548 (1937) (Emphasis added; citations omitted.) Thus, what the income tax does fall on, as the excise that it is, can be roughly but usefully perceived by remembering that it cant fall on (or be measured by) the objects of a capitation, among which are. The Income tax is only Written And Administered As An Excise On Privilege now, here is what will be the most surprising thing of all, in light of what you have just learned about the nature of the tax and the rules to which. Though the mechanisms by which it does so are a bit difficult to find, the tax law, as written, confines itself carefully and scrupulously to nothing but gains resulting from the exercise of federal privilege, just as any federal excise tax must. It is not by accident or oversight that, for instance, the "wages" subject to the tax, or the phrase "trade or business" as used in the context of the tax, are custom-defined in the law. As written, the income tax laws leave unprivileged earnings and receipts untouched, never crossing the line into the realm of capitations. As written, the income tax remains a proper excise, and as such, doesnt apply to the earnings of most Americans. This shouldnt be surprising (just as nothing else youve read here should be). But unfortunately, a mature scheme has been in place for about the last 70 years which is designed to trick those ignorant of the nuances of the law into inadvertently declaring their unprivileged earnings to be privileged, allowing the government to treat them as subject.
Second, amendment to the United States Constitution
But theres another easy way to grasp the dementia legal reality of the income tax today in light of the actual meaning and effect of the 16th Amendment, too. That is to remember that the amendment caused no change professional to the apportionment rule for direct taxes (as declared in all those supreme court rulings and other authorities"d above). This means that taxes on general revenues and/or the unprivileged activities which produce them- constitutionally designated as capitations - remain subject to that rule. Here is the supreme court again declaring the ongoing vitality of the apportionment rule (the 16th Amendment notwithstanding and specifically distinguishing the income tax as an excise and not a capitation: " If a tax is a direct one, it shall be apportioned according. If it is a duty, impost, or excise, it shall be uniform throughout the United States. Together, these classes include every form of tax appropriate to sovereignty. Whether the income tax is to be classified as an "excise" is in truth not of critical importance for this analysis. If not that, it is an "impost or a "duty". A capitation or other "direct" tax it certainly is not. Supreme court, Steward Machine. Collector of Internal revenue, 301.
165 (1918) "The settled doctrine is that the sixteenth Amendment confers no power upon Congress to define and tax as income without apportionment something which theretofore could not have been properly regarded as income.". Supreme court, taft. Bowers, 278 us 470, 481 (1929) "The sole purpose of the sixteenth Amendment was to remove the apportionment requirement for whichever incomes were otherwise taxable. At 2539 ; see also Brushaber. 17 -18 (1916) ". 505 (1988) Summing it all up, the 16th Amendment comes down to this: The pollock court had said, "Congress has laid a tax on a big class of excisable objects (which it calls "incomes and it's all good. But when the tax is applied to dividend and rent "incomes it actually functions as a property tax on their sources and therefore, in regard to those two father's "incomes the tax has to be apportioned." The 16th Amendment simply says, "Nix to that last bit.". Simply imagine that the pollock court had upheld the application of the tax to excisable dividends and rent without apportionment, and the 16th Amendment had never happened. What we would have had from that course of events is exactly what we have now- federal authority for an indirect excise tax falling only on objects suitable to that type of tax, unthwarted by the argument that if applied to excisable dividends and rent.
The 16th Amendment eliminated the "source" argument, but didn't change the limits on what was subject list to the tax. If something didnt qualify as taxable without apportionment prior to pollock and the amendment, it still doesn't qualify as taxable without apportionment. The supreme court reiterates this in ruling after ruling: by the Brushaber ruling, it was settled that the provisions of the sixteenth Amendment conferred no new power of taxation, but simply prohibited the previous complete and plenary power of income taxation possessed by congress from. Supreme court, summary Stanton. Baltic Mining., 240. 103 (1916) "The sixteenth Amendment, although referred to in argument, has no real bearing and may be put out of view. As pointed out in recent decisions, it does not extend the taxing power to new or excepted subjects.". Supreme court, peck.
Therefore, they are again to be classified in the class of indirect taxes to which they by nature belong." Cornell Law quarterly, 1 Cornell. 298 (1915-16) "In Brushaber. Union Pacific railroad.,. White, upholding the income tax imposed by the tariff Act of 1913, construed the Amendment as a declaration that an income tax is "indirect rather than as making an exception to the rule that direct taxes must be apportioned." Harvard Law review, 29 Harv. 536 (1915-16) "The supreme court, in a decision written by Chief Justice White, first noted that the sixteenth Amendment did not authorize any new type of tax, nor did it repeal or revoke the tax clauses of Article i of the constitution,"d above. . Direct taxes were, notwithstanding the advent of the sixteenth Amendment, still subject to the rule of apportionment" Legislative attorney of the American Law division of the library of Congress Howard. Zaritsky in his 1979 Report. 80-19a, entitled 'some constitutional questions Regarding the federal Income tax Laws' so, the class of what qualifies as "income" subject to the tax remains the same after the amendment as it had been before. .
United States Constitution - us constitution
The 16th Amendment Merely says That Privileged gains Cant Escape The tax by resorting to pollocks source Argument The 16th Amendment says the pollock court's conclusion was wrong (or, in any event, is overruled). The amendment provides that Congress can continue to apply the income tax to gains that qualify as "incomes" (that is, the subclass of resume receipts that had always been subject to the income excise due to being the product of an exercise of privilege) without being. It simply prohibits the courts from using the overruled reasoning of the pollock decision to shield otherwise excisable dividends and rents from the tax. As Treasury department legislative draftsman. Morse hubbard summarizes the amendments effect for Congress in hearing testimony in 1943 : "The amendment made it possible to bring investment income within the scope of the general income-tax law, but did not change the character of the tax. It is still fundamentally an excise or duty." This isnt Hubbards personal opinion.
Almost immediately after the amendment was declared adopted in 1913, and the income tax was revived after its 18-year hiatus since the pollock decision, the application of the tax was again challenged (in Brushaber. Union Pacific., 240. Frank Brushaber, a new Yorker with investments in the Union Pacific railroad Company, based his suit on a series of contentions about the 16th Amendment. The supreme court took the case with the intention of settling all issues regarding the purpose and meaning of the amendment and declaring the ongoing nature of the income tax as affected thereby. The lengthy, detailed and unanimous ruling issued by the court declares that the amendment has no effect on what is and what is not subject to the income tax, and does nothing to limit or diminish the apportionment provisions in the constitution concerning capitations. Here are three more good summaries of the Brushaber ruling to add. Morse hubbards: "The Amendment, the supreme court said, judged by the purpose for which it was passed, does not treat income taxes as direct taxes but simply removed the ground which led to their being considered as such in the pollock case, namely, the source.
429, and 158. 601, (both 1895 while making no changes to its pre-amendment nature. The Income tax Was Established As An Excise On Privilege. From its inception the income tax has been an excise that applies only to gains from the profitable exercise of federal privileges (and therefore neednt be apportioned as the. Pollock court itself noted (here in Justice fields separate concurring opinion ".in Springer. 586, it was held that a tax upon gains, profits, and income was an excise or duty, and not a direct tax, within the meaning of the constitution, and that its imposition was not, therefore, unconstitutional.".
Farmer's loan trust, 157. Nonetheless, in its Pollock ruling, the court embraced an argument that when applied to excisable gains realized in the form of dividends and rent, the "income" tax was transformed into a property tax on the personal property sources (stock and real estate) from which the. The tax on these fruits, said the court, amounted to a tax on the trees (even though the analogy is less than perfect, since the thing really being taxed is neither the fruit nor the tree, but rather the privileged activity that produced the fruit. It's important to note that the pollock court only applied its tree/fruit/property-tax-not income-tax reasoning to the application of the tax to rent and dividends. As the court put it in its final ruling (with emphasis added "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 dividends, being a direct. Everything else taxed as "income" is and always has been properly taxed without apportionment, because other than as to those two exceptions, the tax is and always has been unambiguously of the character of an excise, both in how it operates and on what.
Middle, english, dictionary - the University of Michigan
Also missing from these stories is any explanation of why the several states would ratify such a tax, under which they would inevitably lose power and significance in favor of their federal competitor. Further, these stories leave out the fact that there already was an income tax on the books and still in force at the time of the 16th Amendment, which had been successfully deployed over the preceding 52 years without Constitutional problem, save for a single. These stories dont mention that, in fact, huge portions of our modern body of income tax law pre-date the 16th Amendment, even though this is plainly stated first in the preamble to the 1939 Internal revenue code, and even though Congress publishes a comprehensive derivation table. (see a little video presentation on this subject here. the fact is, an awful lot is left out of these stories purporting to explain the seemingly best inexplicable decision of the prosperous American people of the early 20th Century to chuck a system that had served them so well for so long- because theyre just. Theyre fiction, so they dont have to make sense. Those telling these stories want you to believe otherwise for reasons of their own, but the truth is, the 16th Amendment did nothing these story-tellers want you to imagine it did. Instead, the amendment merely overruled a supreme court decision that had briefly interrupted the application of the already-long-standing tax (the twice-heard case of Pollock. Farmers loan trust, 157.
Read the "notes" at the end of the paper, also. Like the linked materials, the notes contain important documentation of everything you'll have read in the main paper, and will be very intriguing and entertaining to any legal scholar and historian, as well. The fascinating Truth Versus The comforting Myth "The great enemy of the truth is very often not the lie- deliberate, contrived and dishonest- but the myth, persistent, persuasive and unrealistic. Belief in myths allows the comfort of opinion without the discomfort of thought." -john. Kennedy "All governments are run by liars and nothing they say should be believed." -I. Stone, my friend, all your life youve been told that the 16th amendment was a transformational event in the history of the United States Constitution by which an unapportioned direct federal tax on "all that comes in" was authorized. Youve been told that the amendment reversed the preceding 137-year-old Constitutional tax structure prohibiting such taxes- under which the American people had grown to be the freest, most prosperous, and most optimistic people in the history of the world- in favor of a radically-different structure. Explanations as to why the rich and happy Americans movie of the early 20th Century would do such a thing to themselves have always been vague- they typically amount to something about a populist or progressive impulse that swept the country in favor of sticking. Missing is any reason why such an impulse would embrace a universal tax reaching not just the robber barons, but their alleged victims in the working class, as well (along with every little shopkeeper, every mid-level success-story working out the American dream, and everyone else.
that everyone's emails and phone calls were being systematically vacuumed-up by the government without warrants would have sounded a few years ago. Please suppress your skepticism for the moment and indulge your curiosity (and don't forget that thousand-plus-high stack of complete refunds, social security taxes and all, that you looked at a few moments ago, which you also would have found very unlikely indeed). Just read what follows. You'll end up recognizing the truth. Please read carefully and thoroughly! In particular, click on links in the text such as those for "apportionment "excise" and "capitation". Even if you are a legal specialist, i assure you that the legal meanings of these constitutional terms are not what you think, just as the constitutional term "income" doesn't mean what you think it does. You'll find something very worthwhile, and often very important, at every other link within the text, as well.
In this short paper, i am going to show you what the income tax really is and on what it really falls. I'm also going to show you how the tax has come to be widely misunderstood and how, since fdr's third term as president, that misunderstanding has been systematically cultivated and exploited by an first insatiable state which is increasingly impatient with any level of restraint. To put iutshell what you are about to learn, the "income" tax is and always has been an excise on gains from certain federally-connected activities in which most Americans do not engage in meaningful (taxable) amounts, if at all. The law says this plainly, if only in places not commonly seen by most people. Unfortunately, most Americans have been successfully conditioned over the last 75 years to believe the tax applies to all economic activity. Concurrently, most Americans have been induced to report payments of all kinds to government tax agencies using forms such as W-2s and 1099s which are actually prescribed- again, in places most people don't know to look- exclusively for the reporting of federally-connected tax-relevant payments. These reporting-form allegations are taken as true if unrebutted, and it is on that basis that the income tax is ultimately applied, both to those who have engaged in taxable activities and those who have not, but aren't aware of the need to rebut the.
Argumentative essay on texting and driving - academic
The fascinating Truth About The 16th Amendment. The income tax paper is just an excise; capitations still require apportionment; and youve been taken to the cleaners. Introduction, as the first american in history to secure a complete refund of all federal income taxes withheld- including Social Security and Medicare taxes- and the author of several books that have led to many tens of thousands of other American men and women getting. But that's what you're hearing. The fact is, the income tax is not only a constitutional tax, it is also a very desirable tax. Applied in strict adherence to its statutory design, the income tax is benignly-limited in scope. It is also a fit mechanism by which those who make money from the exploitation of public resources return to the common purse a portion of their private profits.