 3 U.S. 171
"A general power is given to Congress, to lay and collect taxes, of every kind or nature, without any restraint, except only on exports; but two rules are prescribed for their government, namely, uniformity and apportionment: Three kinds of taxes, to wit, duties, imposts, and excises by the first rule, and capitation, or other direct taxes, by the second rule. " "the present Constitution was particularly intended to affect individuals, and not states, except in particular cases specified: And this is the leading distinction between the articles of Confederation and the present Constitution." "Uniformity is an instant operation on individuals, without the intervention of assessments, or any regard to states," "[T]he DIRECT TAXES contemplated by the Constitution, are only two, to wit, A CAPITATION OR POLL TAX, simply, without regard to property, profession, or any other circumstance; and a tax on LAND."
Pollock v. Farmers' Loan and Trust Company, 157 U.S. 429 (1895)
- "The people of the United States constitute one nation, under one government, and this government, within the scope of the powers with which it is invested, is supreme."
- "Without the States in union, there could be no such political body as the United States. Both the States and the United States existed before the Constitution. The people, through that instrument[the Constitution], established a more perfect union by substituting a national government, acting, with ample power, directly upon the citizens, instead of the confederate government, which acted with powers, greatly restricted, only upon the States."
POLLOCK v. FARMERS' LOAN & TRUST CO., 158 U.S. 601 (1895):
- "We have considered the act only in respect of the tax on income derived from real estate, and from invested personal property, and have not commented on so much of it as bears on gains or profits from business, privileges, or employments, in view of the instances in which taxation on business, privileges, or employments has assumed the guise of an excise tax and been sustained as such."
- "If that[rents from land] be stricken out, and also the income from all invested personal property, bonds, stocks, investments of all kinds, it is obvious that by a r the largest part of the anticipated revenue would be eliminated, and this would leave the burden of the tax to be borne by professions, trades, employments, or vocations; and in that way what was intended as a tax on capital would remain, in substance, a tax on occupations and labor. We cannot believe that such was the intention of congress."
- "We do not mean to say that an act laying by apportionment a direct tax on all real estate and personal property, or the income thereof, might not also lay excise taxes on business, privileges, employments, and vocations. "
- Our conclusions may therefore be summed up as follows:
First. We adhere to the opinion already announced,-that, taxes on real estate being indisputably direct taxes, taxes on the rents or income of real estate are equally direct taxes.
Second. We are of opinion that taxes on personal property, or on the income of personal property, are likewise direct taxes.
Third. The tax imposed by sections 27 to 37, inclusive, of the act of 1894, so far as it falls on the income of real estate, and of personal property, being a direct tax, within the meaning of the constitution, and therefore unconstitutional and void, because not apportioned according to representation, all those sections, constituting one entire scheme of taxation, are necessarily invalid.
- Mr. Justice WHITE, dissenting.
16. The injustice of the conclusion points to the error of adopting it. It takes invested wealth, and reads it into the constitution as a favored and protected class of property, which cannot be taxed without apportionment, while it leaves the occupation of the minister, the doctor, the professor, the lawyer, the inventor, the author, the merchant, the mechanic, and all other forms of industry upon which the prosperity of a people must depend, subject to taxation without that condition.
After ratification of the 16th amendment:
Stratton's Independence, LTD. v. Howbert(1913), 231 U.S. 399:
- "'[I]ncome' may be defined as the gain derived from capital, from labor, or from both combined, and here we have combined operations of capital and labor. As to the alleged inequality of operation between mining corporations and others, it is of course true that the revenues derived from the working of mines result to some extent in the exhaustion of the capital. But the same is true of the earnings of the human brain and hand when unaided by capital, yet such earnings are commonly dealt with in legislation as income."
BRUSHABER v. UNION PACIFIC R. CO., 240 U.S. 1 (1916)
- "the conclusion reached in the Pollock Case did not in any degree involve holding that income taxes generically and necessarily came within the class [240 U.S. 1, 17] of direct taxes on property, but, on the contrary, recognized the fact that taxation on income was in its nature an excise entitled to be enforced as such"
Stanton v. Baltic Mining Co.(1916), 240 U.S. 103:
- "the provisions of the 16th Amendment conferred no new power of taxation, but simply prohibited the previous complete and plenary power of income taxation possessed by Congress from the beginning from being taken out of the category of indirect taxation to which it inherently belonged, and being placed in the category of direct taxation subject to apportionment"
Lucas v. Earl(1930), 281 U.S. 111:
- "The Revenue Act of 1918 approved February 24, 1919, c. 18, 210, 211, 212(a), 213(a), 40 Stat. 1057, 1062, 1064, 1065, imposes a tax upon the net income of every individual including 'income derived from salaries, wages, or compensation for personal service ... of whatever kind and in whatever form paid,' 213(a). The provisions of the Revenue Act of 1921, c. 136, 42 Stat. 227, 233, 237, 238, in sections bearing the same numbers are similar to those of the above."
- "There is no doubt that the statute could tax salaries to those who earned them "
Charles C. Stewart Machine Co. v. Davis (1937), 301 U.S. 548:
- "But natural rights, so called, are as much subject to taxation as rights of lesser importance. An excise is not limited to vocations or activities that may be prohibited altogether. It is not limited to those that are the outcome of a franchise. It extends to vocations or activities pursued as of common right."
My biggest gripe with Fair Taxers is they always oversell their case.
How can you "oversell" a proposed scheme? It's still up for changes & approval.
Where are the limits on the fair tax????
An Amendment could limit the taxing power. What do you propose?
And how is a tax on services Constiutional????
Make your case that they are unconstitutional. Be refreshing to see a valid argument around here for a change.
If the 16th Amendment should be repealed, a tax on services would be as unconstutional as a tax on income.
On what basis? Convince me, as I would certainly like that to be the case, being a building contractor.
The exact details are in the bill, cited many times on these threads, which you admit reading.
I've read that same line too many times to count. Is that the official AFT response/talking point?
AFT-FAQ #7----- How is the Social Security system affected?
Like all federal spending programs, Social Security operates exactly as it does today, except that its funds come from a broad, progressive sales tax, rather than a narrow, regressive payroll tax. Employers will continue to report wages for each employee, though, to the Social Security Administration for the determination of benefits. The transition to a reformed Social Security system will be eased while ensuring there is sufficient funding to continue promised benefits.Meanwhile, Social Security/Medicare funds will no longer be triple-taxed as they are now: 1) when payroll taxes are initially withheld; 2) when those withheld payroll taxes are counted as part of the taxable base for income tax purposes; and 3) when the promised benefits are finally received.
#8 ---How does the FairTax affect Social Security reform?
FairTax.org is a one-issue organization: Tax replacement. However, its proposal does benefit any Social Security reform proposal. The FairTax.org plan does not change Social Security benefits or the structure of the Social Security system. All it does is replace the current revenue source (narrow, regressive payroll taxes) with a new revenue source (broad, progressive sales taxes paid by all consumers).
Additionally, research shows that consumption is a more stable revenue source than income. If Social Security is reformed or privatized in a way that reduces the government’s need for revenue, then the FairTax rate can be reduced. For example, if a mandatory private savings program is implemented where people must save 10 percent of their income and Social Security benefits are curtailed, then the FairTax rate can be reduced just as payroll taxes would be reduced.
A simple concept, yet YOU can't grasp it.
So where are those "exact details" again?
What is it about the Fairtax that attracts so many disingenuous frauds?
The exact details are in the bill, cited many times on these threads, which you admit reading. [And, - just posted below.]
AFT-FAQ #7----- How is the Social Security system affected?
Like all federal spending programs, Social Security operates exactly as it does today, except that its funds come from a broad, progressive sales tax, rather than a narrow, regressive payroll tax.
Specific enough, lew? The proposed plan ends the income tax/ss withholding mess, and replaces it with a sales tax scheme.
So where are those "exact details" again?
In front of your nose lew, -- you just posted them but still refuse to admit that they are quite specific.
Then why was the 16th Amendment needed???? Because income tax was considered a direct tax and had to be apportioned. That requirement made it impossible to actually tax income, thus Pollock vs. Farmer's overturned the tax. That is why we had to have the 16th Amendment and if repealed would make taxing services provided by individuals a direct tax that has to be apportioned.
Does this mean that you would support the FairTax idea if taxing services provided by individuals was not included?
-- Sounds OK to me, -- welcome aboard..
LOL, Wrong answer. At least the rationale put forward by the Pollock court was that rents of real property were afruit of that property and an appertenance to that property such that taxing rent was the equivalent of taxing property solely because of its ownership thus a direct tax that must be apportioned as a direct tax thus that portion of the income tax law that dealt with returns form property real or personal were to be regarded as under the classification of direct taxes.
The specific income tax law struck down by Pollock was not found to be unconstitutional because of taxes on wages or occupations (in fact the Pollock court supported such excises as classed as indirect taxes) It was found to be unconstitutional for its provisions that taxed earnings from real property, stocks and bonds merely because of ownership of property, real or personal!!!
BROMLEY v. MCCAUGHN, 280 U.S. 124,136 (1929)
- "Whatever may be the precise line which sets off direct taxes from others, we need not now determine. While taxes levied upon or collected from persons because of their general ownership of property may be taken as direct, this Court has consistently held, almost from the foundation of our government, that a tax imposed upon a particular use of property or the exercise of a single power over property incidental to ownership, is an excise which need not be apportioned, and it is enough for present purposes that this tax is of the latter class.
Hylton v. United States(1796), 3 U.S. 171
"A general power is given to Congress, to lay and collect taxes, of every kind or nature, without any restraint, except only on exports; but two rules are prescribed for their government, namely, uniformity and apportionment: Three kinds of taxes, to wit, duties, imposts, and excises by the first rule, and capitation, or other direct taxes, by the second rule. " "the present Constitution was particularly intended to affect individuals, and not states, except in particular cases specified: And this is the leading distinction between the articles of Confederation and the present Constitution." "Uniformity is an instant operation on individuals, without the intervention of assessments, or any regard to states," "[T]he DIRECT TAXES contemplated by the Constitution, are only two, to wit, A CAPITATION OR POLL TAX, simply, without regard to property, profession, or any other circumstance; and a tax on LAND."
BROMLEY v. MCCAUGHN, 280 U.S. 124,136 (1929)
- It is a tax laid only upon the exercise of a single one of those powers incident to ownership, the power to give the property owned to another. . . . The persistence of this distinction and the justification for it rest upon the historic fact that taxes of this type were not understood to be direct taxes when the Constitution was adopted and, as well, upon the reluctance of this Court to enlarge by construction, limitations upon the sovereign power of taxation by Article 1, sec. 8, so vital to the maintenance of the National Government.
280 U.S. at 136; see The Federalist No. 21 (Hamilton) (distinguishing between "direct taxes" and "taxes on consumption")."
Alexander Hamilton, Federalist #21:
- It is a signal advantage of taxes on articles of consumption, that they contain in their own nature a security against excess. They prescribe their own limit; which cannot be exceeded without defeating the end proposed, that is, an extension of the revenue. ... Impositions of this kind usually fall under the denomination of indirect taxes, and must for a long time constitute the chief part of the revenue raised in this country.
Those of the direct kind, which principally relate to land and buildings, may admit of a rule of apportionment. Either the value of land, or the number of the people, may serve as a standard. The state of agriculture and the populousness of a country have been considered as nearly connected with each other. And, as a rule, for the purpose intended, numbers, in the view of simplicity and certainty, are entitled to a preference.
But the more likely answer, and the one that fits the facts best as to why the 16th amendment was even proposed was that it was a political gambit to interfere with the enactment of a proposed income tax bill that backfired very badly:
| The Bailey Bill In April 1909, Senator Joseph W. Bailey, a conservative Democrat from Texas who was also opposed to income taxes, decided to further embarrass the Republicans by forcing them to openly oppose an income tax bill similar to those which had been introduced in the past. He introduced his bill expecting it to get the usual opposition. However, to his amazement, Teddy Roosevelt and a growing element of liberals in the Republican party came out in favor of the bill and it looked as though it was going to pass. Not only was Bailey surprised, but Senator Nelson W. Aldrich of Rhode Island, the Republican floor leader, frantically met with Senator Henry Cabot Lodge of Massachussetts and President Taft to work out a strategy to demolish the Bailey tax bill. Their own party was split too widely to permit a direct confrontation, so the strategy was to pull a political end run. They announced that they favored an income tax but only if it were an amendment to the Constitution. Within their own circle, they discussed how it might get approval of the House and the Senate, but they were quite certain that it could be defeated in the more conservative states-three-fourths of which were required in order to ratify the amendment. Thus, the Democrats were off guard when President Taft unexpectedly sent a message to Congress on June 16th, 1909, recommending the passage of a consitutional amendment to legalize federal income tax legislation. The strategy threw the liberals into an uproar. At the very moment when their Bailey bill was about to pass, the Republicans were coming out for an amendment to the Constitution which would probably be defeated by the states. Reaction to the Amendment Congressman Cordell Hull (D-Tenn., and later Secretary of State under FDR) saw exactly what was happening. He took the floor to excoriate the Republican leaders. Said he: "No person at all familiar with the present trend of national legislation will seriously insist that these same Republican leaders are over-anxious to see the country adopt an income tax...What powerful influence, what new light and deepseated motive suddenly moves these political veterans to 'about face' and pretend to warmly embrace this doctrine which they have heretofore uniformly denounced?" {1} He went on to expose what he considered to be a political trick. He needn't have been so concerned. The slogan of "soak the rich" automatically aroused Pavlovian salivation among politicians both in Washington and the states. The Senate approved the Sixteenth Amendment with an astonishing unanimity of 77-0! The House approved it by a vote of 318-14. When Republican Congressman Sereno E. Payne of New York, who had introduced the amendment in the House, saw that this end run was turning into a winning touchdown for the opposition, he was horrified. He went to the floor and openly denounced the bill he had sponsored. Said he: "As to the general policy of an income tax, I am utterly opposed to it. I believe with Gladstone that it tends to make a nation of liars. I believe it is the most easily concealed of any tax that can be laid, the most difficult of enforcement, and the hardest to collect; that it is, in a word, a tax upon the income of honest men and an exemption, to a greater or lesser extent, of the income of rascals; and so I am opposed to any income tax in time of peace...I hope that if the Constitution is amended in this way the time will not come when the American people will ever want to enact an income tax except in time of war." {2} The end run of the Republican leadership did indeed backfire. State after state ratified this "soak the rich" amendment until it went into full force and effect on February 12, 1913 |
That requirement made it impossible to actually tax income, thus Pollock vs. Farmer's overturned the tax.
Baloney, as the Pollock decision did nothing to prevent the taxation of wages, in fact the Pollock Court made it very clear that excises on business, privileges, or employments were not included within its consideration of the issue at all. In fact expressly sustained there status as allowed excises:
POLLOCK v. FARMERS' LOAN & TRUST CO., 158 U.S. 601 (1895):
- "We have considered the act only in respect of the tax on income derived from real estate, and from invested personal property, and have not commented on so much of it as bears on gains or profits from business, privileges, or employments, in view of the instances in which taxation on business, privileges, or employments has assumed the guise of an excise tax and been sustained as such."
- "We do not mean to say that an act laying by apportionment a direct tax on all real estate and personal property, or the income thereof, might not also lay excise taxes on business, privileges, employments, and vocations. "
Which what was complained of in the dissent!!!
Mr. Justice WHITE, dissenting.
16. The injustice of the conclusion points to the error of adopting it. It takes invested wealth, and reads it into the constitution as a favored and protected class of property, which cannot be taxed without apportionment, while it leaves the occupation of the minister, the doctor, the professor, the lawyer, the inventor, the author, the merchant, the mechanic, and all other forms of industry upon which the prosperity of a people must depend, subject to taxation without that condition.
All I can figure out from all this is there was never any Supreme Court ruling on the issue of whether tax on the income from one's labor would be direct or indirect. A handful of cases mentioned it, but the actual issue was never before the court. If income tax on labor was considered an indirect tax, the 16th Amendment had little to no effect. Politicians seemed to assume for our first 130 years that an income tax was a direct tax and did not pass an income tax under after the 16th Amendment was ratified. The logic of Pollock escapes me. If taxes on the income from owning Real Estate is a direct tax, how can they even imply that taxes on one's labor might be an indirect tax. But Pollock does make it clear, they were not ruling on that issue.
All I can figure out from all this is there was never any Supreme Court ruling on the issue of whether tax on the income from one's labor would be direct or indirect.
Prior the ruling of Pollock as regards rents & returns from investment property, Springer encompassed all income without regard to source of it, including wages.
Springer v. United States(1880), 102 U.S. 586
"The central and controlling question in this case is whether the tax which was levied on the income, gains, and profits of the plaintiff in error, as set forth in the record, and by pretended virtue of the acts of Congress and parts of acts therein mentioned, is a direct tax." "Our conclusions are, that direct taxes, within the meaning of the Constitution, are only capitation taxes, as expressed in that instrument, and taxes on real estate; and that the tax of which the plaintiff in error complains is within the category of an excise or duty." "[W]henever the government has imposed a tax which it recognized as a direct tax, it has never been applied to any objects but real estate and slaves."
And at that time, income and more particularly gain and profit had specific meaning in law that was inclusive of proceeds derived from one's labor:
A LAW DICTIONARY
by John Bouvier, Revised Sixth Edition, 1856:
INCOME. The gain which proceeds from property, labor, or business; it is applied particularly to individuals; the income of the government is usually called revenue.A LAW DICTIONARY
by John Bouvier, Revised Sixth Edition, 1856:
GAIN. The word is used as synonymous with profits.A LAW DICTIONARY
by John Bouvier, Revised Sixth Edition, 1856:
PROFITS. In general, by this term is understood the benefit which a man derives from a thing. It is more particularly applied to such benefit as arises from his labor and skill
A definition carried on into current law:
Stratton's Independence, LTD. v. Howbert(1913), 231 U.S. 399:
- "'[I]ncome' may be defined as the gain derived from capital, from labor, or from both combined, and here we have combined operations of capital and labor. As to the alleged inequality of operation between mining corporations and others, it is of course true that the revenues derived from the working of mines result to some extent in the exhaustion of the capital. But the same is true of the earnings of the human brain and hand when unaided by capital, yet such earnings are commonly dealt with in legislation as income."
FindLaw: HELVERING v. BLISS, 293 U.S. 144 (1934)
- 'Gross income' includes gains, profits, and income derived from salaries, wages, or compensation for personal service, of ...
Eisner v. Macomber(1920), 252 U.S. 189,207
http://caselaw.findlaw.com/scripts/getcase.pl?court=US&vol=252&invol=189#207
- "After examining dictionaries in common use (Bouv. L. D.; Standard Dict.; Webster's Internat. Dict.; Century Dict.), ... , 'Income may be defined as the gain derived from capital, from labor, or from both combined,' provided it be understood to include profit gained through a sale or conversion of capital assets, to which it was applied in the Doyle Case, , 38 S. Sup. Ct. 467, 469 (62 L. Ed. 1054)."
As well as its continued common usage of the term "income":
Merriam-Webster's Collegiate® Dictionary © 2000
Main Entry: in·come
Pronunciation: 'in-"k&m also 'in-k&m or 'i[ng]-k&m
Function: noun
Date: 14th century
1 : a coming in : , <fluctuations in the nutrient income of a body of water>
2 : a gain or recurrent benefit usually measured in money that derives from capital or labor; also : the amount of such gain received in a period of time <has an income of $20,000 a year>
Politicians seemed to assume for our first 130 years that an income tax was a direct tax and did not pass an income tax under after the 16th Amendment was ratified.
Politicians assume and say many things, often wrongly, especially when it gives them cover for what they do and just happens to conform to what people in general believe about a thing, why correct the public's mistaken beliefs about something when it serves as well or better to let them continue thinking that way.
As far as an income tax being enacted, Flint made it clear that income taxes on income from the conduct of any business was considered constitutional before the 16th and after Pollock.
Flint v. Stone Tracy Co.(1911), 220 U.S. 107
- "This tax, it is expressly stated, is to be equivalent to 1 per centum of the entire net income over and above $5,000 received from all sources during the year, this is the measure of the tax explicitly adopted by the statute." *** In other words, the tax is imposed upon the doing of business of the character described, and the measure of the tax is to be income, with the deduction stated, received not only from property used in business, but from every source."
- "The Pollock Case construed the tax there levied as direct, because it was imposed upon property simply because of its ownership."
- "In the present case the tax is not payable unless there be a carrying on or doing of business in the designated capacity, and this is made the occasion for the tax, measured by the standard prescribed. The difference between the acts is not merely nominal, but rests upon substantial differences between the mere ownership of property and the actual doing of business in a certain way."
- "As we have seen, the only limitation upon the authority conferred is uniformity in laying the tax, and uniformity does not require the equal application of the tax to all persons or corporations who may come within its operation, but is limited to geographical uniformity throughout the United States. This subject was fully discussed and set at rest in Knowlton v. Moore, 178 U.S. 41, 44 L. ed. 969, 20 Sup. Ct. Rep. 747, and we can add nothing to the discussion contained in that case."
If income tax on labor was considered an indirect tax, the 16th Amendment had little to no effect.
In that the U.S. Supreme Court agrees with you.
Stanton v. Baltic Mining Co.(1916), 240 U.S. 103:
- "the provisions of the 16th Amendment conferred no new power of taxation, but simply prohibited the previous complete and plenary power of income taxation possessed by Congress from the beginning from being taken out of the category of indirect taxation to which it inherently belonged, and being placed in the category of direct taxation subject to apportionment"
The logic of Pollock escapes me. If taxes on the income from owning Real Estate is a direct tax, how can they even imply that taxes on one's labor might be an indirect tax
Actually Pollock was an aberation of a specific Supreme Court not following precident rulings in prior cases and the usage of the term as it was regard by the authors of the Constitution. It was the exception of its day, the same as Roe is an exception today.
In fact going as far back as the War of 1812, an income tax was under proposal to help finance that war, fortunately for the folks of that time as the War ended before they actually got to the point of enacting it.
The reality is, until Pollock, only taxes laid on land and slaves (i.e. property per-se) were considered direct!! And all income regardless of the source or how it was come by was considered fair game.
Springer v. United States(1880), 102 U.S. 586
"The central and controlling question in this case is whether the tax which was levied on the income, gains, and profits of the plaintiff in error, as set forth in the record, and by pretended virtue of the acts of Congress and parts of acts therein mentioned, is a direct tax." "Our conclusions are, that direct taxes, within the meaning of the Constitution, are only capitation taxes, as expressed in that instrument, and taxes on real estate; and that the tax of which the plaintiff in error complains is within the category of an excise or duty." "[W]henever the government has imposed a tax which it recognized as a direct tax, it has never been applied to any objects but real estate and slaves." "If the laws here in question involved any wrong or unnecessary harshness, it was for Congress, or the people who make congresses, to see that the evil was corrected.
The remedy does not lie with the judicial branch of the government."
Pollock merely attempted to carve out an exception for earnings from invested capital and rents in its attempt to negate what was long settled law as regards the nature of what constituted a direct tax.
The problem is that people mistake an income tax to be a tax upon the money the receive for what they do. As Flint pointed out, the money received merely sets the value of the endevour engaged in, and is not what the tax is actually laid on. Indirect taxes are laid upon exchanges or activity such as are the basis of commerce, the amount of the tax merely measured by the value of the activity engaged in.
Flint v. Stone Tracy Co.(1911), 220 U.S. 107
- "This tax, it is expressly stated, is to be equivalent to 1 per centum of the entire net income over and above $5,000 received from all sources during the year, this is the measure of the tax explicitly adopted by the statute." *** In other words, the tax is imposed upon the doing of business of the character described, and the measure of the tax is to be income, with the deduction stated, received not only from property used in business, but from every source."
- "The Pollock Case construed the tax there levied as direct, because it was imposed upon property simply because of its ownership."
- "In the present case the tax is not payable unless there be a carrying on or doing of business in the designated capacity, and this is made the occasion for the tax, measured by the standard prescribed. The difference between the acts is not merely nominal, but rests upon substantial differences between the mere ownership of property and the actual doing of business in a certain way."
KNOWLTON v. MOORE, 178 U.S. 41 (1900)
- 'indirect taxes are levied upon the happening of an event or an exchange.'
Tyler v. U.S. 281 U.S. 497, 502 (1930)
- An indirect tax is a tax laid upon the happening of an event,as distinguished from its tangible fruits.
House Congressional Record, March 27, 1943, pg. 2580:
- "The income tax is, therefore, not a tax on income as such. It is an excise tax with respect to certain activities and privileges (the type 3 and 4 taxes) which is measured by reference to the income which they produce. The income is not the subject of the tax; it is the basis for determining the amount of tax."
Any amendment that has a hope of removing taxation in regard to income must, of necessity, include specific air tight language that actually prohibits the use of income as a measure for taxation and utterly destroy the authority of Congress to levy any such tax.
A *crisis* will occur during the obligatory transition phase, and voila, two tax systems instead of one!!
Ha, ha, ha, ha, ha, ha, ha.
Laugh now, while you can.
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