Talk:Sixteenth Amendment to the United States Constitution

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Sixteenth Amendment to the United States Constitution is part of WikiProject U.S. Congress, an attempt to build a comprehensive guide to the United States Congress. You can help by editing this article. This template adds articles to Category:WikiProject U.S. Congress articles.

	This article is within the scope of WikiProject Taxation, an effort to create, expand, organize, and improve Tax related articles to a feature-quality standard.

• /archive 1; /archive 2; /archive 3 (2006)

Contents 1 Material moved from article to talk page 1.1 Early Interpretation 1.2 Modern interpretation 1.3 Introduction to Adding Info 1.4 Comment on Constitutional Amendments 1.5 Further Comment on Conclusion Regarding Amendments 1.6 Discussion of Direct Taxes and the 16th Amendment 1.7 Further Response and Discussion 1.8 Response to Wixpositor 1.8.1 Pacific Ins. Co. v. Soule 1.9 Comments by Brad C 1.9.1 More response to Brad C and Wixpositor 2 Please stop making personal attacks; let us discuss substance 2.1 Hey, let's read the 1913 Form 1040 3 Income under the Constitution versus wages for purposes of statutory tax withholding 4 Naming conventions in case law citations 5 I was thinking of adding something, but... 6 "the constitution is stupid"...? 7 Someone on raticftaction 8 Ratification dates 9 Clarification of Brushaber 10 Renaming of article

[edit] Material moved from article to talk page

The following text has been moved from the article to here, for discussion:

Stay tuned. Yours, Famspear 18:53, 30 December 2006 (UTC)

OK, the removed text is so full of errors it's hard to know where to begin. Here goes.

The statement that the taxing power is limited "to allowing only the collection of indirect taxes within the States" is nonsensical. Nothing in the cited provisions says that Congress cannot validly impose, and the government cannot validly collect, direct taxes "within the states." Despite gazillions of attempts by tax protesters in Federal courts since the mid-1970s, every court considering this issue has rejected the tax protesters' argument.

Neither the Supreme Court nor any other Federal court has never ruled that "to avoid having the 16th Amendment destroy this provision of the original Constitution, 'income' in its Constitutional sense can only be that on which an indirect tax can be imposed." Please read the quoted language again.

The statement that "the 16th Amendment is irrelevant to whether any particular tax is constitutional under Article 1, which is controlling" is also legally nonsensical. Tax protesters have constantly claimed in court that under the Constitution as amended by the Sixteenth Amendment, the Congress does not have the power to lay and collect taxes on incomes from whatever source, without having to apportion the taxes among the states and without regard to any census or enumeration -- and every court that has decided the issue has ruled that Congress does have that power. Many of the court cases are listed in Wikipedia. Sorry, but both Article I and the Sixteenth Amendment are legally relevant on the issue of validity of Federal income taxes.

The statement: "The two purposes of the 16th Amendment were to (1) restore the taxing power of Congress to its pre-Pollock levels, and (2) restrain the judiciary from making another Pollock-like ruling" -- is basically correct! Please read the relevant articles on Pollock, Brushaber, and the Sixteenth Amendment.

The statement: "The 'income' that Congress could tax from the beginning has always been defined only as the gain (profit) derived from the exercise of a privilege" is absolutely false. Over and over, Federal courts since 1913 (the year of inception of the modern version of the Federal income tax system) have ruled that "income" for purposes of the Constitution (including but not limited to the Sixteenth Amendment) and the tax statutes includes compensation in any form for personal services such as wages or salaries, and that taxpayers are not entitled to any exclusion or exemption from income with respect to amounts received for labor merely because income from labor is somehow not a gain or profit.

The statement that a "human being supplying labor (work for hire) does not derive profit from the use of assets but rather receives necessaries from the use of resources" is legally incorrect as an argument attempting to claim that amounts received for labor are not items of income under the Constitution. The statement: "Nowhere are necessaries (requirements for sustaining life and the ability to work) defined as 'income'" is legally irrelevant, and no court has ever upheld an argument that wages, etc., are not income on that basis.

The statement that "many rulings of the Supreme Court (cf. Eisner v. Macomber, above) held that whatever claim one makes about the ingredients of 'income,' it can only be that on which an indirect tax can be imposed" is incorrect. No Federal court has ever ruled that income can only be that on which an indirect tax can be imposed.

The statement that "a tax on wages (money) is a direct tax on the ownership of property (since money is personal property), which is prohibited by Article 1" is simply false. Even in the Pollock case, the Court recognized that a tax on income from employment (wages, salary, etc.) is an excise (an indirect tax). No Federal court has ever ruled that a tax on wages is a direct tax on the ownership of property.

Further, nothing in Article I of the Constitution prohibits a direct tax on the ownership of property. Indeed, under Article I, Congress can validly impose a direct tax on the ownership of property if it so desires. (Since a tax on the ownership of property itself would be a direct tax but not an income tax, the rule of apportionment would apply, and the tax would have to be collected in a way so that it would be proportional among the states according to population -- but that's another matter.)

Regarding the statement that "Congress has not enacted an indirect tax (excise) on either the activity of working for hire (labor) or on the event of the transfer of property (money) from employer to employee, so neither the activity of working nor the event of paying wages is taxed" is false. See 26 U.S.C. § 61 and gazillions of court decisions interpreting that and other provisions. For a listing of some of the court decisions including rulings that the U.S. Federal income tax validly applies to labor, income from labor, wages, salaries, etc., etc., see Tax_protester_constitutional_arguments#Cases_where_wages_or_labor_ruled_taxable.

As stated in that article, the courts have consistently rejected arguments that "wages" or "labor" (whether denominated as "labor property" or not) cannot be taxed under the Internal Revenue Code. For example, see:

• United States v. Connor, 898 F.2d 942, 90-1 U.S. Tax Cas. (CCH) paragr. 50,166 (3d Cir. 1990) (tax evasion conviction under 26 U.S.C. § 7201 affirmed by the United States Court of Appeals for the Third Circuit; taxpayer’s argument -- that because of the Sixteenth Amendment, wages were not taxable -- was rejected by the Court; taxpayer’s argument that an income tax on wages is required to be apportioned by population also rejected);

• Perkins v. Commissioner, 746 F.2d 1187, 84-2 U.S. Tax Cas. (CCH) paragr. 9898 (6th Cir. 1984) (26 U.S.C. § 61 ruled by the United States Court of Appeals for the Sixth Circuit to be “in full accordance with Congressional authority under the Sixteenth Amendment to the Constitution to impose taxes on income without apportionment among the states”; taxpayer’s argument that wages paid for labor are non-taxable was rejected by the Court, and ruled frivolous);

• White v. United States, 2005-1 U.S. Tax Cas. (CCH) paragr. 50,289 (6th Cir. 2004), cert. denied, ____ U.S. ____ (2005) (taxpayer’s argument that wages are not taxable was ruled frivolous by the United States Court of Appeals for the Sixth Circuit; penalty -- imposed under 26 U.S.C. § 6702 for filing tax return with frivolous position -- was therefore proper);

• Granzow v. Commissioner, 739 F.2d 265, 84-2 U.S. Tax Cas. (CCH) paragr. 9660 (7th Cir. 1984) (taxpayer’s argument that wages are not taxable was rejected by the United States Court of Appeals for the Seventh Circuit, and ruled frivolous);

• Waters v. Commissioner, 764 F.2d 1389, 85-2 U.S. Tax Cas. (CCH) paragr. 9512 (11th Cir. 1985) (taxpayer’s argument that income taxation of wages is unconstitutional was rejected by the United States Court of Appeals for the Eleventh Circuit; taxpayer required to pay damages for filing frivolous suit).

See also the decision of the United States Court of Appeals for the Ninth Circuit in United States v. Buras, 633 F.2d 1356, 81-1 U.S. Tax Cas. (CCH) paragr. 9126 (9th Cir. 1980), in which the taxpayer's theory -- that wages were not taxable because (1) "only profit or gain, such as that from the sale of a capital asset, constituted income subject to federal tax" and (2) "[w]ages could not constitute gain or profit because wages merely represent an equivalent exchange for one's labor" -- was rejected.

See also the decision of the United States Tax Court in Link v. Commissioner, CCH Dec. 56,565(M), T.C. Memo. 2006-146 (2006), where the taxpayer's argument -- that pension income is "labor property" and that when taxpayer receives his pension income from his former employer for whom he once performed services (or labor), any amount he receives in exchange for his labor is a nontaxable exchange of equal value -- was rejected.

Further, under the U.S. Federal tax laws, even if labor were considered "property" the gain or income from "labor property" would be defined as the excess of the amount realized (for example, the money received) by the taxpayer over the amount of the taxpayer's "adjusted basis" in the "property" (see 26 U.S.C. § 1001). Since the taxpayer can have only a zero "basis" amount in his or her own labor -- the personal living expenses incurred to generate labor being both non-capitalizable and, under 26 U.S.C. § 262, non-deductible -- the "gain" would thus be equal to the amount of compensation received by the taxpayer. Compare Carter v. Commissioner, 784 F.2d 1006, 86-1 U.S. Tax Cas. (CCH) paragr. 9279 (9th Cir. 1986), where the United States Court of Appeals for the Ninth Circuit stated: "The assertion that proceeds received for personal services cannot be given a 'zero-basis for the purpose of the assessment of taxation,' is frivolous. This is a variation of the 'wages are not income' theme, which has been rejected repeatedly by this court."

Article I is not the "sole determinant" of validity of a Federal income tax. The Sixteenth Amendment is part of the Constitution; both Article I and the Sixteenth Amendment may apply in a particular case, depending on the issues raised by the parties in that case. The "name of the tax" (whatever that means) may or may not be relevant.

Again, for background, see Tax protester constitutional arguments.

Thus, the removed material is objectionable because (1) it is unverifiable (not properly sourced); (2) it is non-neutral POV; (3) it is original research; (4) it is, from a legal standpoint, blatantly incorrect. Yours, Famspear 20:38, 30 December 2006 (UTC)

[edit] Introduction to Adding Info

First, I need to apologize to the other editors of this page. I recently "discovered" the edit feature of Wikipedia without realizing that there is a protocol attached, and jumped in with both feet. I now know that this page is where ideas are supposed to be discussed first. I also observed that Famspear seems to have a lot of time to devote to this particular subject and seems to be the unofficial censor of research that does not conform to his view of the subject matter. Therefore, I'll try coming in the front door this time rather than going in the back door and get some “official” approval.

My research over the years has led me to conclude that the only criterion for whether a tax (any tax) is constitutional is the grants and limitations in Article 1. Since Article 1 is controlling, the 16th Amendment is irrelevant to either the taxing powers of Congress or to the constitutionality of any particular tax. This quote from Eisner v. Macomber pretty much says it all, although there are many more cases which say essentially the same thing. Eisner states that

“The Sixteenth Amendment must be construed in connection with the taxing clauses of the original Constitution and the effect attributed to them before the amendment was adopted.” (252 U.S. at 205)

Also, along with all the other gobbledegook in Brushaber (engineered that way by Justice White), probably the most telling statement that the 16th Amendment does not authorize a non-apportioned direct tax is this one:

“But it clearly results that the proposition and the contentions [of the litigants, that the 16th Amendment authorized an unapportioned direct tax], if acceded to, would cause one provision of the Constitution to destroy another; that is, they would result in bringing the provisions of the Amendment exempting a direct tax from apportionment into irreconcilable conflict with the general requirement that all direct taxes be apportioned. Moreover, the tax authorized by the Amendment, being direct, would not come under the rule of uniformity applicable under the Constitution to other than direct taxes, and thus it would come to pass that the result of the Amendment would be to authorize a particular direct tax not subject either to apportionment or to the rule of geographical uniformity, thus giving power to impose a different tax in one state or states than was levied in another state or states. This result, instead of simplifying the situation and making clear the limitations on the taxing power, which obviously the Amendment must have been intended to accomplish, would create radical and destructive changes in our constitutional system and multiply confusion.”—Brushaber v. Union Pacific Railroad, 240 U.S. 1, 12

If anyone has a contrary view that somehow Article 1 has lost its original vitality I would welcome discourse on the subject. If not, I would like to add the conclusion that Article 1 is controlling to the broader context of either the 16th Amendment page or the Tax Protestor page. I would also like to point out that the contrary decisions of the appellate courts are irrelevant and involve using the word "income" to attempt to attach significance to the name of a tax rather than concentrating only on its constitutional characteristics. I pretty much ignore the myriad of appellate court decisions, especially the abominally bad 1989 9th Circuit case "In Re Becraft," because the appellate courts exhibit confusion (probably intentional) and don't really follow either the Supreme Court or the Constitution itself. Besides, appellate decisions are only the law of the Circuit, and when the law of the Circuit is in opposition to the law of the land, the law of the Circuit must yield. Anyone? —The preceding unsigned comment was added by Wixpositor (talk • contribs). on 30 Dec 2006.

Dear Wixpositor: Thanks for your comments. Be back later. Yours, Famspear 21:59, 30 December 2006 (UTC)

Dear Wixpositor: Regarding the statement that I seem to be "the unofficial censor of research that does not conform to [my] view of the subject matter" -- well, all Wikipedia editors are here to edit according to the rules of Verifiability, Non-neutral point of view, No original research, and so on. With respect to legal topics, conjecture by an editor about what the law is or should be is probably going to be considered "original research" and does violate the No Original Research rule.

In writing about legal texts in Wikipedia, I would argue that you would follow the rules of legal analysis with respect to court decisions. That means that you do not develop your own interpretation. That means you observe the legal concepts of Stare decisis, Ratio decidendi and Obiter dictum. For a given statement, you would cite authority. If it's Primary authority you would have to be clear whether the statement is a Ratio decidendi or, alternatively, nonbinding dicta. If it's Secondary authority, it should pass the Wikipedia rules for reliability. For example, statements about what the law actually is from Corpus Juris Secundum could be reliable, while statements from Irwin Schiff or some tax protester web site would not be.

Your quote from Eisner v. Macomber for example, that “The Sixteenth Amendment must be construed in connection with the taxing clauses of the original Constitution and the effect attributed to them before the amendment was adopted" is a legally correct statement, but is not a Ratio decidendi from that case, and we don't want to lead non-lawyer readers (which after all is most Wikipedia readers) to incorrectly assume otherwise.

These statements you made are pretty telling:

I pretty much ignore the myriad of appellate court decisions, especially the abominally bad 1989 9th Circuit case "In Re Becraft," because the appellate courts exhibit confusion (probably intentional) and don't really follow either the Supreme Court or the Constitution itself. Besides, appellate decisions are only the law of the Circuit, and when the law of the Circuit is in opposition to the law of the land, the law of the Circuit must yield.

If you are ignoring appellate court decisions because you believe those decisions exhibit "confusion" and you really believe that the appellate decisions "don't really follow either the Supreme Court or the Constitution itself" then in my opinion your reasoning and your analysis is going to be very flawed -- not just from a legal standpoint, but also from a Wikipedia rules and guidelines standpoint. We are not here to make our own personal judgments about what the law is or should be. You can find reliable (as that term is used in Wikipedia) secondary sources that argue that such and such a court in such and such a case ruled "incorrectly" -- and you can cite those secondary sources as making that argument. (I don't think you will find any such reliable sources for frivolous tax protester arguments, though.)

The statement that "the law of the Circuit is in opposition to the law of the land" -- if that is what you are saying about one or more Circuits -- is from a legal standpoint problematic. As every first year law student in the United States learns or should realize, under the U.S. legal system the law is what the court rules the law is. Again Stare decisis, Ratio decidendi, etc. Even a secondary source (such as a law professor) who writes an article contending that such and such a court was "wrong" in deciding a particular case a certain way is cognizant of the basic principle: the law is what the court rules the law is. To paraphrase Oliver Wendell Holmes: "The life of the law is not logic; it is experience."

Gotta go for now. To be continued. Yours, Famspear 22:35, 30 December 2006 (UTC)

[edit] Comment on Constitutional Amendments

I’m still trying to get the hang of where what goes and the tilde business. Sorry if I put things in the wrong place. I’m going to try it again. If someone moves this commentary please leave a note on my talk page as to where it went.

I would like to make a further comment about the comments by one bd2412 in June (below under “Materials deleted from article”) about amendments to the Constitution. He notes, for example, that the Seventeenth Amendment regarding the direct election of Senators comes into direct conflict with the original provision of the Constitution providing for State election of Senators. This conflict exists because the Seventeenth Amendment actually did alter (supersede) the original provision. However, the Sixteenth Amendment could not alter anything in Article 1 because the Sixteenth Amendment does not contain the term “direct tax” and Article 1 does not contain the term “income.” Therefore, the only possible connection between the two would have to be provided by the Supreme Court when interpreting how the new amendment would be applied. The Supreme Court did this in spades in Brushaber. The quote to which bd2412 derisively refers as being “pure idiocy on the part of its author” is from the Brushaber decision, and unequivocally holds that the Sixteenth Amendment does not allow an unapportioned direct tax. Repeating it in its entirety:

“But it clearly results that the proposition and the contentions [of the litigants, that the 16th Amendment authorized an unapportioned direct tax], if acceded to, would cause one provision of the Constitution to destroy another; that is, they would result in bringing the provisions of the Amendment exempting a direct tax from apportionment into irreconcilable conflict with the general requirement that all direct taxes be apportioned. Moreover, the tax authorized by the Amendment, being direct, would not come under the rule of uniformity applicable under the Constitution to other than direct taxes, and thus it would come to pass that the result of the Amendment would be to authorize a particular direct tax not subject either to apportionment or to the rule of geographical uniformity, thus giving power to impose a different tax in one state or states than was levied in another state or states. This result, instead of simplifying the situation and making clear the limitations on the taxing power, which obviously the Amendment must have been intended to accomplish, would create radical and destructive changes in our constitutional system and multiply confusion.”—Brushaber v. Union Pacific Railroad, 240 U.S. 1, 12 (1916)

The only “confusion” has been added by the Circuits. District and appellate court decisions to the contrary are merely the subjective opinions of overzealous judges, most of whom are dead by now, who have built on the previous errors of other overzealous judges, until all the Circuits are hopelessly enmeshed in Circuit law that bears no relationship to the holdings of the Supreme Court. So far the Supreme Court has turned a blind eye, possibly because the arguments it received were not framed in language that would have broad application. At any rate, the KISS principle applies here. The Supreme Court has ruled in several cases that Article 1 is controlling such that the Sixteenth Amendment is irrelevant as to whether any particular tax might be constitutional. Leaving the name of the tax out of the equation and examining only its effect on the one who is responsible for remitting its payment to the government will remove a huge amount of superfluous material from consideration, leaving only the Article 1 question: “Is this tax direct?” If so, it is prohibited. If not, it is allowed.Wixpositor 02:32, 31 December 2006 (UTC)

Read in its entirity, the Brushaber Court is agreeing with my assessment. The quote above is not the conclusion of the Court, but the Court's restatement of the argument which it is rejecting. The Court basically says, 'here's what the taxpayer is putting forth as a reason not to pay the tax owed', recites that argument, then says 'here's why it's wrong'. Or, as the Court more artfully says, after reciting the above proposition, "let us by a demonstration of the error of the fundamental proposition as to the significance of the Amendment dispel the confusion necessarily arising from the arguments deduced from it." bd2412 T 04:07, 31 December 2006 (UTC)

[edit] Further Comment on Conclusion Regarding Amendments

I repectfully disagree with your conslusion. The Court is talking about the beliefs of the litigants that the 16th Amendment authorizes a non-apportioned direct tax, and is reacting to their mistaken conclusion. Immediately above (p.11), the Court states:

"The various propositions [of the litigants] are so intermingled as to cause it to be difficult to classify them. We are of opinion, however that the confusion is not inherent, but rather arises from the[ir] conclusion that the 16th Amendment provides for a hitherto unknown power of taxation; that is, a power to levy an income tax which, although direct, should not be subject to the regulation of apportionment applicable to all other direct taxes. And the far-reaching effect of this erroneous assumption will be made clear by generalizing the many contentions advanced in argument to support it[.]"---Brushaber, supra.

Therefore, the Court held here, as it has done in other cases, that the 16th Amendment does not authorize such a tax and the income tax has always been an indirect tax, which is one imposed on the exercise of a privilege. cf. Stanton v. Baltic Mining:

"[B]y the previous ruling [Brushaber] it was settled that 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[.]" (243 U.S. at 112)

The 16th Amendment had two purposes, one short-term and the other long-term: The short term purpose was to again allow Congress to tax corporate profits, which it had always been able to do prior to Pollock. The long-term purpose was to restrain the judiciary, which had caused the problem in the first place. I still have not seen any Supreme Court case which holds that the 16th Amendment superseded Article 1 (1:2:3 and 1:4:9).Wixpositor 05:18, 31 December 2006 (UTC)

I also refer to a couple of other cases which pretty much cement the concept (at least for me) that the 16th Amendment is subordinate to the provisions of Article 1.

"The Sixteenth Amendment must be construed in connection with the taxing clauses of the original Constitution and the effect attributed to them before the amendment was adopted."---Eisner v. Macomber, 252 U.S. 189, 205 (1920)

Although Eisner (again) involved corporations rather than individuals, the above holding is "tax-neutral;" that is, it says nothing about the income tax but instead is only about the amendment as an amendment (rather than being about its effects). While I'm at it, I might as well cover another statement in Eisner which (I believe) many misinterpret.

"As repeatedly held, this [amendment] did not extend the taxing power to new subjects, but merely removed the necessity which otherwise might exist for an apportionment among the states of taxes laid on income. (Citations omitted.) A proper regard for its genesis, as well as its very clear language, requires also that this amendment shall not be extended by loose construction, so as to repeal or modify, except as applied to income, those provisions of the Constitution that require an apportionment according to population for direct taxes upon property, real and personal. This limitation still has an appropriate and important function, and is not to be overridden by Congress or disregarded by the courts."---Eisner, supra, at 206.

The direct taxes spoken of here are what I call the "pseudo direct taxes" manufactured by Pollock. Those taxes too were indirect (taxes on rents derived from property), but the Court had labeled them as being direct and had upset Congress's apple cart. Eisner above does refer to these taxes as being direct, but only because of Pollock. They are not direct in the constitutional sense because they are taxes on a derivative of corporate activity (income in the constitutional sense being the profit on which Article 1 allows an indirect tax to be laid and collected). Another case on point popped up nearly 70 years later:

"The legislative history merely shows that the words "from whatever source derived" of the Sixteenth Amendment were not affirmatively intended to authorize Congress to tax state bond interest or to have any other effect on which incomes were subject to federal taxation, and that the sole purpose of the Sixteenth Amendment was to remove the apportionment requirement for whichever incomes were otherwise taxable. 45 Cong. Rec. 2245-2246 (1910); id., at 2539; see also Brushaber v. Union Pacific R. Co., 240 U.S. 1, 17-18 (1916)."---South Carolina v. Baker, 485 U.S. 505, n.13 (1988) (Emphasis added)

Since the only two provisions of the Constitution addressing taxes are Article 1 and the 16th Amendment, the "otherwise" above can only refer to Article 1 and its limitations on collecting taxes within the States. Further evidence that the 16th Amendment is irrelevant to the taxing powers of Congress is a 1929 case which concisely defines the entire federal taxing scheme.

“The general power to ‘lay and collect taxes, duties, imposts, and excises’ conferred by article 1, 8, of the Constitution, and required by that section to be uniform throughout the United States, is limited by section 2 of the same article, which requires ‘direct’ taxes to be apportioned, and section 9, which provides that ‘no capitation, or other direct, tax shall be laid, unless in proportion to the census directed by the Constitution to be taken’. . . . [T]axes levied upon or collected from persons because of their general ownership of property may be taken to be direct, [while] 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[.]”---Bromley v. McCaughn, 280 U.S. 124, 136 (1929) (Citations omitted)

Significantly, the 16th Amendment is not mentioned as being relevant to the taxing powers of Congress, and it is also settled that money is property. To me at least, the conclusions about what Congress cannot tax are obvious.

Sorry that I'm still getting the hang of things. I just found Famspear's comments to my earlier posts and will digest them at another time (it's now 3:15 A.M. USA Pacific time), leaving my comments above intact.Wixpositor 11:24, 31 December 2006 (UTC)

The 3rd Circuit Court of Appeals clarifies: "It did not take a constitutional amendment to entitle the United States to impose an income tax. Pollock v. Farmers' Loan & Trust Co. only held that a tax on the income derived from real or personal property was so close to a tax on that property that it could not be imposed without apportionment. The Sixteenth Amendment removed that barrier. Indeed, the requirement for apportionment is pretty strictly limited to taxes on real and personal property and capitation taxes." Penn Mutual Indemnity Co. v. C.I.R., 277 F.2d 16 (1960)

The court also said "It is not necessary to uphold the validity of the tax imposed by the United States that the tax itself bear an accurate label." Congress is free to name the tax whatever it desires. It is the subject of the tax, not the name of the tax that is important.

The United States Supreme Court in the Brushaber case said "Indeed, from another point of view, the Amendment demonstrates that no such purpose was intended, and on the contrary shows that it was drawn with the object of maintaining the limitations of the Constitution and harmonizing their operation." —The preceding unsigned comment was added by 24.151.200.56 (talk • contribs). on 1 January 2007.

Dear fellow editors: Please stay tuned for more commentary on this topic. Yours, Famspear 19:34, 1 January 2007 (UTC)

Oh, gee, at the expense of appearing to rub it in, I would also point out that in the cited case above, Penn Mutual Indemnity Co. v. Commissioner, 277 F.2d 16, 60-1 U.S. Tax Cas. (CCH) paragr. 9389 (3d Cir. 1960), not only does the quoted language actually degrade Wixpositor's position -- especially the court's statement that "the requirement for apportionment is pretty strictly limited to taxes on real and personal property and capitation tax" -- but the court in that case upheld the constitutionality of the Federal income tax. So sorry. Yours, Famspear 20:05, 2 January 2007 (UTC)

[edit] Discussion of Direct Taxes and the 16th Amendment

The unsigned writer above is correct, and the Third Circuit certainly isn’t needed to confirm that the 16th Amendment is irrelevant to the taxing powers of Congress (a point which I made above). Furthermore, he agrees with my claim that the name of the tax is irrelevant, because any name which Congress might attach to a tax is merely statutory. All statutory law is subordinate to the Constitution because it is the source of the power under which Congress is allowed to enact statutes. I believe that over the years, the Supreme Court has pretty much confirmed the following principles:

1. Within the States, Congress is limited to collecting taxes that are not direct, along with duties, imposts and excises.

2. Since the Constitution was adopted, Congress always could tax incomes.

3. Although the name of any tax is irrelevant to the taxing powers of Congress, because of the limitations in Article 1, “income” as defined for use within the States can only be something on which an indirect tax can be laid and collected.

4. The 16th Amendment did not affect that authority. It merely superseded the principle decided in Pollock that indirect taxes laid on the profits derived from real property must be apportioned, so that Congress could again tax corporate profits. (Significantly, the holding that such taxes are labeled as being “direct” has not been overturned, allowing these “special” direct taxes to be laid and collected without apportionment yet today.)

4. Article 1 controls the application of the 16th Amendment.

5. Since Article 1 allows the federal government to lay and collect only indirect taxes within the States, the subject of any tax under the purview of the 16th Amendment can only be that on which an indirect tax can be imposed.

6. Indirect taxes are those imposed on the profits derived from privileged activities, such as earning profit (interest) on invested capital.

“A tax laid upon the happening of an event, as distinguished from its tangible fruits, is an indirect tax[.]”— Tyler v. U.S., 281 U.S. 497, 502 (1930)

“‘Direct taxes bear immediately upon persons, upon the possession and enjoyments of rights; indirect taxes are levied upon the happening of an event or an exchange.’”—Knowlton v. Moore, 178 U.S. 41, 47 (1900)

7. Direct taxes, therefore, are taxes which are not indirect, and include those imposed on the possession of property.

8. Congress has not enacted an indirect tax (excise) on either the activity of generating money (laboring, or working for hire) or on the event of transferring property (money) from employer to employee, such that the only tax left is a tax on the tangible fruits (the money which was exchanged for the labor).

9. Money is property. Whether it is also called “income” is irrelevant.

10. A tax on property (whether real or personal) is a direct tax.

11. Such a tax is prohibited by Article 1.

Confirming that it is the effect of the tax which controls into which class a particular tax falls and not its name, the Supreme Court said:

“The power to tax is the one great power upon which the whole national fabric is based. It is as necessary to the existence and prosperity of a nation as is the air he breathes to the natural man. It is not only the power to destroy, but it is also the power to keep alive.

This necessary authority is given to congress by the constitution. It has power from that instrument to lay and collect taxes, duties, imposts, and excises, in order to pay the debts and provide for the common defense and general welfare; and the only constitutional restraint upon the power is that all duties, imposts, and excises shall be uniform throughout the United States, and that no capitation or other direct tax shall be laid, unless in proportion to the census or enumeration directed to be taken, and no tax or duty can be laid on articles exported from any state. Const. art. 1, 8, and section 9, subds. 4, 5. As thus guarded, the whole power of taxation rests with congress.

The commands of the constitution in this, as in all other respects, must be obeyed. Direct taxes must be apportioned, while indirect taxes must be uniform throughout the United States. But, while yielding implicit obedience to these constitutional requirements, it is no part of the duty of this court to lessen, impede, or obstruct the exercise of the taxing power by merely abstruse and subtle distinctions as to the particular nature of a specified tax, where such distinction rests more upon the differing theories of political economists than upon the practical nature of the tax itself.

In deciding upon the validity of a tax with reference to these requirements, no micro-scopic examination as to the purely economic or theoretical nature of the tax should be indulged in, for the purpose of placing it in a category which would invalidate the tax. As a mere abstract, scientific, or economical problem, a particular tax might possibly be regarded as a direct tax, when, as a practical matter pertaining to the actual operation of the tax, it might quite plainly appear to be indirect. Under such circumstances, and while varying and disputable theories might be indulged as to the real nature of the tax, a court would not be justified, for the purpose of invalidating the tax, in placing it in a class different from that to which its practical results would consign it. Taxation is eminently practical, and is in fact brought to every man's door; and, for the purpose of deciding upon its validity, a tax should be regarded in its actual, practical results, rather than with reference to those theoretical or abstract ideas whose correctness is the subject of dispute and contradiction among those who are experts in the science of political economy.”—Nicol v. Ames, 173 U.S. 509, 515 (1899)

The inverse of the above statement is that to validate a tax it cannot be placed into a class different than that to which its practical results would consign it. Regardless of how someone wants to characterize the income tax, its practical results (the diminution of property held) consign it to the direct class. Calling it indirect to validate it under Article 1 satisfies neither the Constitution nor the Supreme Court.Wixpositor 04:45, 2 January 2007 (UTC)

Dear Wixpositor:

Your statement that "the 16th Amendment is irrelevant to the taxing powers of Congress" is incorrect, and no court has ever ruled that the Sixteenth Amendment is irrelevant. You keep quoting language from court decisions, incorrectly referring to that language as a "holding" of the court, and claiming that the language says what you wish it meant rather than what it really says. This is original research on your part -- and worse -- it is incorrect.

Let's look as some of your latest assertions:

I believe that over the years, the Supreme Court has pretty much confirmed the following principles:

1. Within the States, Congress is limited to collecting taxes that are not direct, along with duties, imposts and excises.

That's incorrect. With respect to income taxes, neither the Supreme Court nor any other Federal court has ever ruled that Congress "is limited to collecting taxes that are not direct, along with duties, imposts and excises." You cannot cite a single case where any court has so ruled -- because there is none.

The statement: "Since the Constitution was adopted, Congress always could tax incomes" is actually correct -- unfortunately for your own conclusion (see below).

The statement that "'income' as defined for use within the States can only be something on which an indirect tax can be laid and collected" is incorrect and pretty much meaningless. No court has ever come up with a ruling like this.

The statement that the Sixteenth Amendment "merely superseded the principle decided in Pollock that indirect taxes laid on the profits derived from real property must be apportioned, so that Congress could again tax corporate profits" is incorrect. As the Court indicated in Brushaber, the Sixteenth Amendment removed the requirement that had been imposed by Pollock that the courts consider whether an income tax was deemed direct or, alternatively, indirect (i.e., removed the requirement that we consider the source of the income) in determining whether Congress can constitutionally tax that income with respect to the apportionment requirement. Sorry, but the Supreme Court in Brushaber and other cases -- and all other Federal courts -- have consistently upheld the tax statutes since 1913 from attacks on the basis of the direct - indirect arguments.

Thus, your statement "that such taxes are labeled as being 'direct' has not been overturned, allowing these 'special' direct taxes to be laid and collected without apportionment yet today" is idiosyncratic and, from a legal standpoint, nonsense.

Your statement that "Article 1 controls the application of the 16th Amendment" is idiosyncratic and meaningless. It is correct to say that the Amendment has modified the application of Article I as defined in Pollock -- by overruling Pollock.

The statement that indirect taxes "are those imposed on the profits derived from privileged activities, such as earning profit (interest) on invested capital" and the quotes you inserted from Tyler and Knowlton v. Moore not only do not support your position, if anything they actually degrade it.

The statement that direct taxes "are taxes which are not indirect, and include those imposed on the possession of property" is partially correct! The problem for you is that it does not support your ultimate conclusion (see below).

Your statement that "Congress has not enacted an indirect tax (excise) on either the activity of generating money (laboring, or working for hire) or on the event of transferring property (money) from employer to employee [ . . . ]" is not only incorrect, it is silly. Congress has imposed taxes (whether deemed direct or indirect) on income. The income event of the receipt of wages certainly does involve the transferring of property (money) from employer to employee -- but the event is being taxed in its character as an income event (not as a "transfer" event, which it also most certainly is). Transfer taxes, by contrast, have indeed been imposed by Congress as well; examples of these taxes are the gift tax and the estate tax.

The statements: "Money is property" and "Whether it is also called “income” is irrelevant" are actually correct. The problem for you is that your statements are also immaterial to your conclusion.

The statement "A tax on property (whether real or personal) is a direct tax" is correct assuming that you mean "a tax on property by reason of its ownership." Again, the problem for you is that this argument doesn't get you anywhere (see below).

The statement that "Such a tax is prohibited by Article 1" is incorrect. Article I does not now and has never prohibited any kind of direct tax whatsoever merely because it happens to be a direct tax. Again, the only restriction in article I is that a direct tax be apportioned among the states according to population, and that an indirect tax be imposed with uniformity. The problem is that this Article I restriction was modified by the Sixteenth Amendment with respect to any kind of income tax you may want to consider. If it's an income tax, then with respect to the apportionment requirement Congress has the power to lay and collect it without having to consider whether it's a direct tax or an indirect tax. Read the Sixteenth Amendment again. There is nothing in the Sixteenth Amendment that limits its application to "income taxes that happen to be direct" or to "income taxes that happen to be indirect."

Instead of trying to elaborate your own personal theory about the constitutionality of Federal income taxes, you would be better served for purposes of Wikipedia by locating primary and secondary authority on constitutionality. You have mixed up some legally correct statements (which you apparently do not understand actually degrade your own position rather than help it) with some wildly incorrect statements.

You keep citing cases like Brushaber and Eisner v. Macomber but you ignore what the Supreme Court ruled in those cases. For example, in Eisner v. Macomber, the court ruled that a stock dividend that did not constitute a distribution of cash or any other property to a corporate shareholder was not income to the shareholder. You cite Nicol v. Ames, 173 U.S. 509 (1899), where the Court actually upheld the validity of a tax law called the War Revenue Act of 1898. In Brushaber the Supreme Court upheld the constitutionality of the income tax law. Gee, that's helpful. Instead of citing the rulings in those cases, you take language from those cases -- language, by the way, that is not a holding -- and claim that the language means something other than what it says. This is partly why Wikipedia has its policy: no original research.

No one is arguing that "Article I has lost its original vitality." What the courts have consistently ruled, however, is that under Article I Congress always had the power to tax incomes, and that the Sixteenth Amendment removed the requirement that we consider the source of the income (i.e., removed the requirement that we try to figure out whether the tax on that income is "direct" or "indirect") in determining, with respect to the apportionment requirement, whether the Congress has the power to impose that tax.

You have admitted that you "ignore" the appellate court decisions where you consider the courts to have been "confused" -- and we can see why; the courts ruled against your argument. You quote from the same Supreme Court decisions that many tax protesters repeatedly quote from, but you claim that the quotes mean something other than what they say -- and you ignore the holdings, the rulings, in those cases. In Brushaber for example you ignore the holding of the Court that the income tax was constitutional. Mr. Frank Brushaber lost the case, remember? Please read the articles on Precedent, Ratio decidendi and Obiter dictum for background.

For example, you cite the Bowers v. Kerbaugh-Empire case for the assertion that income is "corporate profit" (meaning that income is ONLY corporate profit). The problem is that neither in that case nor in any other Federal court case has any court ever ruled that income means only corporate profit. This argument is sometimes called the Merchants' Loan argument. Every court that has been presented with this argument has rejected it. This rejection by every Federal court deciding the issue has occurred over and over and over.

You incorrectly imply that the Supreme Court is at odds with the lower Federal courts on these issues -- yet you cite no example of where the Supreme Court ruled one way and a lower court ruled the other (hint: there are no such cases!).

No Federal court has ever ruled that wages are not includible in income for Federal income tax purposes. No Federal court has ever ruled that wages are not taxable. No Federal court has ever ruled that an income tax on wages is a "direct" tax (not that it matters after 1913 anyway). Every Federal court that has decided the issue has ruled that wages are includible in income under Article I as modified by the Sixteenth Amendment, and are taxable. Some examples of these cases are clearly cited in the article Tax protester constitutional arguments.

Your personal research fails on two levels. First, you are not following the rules for proper legal analysis. What this means is that you are ignoring the holdings (the rulings) in the Supreme Court cases that you apparently believe somehow support your own conclusions, and you are instead quoting what is often obiter dicta from the cases -- and then arguing that the text means something other than what it says. By ignoring the actual Supreme Court holdings in these cases and, by your own admission, ignoring the rulings in the lower appellate court decisions (which, by the way, are consistent with the Supreme Court rulings, not inconsistent), you are painting a false picture of what the courts have ruled.

Second, the original research you are performing, and the resulting conclusions you are reaching, violate the Wikipedia policy regarding NO ORIGINAL RESEARCH.

Rather than ignoring court decisions -- Primary authority -- that you admit you personally consider "confused" and rather than trying to do your own research to reach your own conclusions, please review the Wikipedia rules and guidelines on Verifiability and No Original Research. Look for primary and secondary authority based on research by reputable sources.

Additionally, the arguments you are trying to raise do not belong in this article anyway. Even if these arguments came from reliable primary and secondary authority, they would belong in the article on Tax protester constitutional arguments with the other arguments about the Sixteenth Amendment. Yours, Famspear 10:12, 2 January 2007 (UTC)

Just as a post-script, I'd like to point out another example. In the 1991 Supreme Court case of Cheek v. United States, a criminal case, the U.S. Supreme Court noted that the taxpayer and others involved in prior civil tax litigation had been "informed by the courts that many of their arguments, including that they were not taxpayers within the meaning of the tax laws, that wages are not income, that the Sixteenth Amendment does not authorize the imposition of an income tax on individuals [ . . . ]" were frivolous (that's the term the Court used). Mr. Cheek, a pilot for American Airlines, was convicted of tax evasion and various other tax charges in connection with his refusal to pay Federal income taxes on his wage or salary income from American Airlines. The Supreme Court reversed Cheek's first conviction because of an error made by the trial court judge in the court's instruction to the jury about the meaning of the term "willfulness." See Cheek v. United States, 498 U.S. 192 (1991). At his retrial, Mr. Cheek was again convicted -- this time with a correct jury instruction. That conviction was upheld by the United States Court of Appeals for the Seventh Circuit. Then, despite Mr. Cheek's request for a writ of certiorari, the United States Supreme Court refused to hear his arguments about that conviction. See United States v. Cheek, 3 F.3d 1057 (7th Cir. 1993), cert. denied, 510 U.S. 1112 (1994). Mr. Cheek's conviction in connection with willfully attempting to evade Federal income tax on wage and salary income having been affirmed by the Seventh Circuit, Mr. Cheek went to prison. Contributor Wixpositor's theory that the U.S. Supreme Court and the lower courts somehow disagree over the application of Article I, of the Sixteenth Amendment -- and of the taxability of wages or salaries received by an individual -- is simply incorrect. Yours, Famspear 17:29, 2 January 2007 (UTC)

Post-post script: Sorry, but I can't resist more comment. Let's look at this statement: "However, the Sixteenth Amendment could not alter anything in Article 1 because the Sixteenth Amendment does not contain the term 'direct tax' and Article 1 does not contain the term 'income.'" This statement highlights the one of the problems I believe our contributor is presenting with this kind of original research and, bluntly original, idiosyncratic thought. Statements like this, while they may appear facially reasonable to the general readership of an encyclopedia, have no foundation in law. There is absolutely no U.S. legal rule or doctrine that would require that the Sixteenth Amendment contain the terms "direct tax" or "income" in order for the Amendment to modify the provisions of Article I that do or do not contain those terms.

Let's look at this statement: "The quote to which bd2412 derisively refers as being 'pure idiocy on the part of its author' is from the Brushaber decision, and unequivocally holds that the Sixteenth Amendment does not allow an unapportioned direct tax." The statement is totally incorrect.

BD2412's comment was not made in reference to any language from the Brushaber decision. The comment was made in response to a Wikipedia user's suggestion that "if the amendment authorized a direct tax, it would cause one part of the Constitution to come into irreconcilable conflict with Article 1, Section 2, Clause 3 and Article 1, Section 9, Clause 4." Editor BD2412 was correctly pointing out the fallacy behind this strange argument -- an argument which, again, has no foundation in U.S. law.

The actual language from Brushaber, with my bracketed insertions, is as follows: "But it clearly results that the proposition [by Frank Brushaber] and the [above listed erroneous] contentions under it [i.e., under Mr. Frank Brushaber’s erroneous proposition], if acceded to, would [incorrectly] cause one provision of the Constitution to destroy another; that is, they [Mr. Frank Brushaber’s erroneous contentions] would result in bringing the provisions of the Amendment exempting a direct tax from apportionment into irreconcilable conflict with the general requirement that all direct taxes be apportioned." The Court was rejecting Frank Brushaber's contentions. As explained later in the text of the decision, the Court did not accede to Mr. Brushaber's contentions. Mr. Brushaber lost the case.

Next, let's look at the assertion that the court in Brushaber "unequivocally holds that the Sixteenth Amendment does not allow an unapportioned direct tax." That is totally incorrect. The Court in Brushaber did not hold any such thing.

There were several holdings in Brushaber. One of the most important holdings is that the Revenue Act of 1913, imposing income taxes that are not apportioned among the states according to each state's population, is not unconstitutional.

How do we know that the Court held this? Well, Mr. Frank Brushaber argued that the income tax --which admittedly had not been apportioned among the states according to population -- was unconstitutional. The parties actually litigated that issue. The Court considered Mr. Brushaber's argument, and specifically discussed his argument in the text of the opinion. The Court then rejected Mr. Brushaber's argument. Mr. Brushaber, the appellant, lost the case.

The proper analysis of law is not a process of making it up as you go along. Proper analysis is not a process of coming up with arguments that "sound good." Proper analysis does not consist of taking quotations from court opinions and then arguing that those quotations mean the opposite of what the courts ruled in those cases. Refer to Precedent, Ratio decidendi, and Obiter dictum. Legal analysis of court decisions is complex and multi-layered but, in its fundamental form, involves figuring out what the parties actually fought about and what the court actually decided about what they actually fought about. This means that much of the text of a court opinion, while useful, is what we call obiter dicta. Whether obiter dicta (words said in passing) happen to be correct statements of law or not, they are, under the U.S. legal system, non-binding. In other words, most of the verbiage from the text of a court opinion is not a statement of a holding in the case.

Now, for yet another version of my "experts and non-experts in Wikipedia" speech.

A basic tenet of Wikipedia is that non-experts are allowed to edit in technically complex areas in which they hold no expertise. The concomitant concept is that, on de facto basis, non-experts are being held to the same standards as the Wikipedia experts. (By the way, although I may have been designated as an expert in a legal proceeding, I myself cannot designate myself as an expert. Expert status is something that someone else can confer on you; it is not something you generally claim for yourself, at least not in the fields of accounting and law in the U.S.A.) In relatively technical areas such as medicine, physics, engineering, law, etc., you cannot, in Wikipedia, simply make it up as you go along. If, in editing legal articles, you don't know a holding from an obiter dictum, someone may call you on it.

And, as restrictive or unfair as it may sound, Wikipedia is not the place for original research and new ideas created by Wikpedia editors. Instead, look for reliable primary sources, secondary sources, or tertiary sources (which roughly correspond to the legal concepts of Primary authority and Secondary authority). Yours, Famspear 02:50, 3 January 2007 (UTC)

[edit] Further Response and Discussion

Latest Introduction Dear fellow editors: My comments over the last few days and Famspear’s seeming non-Wikipedian reply to them (“nonsense,” “idiosyncratic,” “meaningless,” “silly,” etc.) along with the inaccurate and misleading claims in some of his own answers has led me to believe that I’ve hit a nerve on the direct tax issue. When one has no adequate response, one retreats to invective in an attempt to convince other readers that the subject under discussion is without merit even though no proof is offered. Famspear provided no countervailing authorities yet claimed that, for example, “[n]o court has ever come up with a ruling like this.” What he means to say is that he has not seen a case with a ruling like this. For this statement to be accurate he would have had to examine every case on the subject that has ever been handed down, and I doubt that he has done this. Therefore, his own statement shares the same characteristics he gives to mine.

Additionally, for example, he states: “The problem [with my claim] is that this Article I restriction [its limitation on direct taxes] was modified by the Sixteenth Amendment with respect to any kind of income tax you may want to consider.” I will add another invective to the mix about this particular claim: Hogwash! Furthermore, he offers no authority in support of his assertion—principally, in my view, because there is so much on the other side of the question. Even though the following statement by the Court is in the realm of ratio decidendi, as Famspear points out above, and even though the following case did not involve individuals, I believe that when the Supreme Court speaks to a broad subject in issuing a more narrow ruling that their statement falls within stare decisis. The 16th Amendment did not modify anything about Article 1. That’s my claim, because the Supreme Court said so:

”The Sixteenth Amendment must be construed in connection with the taxing clauses of the original Constitution and the effect attributed to them before the amendment was adopted.”—Eisner v. Macomber, 252 U.S. 189, 205 (1920)

Let’s see if we can figure this out in plain English. The above quote first says that “the 16th Amendment must be construed”. This means that its application must be determined. Then it says, “in connection with the taxing clauses (plural) of the original Constitution”. This means considered with the Article 1 limitations on direct taxes. Then it says, “the effect attributed to them”. This means as applied to the federal government. Then it says, “before the amendment was adopted”. This means before the amendment existed. Therefore, stringing everything together, we arrive at:

”The application of the 16th Amendment must be determined by being considered with the Article 1 limitations on direct taxes as applied to the federal government before the amendment existed.”—Eisner v. Macomber II (see above)

Hmmm. It would appear that this is a fancy way of saying that the 16th Amendment has absolutely no effect on the original taxing clauses. Also, there are other cases which say essentially the same thing differently. This is but one example of an inaccurate claim on Famspear’s part about my points.

I can’t crank out responses as fast or as voluminous as he can crank out inaccurate answers, so I can’t answer point by point. Also, after looking more closely at Wikipedia and at my admittedly brash “entrance” into its world of editing (as opposed to dialoging), I will fold my tent and remain on the sidelines for others to take up the gauntlet since I appear to not be the proper person for making encyclopedic entries. And to Famspear, I certainly do thank you for your efforts to keep the main page only encyclopedic in content and pointing out to me that my comments only belong here. I agree with your goal. But before returning to the sidelines, I would like to comment on Famspear’s latest post.

Brushaber Revisited In Famspear’s latest post he quotes Brushaber, with his own comments in brackets. Here, I will insert a paragraph from Brushaber with my own comments in brackets, then Frank Brushaber’s contention regarding a direct tax, followed by Famspear’s comments, then comment further.

My quote from Brushaber and comments: “We are of opinion, however, that the confusion [on Frank Brushaber’s part] is not inherent, but rather arises from the [his] conclusion that the 16th Amendment provides for a hitherto unknown power of taxation; that is, a power to levy an income tax which, although direct, should not be subject to the regulation of apportionment applicable to all other direct taxes. [Brushaber claims that the 16th Amendment authorizes a direct tax that doesn’t require apportionment] And the far-reaching effect of this [Brushaber’s] erroneous assumption will be made clear by generalizing the many contentions advanced in argument to support it[.]” [Brushaber is wrong, as we will show]

Brushaber’s erroneous assumption: “(a) The Amendment authorizes only a particular character of direct tax without apportionment, and therefore if a tax is levied under its assumed authority which does not partake of the characteristics exacted by the Amendment, it is outside of the Amendment, and is void as a direct tax in the general constitutional sense because not apportioned.”—240 U.S. at 11

Famspear’s quote and comments: “‘The actual language from Brushaber, with my bracketed insertions, is as follows: "But it clearly results that the proposition [by Frank Brushaber] and the [above listed erroneous] contentions under it [i.e., under Mr. Frank Brushaber’s erroneous proposition], if acceded to, would [incorrectly] cause one provision of the Constitution to destroy another; that is, they [Mr. Frank Brushaber’s erroneous contentions] would result in bringing the provisions of the Amendment exempting a direct tax from apportionment into irreconcilable conflict with the general requirement that all direct taxes be apportioned." The Court was rejecting Frank Brushaber's contentions. As explained later in the text of the decision, the Court did not accede to Mr. Brushaber's contentions. Mr. Brushaber lost the case.”

My Analysis of the Above Quotes Above we have the Court’s analysis of why Brushaber was wrong and the bad things that would happen if his view prevailed. I certainly do agree with Famspear’s comments about the the above paragraph. However, as I read it, Famspear runs counter to his own arguments. Article 1 requires that all direct taxes be apportioned among the States. Frank Brushaber said, “no, the 16th Amendment authorizes a particular direct tax that doesn’t require apportionment.” The court said, “no, Mr. Brushaber, you’re wrong; all direct taxes require apportionment. If one didn’t, that would destroy the general requirement (in Article 1) that they all must be apportioned.” That’s what the above statement says, and I agree with it. In fact, the Court’s rejection of Brushaber’s contention that there can be a direct tax that is collected without apportionment is exactly why the federal tax on personal property (money) is not allowed under Article 1—it is a direct tax collected without apportionment, which the Supreme Court rejected in the Brushaber decision as being a tax without foundation. He claimed that his tax was unconstitutional because the 16th Amendment allowed an unapportioned direct tax of a particular character that did not require apportionment, and the tax on the dividends from his shares of Union Pacific was outside that provision of the Amendment. He lost the case, not because the tax of which he complained was outside his special direct tax (there was no such special direct tax), but rather because it was an indirect tax for which the 16th Amendment again allowed collection since it had superseded the holding against such collection in Pollock.

Commentary I guess I’m missing something. Frank Brushaber (a non-resident alien from Belgium) appears in court with a claim that “the 16th Amendment provides for a hitherto unknown power of taxation; that is, a power to levy an income tax which, although direct, should not be subject to the regulation of apportionment.” The Court then goes on to amplify the contents of his contentions and then says that they are erroneous—that the 16th Amendment did no such thing (“...the far-reaching effect of this erroneous assumption...”). The Brushaber Court then goes on to quote Pollock, validating the application of the original taxing clauses to the Brushaber case:

'In the matter of taxation, the Constitution recognizes the two great classes of direct and indirect taxes, and lays down two rules by which their imposition must be governed, namely: The rule of apportionment as to direct taxes, and the rule of uniformity as to duties, imposts, and excises.'—240 U.S. at 13, quoting Pollock

What I seem to be missing is any shred of proof that the Constitution somehow allows the federal government to collect an unapportioned direct tax within the States, regardless of what it is named. The Brushaber case construed the 16th Amendment as a declaration that an income tax must be indirect to harmonize the tax with Article 1. It did this rather than declare the tax to be direct and thereby have the 16th Amendment become a mechanism to destroy the two great classifications by making an exception to the rule that all direct taxes must be apportioned.

The income tax One point that people seem to miss is that there is not “the income tax.” A tax imposed by a single statute can be either direct or indirect (a distinct tax in either one of two distinct classes) depending on what is being taxed and the effect on the one who pays it. All the 16th amendment did was to prevent a tax on income, which is inherently an indirect tax, from being declared a direct tax (which the Supreme Court itself did in Pollock) due to a consideration of the source from which the income came (the Amendment did so when it superseded their holding in Pollock.) The 16th Amendment had nothing to do with allowing an unapportioned direct tax on personal property. It forever placed taxes on incomes within the classification of indirect taxes, but only for those that are inherently indirect from the outset. It did not turn direct taxes into indirect taxes for the convenience of the federal government or allow the collection of unapportioned direct taxes from individuals within the States whatsoever. Income taxes that are inherently in the direct class are outside the scope of the 16th Amendment and fall within the limitations of Article 1. If one diligently searches the Supreme Court decisions on taxation from the late teens and early twenties, the court confirms this claim six ways from Sunday by how it defines income (essentially, the results of the exercise of a privilege). Although I quoted the following case far above, it bears repeating because it summarizes 75 years of tax law in a single sentence:

”The legislative history merely shows that the words "from whatever source derived" of the Sixteenth Amendment were not affirmatively intended to authorize Congress to tax state bond interest or to have any other effect on which incomes were subject to federal taxation, and that the sole purpose of the Sixteenth Amendment was to remove the apportionment requirement for whichever incomes were otherwise taxable. 45 Cong. Rec. 2245-2246 (1910); id., at 2539; see also Brushaber v. Union Pacific R. Co., 240 U.S. 1, 17-18 (1916).”—South Carolina v. Baker, 485 U.S. 505, n.13 (1988) (Emphasis added.)

Once again, the Supreme Court confirms my statement above that the 16th Amendment removed the apportion requirement for incomes that were taxable as indirect taxes under Article 1 (those that were “otherwise taxable”) but which Pollock had held to be direct because of their perceived effect on the underlying source. Again, the “otherwise” above refers to income taxes which are allowed under Article 1 (those that are indirect and therefore are allowed to be laid and collected within the States). Furthermore, the Court above confirms that their conclusion on this point was taken right from the Brushaber decision as well as from the submission debates. As Famspear pointed out somewhere above, a statement such as this could be considered as being dicta, but I would claim it as being accurate dicta, and in any event it certainly gives an indication as to the leanings of the Court.

Direct and Indirect One other point of explanation. The term “indirect” refers to the effect which a tax would have on the source of the thing being taxed. For capital earning interest, a tax on the interest is considered an indirect tax on the source which produced the interest, because the source (the capital) is not diminished. On the other hand, a tax on the source itself (the capital) would be considered a direct tax because it would diminish the amount of capital remaining to earn interest. Confusion results from the fact that the tax on the interest is a direct tax on the earnings, which many also consider to be an unapportioned direct tax. However, when the whole picture is taken into account, the tax on earnings is lawfully considered to be only an indirect tax on the underlying source rather than a direct tax on the proceeds.

Can’t get more simple than that. If a particular tax is a direct tax—that is, if its burden cannot be shifted (such as with a property tax, real or personal) thereby diminishing the source (the amount of capital or of the resource remaining to produce more of the thing taxed) it is prohibited by Article 1 within the States. If that same tax is indirect—that is, if its burden can be shifted, such as a tax on manufacturing beer being shifted to a customer of the business which has produced the beer, it does not diminish the source (the resources of the beer manufacturer) and is permitted by Article 1 within the States. Its name is irrelevant.

Back two centuries ago (!) (in the 1800s), the Supreme Court gave an excellent explanation of the way these direct and indirect taxes operate, which remains true yet today:

“The ordinary test of the difference between direct and indirect taxes is whether the tax falls ultimately on the tax-payer [the one responsible for remitting it to the government], or whether, through the tax-payer, it falls ultimately on the consumer [customer]. If it falls ultimately on the tax-payer, then it is direct in its nature, as in the case of poll taxes and land taxes [and personal property taxes]. If, on the contrary, it falls ultimately on the consumer [if the business doesn’t absorb it—the customer does], then it is an indirect tax [on the business]. Such is the test, as laid down by all writers on the subject. Adam Smith, who was the great and universally received authority on political economy, in the day when the Federal Constitution was framed, sets forth a tax on a person's revenue to be a direct tax.”—Pacific Ins. Co. v. Soule, 74 U.S. 433, 437 (1868) (Emphasis added)

The 16th Amendment changed nothing in the above statement nor did it authorize a tax on a person's revenue.

Web References One last note: On this one subject (Article 1 prohibiting a direct tax within the States) I make two observations: (1) On the IRS website at http://www.irs.gov/pub/irs-utl/friv_tax.pdf, their denigration of this argument is pitifully weak. Look at Contention 6 under Constitutional Amendment Claims (page 30) about a non-apportioned direct tax. First, they attempt to divert attention from the main issue at the outset by making two assertions, one true and one untrue. They first state that “the Sixteenth Amendment does not authorize a direct non-apportioned income tax”. (True. It cannot do so because of the limitations in Article 1). They then go on to add “and thus, U.S. citizens and residents are not subject to federal income tax laws”. (Completely untrue, and completely irrelevant to the initial claim. If U.S. citizens and residents have anything taxable under the authority granted by Article 1 to the federal government to collect it, they certainly are subject to the applicable income tax laws.) This second assertion has nothing to do with the initial claim regarding direct taxes within the States but is an attempt to taint the whole subject by inference. Clever, at least in relation to the casual reader. Second, they admit that the personal income tax is a non-apportioned direct tax. So much for having to prove that. (This makes the Law of the Circuit in several Circuits that the income tax is an indirect tax somewhat suspect, at least according to the IRS, although this position is legally correct.) Second, everything they quote is from appellate cases. They do attempt to make it look “official” by showing that the Supreme Court denied cert. (under “The Law”), but that’s useless as an affirmative position, especially when there is so much countervailing case law exactly on point. (cf. Brushaber quoting Pollock on the two great classes immediately above). (2) The Wikipedia entry on tax protester constitutional arguments at http://en.wikipedia.org/wiki/Tax_protestor_constitutional_arguments wisely omits the argument entirely, presumably because it is the one argument which has enough traction (potential for debate) that it doesn’t belong in an encyclopedia. The huge amount of exchange above should confirm that contention.

Conclusion So there we have it. I won’t comment further on the inaccuracies in Famspear’s response to my earlier posts and will leave that to those who might have more time and inclination to do so. The whole federal tax scheme is pretty much summarized in my paragraphs immediately above (at least my view of them), so my conclusions speak for themselves. Thanks for this brief opportunity to at least become involved in the debate, albeit not in the proper forum.Wixpositor 23:46, 5 January 2007 (UTC)

[edit] Response to Wixpositor

Dear Wixpositor: Your belief that you have “hit a nerve” on the “direct tax” issue is incorrect. First of all, the “direct tax” issue -- with respect to Federal income taxes -- was mooted (rendered legally irrelevant) in 1913 when the Sixteenth Amendment was ratified. Nobody cares whether a Federal income tax is a “direct tax” or an “indirect tax.” Nobody, that is, except the tax protesters – especially those who have litigated these kinds of arguments to no avail.

I and other Wikipedia editors are not here to prove to you or to persuade you that the law is what it is. You inserted certain material into the article. The material was removed for the reasons stated above. The purpose of this talk page is in part to discuss what should or should not be in the article. The following material is provided as part of the discussion as to why the material should not be in this article. The main problems with the material are lack of Verifiability and the rule against Original Research (aside from the fact that the material is demonstrably riddled with errors).

The terms “nonsense,” “idiosyncratic,” “meaningless,” and “silly” that I used to describe certain statements in the materials (article or talk page) are not examples of “invective.” The term “invective” means “a violent verbal attack; strong criticism, insults, curses, etc. [ . . . ] an abusive term; insult, curse, etc.” Webster’s New World Dictionary of the American Language, p. 740 (2d College Ed. 1970). No one has engaged in anything close to “invective” in connection with your edits to this article.

What I said was that your statement -- "that such taxes are labeled as being 'direct' has not been overturned, allowing these 'special' direct taxes to be laid and collected without apportionment yet today" -- is idiosyncratic and, from a legal standpoint, nonsense. The term “idiosyncratic” is used here to mean that the statement you made is idiosyncratic -- in the sense of having the characteristic of an idiosyncrasy: “an individual reaction [ . . . ] that is different from the reaction of most people.” Webster’s New World Dictionary of the American Language, p. 697 (2d College Ed. 1970). In other words, the statement is based on your own belief, rather than on court rulings, and is contrary to the great weight of authority. As you readily have admitted, the statement is based on your own personal, original research or opinion. However, Wikipedia is not a forum for Wikipedia editors’ first time publication of their own personal, original research. Materials should come from reliable primary, secondary or tertiary sources.

When I used the term “nonsense” in describing certain materials, I was using that term in a LEGAL sense; that is, I was using the term to identify material that is legally frivolous. This means that not only does it have no legal merit, but it also has no conceivable chance of even being close to legally correct.

Your statement that “no proof is offered” evidences your misplaced assumption that the rest of us are here to “prove” to you that you are wrong and we are right.

Your incorrect statement that I provided no “countervailing authorities” is at least consistent with your statement that you “pretty much ignore” appellate court rulings. You seem to have ignored the many appellate court rulings I cited above.

I am not “claiming” that “[n]o court has ever come up with a ruling like this.” I am stating that as a fact, and it is a fact. I have studied the actual verbatim texts of literally thousands of statutes, regulations, and court decisions. Your argument that for my statement to be accurate, I would have had to examined “every case on the subject that has ever been handed down” is incorrect. No one needs to read “every case on the subject” in order to know that no Federal court has ever ruled in favor of your arguments.

Further, all the cases you have cited (most or all of which are, by the way, U.S. Supreme Court cases) support my position, not yours.

Above, you make the following astonishing statement:

Even though the following statement by the Court is in the realm of ratio decidendi, as Famspear points out above, and even though the following case did not involve individuals, I believe that when the Supreme Court speaks to a broad subject in issuing a more narrow ruling that their statement falls within stare decisis. The 16th Amendment did not modify anything about Article 1.

You are making two errors here. First, you are in effect arguing that the language you quote immediately thereafter is a statement of a holding of the case – stare decisis -- part of a decision in the case. Second, you are essentially ‘’’ignoring’’’ (there’s that word again) the text of the quoted material, and instead arguing that it somehow means something other than what it says.

Then you state:

Hmmm. It would appear that this is a fancy way of saying that the 16th Amendment has absolutely no effect on the original taxing clauses.

This is your own interpretation which you use to argue that somehow Congress has no authority to tax incomes from whatever source derived, without apportionment among the states, and without regard to any census or enumeration, despite the fact that the Sixteenth Amendment states that Congress does indeed have that authority -- and despite the fact that in every case you have cited, including ‘’Brushaber’’ and ‘’Eisner v. Macomber’’, the Supreme Court either ruled the income tax constitutional or did not rule on the issue at all.

You have failed in your attempt to divert attention from the nonexistence of even a single court decision since 1913 where a court upheld a taxpayer argument that the Federal income tax was unconstitutional on the grounds you are citing. There are no such court decisions, and the argument is both legally invalid and legally frivolous, as the courts have ruled.

The Supreme Court in Brushaber never said that all direct taxes require apportionment. Further, the implication -- that if a direct tax could be found that was not required to be apportioned, this would “destroy the general requirement (in Article 1) that they all must be apportioned” -- is incorrect. That’s not what the Court said. Further, the Article I requirement that direct taxes be apportioned is not “destroyed” by the Sixteenth Amendment. The Article I requirement – as interpreted by the Pollock court -- is, however, modified (or partially repealed, if you like) by the Amendment. Again, what the courts have indicated is that the Sixteenth Amendment removed whatever requirement was imposed in Pollock that certain particular kinds of income taxes (taxes on income from property, to be specific) be apportioned. In Pollock, for the very first time, certain income taxes (not all income taxes, just taxes on income from property) were treated as direct taxes. The Pollock court indicated that up until that time (year 1895), all income taxes had been considered indirect taxes (excises). The Pollock court decided, however, that taxes on income from property should be treated as direct taxes (just like taxes on property by reason of its ownership), under the theory that a tax on the income from the property “burdened” the property in the same way that a tax on property by reason of ownership burdened that property. The Pollock court even specifically took the trouble to note that taxes on income from employment, etc., were still indirect taxes (excises). The Pollock court also took the trouble to point out that the reason it was throwing out the entire statute (including the taxes on income from employment) was not that taxes on income from employment were deemed direct taxes (they weren’t), but rather because the court recognized that Congress had not anticipated that taxes on income from property would be considered DIRECT taxes. The Court did not want to leave in place a statute that would tax income from employment but not income in the form of interest, dividends and rent, as Congress had not intended that result.

No, you are taking quotations from the court opinions, many of which are not even part of the holdings in the cases, and then arguing that the statements are “saying” something else – and then “agreeing” with your own conclusions about what you argue the courts mean. Sorry, but that gets you nowhere.

Let’s look at this statement:

In fact, the Court’s rejection of Brushaber’s contention that there can be a direct tax that is collected without apportionment is exactly why the federal tax on personal property (money) is not allowed under Article 1—it is a direct tax collected without apportionment, which the Supreme Court rejected in the Brushaber decision as being a tax without foundation.

First of all, the Supreme Court did not reject a federal tax on personal property (money) in Brushaber -- or in any other Federal case. Indeed, no Federal court has ever rejected such a tax. Want to know why?

To the best of my knowledge, no such tax has ever existed, so there could never have been a court case on the subject. A tax on personal property (whether money or anything else) is a tax on property ‘’’by reason of ownership’’’ – not an income tax. I know of no such tax in the history of the Republic. (There may have been one in the late 1700s or the first half of the 1800s, but I'm not aware of one.) Second, such a tax would be perfectly constitutional – as long as it were apportioned among the states by population.

Again, an income tax is not a tax on personal property (money or otherwise). An income tax is a tax on income, not a tax on property by reason of its ownership. Taxes on income, regardless of source, may be validly imposed without apportionment. Read the Sixteenth Amendment and the court decisions on income taxes. Yes, income may be realized or received in the form of money, or at least a check, but that is a separate concept.

Your statement that Frank Brushaber “lost the case, not because the tax of which he complained was outside his special direct tax (there was no such special direct tax), but rather because it was an indirect tax for which the 16th Amendment again allowed collection since it had superseded the holding against such collection in Pollock” is interesting. You seem to finally be recognizing that the court ruled against you in the Brushaber case.

As an aside, tax protesters have argued for years that Frank Brushaber was a non-resident alien from Belgium, and that this was somehow significant to the outcome of his case. Assuming for the sake of argument that he was a non-resident alien from Belgium, that fact is irrelevant. Here’s why.

Brushaber apparently did not bring up his citizenship status or residency status, and the Court certainly did not mention it. Any argument about his citizenship status might have had significance if the issue had been presented to the court and considered by the court, and decided upon by the court. It was not.

You state:

What I seem to be missing is any shred of proof that the Constitution somehow allows the federal government to collect an unapportioned direct tax within the States, regardless of what it is named. The Brushaber case construed the 16th Amendment as a declaration that an income tax must be indirect to harmonize the tax with Article 1. It did this rather than declare the tax to be direct and thereby have the 16th Amendment become a mechanism to destroy the two great classifications by making an exception to the rule that all direct taxes must be apportioned.

In a sense, you are partially correct on one point: The Brushaber court treated the Sixteenth Amendment (year 1913) as having overruled Pollock (year 1895). Taxes on income from property, after 1913, were again considered indirect taxes (excises), as they had been prior to 1895. Since the Pollock court never did treat any other income taxes as direct taxes anyway, there was no need in 1913 to “classify them back” to the category of excises; the other income taxes (including, but not limited to, taxes on income from employment) never “left” the indirect tax category. The result is that, today, all incomes, from whatever source, may be validly taxed without apportionment. That’s what the Sixteenth Amendment says, and that’s what the courts always rule when an income tax is challenged on this point. Again, see the list of cases I cited above.

One point you and many tax protesters seem to get hung up on is the fact that the Sixteenth Amendment does not use the terms “direct tax” or “excise” (indirect tax). Instead, the Amendment uses the word “source.” You fail to make the connection between the direct tax-excise formulation and the “source” formulation, in part because you keep misreading Pollock and Brushaber. A big part of the significance of Pollock, Brushaber, and the Sixteenth Amendment is the conceptual link between the “direct tax-excise” terminology and the “source” term.

It’s almost as if the tax protesters would not be satisfied unless the Sixteenth Amendment were worded as follows:

Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several states, and without regard to any census or enumeration regardless of any provision in Article I, including any income taxes deemed to be direct taxes, and any provision in Article I to the contrary is hereby repealed”

--or something like that. Tax protesters keep clinging pitifully to the language of Article I, ignoring the plain language of the Amendment and the rulings of the courts, based on some sort of false belief that somewhere there ought to be some rule of law (if they could just find it) that says that a U.S. constitutional amendment cannot change the legal effect of an original constitutional provision unless the amendment somehow uses some special “magic words,” such as “repeal” or “repealed” or “direct tax.” Protesters grasp ineffectually for an imaginary, non-existent rule of law that says that an amendment cannot modify the effect of a provision of the original constitution without some sort of special language. The Brushaber court never ruled any such thing.

Unfortunately for tax protesters, the U.S. follows the doctrine of implied repeal. Nearly all constitutional amendments modify provisions in the original constitution without any special wording.

Cheer up! The following language is actually more or less correct:

A tax imposed by a single statute can be either direct or indirect (a distinct tax in either one of two distinct classes) depending on what is being taxed and the effect on the one who pays it. All the 16th amendment did was to prevent a tax on income, which is inherently an indirect tax, from being declared a direct tax (which the Supreme Court itself did in Pollock) due to a consideration of the source from which the income came (the Amendment did so when it superseded their holding in Pollock.)

But in the language that follows, you go awry:

The 16th Amendment had nothing to do with allowing an unapportioned direct tax on personal property. It forever placed taxes on incomes within the classification of indirect taxes, but only for those that are inherently indirect from the outset. It did not turn direct taxes into indirect taxes for the convenience of the federal government or allow the collection of unapportioned direct taxes from individuals within the States whatsoever.

You further state that “income taxes that are inherently in the direct class are outside the scope of the 16th Amendment and fall within the limitations of Article 1”. That statement is absolutely incorrect as a matter of law.

There is no such thing as an income tax (direct, indirect, red, blue, green or purple) that is “outside the scope” of the Amendment, regardless of whether that income tax was considered a “direct tax” by the Pollock court or not.

I’m sorry, but if one diligently searches the Supreme Court decisions on taxation from the late teens and early twenties, one finds that the court in no way confirms your claim “six ways from Sunday” in any shape or form. Your quote from the Congressional record is actually a fairly accurate statement of the law (although, ironically, not authoritative). The problem for you is that it doesn’t get you anywhere. Further, it does not constitute a binding decision about what incomes are taxable and what incomes are not taxable.

You correctly state:

that the 16th Amendment removed the apportion requirement for incomes that were taxable as indirect taxes under Article 1 (those that were ‘otherwise taxable’) but which Pollock had held to be direct because of their perceived effect on the underlying source.

Then you go off course again:

Again, the “otherwise” above refers to income taxes which are allowed under Article 1 (those that are indirect and therefore are allowed to be laid and collected within the States).

Both before and after the 1895 Pollock decision, Article I placed no restriction at all on income taxes in this way. Your language “income taxes which are allowed under Article 1” seems to incorrectly imply that while income taxes (income taxes that were indirect) were allowed under Article I, others (presumably income taxes that were direct) were not.

No court has ever ruled that any income tax is prohibited merely because it is a “direct” tax. Not even the Pollock court ruled that way.

The “direct” income tax in Pollock was thrown out not because of its “directness” but instead because it was deemed to be a direct tax that was unapportioned.

Nothing in Article I has ever said that Congress cannot impose a direct tax merely because it’s a direct tax. And no court has ever ruled that Congress cannot impose a direct tax merely because it’s a direct tax.

Let’s look at this passage:

The term “indirect” refers to the effect which a tax would have on the source of the thing being taxed. For capital earning interest, a tax on the interest is considered an indirect tax on the source which produced the interest, because the source (the capital) is not diminished. On the other hand, a tax on the source itself (the capital) would be considered a direct tax because it would diminish the amount of capital remaining to earn interest.

Except for the first sentence, the above is “sort of” correct. As you continue, here’s where you go wrong:

Confusion results from the fact that the tax on the interest is a direct tax on the earnings, which many also consider to be an unapportioned direct tax. However, when the whole picture is taken into account, the tax on earnings is lawfully considered to be only an indirect tax on the underlying source rather than a direct tax on the proceeds.

I can see there is some “confusion” here. A tax on interest is not a direct tax except to the extent that we may consider Pollock to be viable. Yes, interest is a tax on the earnings of capital, but prior to Pollock it was not considered a direct tax. Beginning with Pollock, it was either considered a direct tax or was deemed to be a direct tax or was still an indirect tax but was TREATED as a direct tax. Take your pick. However you want to look at it, the reality is that from 1895 (Pollock) to 1913 (the Amendment), a tax on interest income, on that source, would have had to have been apportioned to be valid. The Sixteenth Amendment simply removed the apportionment requirement by making a blanket statement about all incomes “from whatever source derived.” The phrase “from whatever source derived” obviously includes, well, every source. Income from property. Income from employment. Income in the form of huge pots of gold falling from the sky right into my back yard. Whatever.

Let’s look at this statement:

If a particular tax is a direct tax—that is, if its burden cannot be shifted (such as with a property tax, real or personal) thereby diminishing the source (the amount of capital or of the resource remaining to produce more of the thing taxed) it is prohibited by Article 1 within the States.

The above statement is absolutely incorrect. You have made a fundamental error. Nothing in Article I prohibits any such tax. No court has ever interpreted Article I in the way you have done so.

Today, in the year 2007, Congress could validly impose any direct tax without running afoul of Article I or any other Constitutional provision. Congress could impose a national property tax, for example. Congress could impose a national capitation (such as $100 per year from every man, woman and child). Yes, the national property tax would have to be apportioned. And yes, the capitation would have to be apportioned. But there is nothing in Article I that prohibits a direct tax merely because it is a direct tax.

If the tax were a property tax or a capitation, the Sixteenth Amendment (which applies only to income taxes) would not apply to it, of course. A property tax (tax on property by reason of its ownership) and a capitation would have to be apportioned among the states by population.

Further, after the year 1913, if an unapportioned income tax were somehow deemed to be a direct tax, it would still be constitutionally valid, even though unapportioned. Read the Sixteenth Amendment again.

IN EVERY CASE WHERE TAX PROTESTERS HAVE CHALLENGED AN UNAPPORTIONED INCOME TAX AS BEING UNCONSTITUTIONAL, THE COURTS HAVE RULED THAT THE INCOME TAX WAS CONSTITUTIONAL EVEN THOUGH UNAPPORTIONED.

[edit] Pacific Ins. Co. v. Soule

Now we come to a part that I suspect you are going to find particularly painful. Let’s look at your verbiage regarding the U.S. Supreme Court case of ‘’Pacific Ins. Co. v. Soule’’:

Back two centuries ago (!) (in the 1800s), the Supreme Court gave an excellent explanation of the way these direct and indirect taxes operate, which remains true yet today:

“The ordinary test of the difference between direct and indirect taxes is whether the tax falls ultimately on the tax-payer [the one responsible for remitting it to the government], or whether, through the tax-payer, it falls ultimately on the consumer [customer]. If it falls ultimately on the tax-payer, then it is direct in its nature, as in the case of poll taxes and land taxes [and personal property taxes]. If, on the contrary, it falls ultimately on the consumer [if the business doesn’t absorb it—the customer does], then it is an indirect tax [on the business]. Such is the test, as laid down by all writers on the subject. Adam Smith, who was the great and universally received authority on political economy, in the day when the Federal Constitution was framed, sets forth a tax on a person's revenue to be a direct tax.”—Pacific Ins. Co. v. Soule, 74 U.S. 433, 437 (1868) (Emphasis added)

The 16th Amendment changed nothing in the above statement nor did it authorize a tax on a person's revenue.

I hate to be the one to have to break the news to you, but the “quotation” you attribute to the “Supreme Court,” even going so far as to say that “the Supreme Court gave an excellent explanation of the way these direct and indirect taxes operate, which remains true yet today” – was never made by the Court. (I will assume that this was innocent on your part.)

The quoted material is a statement made by the attorney for the INSURANCE COMPANY – the LOSING PARTY in the case. This quote is not only NOT part of the Court’s ruling in the case -- it’s not even part of the Court’s dicta! It’s not even from the text of the Court’s opinion!

In some versions of the reprints of the case -- including (for example) the reprint at findlaw.com -- this material (as well as some arguments made by the attorney for the opposing side) is reprinted as introductory material -- as a headnote or syllabus -- ABOVE THE ACTUAL TEXT OF THE COURT’S OPINION. As every first year law student knows, material in the headnote or syllabus, or any other material physically printed above the opinion of the Court, is NOT PART OF THE TEXT OF THE COURT’S OPINION.

The court rejected these arguments and ruled that a tax on insurance premium revenues was an excise, not a direct tax. (The Court also quoted from prior decisions that indicated that direct taxes consist of capitations and property taxes.)

This is yet another illustration of why Wikipedia has a rule against people using Wikipedia to publish their own original research. Law is a technical subject. Your analysis of Pacific Insurance Co. v. Soule – including the fundamental mistake of citing a losing party’s argument as being a statement by the Court -- is your own original research.

Analysis of legal materials is not something that can be properly learned by reading one, or ten, or even a hundred court opinions. Tax protest arguments are based in large part on misinterpretations of materials from cases decided prior to about 1930, and the older a court case, the more difficult it is to analyze. This is not the first time people have made this mistake in reading old Supreme Court decisions. The same mistake has been made on the internet – including right here in Wikipedia – with the leading case of Lucas v. Earl, where at least one tax protester has quoted excerpts from a brief filed by the losing party (the taxpayer) and have falsely claimed that the material was from the text of the opinion of the court itself. Yes, Lucas v. Earl is yet another case where the tax protesters falsely state that the taxpayer’s argument was a winner, when in actuality the Court ruled against the taxpayer.

Finally, you complain of materials on the IRS web site and go off on another tangent. But I think we’ve had enough for now.

Wikipedia has certain rules, including Verifiability, Neutral Point of View, and No Original Research. Your material fails especially on the Verifiability and No Original Research points.

In my opinion, you have demonstrated on this talk page very compellingly the wisdom of the Wikipedia rule regarding No Original Research. Famspear 22:00, 13 January 2007 (UTC)

[edit] Comments by Brad C

What is all comes down to is understanding that direct taxes are taxes on real and personal property and they shall be apportioned according to population(Article 1, Section 2) and duties, imposts, and excises shall be uniform(Article 1, Section 8). These two sections encompass the complete power of taxation that Congress has. Why so many people still think that the 16th Amendment gave Congress some new power of taxation, I will leave it to you to draw your own conclusions. Brad C. [Brad C. posting from IP 68.17.114.3 on 10 January 2007]

The above statements by Brad C. are incorrect. First of all, direct taxes also include "capitations" (head taxes). Some tax protesters have argued that Congress does not have the power to tax incomes -- from whatever source derived -- without apportionment among the states. Congress does have that power. Read the text of the Sixteenth Amendment. Despite lots and lots of litigation by tax protesters to try to get a Federal court to rule that Congress does not have constitutional authority to tax income, including income in the form of wages, salaries and other compensation for personal services, over the years, the protesters have lost every single case. The courts have ruled unequivocally and uniformly that Congress has the power, under the Constitution as amended by the Sixteenth Amendment, to impose income taxes (including taxes on wages, etc.) without any apportionment requirement whatsoever. The Sixteenth Amendment does not say "income taxes that happen to be direct taxes" or "income taxes that happen to be indirect taxes." It says taxes on incomes from whatever source derived. Sorry. Famspear 23:34, 10 January 2007 (UTC)

Arrrrgh! I can’t sit still! Famspear’s reply to Brad C is a perfect example of the doublespeak with which the government has enforced an unconstitutional direct tax since 1913.

First and foremost, the fact that direct taxes also include head taxes is irrelevant to defining a direct tax. It is what it is regardless of what it encompasses, so Brad C’s “mistake” has no relevance to the accuracy of his statement. A direct tax includes (but is not limited to) taxes on real and personal property, so Brad C’s statement stands.

Second, the name of any tax is irrelevant to its constitutionality under Article 1 because Article 1 only involves two classes of tax and requires that all federal taxes be in either class. Famspear attempts to add relevance to the term “income,” when any tax, regardless of its name, must fall within the indirect class to be collectible within the States. The fact that “the protesters have lost every single case” is also untrue. The feds lost U.S. v. Garland in 1983 (http://query.nytimes.com/gst/fullpage.html?res=9905E4DC1039F930A25750C0A965948260), U.S. v. Kuglin in the summer of 2003 (http://www.sierratimes.com/03/08/10/ar_IRS_vs._KUGLIN.htm) , and there have been others over the years (Vivian Kellums around 1950 is another example, and I have an original copy of her book on the subject). These cases were won on the lack of willfulness, but they were won. I will agree with Famspear that the protesters have lost most of these cases, but I attribute that fact to the propensity of federal judges to not want to be blackballed by the U.S. Attorney’s office and to their lack of fealty to their oaths of office rather than to the accuracy of their decisions. Additionally, many (most) of the arguments presented were either poorly framed or not on point at all, so of course they lost. (One can ascertain the contents of the arguments by reading the court decisions in these cases.)

Third, Famspear’s statement about how the courts have ruled says nothing about the arguments that were presented. He (and I) can find a plethora of inferior court decisions (inferior refers both to the constitutional status of the courts and to some of the decisions which they have handed down) which have held that wages are income and Congress can tax income therefore Congress can tax wages. Unfortunately for Famspear and the apologists, the conclusion does not follow from the premise. On that score, wages are property (wages are money and money is property). The inferior courts use the common definition of income (“everything that comes in”) rather than its legal definition and then build decisions based on their faulty definition. The government has managed to cobble together a morass of conflicting lower court decisions based on poorly-framed arguments to keep the Constitution at bay, claiming that the Constitution allows the collection of an “income” tax while carefully steering clear of any reference to Article 1 and the fact that wages are property. Wages are not income in the constitutional sense because a tax on them is not in the indirect class, which encompasses the only taxes that the federal government is allowed to collect from within the States.

Fourth, Famspear’s claim that the 16th Amendment has powers which in fact it does not have is particularly galling because the Supreme Court has defined its powers in black and white. Read my analysis of Famspears accurate depiction of the Brushaber decision immediately above and of the Eisner Court’s statement on that same issue. The Supreme Court (as opposed to the mistaken lower courts) has never held that the federal government has the authority to collect an unapportioned direct tax from within the States. (However, the federal government can collect an unapportioned direct tax from within territory which it owns, leading to further confusion.) If Famspear has such a case (but certainly not one involving “income” in an attempt to divert attention from the central issue of the class of the tax) then let’s dissect it. If not, Brad C’s and my statement that the federal government does not have the authority to collect an unapportioned direct tax within the States remains in agreement with the law of the land. Sorry.Wixpositor 00:49, 13 January 2007 (UTC)

Famspear speaks like a lawyer. He says on his profile he is "I am an American attorney and a Certified Public Accountant with an interest in Income tax in the United States." Many people have an interest in the income tax, attorney and laymen alike. But if he is an attorney and CPA, I feel sorry for his clients. Millions of people are in jail. It does well to ask the question: How come? Brad C. January 13, 2007

Brad C, This sounds like a personal attack and is not healthy for Wikipedia. I suggest you add something more constructive to the discussion. Morphh ^(talk) 15:29, 13 January 2007 (UTC)

Dear Brad C: Millions of people are in jail? Millions of people are in jail in connection with the Federal income tax laws? Famspear 22:02, 13 January 2007 (UTC)

[edit] More response to Brad C and Wixpositor

Dear Brad C and Wixpositor: I’ll respond to your comments about my response to the comments by Brad C here. The statement I made was: “Despite lots and lots of litigation by tax protesters to try to get a Federal court to rule that Congress does not have constitutional authority to tax income, including income in the form of wages, salaries and other compensation for personal services, over the years, the protesters have lost ‘every single case’.” In case you missed it, what I was saying was that in every case where a tax protester argued that Congress does not have constitutional authority to tax income, including income in the form of wages, salaries and other compensation for personal services, the tax protesters have lost that point. No court has ever ruled in favor of a tax protester on that argument.

The fact that direct taxes also include head taxes is most certainly relevant to defining a direct tax. Your statement that “It is what it is regardless of what it encompasses”, is of course a tautology and is of course a correct statement. You are also correct when you say that a direct tax includes (but is not limited to) taxes on real and personal property. None of this changes the fact that Brad C made an incorrect statement about a definition, and I provided a correction.

Wixpositor, your statement that “any tax, regardless of its name, must fall within the indirect class to be collectible within the States” is both legally incorrect and legally frivolous. Nothing in the text of Article I states -- and no Federal court has ever ruled -- that any tax, regardless of its name, must fall within the “indirect” class to be collectible within the States.

Now let’s talk about the Kuglin, Kellums, and Garland cases – using the example of Kuglin, a case which is erroneously cited by tax protesters over and over. We are going to have to talk about some of the basics of the U.S. legal system.

You readily admit that “These cases were won on the lack of willfulness, but they were won.” You – and Carl Worden, the author of the Sierra Times article you referenced – miss the importance of that statement. Let’s look at this Carl Worden verbiage from the material you cited regarding the Kuglin case:

Now pinch yourself and review this astonishing turn of events: A highly trained and educated federal prosecutor in Memphis was unable to convince 12 American citizens that Vernice Kuglin was required to pay federal income taxes. He was clearly unable to produce a single section of the Tax Code to that end, and the jury was unanimous in clearing Kuglin of all charges against her. If the foregoing was not so, Kuglin would have been convicted.

This is a tired, old tax protester argument. Every time a tax protester (or other taxpayer) is acquitted in a criminal case, the tax protesters try to argue that this is a ruling by a court of law that “wages are not taxable,” “there is no law making me liable for a tax,” etc., etc.

Under the U.S. legal system, the general rule is that two categories of issues (questions) are determined in court. These are called “questions of fact” and “questions of law.”

Let’s look at this question: Under the Internal Revenue Code, are wages, salaries, and other forms of compensation for personal services includible in gross income -- and taxable -- for Federal income tax purposes? That is a question of law. Questions of law are decided only by a judge, not by a jury.

Let’s look at this question: Is the willful attempt in any manner to evade or defeat the assessment of any tax imposed by the Internal Revenue Code (or the attempt to evade or defeat the payment of such a tax) a felony under Internal Revenue Code? That is another question of law, to be decided by a judge, not by a jury.

One example of a question of fact would be: Did this particular taxpayer engage in an affirmative act to evade or defeat either the assessment of a Federal tax or the payment of a Federal tax, in connection with wages he or she received (actus reus)?

Another example of a fact question would be: Was this particular taxpayer aware of the existence of a law that made wages taxable for Federal income tax purposes (mens rea)?

Still another example of a fact question would be: Was any portion of the aforementioned Federal tax (for this particular taxpayer) unpaid at the time of the aforementioned actus reus and the mens rea (i.e., was there an actual tax deficiency) (attendant circumstance)?

Notice that on the question of whether this particular taxpayer was aware of the existence of a law that made wages taxable for Federal income tax purposes, the question is not whether the taxpayer agreed with the law, or agreed that it should be the law, or even believed that it really was the law. The question is whether the taxpayer was aware of the existence of the law.

Think of the situation where you are standing on a railroad track. Someone standing off to the side yells, warning you that a train is coming. You look down the track and you see the train speeding at you, and you say “No, that’s not a train, it’s just a mirage.” The fact that you do not believe that what you see is “a real train” when in fact it is a real train does not change the fact that you are aware of its existence.

In a criminal case, a “not guilty” verdict by the jury does not constitute a ruling by the court on any point of law. Again, juries determine what are called “questions of fact.” Juries do not determine questions of law, and juries render verdicts, not court judgments. No U.S. jury has ever ruled that wages are not taxable; indeed, no jury has the power to make such a ruling.

On a rare occasion, a jury may render a verdict that seems to a prosecutor or a news reporter, or maybe to you or me, to fly in the face of the facts and the law as presented to the jury. Legal scholars refer to this phenomenon as Jury nullification. Some commentators may even refer to this phenomenon as the jury “nullifying the law itself” – as applied in that particular case.

I’m sorry, but arguing that a “not guilty” verdict based on a finding of lack of willfulness in a criminal tax case is a ruling by the jury that wages are not taxable is like arguing that a “not guilty” verdict based on a finding of lack of willfulness in a murder case is a ruling by the jury that murder is not against the law.

Willfulness is one of the elements that the prosecution must prove in a criminal tax case – beyond a reasonable doubt. Under our legal system, proof in this context means PERSUASION. The jury may be persuaded that the defendant engaged in the conduct. The jury may be persuaded that a tax was owed. But if the jury is not persuaded that the defendant’s conduct was also WILLFUL, that jury is required, as instructed by the judge, to render a verdict of NOT GUILTY. Jury nullification in a particular case applies only to a verdict by a jury in that particular case. Jury nullification does not constitute a legal judgment by the court itself that the underlying law is somehow invalid, or non-existent, or wrongly applied, or wrongly interpreted, or wrongly anything else.

It is possible, but difficult, to empanel a jury of twelve people who will unanimously ignore the judge’s instructions on the law and render a “not guilty” verdict based on a belief by the members of the jury that wages are not taxable, or that wages should not be taxable. But even if that were to occur, or even if it has occurred in the Kuglin or other cases, that does not mean that wages are not taxable under the Internal Revenue Code, any more than a not guilty verdict in a murder case would mean that murder is not illegal. No Federal court has ever ruled that wages are not taxable for Federal income tax purposes.

Now, let’s look at this statement by Wixpositor:

I will agree with Famspear that the protesters have lost most of these cases, but I attribute that fact to the propensity of federal judges to not want to be blackballed by the U.S. Attorney’s office and to their lack of fealty to their oaths of office rather than to the accuracy of their decisions.

Now, let’s look at this statement by Wixpositor:

Additionally, many (most) of the arguments presented were either poorly framed or not on point at all, so of course they lost. (One can ascertain the contents of the arguments by reading the court decisions in these cases.)

And let’s look at this verbiage:

[ . . . ] wages are property (wages are money and money is property). The inferior courts use the common definition of income (“everything that comes in”) rather than its legal definition and then build decisions based on their faulty definition. The government has managed to cobble together a morass of conflicting lower court decisions based on poorly-framed arguments to keep the Constitution at bay [ . . . ]

This is another tired, old tax protester argument. Despite litigating hundreds and hundreds of these cases over the years since the mid-1970s (when tax protester arguments began showing up in reported court decisions in appreciable numbers), the tax protesters just haven’t quite gotten it right, we are led to believe. Every tax protester presumably thinks his argument, which just hasn’t been argued in just the right way, will be the one that finally breaks the spell and convinces the courts that 99.9999% of all legislators, lawyers, CPAs, judges, law professors, etc., etc., for the past umpteen years just didn’t know how to do this right, and that the tax protesters were right all along. The tax protester argument seems to be that the courts just somehow have it wrong, presumably either unintentionally (incompetence?) or intentionally (conspiracy?).

Let’s look at this statement by Wixpositor:

Wages are not income in the constitutional sense because a tax on them is not in the indirect class, which encompasses the only taxes that the federal government is allowed to collect from within the States.

Again, this statement is legally incorrect. Nothing in the text of the U.S. Constitution states that a tax on wages is “not in the indirect class.” No Federal court has ever upheld the argument that, under Article I or any other provision of the United States Constitution, a tax on wages is a direct tax. Nothing in the text of the U.S. Constitution states that taxes in the “indirect class” are “the only taxes that the federal government is allowed to collect from within the states” – and no court has ever upheld that argument. These arguments are legally frivolous.

I, Famspear, have never “claimed” that the 16th Amendment “has powers which in fact it does not have.” The law is as follows: Congress has the power to lay and collect taxes on incomes – from whatever source derived – without apportionment among the several states, and without regard to any census or enumeration. There is no “exception” in the text of the Sixteenth Amendment that applies to “direct taxes” or “taxes that happen to be red” or “taxes that happen to be blue” or any other kind of taxes. If it’s an income tax, then Congress has the power to lay and collect it – without apportionment, etc. That’s not merely my personal “belief.” That’s not my original research. You can argue about what you personally believe the Constitution means from now until doom’s day, and you can argue about what you personally believe income means, but you cannot get around the central reality that the Constitution says what it says (to use another tautology), and that under the U.S. legal system the law is what the courts rule the law is.

Now, let’s look at this language from Wixpositor:

The Supreme Court (as opposed to the mistaken lower courts) has never held that the federal government has the authority to collect an unapportioned direct tax from within the States. (However, the federal government can collect an unapportioned direct tax from within territory which it owns, leading to further confusion.)

This verbiage illustrates again the wisdom of the Wikipedia policy against “original research.” By his own admission, Wixpositor pretty much “ignores” decisions of the “mistaken lower courts.” This is code language by Wixpositor which really means: I, Wixpositor, have come up with my own theory, and the courts are wrong.

The attitude of the U.S. Supreme Court toward tax protesters is summed up in the most recent tax protester case to be decided by the Court: the ‘’Cheek’’ case. In Cheek the Court stated:

Claims that some of the provisions of the tax code are unconstitutional are submissions of a different order. They do not arise from innocent mistakes caused by the complexity of the Internal Revenue Code. Rather, they reveal full knowledge of the provisions at issue and a studied conclusion, however wrong, that those provisions are invalid and unenforceable. Thus, in this case, Cheek paid his taxes for years, but after attending various seminars and based on his own study, he concluded that the income tax laws could not constitutionally require him to pay a tax. [ . . . ] We do not believe that Congress contemplated that such a taxpayer, without risking criminal prosecution, could ignore the duties imposed upon him by the Internal Revenue Code and refuse to utilize the mechanisms provided by Congress to present his claims of invalidity to the courts and to abide by their decisions. [ . . . ] As we see it, he is in no position to claim that his good-faith belief about the validity of the Internal Revenue Code negates willfulness or provides a defense to criminal prosecution under 7201 and 7203. Of course, Cheek was free in this very case to present his claims of invalidity and have them adjudicated, but, like defendants in criminal cases in other contexts who "willfully" refuse to comply with the duties placed upon them by the law, he must take the risk of being wrong. Cheek, 498 U.S. at 205-206 (footnote omitted).

In this case, Mr. Cheek’s first conviction was actually reversed by the Supreme Court on a non-tax protester argument regarding an incorrect instruction by the judge on “willfulness” (remember my explanation about questions of law and questions of fact?), and the case was remanded for a new trial. Cheek was convicted under the corrected instruction per the holdings of the Supreme Court. His conviction was upheld on appeal. He asked for a review by the Supreme Court and – guess what – the Supreme Court let his conviction stand, by declining his petition. Mr. Cheek went to prison.

Let’s look at this statement by Wixpositor:

If not, Brad C’s and my statement that the federal government does not have the authority to collect an unapportioned direct tax within the States remains in agreement with the law of the land. Sorry.

Wixpositor, the issue – properly framed -- is whether the federal government has the authority to impose and collect an unapportioned income tax within the States. The answer that every Federal court has given – every Federal court that has decided the issue – is yes. The courts have uniformly applied that rule to taxes on lots of different kinds of income – including, especially, wages, salaries, and other forms of compensation for personal services. And each court that has considered the argument that wages cannot be taxed because the tax is “direct” has rejected that argument.

Sorry.

Verifiability, Neutral Point of View, and No Original Research. Yours, Famspear 22:05, 13 January 2007 (UTC)

[edit] Please stop making personal attacks; let us discuss substance

Dear anonymous editor at IP 129.137.3.208: Because you have made multiple personal attacks on me, even continuing your attacks after having been cautioned on your own talk page, and because you have failed to discuss your edits to the article here on the talk page for the article, I am reluctantly bringing your personal attacks to the attention of the readers of this talk page.

Your attacks began in your descriptions of your edits to the article, as follows:

“remove historical inaccuracies & anachronsims by an incompetent author”[1]

and here:

“remove historical inaccuracy by an author too incompetent to gain tenure at any university”[2].

After being cautioned in what I calculated was a reasonably diplomatic way on your own discussion page regarding your personal attacks, you posted a response on my talk page that included the following language:

“Now, if I come along and refine the entry to reflect the same language for the same issues that White considered, I shouldn't have to educate you people to overcome your ignorance, or convince you that you all are not graced with papal infallibility. Thus, it is quite appropriate to make personal attacks on those to arrogant to study the historical record, if only because a status quo based on ever laxer standards is good enough for a low-minded consensus.”[3]

You have so far declined to discuss your edits to this article here on the talk page for the article. Instead of engaging in personal attacks, please review the changes you want to make and my explanations of why, in my opinion, the changes are objectionable.

You keep changing from the following material:

This meant that, after Pollock, while income taxes on income from labor (as indirect taxes) were still not required to be apportioned by population, taxes on interest, dividends and rent income were required to be apportioned by population. The Pollock ruling made the source of the income (e.g., property versus labor, etc.) relevant in determining whether the tax imposed on that income was deemed to be "direct" (and thus required to be apportioned among the states according to population) or, alternatively, "indirect" (and thus required only to be imposed with geographical uniformity).

To this language:

This meant that, after Pollock, while taxes on the incomes of the self-employed (as indirect taxes) were still not required to be apportioned by population, taxes on interest, dividends and rental income were required to be apportioned by population. The Pollock ruling made the source of the income (e.g. who is transferring the taxable amount) relevant in determining whether the tax imposed on that income was deemed to be "direct" (upon the recipient and thereby required to be apportioned among the states according to population) or, alternatively, "indirect" (i.e. upon the originator and thereby required only to be imposed with geographical uniformity).

The term “self-employed” as used in this edit is enigmatic. In Federal tax law, the term “self-employed” has a particularized legal meaning. The term is used to describe people who work for themselves in businesses they themselves own, as opposed to “employees” (people who work for someone else in businesses someone else owns). I argue that the edit is objectionable because the cited rule applies to taxes on income from all labor, not merely self-employment labor.

The anonymous editor uses the phrase “who is transferring the taxable amount” as describing an example of the “source” of the income. That is incorrect. The term “source” as used in the Sixteenth Amendment refers to whether the income is wages, salaries, interest, dividend, rental income, and so on. It does not refer to who is paying (transferring) the income. While this may appear to be legal hair-splitting, it is legal hair-splitting that is important. I argue that there is no need to muddy the water with this kind of edit.

The anonymous user wants to change the text to say use the words “upon the recipient” in referring to the word “direct” (as in a “direct” tax). This appears to be a well-meaning but ill-advised edit -- for the following reason.

While the anonymous editor does not necessarily appear to be making blatant tax protester arguments, some tax protesters have tried to argue that a “direct tax” should be defined as a tax that falls ultimately on the taxpayer (which sounds perilously close to “the recipient” in the sense of the “recipient of the income”). The following is an example language that has been quoted in support of the tax protester argument:

The ordinary test of the difference between direct and indirect taxes, is whether the tax falls ultimately on the tax-payer, or whether, through the tax-payer, it falls ultimately on the consumer. If it falls ultimately on the tax-payer, then it is direct in its nature, as in the case of poll taxes and land taxes. If, on the contrary, it falls ultimately on the consumer, then it is an indirect tax.

Such is the test, as laid down by all writers on the subject. Adam Smith, who was the great and universally received authority on political economy, in the day when the Federal Constitution was framed, sets forth a tax on a person's revenue to be a direct tax. 5 Mill,6 Say,7 J. R. McCulloch,8 Lieber,9 among political economists, do the same in specific language. Mr. Justice Bouvier, in his learned Law Dictionary, defines a capitation tax, 'A poll tax; an imposition which is yearly laid on each person according to his estate and ability.'

The above-quoted language has been used right here on this talk page in this past few days to give the incorrect impression that this is from an opinion by the U.S. Supreme Court, when in fact it was a losing argument from a taxpayer in a Supreme Court case called Pacific Insurance Company v. Soule (see above).

Although the anonymous editor has not made a tax blatant protester argument and has not cited the Pacific Insurance case at all, I’m concerned that the kind of edit he/she proposes would, again, simply muddy the water.

The term “direct tax” as used in the Constitution (as interpreted by the courts) does not so much refer to its effect on the recipient as it simply refers to (1) property taxes imposed by reason of ownership and (2) capitations. Further, subsequent cases like Pollock reinforce this view.

The anonymous editor keeps changing from this language:

During this period from 1895 to 1913 when the Sixteenth Amendment was ratified, while Congress could have re-imposed taxes on income from labor and other non-property sources without apportionment by population, imposing taxes on interest, dividends and rent income would not have been practical (as the income from property in each state would virtually never correspond to the population of that state in relation to the population of the entire nation). The Congress was unwilling to impose an income tax on labor and other non-property sources without also imposing a tax on income from property -- and taxes on income from property were no longer realistic.

To this language:

During this period from 1895 to 1913 when the Sixteenth Amendment was ratified, while Congress could have re-imposed taxes on incomes of the self-employed and other non-property sources without apportionment by population, imposing taxes on interest, dividends and rental income would not have been practical (as the income from property in each state would virtually never correspond to the population of that state in relation to the population of the entire nation). The Congress was unwilling to impose an income tax on the self-employed and other non-property sources without also imposing a tax on income on property owners--and taxes on income from property were no longer realistic.

Again, the change to the term “self-employed” is incorrect in the sense that it is too limited. The phrases “income from labor” or “income realized in the performance of personal services” would be more accurate here.

The anonymous editor changes from this:

Until the ratification of the Sixteenth Amendment, all direct taxes were required to be apportioned among the states according to each state's population

To this:

Until the ratification of the Sixteenth Amendment, all taxes direct in substance but indirect in form were required to be apportioned among the states according to each state's population, per Article I, section 2, clause 3 and Article I, section 9, clause 4.

Again, while the amended language is correct as far as it goes, it does not go far enough. It would be more correct to say “all direct taxes were required to be apportioned,” or, if you like, “all direct taxes and all indirect taxes treated as direct taxes.”

It’s important to note that some of these edits by the anonymous user are not completely incorrect. I argue that the edits are just incorrect enough to be misleading.

I would appreciate any comments from anyone. Yours, Famspear 07:16, 15 January 2007 (UTC)

As a post-script, here is the entire message that was posted over the weekend on my own talk page. The material did not mention the Sixteenth Amendment article by name, but obviously was related to the article:

I'm a diff't anon user, one who is questioning the use of language that does not reflect the meaning at the time.

The article could be much more specific in terminology.

As it stands, it employs stereotypical usages which trivialise the issues.

The Pollock case is best explained in the Brushaber decision, which was written by Justice White who wrote the minority opinion in Pollock.

He explictly wrote that Congress had the income tax act collect the tax at source as required for any excise.

This requirement has been upheld by every revisit of the matter, such as Gurley v. Rhoden.

White knows better than anyone alive today. He did not mention wages as an item of taxable income.

The original 1040 for 1913 implemented exactly what Congress intended to achieve with the 16th.

You can read it at the irs.gov site, and see that it does not include wages as taxable income.

The 1040 spanning 3 decades until WWII did not tax wages, and so was not an issue in 1913.

The onus is on you to prove that Justice White did not consider 'substance' to be an issue.

Do you internet people have the intellectual honesty to admit that it was, or the diligence to study the decisions cited?

His decision explictly states that the Pollock court acted as if it was their duty to disregard form and consider substance alone:

http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=US&vol=240&invol=1#17

Thus, it was an issue whether the tax was indirect in form but direct in substance.

Now, if I come along and refine the entry to reflect the same language for the same issues that White considered, I shouldn't have to educate you people to overcome your ignorance, or convince you that you all are not graced with papal infallibility.

Thus, it is quite appropriate to make personal attacks on those too arrogant to study the historical record, if only because a status quo based on ever laxer standards is good enough for a low-minded consensus.

That is what keeps Newton's flawed theory of gravity as a Law, and prevents Einstein's theory from becoming one, despite repeated observations bearing out its most outlandish aspects.

More on all this later. Yours, Famspear 15:15, 15 January 2007 (UTC)

OK, to continue: The material copied from my user page is, unfortunately, legally frivolous tax protester rhetoric. When viewing the edits in light of this material, I argue that it is obvious that this anonymous editor is trying to insert his/her original research - original research which is both unverifiable and incorrect.

The incomplete citation to "Gurley v. Rhoden" apparently is meant to refer to the U.S. Supreme Court decision in Gurley v. Rhoden, 421 U.S. 200 (1975). This case involved the issue of whether the denial of the deduction of the Mississippi and federal gasoline excise taxes in computing the gross proceeds of retail sales for purposes of the Mississippi sales tax was constitutional. The Court ruled that it was not unconstitutional. No issues involving the taxation of income of any kind whatsoever for Federal income tax purposes were presented to or decided by the Court. The words "wage," "wages," "salary," or "salaries, "employment," and "self-employment" do not even appear in the text.

Regarding Form 1040, the anonymous editor is quite wrong. At the expense of pointing out what is obvious to legal practitioners, but which is not obvious to the average reader, a tax form -- such as Form 1040 -- while certainly an official form, is not "the law." More importantly, the statement that the "1040 spanning 3 decades until WWII did not tax wages" is false. No Form 1040 for any year (1913 or otherwise) has ever provided a legal exclusion that would allow wage income to go untaxed.

This kind of material has been covered over and over again on the talk pages of Wikipedia. Rather than repeat the authorities already listed, I will add an excerpt from another case, just for some relief. The following is an excerpt from the opinion of the United States Court of Appeals for the Fifth Circuit in a case called Parker v. Commissioner, where as usual a taxpayer argued unsuccessfully that wages were not taxable:

Parker [the taxpayer] maintains that "the IRS and the government in general, including the judiciary, mistakenly interpret the sixteenth amendment as allowing a direct tax on property (wages, salaries, commissions, etc.) without apportionment." As we observed in Lonsdale v. CIR, 661 F. 2d 71 (5th Cir. 1981), the sixteenth amendment was enacted for the express purpose of providing for a direct income tax. The thirty words of this amendment are explicit: "The Congress shall have power to lay and collect taxes on income, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration." The Supreme Court promptly determined in Brushaber v. Union Pacific Ry. Co., 240 U. S. 1, 36 S. Ct. 236, 60 L. Ed. 493 (1916), that the sixteenth amendment provided the needed constitutional muster for the imposition of a direct non-apportioned income tax.

Appellant cites Brushaber and Stanton v. Baltic Mining Co., 240 U. S. 103, 36 S. Ct. 278, 60 L. Ed. 546 (1916), for the proposition that the sixteenth amendment does not give Congress the power to levy an income tax. This proposition is only partially correct, and in its critical aspect, is incorrect. In its early consideration of the sixteenth amendment the Court recognized that the amendment does not bestow the taxing power. The bestowal of such authority is not necessary, for as the Court pointedly noted in Brushaber:

The authority conferred upon Congress by §8 of article 1 "to lay and collect taxes, duties, imposts and excises" is exhaustive and embraces every conceivable power of taxation has never been questioned, or, if it has, has been so often authoritatively declared as to render it necessary only to state the doctrine. And it has also never been questioned from the foundation . . . that there was authority given . . . to lay and collect income taxes.

240 U. S. at 12-13, 36 S. Ct. at 239-240.

The sixteenth amendment merely eliminates the requirement that the direct income tax be apportioned among the states. The immediate recognition of the validity of the sixteenth amendment continues in an unbroken line. See e.g. United States v. McCarty, 665 F. 2d 596 (5 Cir. 1982); Lonsdale v. CIR.

Appellant cites Flint v. Stone Tracy Co., 220 U. S. 107, 31 S. Ct. 342, 55 L. Ed. 389 (1911), in support of his contention that the income tax is an excise tax applicable only against special privileges, such as the privilege of conducting a business, and is not assessable against income in general. Appellant twice errs. Flint did not address personal income tax; it was concerned with corporate taxation. Furthermore, Flint is pre-sixteenth amendment and must be read in that light. At this late date, it seems incredible that we would again be required to hold that the Constitution, as amended, empowers the Congress to levy an income tax against any source of income, without the need to apportion the tax equally among the states, or to classify it as an excise tax applicable to specific categories of activities.

[ . . . ]

The absence of a semblance of merit in any issue raised in appellant's appeal mandates a repeat of the warning we gave in Lonsdale v. CIR, 661 F. 2d at 72, concerning the very claims raised in this case:

Appellants' contentions are stale ones, long settled against them. As such they are frivolous. Bending over backwards, in indulgence of appellants' pro se status, we today forbear the sanctions of Rule 38, Fed. R. App. P. We publish this opinion as notice to future litigants that the continued advancing of these long-defunct arguments invite such sanctions, however.

Our warning has been ignored. We now invoke the sanctions of Fed. R. App. P. 38 and assess appellant with double costs. This time we do not award damages but sound a cautionary note to those who would persistently raise arguments against the income tax which have been put to rest for years. The full range of sanctions in Rule 38 shall hereafter be summoned in response to a totally frivolous appeal.

--Parker v. Commissioner, 724 F.2d 469, 84-1 U.S. Tax Cas. (CCH) paragr. 9209 (5th Cir. 1984).

Neither the Pollock court, nor the Brushaber court, nor any other Federal court has ever ruled that wages are not taxable for Federal income tax purposes. This anonymous user's arguments constitute legally frivolous, repeatedly rejected, erroneous arguments. Verifiability, Neutral Point of View, No Original Research, and No Personal Attacks. Yours, Famspear 16:11, 15 January 2007 (UTC)

[edit] Hey, let's read the 1913 Form 1040

Dear readers: Here's another comment about the phony claim about Form 1040 by the anonymous user at IP 129.137.3.208:

"The original 1040 for 1913 implemented exactly what Congress intended to achieve with the 16th. You can read it at the irs.gov site, and see that it does not include wages as taxable income."

I agree that the original Form 1040 for 1913 "implemented exactly what Congress intended," etc. You see, I have a copy of the form. Although the copy of the 1913 Form 1040 at the IRS web site does not appear to want to load up properly on my computer at the moment, readers can find the form at other web sites by doing a google search.

The 1913 Form 1040 is a three page form, plus instructions. Page 1, line 1 clearly states: "Gross income (see page 2, line 12)." Line 12 on page 2 is the "total" line for page 2.

The very first line for the various kinds of taxable income on page 2, under "DESCRIPTION OF INCOME," is "Total amount derived from salaries, wages, or compensation for personal service of whatever kind and in whatever form paid" (bolding added).

Are we starting to see a trend here with the material provided by the user at IP 129.137.3.208? Falsely citing "Gurley v. Rhoden" for an argument about the validity of the Federal income tax on wages -- when the case did not even involve Federal income tax, much less taxation of wages. A false claim that the 1913 Form 1040 "does not include wages as taxable income" when it clearly does. Does IP129.137.3.208 think that nobody can check this kind of stuff?

Dear IP 129.137.3.208 -- please do not falsely cite IRS tax forms unless you want to be called on it -- or you enjoy being exposed.

Hint #1: Lots of tax practitioners have ready internet access to all the statutes, regulations and court decisions on taxation since the year 1913. Further, all the decisions before 1913 are available at the library of any law school. Do not cite court decisions that you don't want other people to check.

Hint #2: Lots of tax practitioners keep clean copies of the IRS forms and instructions going back for many years. We need them for our work. Yours, Famspear 19:17, 15 January 2007 (UTC)

[edit] Income under the Constitution versus wages for purposes of statutory tax withholding

An anonymous editor at IP 198.153.17.188 inserted a fragment from the definition of wages from 26 U.S.C. § 3401 -- in the section discussing income under the U.S. Constitution. The edit as inserted by the anon resulted in an incorrect definition of income.

The term "wage" as used in section 3401 refers to "wage" (or salary or other compensation for personal services) for purposes of the tax withholding requirements. That is not necessarily the same as the definition of "wage" for purposes of 26 U.S.C. § 61 (i.e., relating to the issue of what is a "wage" for purposes of the Federal income tax itself under 26 U.S.C. § 1. More importantly, the term "income" as discussed in the article refers to income under the Constitution, which may be a broader definition than that for income under some provision of the Internal Revenue Code such as section 61 or section 3401. Yours, Famspear 21:29, 24 January 2007 (UTC)

[edit] Naming conventions in case law citations

An anonymous editor changed the abbreviated references to the Pollock case from "Pollock" to "Farmers' Loan." In citing U.S. case law regarding Federal taxation, the convention is to cite the first listed party (in this case, Mr. Pollock) unless the first listed party happens to be the Collector of Internal Revenue, the Commissioner of Internal Revenue, etc. In this case, Pollock was a private citizen, so in abbreviated citations, you would normally cite the case as Pollock and not as Farmers' Loan. I therefore reverted the edits. Yours, Famspear 18:04, 4 February 2007 (UTC)

OK, I see that editor Mateo SA has already corrected this. Yours, Famspear 18:06, 4 February 2007 (UTC)

[edit] I was thinking of adding something, but...

I was thinking of adding to the article and was amazed to find the controversies being played out here. Now I'm having second thoughts. Suprisingly, the topic I was interested in including my have some relevance to the argument. Here it is...

One very important landmark tax decision not discussed here by either side of the discussion is Hylton vs US, 3 US 171 (1796).

[http://caselaw.lp.findlaw.com/scripts/getcase.pl?navby=CASE&court=US&vol=3&page=171 ]

This case is important for two reasons. It clarifies, for the first time, the ill-defined terms in the taxation sections of Article 1 of the US constitution. Secondly, Alexander Hamilton and Chief Justice Paterson are participants who were both "framers" of the 2-year old constitution; they should know what they are talking about with regards to original intent.

From Hylton vs US...

"...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. I doubt whether a tax, by a general assessment of personal property, within the United States, is included within the term direct tax".

Emphasis is in the orginal, not my own.

This ingenuously omits the words "I am inclined to think" with which the sentence begins; why should we quote dictum? Septentrionalis PMAnderson 19:47, 9 February 2007 (UTC)

Statements made in this discussion that property taxes were considered a direct tax by the framers of the constitution conflict with this very clear statement. Next, from Justice Paterson's opinion...

"It was, however, obviously the intention of the framers of the Constitution, that Congress should possess full power over every species of taxable property, except exports. The term taxes, is generical, and was made use of to vest in Congress plenary authority in all cases of taxation. The general division of taxes is into direct and indirect. Although the latter term is not to be found in the Constitution, yet the former necessarily implies it. Indirect stands opposed to direct. There may, perhaps, be an indirect tax on a particular article, that cannot be comprehended within the description of duties, or imposts, or excises; in such case it will be comprised under the general denomination of taxes. For the term tax is the genus, and includes,
1. Direct taxes.
2. Duties, imposts, and excises.
3. All other classes of an indirect kind, and not within any of the classifications enumerated under the preceding heads.
The question occurs, how is such tax to be laid, uniformly or apportionately? The rule of uniformity will apply, because it is an indirect tax, and direct taxes only are to be apportioned. What are direct taxes within the meaning of the Constitution? The Constitution declares, that a capitation tax is a direct tax; and, both in theory and practice, a tax on land is deemed to be a direct tax. In this way, the terms direct taxes, and capitation and other direct tax, are satisfied."

So there are, in fact three types of taxes discernable in the US constitution, as intended by its original framers. Tax on carriages, which is under consideration in the Hylton case, is a tax on property and falls into category 3. Therefore, it should be uniformly laid since that is the most equitable in practice. The Hylton vs. US decision contains other very interesting points as well. It clearly explains why the direct tax provision was included in the first place; to satisfy Southern states with large acreages and low populations. It also states, with amazing prescience, that carriage taxes and all other taxes on property are really just ways of taxing an individual's income which was impractical at that time. Justice Paterson, an original Constitutional Convention member, says this explicitly in 1796!

Not amazingly prescient at all; read Adam Smith on the window tax (and he was adopting the conventional wisdom of his time, twenty years before) . Septentrionalis PMAnderson 19:41, 9 February 2007 (UTC)

I think a brief description of the Hylton case in the "Treatment of income taxes prior to the Pollock case" section would be helpful. Furthermore, in Hylton vs. US the Supreme Court states, "It is not necessary to determine, whether a tax on the product of land be a direct or indirect tax" which the Pollock decision directly contradicts. Congress never needed the 16th Amendment to lay unapportioned taxes other than poll or land taxes prior to Pollock because, in Hylton vs US, delivered only two years after the Constitution, the Supreme Court (including "framers") said it already could according to Article 1. It seems pretty clear to me, but then I'm an amatuer, not a lawyer. Does anyone here have a more authoritative opinion? --Riromero 19:34, 9 February 2007 (UTC)

To Septentrionalis: Thanks for claiming I could do something ingenious. The partial quote seemed more succinct. Both Justices say that direct taxes are poll taxes and taxes on land. Does my omission somehow change this conclusion? And it was prescient, in my opinion, to include in the decision a comprehensive statement on taxes, including taxes on incomes, which no one was proposing at the time, but which might prove relevant hundreds of years later. --Riromero 20:10, 9 February 2007 (UTC)

I said ingenuous; and Riromero might benefit from reading the article obiter dictum. Septentrionalis PMAnderson 02:58, 10 February 2007 (UTC)

I'm not trying to make an ironclad legal argument to a judge in court. I'm trying to devine the intent of the original framers of the constitution regarding taxation issues from words that they wrote on the subject in court a scant two years after the fact. Does the weakness implied in Obiter Dictum rule this out? --[Riromero] 03:17, 10 February 2007 (UTC)

• WP:NOR rules this out; if it did not, you might consider that excessive weight should not be put on a claim that Paterson himself marked as tentative. Septentrionalis PMAnderson 03:32, 10 February 2007 (UTC)

Let me start again... I'm not interested in deciding whether income taxes are legal or not. I'm mostly interested in the history of taxation in the USA. This fine article on the Sixteenth Amendment jumps straight from the US Constitution to the Pollock case, stating simply that income taxes were considered excise taxes, not direct taxes, previously. Why this was true isn't exactly clear (from the article) since the Constitution doesn't stipulate the classification conditions. I've also seen it stated that direct taxes are "taxes on personal property by virtue of ownership". Which brings us to the Hylton case. Congress had imposed a tax on carriages; a fee of 16 dollars was to be paid for each carriage owned. This was a tax on personal property by virtue of ownership. Mr. Hylton, who owned 125 carriages for his personal use (not for hire), claimed this was a direct tax and unconstitutional unless apportioned. The US Supreme Court said no, it was not a direct tax. When the constitution was written, they say, direct taxes were meant to be poll taxes and taxes on land. If there were other types of direct taxes they would be classified as direct solely upon the basis of whether it is fair and just to apportion them. As far as I know, this definition of a direct tax stands up till the Pollock case. In fact, even in the Pollard case the Supreme Court is still saying that it is the "land" component that makes "land income" a direct tax. I think a reference to the Hylton case would be a useful addition to the article and helpful for people interested in this fascinating subject.

Now concerning this discussion... I see claims made above regarding the US Constitution and the intent of the original framers. If one reads the Hylton vs. United States ruling, written by individuals who attended the Constitutional Convention, it is very difficult to believe in (regardless of what could be proven in court) at least half of the 11+1 points nailed to the discussion by Wixpositor above, much less the more simplistic claims of less sophisticated tax protesters. I must emphasize that I'm not advocating including Hylton vs. US in the article because it offers any kind of legal proof whatsoever of the validity of income tax laws. I'll leave that entire argument to others. --Riromero 22:04, 16 February 2007 (UTC)

Dear Riromero: Stay tuned; I will try to address some of your points. I'm not sure whether an expansion including a description of Hylton would go here or, alternatively, in the article on direct taxes, or indirect taxes, or whatever. This may take a while, as I am in the middle of tax season myself. Yours, Famspear 22:21, 16 February 2007 (UTC)

Famspear: Thank you. Going back over my notes, I see that The Income Tax and the Sixteenth Amendment (in Notes) Harvard Law Review, Vol. 29, No. 5. (Mar., 1916), pp. 536-538. was my original reference and a nice three page summary of the pre-Pollock tax issues, if it helps. --Riromero 18:13, 23 February 2007 (UTC)

Dear Riromero: OK, and maybe I can find a copy of that law review article some time. Yours, Famspear 03:22, 24 February 2007 (UTC)

[edit] "the constitution is stupid"...?

Under the first paragraph of the Background section, I can read this single line phrase "the constitution is stupid". When clicking the "edit" button, this text appears nowhere. Is this a case of a deferred amendment or some bizarro bug in wikipedia? Has the wiki been hacked? —The preceding unsigned comment was added by 86.149.162.10 (talk) 19:46, 11 February 2007 (UTC).

Dear user at IP 86.149.162.10: I have checked and I don't see it on my version. However, I have encountered problems somewhat similar to this in Wikipedia. Sometimes if you clear out your cache in your web browser, it solves the problem. Other times it doesn't. I'm not enough of a "computer person" to know exactly what's going on.

I will check and see if the verbiage is found in an earlier version of the article. I'll be back... Yours, Famspear 19:50, 11 February 2007 (UTC)

OK, I found the verbiage in an edit on 8 February 2007 by a user at IP 204.196.180.12, located here: [4]. However, I don't understand why it would still be showing up on the latest version shown on your computer. Maybe there is a computer tekkie around who can tell us. (?) Yours, Famspear 19:54, 11 February 2007 (UTC)

[edit] Someone on raticftaction

Has every state done so? It is still good law because we only need 3/415:07, 12 February 2007 (UTC) Chivista 15:08, 12 February 2007 (UTC)

[edit] Ratification dates

I posted the section with complete ratification dates, but someone quickly changed a few of the dates citing the United States Government Printing Office [5]. However, just about every other source I've found online, including the US House of Representatives [6] and Lexis Nexus [7], all have different dates for the following states: Montana, South Dakota, Kansas, Arizona, and Wisconsin. Anybody know why? --CapitalR 06:37, 25 February 2007 (UTC)

• Note, I'm leaving the dates as they were changed by the other user, as listed in the US Government Printing Office site. If someone finds that the dates are incorrect, please do update them. --CapitalR

And I'll try to do some further checking on these differences. Stay tuned. Famspear 00:03, 26 February 2007 (UTC)

[edit] Clarification of Brushaber

Hello. I'm new to wiki so forgive me for editing before discussing here.

I will list a few points below of changes i feel would enhance the understanding of this difficult subject.

I believe some weight should be given to the differing views of the courts on whether the income tax is a direct or indirect tax and whether wages should considered to be property or not. I also believe some clarification need to be made about the Brushaber case. Specifically the judgement that the 16th amendment did not allow any new powers to the congress and did not come in conflict with the relevant sections in the constitution(ie a direct tax still must be apportioned) but simply clarified that the income tax which was considered an indirect tax before the Pollock case was to be considered an indirect tax once again. Atleast this is my understanding of the matter.

Additionally the "tax protestor" section could use some additional info and the subject of that text might be changed to something to the effect of "dissenting opinions" or similar. —The preceding unsigned comment was added by Pokeraddict (talk • contribs) 06:52, 18 March 2007 (UTC).

Dear Pokeraddict: I would argue that the section on tax protester arguments actually needs to be reduced, not expanded. This article is about the Sixteenth Amendment. The Brushaber case has its own article. And the tax protester arguments about the Sixteenth Amendment are already found in the article Tax protester constitutional arguments. A decision was apparently made, possibly before I began editing here, that tax protester arguments should be confined to articles dedicated to that topic. In my view that was an excellent decision. Here's why.

From time to time, people pushing tax protester point of view attempt to add tax protester material to various Wikipedia tax articles, perhaps not realizing that the topics are already being covered in articles on tax protester arguments. This tends to lead to both fragmentation and duplication of material throughout Wikipedia. As the duplication increases among various articles, the tax protester material tends to be moved (from tax articles like this one on the Sixteenth Amendment) to the relevant tax protester articles.

Regarding differing views of the courts on whether the income tax is a direct or indirect tax, I think this is already covered, either in the Pollock article or the Brushaber article or the article on the constitutional tax protester arguments.

Regarding the issue of whether wages should considered to be property or not, from a tax law standpoint it's irrelevant to the taxation of wages. And that is already covered in depth in one of the tax protester articles (either Tax protester constitutional arguments or Tax protester statutory arguments) with extensive citations to court decisions.

The Court in Brushaber and other cases has stated over and over that the Sixteenth Amendment did not create any new Congressional power of taxation. The problem for tax protesters is that they keep trying to argue that the Court is saying here that Congress has no power to tax incomes. That is incorrect. The Court is saying that the Amendment created no new power of taxation. No Federal court has ever stated that the Congress has no power to tax incomes. Even in Pollock, the Court did not say that. Indeed, every Federal court decision on this has stated that Congress does have the power to tax incomes, from whatever source derived. Protesters have made a gazillion arguments, for example, that Congress cannot tax wages under the Constitution, etc., and in every single case the courts have rejected that argument. No Federal court in the history of the United States has ever ruled that wages are non-taxable for Federal income tax purposes.

It is correct to say that ALL income taxes were considered to be excises (indirect taxes) before the Pollock case. Pollock changed this rule ONLY with respect to taxes on income from property. The Court in Pollock ruled that taxes on income from property (taxes on interest, dividends, and rents) were to be treated as direct taxes). The Pollock court did not change the rule that all other income taxes (including but not limited to taxes on wages) were still considered indirect taxes.

What the Brushaber Court essentially stated was that the Sixteenth Amendment changed the Pollock rule (overruling Pollock), so that taxes on income from property were again treated as indirect taxes. There was no need to interpret the Amendment as creating a "new" power of taxation, as Congress had always had the power to tax incomes from property, from wages, from whatever.

The point is that the only reason the taxes on income from property had been ruled unconstitutional in Pollock was that they had not been apportioned. Since they were treated as direct taxes, they were required to be apportioned. Had they been apportioned, they would not have been unconstitutional.

Tax protesters constantly misunderstand the Amendment and cases like Pollock and Bushaber and Stanton because they are trying to figure out a way to make income taxes unconstitutional. Income taxes on wages have never been unconstitutional and income taxes on wages have never been apportioned and have never been required to be apportioned.

Contrary to what tax protesters have argued, nothing in the U.S. Constitution either before or after the Sixteenth Amendment has ever prohibited direct taxes. No Federal court has ever ruled that direct taxes are prohibited. The only restriction on direct taxes is that direct taxes must be apportioned, so that the dollar amount of tax collected from the people of each state must be proportional to that state's population in relation to the population of the nation.

The Pollock case and the Sixteenth Amendment are specifically about the effect of the apportionment rule on the Congressional power to impose income taxes - not about the general power of Congress to impose income taxes. The Sixteenth Amendment states that Congress has the power to tax incomes from whatever source, without apportionment, and without regard to any census or enumeration. This is the terrible legal reality that tax protesters cannot overcome.

I would suggest that you carefully review the following articles:

Stare decisis

Obiter dictum

Tax protester constitutional arguments

Tax protester statutory arguments

Tax protester conspiracy arguments

Tax protester history

Yours, Famspear 15:00, 18 March 2007 (UTC)

I would argue that a better historical context on the matter would deepen the understaning and importance of the interpretations of the 16th amendment.

Yes the Pollock and Brushaber case give a good historical overview of what was happening around the time of the ratification(although I believe the text in the Brushaber section can be clarified slightly in regards to the interpretation that income tax is an indirect tax.)

However much has happened since then and it seems the judgement in Brushaber and by extension the 16th amendment has in some cases been misinterpreted to mean that it makes a direct tax which is not apportioned legal when it in fact clearly states that it gives no new powers but simply says that an income tax is an indirect tax. I'm not suggesting listing every conceivable case of any significance since then obviously but I believe a short explanation of differing opinions could be beneficial.

I agree with your view that Brushaber made it clear that congress could impose an indirect income tax. However I'm not sure I agree with you that tax protestors are necessarily disagreeing with that. Today different courts have different interpretations of what the income tax is. If federal court A holds that the income tax is a direct one which is supposed to be illegal while state court B believe it's an indirect law it appears atleast for the uninitiated that this could be a serious problem and basis for these claims that the income tax is illegal.

You might be right that it is irrelevant whether income is property or not. can owned property be taxed indirectly?

--Pokeraddict 17:00, 18 March 2007 (UTC)

Dear Pokeraddict: The three holdings in Brushaber are already clearly stated in the article.

The main points of the whole discussion about income taxes, especially as related to the original text of Article I, the text of the Amendment, and the various Federal court decisions down through the years, are as follows:

1. The question of whether a particular income tax is direct or indirect is legally irrelevant to the question of whether the Congress has the power, under the U.S. Constitution as amended by the Sixteenth Amendment, to impose that tax. Congress has the power to impose any income tax, regardless of whether that tax is deemed direct or indirect.

2. The question of whether a particular income tax is direct or indirect is also legally irrelevant to the issue of whether that tax must be apportioned. After the Sixteenth Amendment, no income tax of any kind whatsoever, whether direct or indirect, is required to be apportioned.

3. Under the Constitution as amended, the only important legal relevancy to the question of whether a particular income tax is Constitutionally valid (aside from rules such as the one prohibiting taxes on exports, or rules that revenue measures must originate in the House, etc.) is probably whether that income tax is imposed with what the law refers to as geographical uniformity. That is, an income tax cannot be imposed on, say, just the incomes of people who happen to reside in New York and Montana.

Just to be clear, nothing in the U.S. Constitution (either before or after the Amendment) says that Congress cannot validly impose a direct income tax or an indirect income tax. And no Federal court has ever ruled that Congress cannot validly impose a direct income tax -- or an indirect income tax. The only restrictions were basically (1) the apportionment restriction (and that one applied only to those particular income taxes that happened to be direct taxes - namely taxes on interest, dividends, and rent), and (2) the uniformity restriction. The apportionment restriction was removed by the Amendment, leaving just the uniformity restriction. And no Federal income tax has ever been imposed on, say, just the residents of New York and Montana.

Stay tuned. Yours, Famspear 18:23, 18 March 2007 (UTC)

Post-script: I should add that as far as what tax protesters argue about the income tax, the arguments are all over the map. The protesters cannot agree among themselves. And all the tax protester arguments are legally invalid. Further, all the arguments are legally frivolous, as the courts have so ruled over and over.

Let's look at some of the arguments.

Some protesters argue that the "income tax is a direct tax", and that Congress somehow cannot validly impose direct taxes. That is blatantly incorrect, for two reasons. First, Congress can indeed validly impose any direct tax; the Constitution specifically allows for imposition of direct taxes, and there is absolutely no limitation whatsoever in the text of the Constitution (either before or after the Amendment) as to what kind of direct taxes (property tax, capitation, income tax, whatever). Second, the statement that the "income tax is a direct tax" is legally meaningless. Which income tax is a direct tax? Taxes on income from personal services (such as wages, salaries, etc.) have always been categorized as indirect taxes (even by the Pollock case). Taxes on income from property also were always categorized as indirect taxes -- except under the Pollock line of cases. And the effect of the 1895 decisions in Pollock for taxes on income from property was overturned by the Sixteenth Amendment in 1913, so the Pollock treatment of taxes on income from property has been legally moot since 1913.

Other tax protesters argue that the income tax is an indirect tax, and is somehow unconstitutional for that reason. That argument is just as incorrect and, to put it bluntly, even more bizarre. If all income taxes are excises (indirect taxes) then you have no chance of getting those income taxes ruled invalid on the grounds of non-apportionment, as the apportionment/non-apportionment rule does not apply to indirect taxes at all. The limitation on indirect taxes is the geographical uniformity rule. As far as I know, even the most deluded, crazed tax protesters have never argued that income taxes are not imposed with geographical uniformity (e.g., are imposed only in New York and Montana, or whatever). If anything, their complaint is that the income tax is being imposed uniformly. (You may be familiar, for example, with the bizarre argument that the income tax should somehow be invalid because it could only be imposed in the District of Columbia or Puerto Rico, etc., and not within the "fifty states" -- a completely laughable argument, and one that is totally legally frivolous.)

Still other protesters take a middle ground of sorts -- but they immediately sink into what is legal quicksand, just the same. They argue that, well, the income tax is a direct tax and that the Sixteenth Amendment does not really mean what it says, and that the Sixteenth Amendment cannot change the legal effect of the original text of Article I regarding apportionment, and that income taxes, as direct taxes, must still be apportioned even though the Sixteenth Amendment clearly states that income taxes do not have to be apportioned, and since the income taxes are not apportioned, the income taxes must somehow be invalid. This argument is completely off the wall. First, the idea that a constitutional amendment cannot change, repeal, partially repeal, amend, modify, or affect the application of a provision of Article I is completely without legal merit. Every single Federal court, from and including the Supreme Court in Brushaber on down to the present day, has upheld every single income tax statute since 1913 where that statute has been challenged under the -- again, to put it bluntly -- doofus theory that the Sixteenth Amendment somehow cannot change the application of Article I with respect to the apportionment of income taxes. Tax protesters love to quote certain language from Brushaber and similar cases about irreconcilable conflicts, etc., but then the protesters not only take that language out of context and try to put their own interpretation on that language, they also ignore the holdings, the rulings in Brushaber and all the other cases. In every single case since 1913 where an income tax was challenged as being unconstitutional because it was not apportioned (and, by the way, no Federal income tax has ever been apportioned), the income tax was upheld as Constitutional. A few income taxes were ruled unconstitutional, but for entirely different reasons that are no longer legally viable.

No court has ever ruled the income tax imposed under the Internal Revenue Code of 1986 to be unconstitutional on the ground that the tax was unapportioned, or on the ground that Congress cannot impose a "direct tax," or on the ground that Congress cannot impose an "indirect tax," or on any other similarly silly theory. Yours, Famspear 20:41, 18 March 2007 (UTC)

Hello,

You assert that the 16th amendment made it possible to impose a direct income tax that did not comply with the rule of apportionment. Could you cite a case where they make this conclusion? It is my opinion that the case Brushaber v. Union Pacific clearly states that this is not the case, in fact it is the court's opinion that an income tax is to be considered an indirect tax. I will give a brief basis for my view pn this below.

In the time before the Pollock case a taxation on property because of ownership was viewed to be a direct tax and therefore had to be apportioned. other kinds of taxes, including income taxes, which where not imposed on property because of ownership where considered to be indirect taxes which should comply with the rule of uniformity.

"Upon the lapsing of a considerable period after the repeal of the income tax laws referred to, in 1894 [28 Stat. at L. 509, chap. 349], an act was passed laying a tax on incomes from all classes of property and other sources of revenue which was not apportioned, and which therefore was of course assumed to come within the classification of excises, duties, and imposts which were subject to the rule of uniformity, but not to the rule of apportionment. The constitutional validity of this law was challenged on the ground that it did not fall within the class of excises, duties, and imposts, [240 U.S. 1, 16] but was direct in the constitutional sense, and was therefore void for want of apportionment, and that question came to this court and was passed upon in Pollock v. Farmers' Loan & T. Co."

Pollock v. Farmers' Loan & T. Co

the court held that indirect taxes which where based on the income of property owned where unconstitutional in substance on the basis that to impose such a tax would for all intents and purposes be to tax the property itself without the need for apportionment, something that could not have been the intent of the constitution. Therefore these specific taxes where to be treated as direct taxes subject to the law of apportionment.

Brushaber v. Union Pacific

The court judged that the 16th amendment where to be interpreted as to do away with the decision in Pollock and put all income taxes, from whatever source derived, back into the excise class to which it belonged and therefore be subject to the law of geographical uniformity. It was not the view of the court that the 16th amendment gave the right to impose a direct unapportioned income tax nor do I believe it was decided that an income tax could be taxed directly even if apportioned since a direct tax was only imposed on property because of ownership. —The preceding unsigned comment was added by Pokeraddict (talk • contribs). (on 20 March 2007)

Dear Pokeraddict: It sounds like you and I may be pretty much in agreement on some major issues. Here's what I mean.

The language in cases like Brushaber has two characteristics which make it difficult to follow. First, the language is archaic, to the point of being in some places actually ungrammatical by 21st Century standards. Second, the language is circumlocutory. That is, the Court states things in roundabout ways, where more direct statements would be more helpful.

There are two possible ways to read Brushaber and the other cases after it that interpret the Sixteenth Amendment. Both ways, however, bring you to the same result from a legal standpoint.

Alternative A: One way is to say that the Sixteenth Amendment did not change the part of the Pollock ruling that held that taxes on income from property (taxes on interest, dividends, etc.) should be treated as being direct taxes in substance.

Alternative B: The other way is to say that the Amendment did change that ruling, and that the Amendment put those income taxes back in the category of excises (indirect taxes) -- i.e., put those taxes back in the category of taxes not required to be apportioned.

Under Alternative A, one would say that "the language of the Amendment doesn't care," essentially, whether a particular income tax was considered a direct tax by the Court in Pollock. And essentially, from a legal standpoint, that would be correct. Here's why.

The amendment says that Congress shall have power to impose taxes on incomes, from whatever source derived, without having to apportion the taxes among the states, etc., etc. There is absolutely no limitation in this language regarding which kinds of income taxes are covered by the amendment. The amendment does not say "income taxes that happened to be considered direct taxes in the Pollock decisions." The amendment does not say "income taxes that happened to be considered indirect taxes in the Pollock decisions." The amendment does not say "income taxes that happen to be taxes your grandmother has to pay." The amendment does not say "income taxes that happened to be income taxes your dog has to pay." The amendment does not say "income taxes that happened to be income taxes you have to pay while standing on your head and whistling Dixie backward."

The amendment says "taxes on incomes." There is absolutely no limitation in the text of the Amendment. Under ordinary rules of construction, that means that if it's an income tax, it's covered by the rule of the Amendment. If you're looking a particular tax, and it happens to be an income tax, then from a legal standpoint it doesn't matter whether that tax is a direct tax or is not a direct tax or would have been a direct tax under Pollock or would not have been a direct tax under Pollock. That's what various courts have meant when they have said that the Amendment authorizes a direct tax on incomes without having to apportion the tax.

On the other hand, Alternative B -- the interpretation that the Amendment actually put the income taxes that had been treated in Pollock as direct taxes BACK into the category of indirect taxes -- is supported by some of the language in the Brushaber case. If you like Alternative B, you reach the same legal result. If all income taxes are indirect taxes, then by definition NO income taxes are required to be apportioned (since the apportionment rule applies only to direct taxes).

The key point is that various Federal courts have essentially used both Alternative A and Alternative B from time to time and, as explained below, BOTH ALTERNATIVES ARE LEGALLY CORRECT.

Tax protesters have come into court on various occasions and have argued, essentially, that the Sixteenth Amendment does not authorize a direct tax, or that the Amendment does not authorize a direct unapportioned tax. I was re-reading a case just the other day where someone had argued that. The court came back with the flat statement that the Amendment indeed DOES authorize a direct unapportioned tax. And that statement, from a legal standpoint, is correct.

Remember the all-encompassing flat out statement of the Sixteenth Amendment: taxes on incomes. The amendment itself says nothing about taking certain income taxes considered by the Pollock court as direct taxes and putting them back in the category of indirect taxes. Sure, that language in one form or another is found in Brushaber or in some cases that cite Brushaber. That language is not in the Amendment itself.

Well, how (you may ask) can both Alternative A and Alternative B be considered correct, considering the language in Brushaber?

The answer is that under U.S. law, a case is important not for all the detailed reasoning that went into the decision, but only for the decision itself. This is the rule of Stare decisis. Case law is different from statute. In a statute, almost every word is important. In case law, much of the statements of law and the statements of the court's reasoning are what the law refers to as obiter dicta, or words said in passing (singular, Obiter dictum). Obiter dicta are non-binding statements by the court included in the court's opinion that are not part of the binding decision itself. Even correct statements on rules of law that are made by the court in a case are really obiter dicta -- as far as that case is concerned. The same statements in some other case may be part of the court's holding, part of the actual decision.

Separating the decision from the dicta in court opinions is just one part of what law students do in studying the actual, verbatim texts of literally thousands of court decisions during law school. That process continues after the individual completes law school, obtains the degree, passes the bar exam, is inducted as an attorney, and begins the practice of law. The skill of distilling the holding (roughly, the decision) or holdings of a case cannot be adequately learned by reading the texts of one, or ten, or even a hundred court opinions.

The mere fact that the Court in Brushaber used, or arguably used, Alternative B in dicta does not foreclose the proper use of Alternative A by another court -- to reach the same result. The legal result is the same under both lines of reasoning, and under the U.S. legal system it is the decision that is of primary importance, not the winding paths used by courts to reach that decision. Yes, the path is important -- but the decision itself is paramount.

This means that when you cite a case like Brushaber, you have to understand that much of the language in the case is non-binding dicta. The mere fact that the Brushaber court may have used one line of reasoning (such as, "this Amendment put those taxes back in that category over there") does not foreclose another court from using another line of reasoning to reach essentially the same decision reached in Brushaber, or to reach some other decision that does not conflict with the decision(s) in Brushaber. Under the U.S. legal system, a court case is important for WHAT it decides, not HOW it decides.

Your statement -- that the Brushaber court judged that the Amendment should be interpreted as to do away with the decision in Pollock and put all income taxes, from whatever source derived, back into the excise class -- is essentially a correct reading of the effect of the Amendment -- but it's only one of the correct readings. It's correct under the Alternative B approach. The Alternative A approach, while different in form, is also correct. The Federal courts have used both approaches to reach the same legal result.

In the article, it's important not to get bogged down in the dicta found in Brushaber and other court cases, and to instead focus on the decisions themselves -- the actual, detailed legal result that followed from an actual, detailed set of facts. Yours, Famspear 15:27, 20 March 2007 (UTC)

PS: Dear Pokeraddict: I also reverted your most recent edits, based on the above lecture. However, one thing to consider would be to expand the article to create a new section to show the "Alternative B" reasoning the Court used, and then to contrast that reasoning with the "Alternative A" reasoning used in other court cases. That section would be labeled as a discussion of the non-binding dicta in the Sixteenth Amendment cases, to illustrate the different ways courts achieve the same result. That approach might help people understand the difference between the three holdings, the decisions, in Brushaber, on the one hand, and (on the other hand) the reasoning methods, the "how they reached the decisions," the non-binding dicta.

What do you think? Famspear 15:45, 20 March 2007 (UTC)

Actually, on second thought, maybe this kind of thing should go in the article on Brushaber. I'm not sure. Famspear 15:47, 20 March 2007 (UTC)

I think my brain hurts trying to understand all this.  :-) Morphh ^(talk) 15:52, 20 March 2007 (UTC)

I know, I know, and this is a simplified version, believe me. Famspear 15:54, 20 March 2007 (UTC)

Dear readers: Just as a follow-up, here is an example of the "Alternative A" approach in a case already quoted earlier on this talk page: the Fifth Circuit decision Parker v. Commissioner, where a taxpayer argued unsuccessfully that wages were not taxable:

Parker [the taxpayer] maintains that "the IRS and the government in general, including the judiciary, mistakenly interpret the sixteenth amendment as allowing a direct tax on property (wages, salaries, commissions, etc.) without apportionment." As we observed in Lonsdale v. CIR, 661 F. 2d 71 (5th Cir. 1981), the sixteenth amendment was enacted for the express purpose of providing for a direct income tax. The thirty words of this amendment are explicit: "The Congress shall have power to lay and collect taxes on income, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration." The Supreme Court promptly determined in Brushaber v. Union Pacific Ry. Co., 240 U. S. 1, 36 S. Ct. 236, 60 L. Ed. 493 (1916), that the sixteenth amendment provided the needed constitutional muster for the imposition of a direct non-apportioned income tax.

-See Parker citation earlier on this talk page.

In Parker, the United States Court of Appeals is citing Brushaber (where, in dicta, the Alternative B reasoning arguably was the reasoning used), but the Fifth Circuit itself is more or less using the Alternative A formulation. The Parker court is making the critical, and correct, point that its own decision is, however, consistent with the decisions in Brushaber. Although Brushaber and Parker involved slightly different legal issues and therefore slightly different decisions, the decisions in those two cases are consistent in a critical aspect: the Federal income tax was upheld as valid under the U.S. Constitution as amended by the Sixteenth Amendment. Yours, Famspear 16:53, 20 March 2007 (UTC)

Hi,

I don't have time to respond in full but I will comment on a few things. I understand your argument concerning the non-binding dicta, and agree this makes much of the text of the brushaber case non-binding. However I believe the actual reason or the points which the decision depends upon, is binding, but i'm no lawyer so it's possible i'm wrong obviously. I believe the reasoning of the court can be said to rely on what congress intended the amendment to do and what they didn't intend it to do. I think this page will make it clear what I mean: http://famguardian.org/Subjects/Taxes/16Amend/LegIntent16thAmend.htm

--Pokeraddict 02:59, 21 March 2007 (UTC)

Dear Pokeraddict: Well, the web site you referenced (http://famguardian.org) is a well-known purveyor of tax protester materials and, for purposes of Wikipedia, is not considered a reliable source (except, obviously, as a source that provides examples of tax protester arguments).

The basic concept is that court's description of "how" it arrives at a decision --whether "correct" or not, and whether the intent of Congress or not -- is non-binding (i.e., dicta). Only the narrow decision itself (or decisions, in the case of multiple holdings) is binding, which means that only the decision itself (what the court actually decided about what the parties actually fought about) is the precedent for which the case stands. Yours, Famspear 16:49, 21 March 2007 (UTC)

Dear readers: On a side note: In my March 20th lecture above, where I said: "Even correct statements on rules of law that are made by the court in a case are really obiter dicta -- as far as that case is concerned" - I should have said: "Even correct statements on rules of law (other than the holdings in that particular case) that are made by the court in a case are really obiter dicta -- as far as that case is concerned." Obviously, by definition, the holding itself is not dicta, and of course the holding itself is binding (precedent). Yours, Famspear 17:47, 21 March 2007 (UTC)

Hi,

You contend that the site I referenced is not considered a realiable enough source to be referenced on wikipedia, that might or might not be true but for our current discussion it is irrelevant as I did not suggest we include any quote from that site on the artice page. I am referencing to that site for the purpose of showing what I believe to be an important part of the court's decision in the Brushaber case, namely that congress rejected to amend the 16th amendment with a phrase that would have made it possible to collect a direct unapportined tax. It is my understanding that this is in fact important to this discussion. I am not sure if you disagree with the statements made on that site or if you are merely pointing out that it is not considered reliable, regardless of whether the statements are true or not.

I agree that any statements in a court decision that are not either 1) the decision itself or 2) the point in the case that determines the ruling(ratio decidendi), are considered obiter dicta, atleast this is my present, limited understanding of the law.

Ratio decidendi is a Latin phrase meaning "the reason (or rationale) for the decision." The ratio decidendi is: "[t]he point in a case which determines the judgment"[1] or "the principle which the case establishes."[2] It is a legal phrase which refers to the legal, moral, political, and social principles used by a court to compose the rationale of a particular judgment. Unlike obiter dicta, the principles of judgment for ratio decidendi stand as potentially binding precedent, through the principle of stare decisis.

So it seems, atleast to me that the principle which the Brushaber case set(ie the income tax is an indirect tax and the 16th amendment does not give the authority to issue an unapportined direct tax) is atleast potentially binding.

--Pokeraddict 21:25, 21 March 2007 (UTC)

Dear Pokeraddict: Well, let me ask for clarification by asking two questions:

1. Do you believe that under the U.S. Constitution as amended by the Sixteenth Amendment, the Congress has the authority to impose an unapportioned tax on income from personal services, such as wages?

2. Do you believe that under the U.S. Constitution as amended by the Sixteenth Amendment, the Congress has the authority to impose an unapportioned tax on interest income?

Yours, Famspear 21:40, 21 March 2007 (UTC)

I do not currently contend that Congress has the authority to impose both those kinds of income taxes. This is based on the limited reasearch I have done on the subject.

--Pokeraddict 21:52, 21 March 2007 (UTC)

Dear Pokeraddict: OK. Now, the only kind of income tax that has ever been ruled to be a direct tax was the tax on income from property, such as interest income. That was the Pollock case.

If I'm understanding you correctly, would all of the following be correct statements?

1. Under Brushaber, either by court decision or by dicta, taxes on income from property (such as interest, dividends and rent) were moved (by the 16th Amendment) from the "direct" category (where they had been put in the year 1895 by Pollock) back into the category of "indirect" (where they had been prior to the Pollock case anyway).

2. All other income taxes are, and have always been, indirect taxes (such as income taxes on personal earnings, etc.).

3. Since all other income taxes have always been "indirect", that leaves essentially no income taxes at all that could now be classified as "direct".

4. The apportionment rule applies only to direct taxes.

5. The uniformity rule applies only to indirect taxes.

6. After 1913, the apportionment rule therefore does not apply to any kind of Federal income tax at all.

7. The uniformity rule applies to all Federal income taxes.

Do you agree with all of these statements? Yours, Famspear 22:15, 21 March 2007 (UTC)

Post-script: Actually, my question could be worded as: Do you agree with any of those seven statements and, if you disagree with any of them, which ones and why? Yours, Famspear 22:24, 21 March 2007 (UTC)

Yes, I agree with all of those statements.

--Pokeraddict 22:47, 21 March 2007 (UTC)

Dear Pokeraddict: OK, since you agree that the apportionment rule does not apply to any kind of Federal income tax at all, I am curious about the following statement you made:

I do not currently contend that Congress has the authority to impose both those kinds of income taxes [referring to Famspear's comments about unapportioned taxes on income from personal services such as wages and unapportioned taxes on interest income].

My questions would be:

1. Under the U.S. Constitution as amended by the Sixteenth Amendment, are there any restrictions at all on the power of Congress to tax wages and, if so, what are those restrictions (other than the geographical uniformity rule and the rule that tax bills, etc. must originate in the House of Representatives)?

2. Under the U.S. Constitution as amended by the Sixteenth Amendment, are there any restrictions at all on the power of Congress to tax interest income and, if so, what are those restrictions (other than the geographical uniformity rule and the rule that tax bills, etc. must originate in the House of Representatives)?

Hi,

I'm not sure why you are curious about my statement that i agreed that congress could impose income taxes from personal services and wages, could you clarify?

Right now I'm really only arguing that income taxes are supposed to be classified as indirect taxes and not direct taxes. I don't think there are any restrictions on the government to impose indirect income taxes other than those previously stated, but i'm not sure. Some tax protesters argue that the intent of the 16th amendment was only to allow congress the right to impose an unapportioned income tax on the employes of the government but I can't really say whether there is any merit to that position.

--Pokeraddict 23:56, 21 March 2007 (UTC)

Dear Pokeraddict: I just was not understanding whether you meant "contend" in the sense of "claim," as in "I do not currently claim that Congress has the authority to impose both those kinds of income taxes" or whether you meant "contend" in the sense of "disagree with the statement that" as in "I do not currently disagree with the statement that Congress has the authority to impose both those kinds of income taxes." I now understand that you mean you agree that Congress can impose income taxes, or at least income taxes on personal services. I just want to avoid accidentally putting "words in your mouth" so to speak that you do not intend.

So, that gets us back to my earlier statement that I think we are pretty much in agreement on some major issues. It sounds like we mainly disagree over whether the wording in Brushaber (regarding the Amendment being interpreted to mean that all income taxes are once again in the "indirect category") is part of dicta (with my position being that while the wording is basically a legally correct analysis, it is only one alternative analysis, and that it has effectively been treated as dicta in some later court decisions opting for a slightly different line of reasoning -- that the Amendment simply allows any income tax, even a "direct" tax) or, alternatively a holding in the case (which I believe is your position).

Anyway, as I said under either approach you reach the same result. Some courts have not used the "Alternative B" (Brushaber) approach but have instead used the "Alternative A" approach (such as the Fifth Circuit in Parker). Perhaps the article can be modified to point out that the Brushaber case has been treated in varying ways over the years, with citations to a small sample of cases that use the Alternative A analysis and a small sample that use Alternative B (if we can find, say, two or three examples of each). It could be a good way to illustrate my point about the difference between "holdings" and "dicta."

However, I'm semi-snowed under with tax season right now (yes, I actually do this stuff for a living), so it may take awhile. Also, a decision would have to be made as to whether the aforementioned proposal should go in this article or, alternatively, in the article on the Brushaber case itself.

Your thoughts? Famspear 01:31, 22 March 2007 (UTC)

Hi,

Sorry for the confusion created by my use of the word contend. I did, as you inferred, use the word with the intent of expressing that I did not disagree with Congress right to collect those income taxes.

I consider your analyzis on our respective views to be a correct one. I also like your proposal to modify the article to include a description of the different views held by the court's regarding the binding nature of the various aspects of the Brushaber case and an explanation of the basis for their discrepancy. It's my position that this should be added to the article on the 16th amendment and not only the article on the Brushaber case because to exclude it would present an incomplete depiction as to the interpretation of the amendment.

On a side note I think our discussion on the topic has been a productive one and has certainly advanced my understanding on the matter. I will see if I can add to the article in some way to make it more comprehensive, time permitting of course, but could certainly benefit from your help since you are experience in this field.

--Pokeraddict 11:32, 23 March 2007 (UTC)

[edit] Renaming of article

Another editor has renamed this article from "Sixteenth" to "16th" under the theory that this conforms to other like articles. I'm confused, as I cannot find a single other article on U.S. constitutional amendments that is worded this way. All I see is "First," "Second,", etc., and not "1st, "2nd" and so on. The archive history for this article has been lost as a result of the change, although I presume there's a way to fix that.

Anyway, I would suggest that the article be changed back to the title "Sixteenth." Any thoughts, anyone? Famspear 22:09, 26 March 2007 (UTC)

OK, per discussion with the editor who had made the change, I have moved the article and related talk page back to "Sixteenth Amendment to the United States Constitution," which is consistent with the other articles on U.S. constitutional amendments. The archive pages appear to be OK. Yours, Famspear 02:26, 27 March 2007 (UTC)