Senator Cruz: keep income tax, lower top rates.

[Sonny Tufts]

for example, taxing individual wage-earners upon their capital is in-fact a direct tax and has always been realized as being so

No court in the history of the country has ever held that a federal tax on wages is a direct tax that has to be apportioned. The first case in which this claim was made was Springer v. U. S., 102 U.S. 586 (1881). The Court rejected Mr. Springer's claim and held that the only direct taxes under the Constitutions were capitations and taxes on land. In so doing, it quoted Hamilton's brief in the Hylton case:

[Hamilton] suggests that the boundary line between direct and indirect taxes be settled by 'a species of arbitration,' and that direct taxes be held to be only 'capitation or poll taxes, and taxes on lands and buildings, and general assessments, whether on the whole property of individuals or on their whole real or personal estate. All else must, of necessity, be considered as indirect taxes.'

The tax here in question falls within neither of these categories. It is not a tax on the 'whole . . . personal estate' of the individual, but only on his income, gains, and profits during a year, which may have been but a small part of his personal estate, and in most cases would have been so. This classification lends no support to the argument of the plaintiff in error...

Our conclusions are, that direct taxes, within the meaning of the Constitution, are only capitation taxes, as expressed in that instrument, and taxes on real estate; and that the tax of which the plaintiff in error complains is within the category of an excise or duty.

It should be noted that Chief Justice Fuller's description of Hamilton's position, quoted from the Pollock case by Mr. White, is incorrect. Hamilton's brief never referred to a "tax upon one's whole income", but rather a tax on one's whole property. Pollock dealt solely with the question of whether a tax on investment income was a direct tax; it did not involve a tax on wages. In dicta, however, the Court recognized the validity of such a tax:

We have considered the act only in respect of the tax on income derived from real estate, and from invested personal property, and have not commented on so much of it as bears on gains or profits from business, privileges, or employments, in view of the instances in which taxation on business, privileges, or employments has assumed the guise of an excise tax and been sustained as such...

According to the census, the true valuation of real and personal property in the United States in 1890 was $65,037,091,197, of which real estate with improvements thereon made up $39,544,544,333. Of course, from the latter must be deducted, in applying these sections, all unproductive property and all property whose net yield does not exceed $4,000; but, even with such deductions, it is evident that the income from realty formed a vital part of the scheme for taxation embodied therein. If that be stricken out, and also the income from all invested personal property, bonds, stocks, investments of all kinds, it is obvious that by far the largest part of the anticipated revenue would be eliminated, and this would leave the burden of the tax to be borne by professions, trades, employments, or vocations; and in that way what was intended as a tax on capital would remain, in substance, a tax on occupations and labor. We cannot believe that such was the intention of congress. We do not mean to say that an act laying by apportionment a direct tax on all real estate and personal property, or the income thereof, might not also lay excise taxes on business, privileges, employments, and vocations. But this is not such an act, and the scheme must be considered as a whole. Being invalid as to the greater part, and falling, as the tax would, if any part were held valid, in a direction which could not have been contemplated, except in connection with the taxation considered as an entirety, we are constrained to conclude that sections 27 to 37, inclusive, of the act, which became a law, without the signature of the president, on August 28, 1894, are wholly inoperative and void.

Pollock was an exeedingly unpopular 5-4 decision, and it has the ignominious distinction of being one of only three Supreme Court decisions to be overturned by a constitutional amendment. Regardless of arguments over what the Founders thought about income taxes, the 16th Amendment makes it perfectly clear that an income tax doesn't have to be apportioned.

 

[Weston White]

As usual Sonny is being entirely misleading and incorrect:

1. That is simply because SCOTUS to date has refused to hear all such case, and it is not as if they have had plenty of opportunities to have done so… Must we really ponder as to why?
2. Sonny is taking the Springer case out of context, the Court had simply enumerated the only forms of direct taxation that Congress had instituted up to that point in time, in a historical context. That was not to mean there would not or could not be others assessed in the future… Otherwise such a nonsensical notion would require for itself to be applied to all modern forms of indirect taxation not specifically stipulated within the U.S. Constitution.
3. While the Court has found the federal income tax to generally be a direct tax (as it had been intended by England’s several revisions of this method of taxation starting in 1799)—and subsequently it has since even been written into a few federal regulations and acknowledged by the IRS (on their student learning Website)—ergo, that the individual income tax is effectively a direct tax. This is precisely why the Sixteenth Amendment was ratified. Otherwise there would have never been such a necessity.
4. The core of the matter is not specifically “wages” (as Sonny so avariciously clings to), but capital—i.e., one’s ‘source’, which is representative of the so-called “wages” concern—and moreover of one’s whole private property acquired throughout a given tax-period.
5. You are only partially correct, in that income taxes no longer require apportionment; however, when attempting to apply that very income tax in a manner that is intended to circumvent constitutional constraint, it then requires apportionment—which is exactly and undoubtedly what the progressive mindset attempts to do. The federal government has neither the business nor necessity to be collecting over $2.3-trillion annually from working class, hard-working Americans.

Actually, the court in Pollock was quoting from 7 Hamilton’s Works, 848: “A tax upon one's whole income is a tax upon the annual receipts from his whole property, and as such falls within the same class as a tax upon that property, and is a direct tax in the meaning of the Constitution.” Further see, ibid, 247 U.S. 179, 185 (1918); 247 U.S. 330, 335 (1918).

And still quoting more from Mr. Hamilton, ibid, 157 U.S. 429, 591; 158 U.S. 601, 626 (1895), this being from 3 Hamilton’s Works, 34: “This principle, which seems critically correct, would exempt as well the income as the capital of the property. It protects the use as effectually as the thing. What, in fact, is property but a fiction without the beneficial use of it? In many cases, indeed, the income or annuity is the property itself.”

Again reemphasizing that the Court clearly stated that: "He [Mr. Hamilton] gives, however, it appears to us, a definition which covers the question before us [i.e., his or her whole income, annual receipts, whole property]." Now it just does not get any more transparent, any more clearer than that.


I rest my case. It was certainly a pleasure. Thank you.

 

[johnwk]

No court in the history of the country has ever held that a federal tax on wages is a direct tax that has to be apportioned.

And our Supreme Court has recently held "Obamacare" is constitutional. What's your point especially if a court's opinion is not in harmony with the legislative intent of our constitution?

As to whether or not a tax on earned wages is direct or not, a review of Adam Smith, Wealth of Nations, a contemporary writing of the time which our Founders were very much familiar with, we find the following reference regarding a capitation tax as being a direct tax:


“Capitation taxes, so far as they are levied upon the lower ranks of people, are direct taxes upon the wages of labor.” Adam Smith, Wealth of Nations, id. at pg. 540.

From the historical documents I have read [ contemporary to our founder's times] it appears that direct taxes are those assessed directly to the individual by government, while indirect taxes are costs added by government to things which individuals are free to acquired or reject.


JWK

 

[Sonny Tufts]

As to whether or not a tax on earned wages is direct or not, a review of Adam Smith, Wealth of Nations, a contemporary writing of the time which our Founders were very much familiar with, we find the following reference regarding a capitation tax as being a direct tax:

“Capitation taxes, so far as they are levied upon the lower ranks of people, are direct taxes upon the wages of labor.” Adam Smith, Wealth of Nations, id. at pg. 540.

Smith's definition of a capitation was one that is payable from whatever revenue the payor might have -- "The taxes which, it is intended, should fall indifferently upon every different species of revenue, are capitation taxes, and taxes upon consumable commodities. These must be paid indifferently from whatever revenue the contributors may possess; from the rent of their land, from the profits of their stock, or from the wages of their labour." (Part II, Article IV) In other words, a capitation, unlike an income tax, isn't aimed at any particular fund. When he says that capitations levied on the lower rakns are effectively a tax on their wages, all he means is that wages are the only fund out of which the lower ranks can pay.

But this doesn't mean that a tax on wages is a capitation under the Constitution. If it were, it would only be a capitation as to the lower ranks, while a tax on the higher ups would not be a capitation because they wouldn't necessarily have to pay it out of wages.

From the historical documents I have read [ contemporary to our founder's times] it appears that direct taxes are those assessed directly to the individual by government, while indirect taxes are costs added by government to things which individuals are free to acquired or reject.

The Hylton case, decided just 8 years after the ratification of the Constitution by a court 3 out of the 4 justices of which had been directly involved in the constitutional conventions, says otherwise. The carriage tax was assesed directly to Mr. Hylton, yet it was held to be an indirect tax.

 

[Sonny Tufts]

As usual Sonny is being entirely misleading and incorrect:

1. That is simply because SCOTUS to date has refused to hear all such case, and it is not as if they have had plenty of opportunities to have done so… Must we really ponder as to why?

Because the Court has a limited amount of time to decide cases, and it doesn't need to waste it on crackpot arguments that have been consistently and uniformly rejected by every other court that has has to waste its time listening to them.

2. Sonny is taking the Springer case out of context, the Court had simply enumerated the only forms of direct taxation that Congress had instituted up to that point in time, in a historical context.

The Springer case dealt with the Civil War income tax, which applied to all income over a certain amount, including wages. The Court unanimously held that it was not a direct tax. Nothing is out of context.

3. While the Court has found the federal income tax to generally be a direct tax (as it had been intended by England’s several revisions of this method of taxation starting in 1799)—and subsequently it has since even been written into a few federal regulations and acknowledged by the IRS (on their student learning Website)—ergo, that the individual income tax is effectively a direct tax. This is precisely why the Sixteenth Amendment was ratified. Otherwise there would have never been such a necessity.

False. The only time in history that the Court held an income tax to be a direct tax was in Pollock, and it restricted its holding to investment income (interest, rents, dicvidends, etc.) The reason the 16th was needed was so that the tax could reach the investment income of the rich.

You are only partially correct, in that income taxes no longer require apportionment; however, when attempting to apply that very income tax in a manner that is intended to circumvent constitutional constraint, it then requires apportionment—which is exactly and undoubtedly what the progressive mindset attempts to do. The federal government has neither the business nor necessity to be collecting over $2.3-trillion annually from working class, hard-working Americans.

Mr. White is hopelessly wrong. The only constitutional constraint on the income tax is that it must be geographically uniform and that it not violate things like equal protection and due process. The $2.3 trillion figure is the total of all taxes collected by the federal government. The individual income tax accounted for only $1 trillion, and of this amount the bottom half of all taxpayers paid only $30 billion. See http://taxfoundation.org/article/summary-latest-federal-income-tax-data

Actually, the court in Pollock was quoting from 7 Hamilton’s Works, 848: “A tax upon one's whole income is a tax upon the annual receipts from his whole property, and as such falls within the same class as a tax upon that property, and is a direct tax in the meaning of the Constitution.” Further see, ibid, 247 U.S. 179, 185 (1918); 247 U.S. 330, 335 (1918).

And still quoting more from Mr. Hamilton, ibid, 157 U.S. 429, 591; 158 U.S. 601, 626 (1895), this being from 3 Hamilton’s Works, 34: “This principle, which seems critically correct, would exempt as well the income as the capital of the property. It protects the use as effectually as the thing. What, in fact, is property but a fiction without the beneficial use of it? In many cases, indeed, the income or annuity is the property itself.”

A citation to 7 Hamilton's Works 848 doesn't appear in either the Pollock or Southern Pacific cases cited. And the language citated to 3 Hamilton's Works 34 dealt with a report on the public credit in which Hamilton discussed contracts with citizens of a foreign country. Not sure what this has to do with taxes.

 

[johnwk]

Smith's definition of a capitation was one that is payable from whatever revenue the payor might have -- "

And, in Hamilton's brief in the Hylton carriage case he says: 'The following are presumed to be the only direct taxes: Capitation or poll taxes, taxes on lands and buildings, general assessments, whether on the whole property of individuals, or on their whole real or personal estate. All else must, of necessity, be considered as indirect taxes.'

The fact is, you cannot provide one instance during the time period our Constitution was being framed and ratified in which a tax was levied upon a working person's earned wage and not considered to be direct.


JWK

 

[johnwk]

The Hylton case, decided just 8 years after the ratification of the Constitution by a court 3 out of the 4 justices of which had been directly involved in the constitutional conventions, says otherwise. The carriage tax was assesed directly to Mr. Hylton, yet it was held to be an indirect tax.

Yes, it was held to be indirect but that does not help you absurd opinion that a tax on earned wages is not a direct tax. As to the carriage case let us look at the facts which you fail to post and instead offer your opinions.


In the Hylton Case, the carriages were consider articles of luxury and the excise was upon luxury and therefore indirect just like the tax in Flint was not upon income but upon the privilege of being a corporation making the tax indirect while the amount of tax to be paid was measured by the income realized under the privilege. And this distinction to tax carriages as a luxury is made known in crystal clear language in the “Act laying duties upon carriages for the conveyance of persons.”

Provided always, That nothing herein contained shall be construed to charge with a duty, any carriage usually and chiefly employed in husbandry, or for transporting or carrying, goods, wares, merchandise, produce or commodities.”

However, taxes laid upon property are considered to be direct taxes and this fact was also stated during the House Debates with reference to a tax upon carriages!

Mr. Sedgwick said that "a capitation tax, and taxes on land and on property and income generally, were direct charges, as well in the immediate as ultimate sources of contribution. He had considered those, and those only, as direct taxes in their operation and effects. On the other hand, a tax imposed on a specific article of personal property, and particularly if objects of luxury, as in the case under consideration, he had never supposed had been considered a direct tax, within the meaning of the Constitution."SEE: House of Representatives, Tuesday, May 6th, 1794,page 644

JWK

 

[MRK]

I've been critical of Cruz lately, but that headline is completely ridiculous. All he said was that he's in favor of cutting taxes.

I like it. It reminds the reader that the income tax is not a given like we were conditioned and raised to believe.

 

[Weston White]

Sonny’s response on the quoting of Smith is again nonsensical. If for but a few of the following reasons:

1. Only the lower ranks of people or the proletariats labored under wages.
2. The lower ranks of people did not possess any land for which to rent; the lower ranks of people did not possess any stock from which to profit.
3. The key distinction concerning ‘capitation taxes’ is that they are assessed directly upon the person themselves with regard to their own industry or occupation, and ergo, correlating their competency, livelihood, or subsistence; further ‘poll taxes’ are assessed directly on who you are as a person.
4. No, that is certainly not the only thing Smith intended, he ends that sentence specifically emphasizing such means of taxing to be a “direct tax upon those wages”, in other words every individual’s capital.
5. Otherwise the apportionment clauses within the U.S. Constitution are meaningless as Congress may easily circumvent them at any turn, upon any whim, or at their pleasure or desire to do so. Thusly, rendering all such clauses and references to be utterly meaningless and as statutory surplus, a clear violation of core statutory cannons.
6. An individual’s labor, just as their money, is their private property and common labor is an immutable right not to be trifled through legislation, in-part from Butcher’s Union Co. v. Crescent City Co., 111 U.S. 746, 757, 762 (1884) in quoting from Dr. Adam Smith’s “Wealth of Nations” (1776):

“It has been well said that “the property which every man has in his own labor, as it is the original foundation of all other property, so it is the most sacred and inviolable. The patrimony of the poor man lies in the strength and dexterity of his own hands, and to hinder his employing this strength and dexterity in what manner he thinks proper, without injury to his neighbor, is a plain violation of this most sacred property. . . .”

7. Further quoted form Pollock, clarifying exactly just how badly incorrect Sonny is for even daring to argue this issue (and why he retains his anonymity as a troll of the Internet and sock-puppet for the government):

“But Albert Gallatin, in his “Sketch of the Finances of the United States,” published in November, 1796, said: “The most generally received opinion, however, is that, by direct taxes in the Constitution, those are meant which are raised on the capital or revenue of the people; by indirect, such as are raised on their expense. …”

He then quotes from Smith's Wealth of Nations, and continues: “The remarkable coincidence of the clause of the Constitution with this passage in using the word ‘capitation’ as a generic expression, including the different species of direct taxes, an acceptation of the word peculiar, it is believed, to Dr. Smith, leaves little doubt that the framers of the one had the other in view at the time, and that they, as well as he, by direct taxes, meant those paid directly from, and falling immediately on, the revenue, and, by indirect, those which are paid indirectly out of the revenue by falling immediately upon the expense.”


Firstly, to simply state that the tax within Hylton was merely upon “coaches” (the luxury item of its day, used for public travel) is rather dishonest; as in 157 U.S. 429, 569 (1895): “Fisher Ames declared that he had satisfied himself that it was not a direct tax, as “the duty falls not on the possession, but on the use.” Annals 730.”

And more at 157 U.S. 429, 570 (1895) 570: “3 Gallatin's Writings (Adams' ed.) 74, 75. The act provided in its first section ‘that there shall be levied, collected, and paid upon all carriages for the conveyance of persons, which shall be kept by or for any person for his or her own use, or to be let out to hire or for the conveyance of passengers, the several duties and rates following,’”

Secondly, in referencing both the Hylton and Springer cases, their scope had been narrowed by the subsequent findings of Pollock—and Sonny just loves to overlook that truth, because of its inconvenience for him. Debating Hylton or Springer is little else than a red-herring (e.g., much of the logic depended upon within Hylton is just downright deplorable.)


Pollock found taxes laid upon income derived from property to be direct, which logically indicates that taxes upon property itself are also direct. The Sixteenth Amendment only ever intended to transpose the former method. Furthermore, the Court has always acknowledged a clear and distinct differentiation between the two, as explicitly set forth within our U.S. Constitution.

This is so far from being a crack-pot issue; the IRS even recognizes it to be a major and ongoing concern to their overall “mission”, by a sum of over 10,000 filers, which only grows with each passing year. Actually, it is such a major issue that the IRS lobbied Congress for a new weapon that was impended as of 2007, the amending of 26 USC 6702 into a tool for which to wage mass-abuse—and the IRS has since unscrupulously used their revamped tool to do just that, meanwhile greatly creeping outside of its rightful breadth.

It is the primary duty of the U.S. Supreme Court to address all questions of constitutionality, without regard to how much of a “crackpot argument” it may sound—still the fact remains the issue has been left unresolved by the Court. Furthermore, it is the duty of every court, including SCOTUS to remain impartial and just in all instances.

And if you really want to reference the Court not having the time to hear such cases, one becomes compelled to ponder if the reason for that could be attributed to them instead wasting the majority of their highly valuable time hearing other tax related arguments that unlike the current argument, have time-and-time again already been so well settled by the Court that the matter should of been blatantly obvious to begin with.

In the Springer case, the matter of “wages” was never addressed, as always it was “income, gains, and profits” that was central to the breadth of the case. In the year 1865, Mr. Springer had reported earnings of $50,798—while he was an attorney that was actively involved in politics from a young age and at the time of this case (1880) was a longtime congressman (D-IL)—so no he was not just some common laborer seeking mere competency.

“False.” Actually, not so much; as technically that is what I had insinuated (if you do not believe me, I suggest for you to review my discourse—a link is located in my signature). While ironically it is precisely “interest, rents, dividends, etc.” which is the primary scope of the federal income taxing scheme.

I am not incorrect on the prior point. The income tax may only be levied upon what was legislatively argued (viz., legislative history) as being ‘constitutional income’—including federal regulations as: “income not taxable by the Federal Government under the Constitution”—ergo, there must first exist a capitalistic source from which the income tax may seek its gain or profit from.

As to comment about the $2.3-trillion, yet again I must remind Sonny that figure includes the additional taxes respective to one’s reported or withheld gross income, which additionally include: Medicare, Social Security, (add to this the ACA), etc., and their employer’s FICA—for without surpassing the income reporting threshold those would all amount to zero.

Sonny is again incorrect, both of my above quotations may be readily viewed HERE.

Let us put an end to this matter now. I will just include the full quotation, as from Pollock v. Farmers' Loan & Trust Company, 158 U.S. 601, 625-626 (1895):

”... 7 Hamilton's Works, 848. Mr. Hamilton therefore clearly supported the law which Mr. Madison opposed, for the same reason that his friend Fisher Ames did, because it was an excise, and, as such, was specifically comprehended by the Constitution. Any loose expressions in definition of the word "direct," so far as conflicting with his well considered views in the Federalist, must be regarded as the liberty which the advocate usually thinks himself entitled to take with his subject. He gives, however, it appears to us, a definition which covers the question before us. A tax upon one's whole income is a tax upon the annual receipts from his whole property, and as such falls within the same class as a tax upon that property, and is a direct tax in the meaning of the Constitution. And Mr. Hamilton, in his report on the public credit, in referring to contracts with citizens of a foreign country, said: "This principle, which seems critically correct, would exempt as well the income as the capital of the property. It protects the use as effectually as the thing. What, in fact, is property but a fiction without the beneficial use of it? In many cases, indeed, the income or annuity is the property itself." 3 Hamilton's Works 34.”

As to the first quotation, it appears to actually be a paraphrasing of Hamilton by the Court, (I had always presumed they were further expanding upon text from the prior cited quotation from that same work—well that better explains why the following portion does not contain quotation marks—egg on my face); but is in-fact part of Hamilton’s carriage tax briefing being referenced (viewable at: The Works of Alexander Hamilton, (Federal Edition), vol. 8, p. 239):

“The following are presumed to be the only direct taxes. Capitation or poll taxes. … General assessments, whether on the whole property of individuals, or on their whole real or personal estate; all else must of necessity be considered as indirect taxes.”

As to the follow-up reference concerning 3 Hamilton's Works 34, again it was resourced in Pollock—not just once, but within both Pollock decisions, so the Justices must have felt value by having included it, at any rate, it is its context that is to be regarded, as it is solidly founded by logical tenets that are irrefragable.

In summary:

“Whatever difficulty there may be about a precise and scientific definition of “income,” it imports, as used here, something entirely distinct from principal or capital either as a subject of taxation or as a measure of the tax, conveying, rather, the idea of gain or increase arising from corporate activities.”
Doyle v. Mitchell Bros. Co., 247 U.S. 179, 185 (1918)

“We must reject in this case, as we have rejected in cases arising under the Corporation Excise Tax Act of 1909 ..., the broad content on submitted in behalf of the government that all receipts -- everything that comes in -- are income within the proper definition of the term "gross income," and that the entire proceeds of a conversion of capital assets, in whatever form and under whatever circumstances accomplished, should be treated as gross income.”
Southern Pacific Co. v. Lowe, 247 U.S. 330, 335 (1918)

“The Court has hitherto consistently held that a literal reading of a provision of the Constitution which defeats a purpose evident when the instrument is read as a whole is not to be favored. … “From whatever source derived,” as it is written in the Sixteenth Amendment, does not mean from whatever source derived. …”
Wright v. United States, 302 U.S. 583, 607 (1938)

 

[Weston White]

Well, John has this thread on lockdown. My services don’t seem to be needed here… The IRS will be sad to hear that I am sure.

 

[Sonny Tufts]

An individual’s labor, just as their money, is their private property and common labor is an immutable right not to be trifled through legislation, in-part from Butcher’s Union Co. v. Crescent City Co., 111 U.S. 746, 757, 762 (1884) in quoting from Dr. Adam Smith’s “Wealth of Nations” (1776):

“It has been well said that “the property which every man has in his own labor, as it is the original foundation of all other property, so it is the most sacred and inviolable. The patrimony of the poor man lies in the strength and dexterity of his own hands, and to hinder his employing this strength and dexterity in what manner he thinks proper, without injury to his neighbor, is a plain violation of this most sacred property. . . .”

Tax protesters love to quote this passage, but they are either oblivious to, or wish to conceal, the fact that it is from the concurring opinion of a single Justice in an antitrust case that had absolutely nothing to do with taxation. Moreover, the Justice who wrote it voted to uphold the Civil War income tax in the Springer case just 3 years earlier.

Firstly, to simply state that the tax within Hylton was merely upon “coaches” (the luxury item of its day, used for public travel) is rather dishonest; as in 157 U.S. 429, 569 (1895): “Fisher Ames declared that he had satisfied himself that it was not a direct tax, as “the duty falls not on the possession, but on the use.” Annals 730.”[/quote[]

There is no distinction between taxing Hylton's ownership and taxing his use. It was stipulated in Hylton that the carriages were not used for commercial purposes but were solely for personal use.

Secondly, in referencing both the Hylton and Springer cases, their scope had been narrowed by the subsequent findings of Pollock—and Sonny just loves to overlook that truth, because of its inconvenience for him. Debating Hylton or Springer is little else than a red-herring (e.g., much of the logic depended upon within Hylton is just downright deplorable.)

What Mr. White overlooks is that Pollock has been completely eviscerated, so his clinging to it is simply a case of denial. First of all, one of its holdings (that a tax on investment income is a direct tax that has to be apportioned) was overturned by the 16th Amendment. Second, its reasoning was later characterized as erroneous by the Court itself. Third, its other holding that interest on state and local bonds is constitutionally exempt from federal income taxation was overturned by the Court itself in 1987.

“The Court has hitherto consistently held that a literal reading of a provision of the Constitution which defeats a purpose evident when the instrument is read as a whole is not to be favored. … “From whatever source derived,” as it is written in the Sixteenth Amendment, does not mean from whatever source derived. …”
Wright v. United States, 302 U.S. 583, 607 (1938)

Ah yes, the Wright case that ignorant tax protesters (a redundant term) like to cite. The problem is that few have ever read the case. First, the quotation from Wright is dictum, that is, language that is totally unnecessary to the holding of the case (Wright involved the issue of whether a bill conferring jurisdiction on the Court of Claims had been legally passed -- it did not involve the Sixteenth Amendment in the slightest). Second, it is BAD dictum; that is, the Wright decision was purportedly citing the quoted statement as having been announced by a prior decision, Evans v. Gore, 253 U.S. 245 (1920). Unfortunately, the Evans decision doesn't contain the statement. Evans involved the issue whether salaries of federal judges could be constitutionally subject to an income tax that was generally applicable to all citizens, in light of the provision in Article III, 1 of the Constitution that prohibits the diminution of a federal judge's salary while in office. The Evans decision held that the Sixteenth Amendment did not override the prohibition in Article III, but it never uttered the statement attributed to it by Wright. By the way, Evans was later overruled in O'Malley v. Woodrough, 307 U.S. 277 (1939), so that federal judges are now subject to the income tax like everyone else. The other cases cited by Wright after referring to Evans v. Gore likewise had absolutely nothing to do with either the 16th Amendment or with Congress’ taxing power.

People like Mr. White who claim that an unapportioned federal tax on wages is unconstitutional have three problems: first, they cannot point to any provision in the Constitution that says so; second, they cannot find any court decision that has ever said so; and third, they cannot distinguish the countess cases that have rejected this idiotic claim. All they do is whine about the "corrupt courts", which fits nicely into their paranoid outlook.

 

[johnwk]

Firstly, to simply state that the tax within Hylton was merely upon “coaches” (the luxury item of its day, used for public travel) is rather dishonest; as in 157 U.S. 429, 569 (1895): “Fisher Ames declared that he had satisfied himself that it was not a direct tax, as “the duty falls not on the possession, but on the use.” Annals 730.”[/quote[]

There is no distinction between taxing Hylton's ownership and taxing his use. It was stipulated in Hylton that the carriages were not used for commercial purposes but were solely for personal use.


.

The only one being dishonest is you who ignores the documented facts, especially the legislative intent under which the tax upon carriages was adopted. I previously wrote:

The Hylton case, decided just 8 years after the ratification of the Constitution by a court 3 out of the 4 justices of which had been directly involved in the constitutional conventions, says otherwise. The carriage tax was assesed directly to Mr. Hylton, yet it was held to be an indirect tax.

Yes, it was held to be indirect but that does not help you absurd opinion that a tax on earned wages is not a direct tax. As to the carriage case let us look at the facts which you fail to post and instead offer your opinions.


In the Hylton Case, the carriages were consider articles of luxury and the excise was upon luxury and therefore indirect just like the tax in Flint was not upon income but upon the privilege of being a corporation making the tax indirect while the amount of tax to be paid was measured by the income realized under the privilege. And this distinction to tax carriages as a luxury is made known in crystal clear language in the “Act laying duties upon carriages for the conveyance of persons.”

Provided always, That nothing herein contained shall be construed to charge with a duty, any carriage usually and chiefly employed in husbandry, or for transporting or carrying, goods, wares, merchandise, produce or commodities.”

However, taxes laid upon property are considered to be direct taxes and this fact was also stated during the House Debates with reference to a tax upon carriages!

Mr. Sedgwick said that "a capitation tax, and taxes on land and on property and income generally, were direct charges, as well in the immediate as ultimate sources of contribution. He had considered those, and those only, as direct taxes in their operation and effects. On the other hand, a tax imposed on a specific article of personal property, and particularly if objects of luxury, as in the case under consideration, he had never supposed had been considered a direct tax, within the meaning of the Constitution."SEE: House of Representatives, Tuesday, May 6th, 1794,page 644

JWK

 

[Weston White]

* I was awaiting for Sonny to first respond to John’s post prior to posting my follow-up, but he was on earlier for a bit and went offline without responding, so I guess he is simply going to again ignore John.

My follow-up:

Not being a tax protester myself, I cannot speak to the loves and whatnot of supposed tax protesters—i.e., personally I have no problem with taxation in general (or constitutional governance), and believe that the income tax, when being correctly and responsibly imposed, is actually a fairly reasonable method of internal taxation, but unfortunately due to overwhelming greed and power-lust emanating from within the government, this is far, far from being the case.

Did Sonny purposefully confabulate the fact that the quoted material was from Dr. Adam Smith, thereby directing the very matter into one of economy and taxation—which is likely Locke inspired (i.e., Section 27 of his “Second Treatise of Civil Government”)?

Still further, when the context of a stated principle is relationally applicable, the framed subject-matter of a case is not relevant. And a principle pertaining to the right of individual competency and to property does relationally pertain to the subject-matter of individual taxation. Regardless, the source-in-reference retains its relevancy as persuasive authority. What is important is that the Court relied upon the material in rendering its decision.

The fact the Justices collectively upheld an income tax is also not relevant; ergo, there was nothing bad or wrong about the income tax until around the 1940’s—because up to that point, it had been imposed in a manner that was perfectly constitutional, at least until Pollock and later corrected by the Sixteenth Amendment.

While the decisions pertinent to the subject-matter presented before the Court in Pollock, including its rehearing, is, at least largely, no longer applicable, what still retains its applicability however, is the Court’s in-depth and thoughtfully researched context, its myriad of references, quotations, citations, and responsible logic that the Justices had wisely, and at great length dispersed throughout its findings.

Moreover, I can only ponder why Sonny lacks the observation skills to realize that Pollock has been frequently referenced within subsequent Court decisions (e.g., from Google, about 2,800 results are returned for the query: “site:justia.com pollock and 157 and 429 or 158 and 601”).

What Sonny is apparently advocating for is that the sum of referenced materials, tenets, records, doctrines, dictum, cannons, etc. used in a case that has gone on to be overturned (and most likely without concern to the degree of being overturned) somehow becomes tainted within that process, all being relegated into legal irrelevance—a vastly dangerous cause to be advocated.

I suppose that Sonny has just conveniently overlooked John’s posts. Wherein he referenced (House of Representatives, 3rd Congress, 1st Session, June 5, 1794):

“SECTION. 1. . . . Provided always, That nothing herein contained shall be construed to charge with a duty, any carriage usually and chiefly employed in husbandry, or for the transporting or carrying of goods, wares, merchandise, produce or commodities.” p.374

‘If, then, the Legislature be authorized to impose a tax on every subject of revenue, (and surely pleasure carriages, as objects of luxury, and, in general, owned by those to whom contributions would not be inconvenient, were fair and proper subjects of taxation,) and a tax on them could not be apportioned by the Constitutional ratio, it would follow irresistibly that such a tax, in this sense of the Constitution, is not “direct.”’ p. 644

“According to these opinions, a capitation tax and taxes on land and on property and income generally, were direct charges, as well in the immediate as ultimate sources of contribution. He had considered those, and those only, as direct taxes in their operation and effect. On the other hand, a tax imposed on a specific article of personal property, and particularly if objects of luxury, as in the case under consideration, he had never supposed had been considered a direct tax, within the meaning of the Constitution.” pp. 644-645

“He said his colleague [Mr. SEDGWICK] had stated the meaning of direct taxes to be a capitation tax, or a general tax on all the taxable property of the citizens; and that a gentleman from Virginia [Mr. NICHOLAS] thought the meaning was, that all taxes are direct which are paid by the citizen without being recompensed by the consumer; but that, where the tax was only advanced and repaid by the consumer, the tax was indirect. He thought that both opinions were just, and not inconsistent, though the gentleman had differed about them. He though that a general tax on all taxable property was a direct tax, because it was paid without being recompensed by the consumer.” p. 646

Regarding the Wright case, not exactly, “MR. JUSTICE STONE, dissenting in part” and “MR. JUSTICE BRANDEIS concurs in this opinion” cited to over one-dozen cases within that specific section, expanding upon several instances of what “the Court has consistently held…”

Regardless, dictum that is profound holds value in itself; while not controlling, it is authoritative. Sonny is in error for asserting that by labeling something as mere ‘dicta’/‘dictum’ (consisting of various classifications, such as ‘obiter dictum’, which is more an instance of being an opinionated side-thought, observation, or commentary) it should just be outright ignored.

(Sonny is now reducing himself to the use of redundant terms? Gee, he must be slipping up.)

Concerning the quotation from Wright (Possibly mistakenly paraphrased from a brief not included within its published opinion?), it could otherwise be a paraphrasing from Evans v. Gore, 253 U.S. 245, 262 (1920), likely relative to the following, which is in reference to each of the following: Brushaber, Eisner, Robertson, Gompers, Bain Peanut Co., and U.S. v. Lefkowitz:

“Thus, the genesis and words of the amendment unite in showing that it does not extend the taxing power to new or excepted subjects, but merely removes all occasion otherwise existing for an apportionment among the states of taxes laid on income, whether derived from one source or another. And we have so held in other cases.

In Brushaber v. Union Pacific R. Co., 240 U. S. 1, 240 U. S. 17-18, where the purpose and effect of the amendment were first drawn in question, the Chief Justice reviewed at length the legislative and judicial action which prompted its adoption, and then, referring to its text and speaking for a unanimous Court, said:

‘It is clear on the face of this text that it does not purport to confer power to levy income taxes in a generic sense -- an authority already possessed and never questioned -- or to limit and distinguish between one kind of income taxes and another, but that the whole purpose of the amendment was to relieve all income taxes when imposed from apportionment from a consideration of the source whence the income was derived. ...that is, determining whether a tax on income was direct not by a consideration of the burden placed on the taxed income upon which it directly operated, but by taking into view the burden which resulted on the property from which the income was derived, since, in express, terms the amendment provides that income taxes, from whatever source the income was derived, shall not be subject to the regulation of apportionment.”’

And as to the principle, perhaps more from, Eisner v. Macomber, 252 U.S. 189, 206 (1920):

“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.”

Additionally, in Robertson v. Baldwin, 165 U.S. 275, 281-282 (1897): Quoted below (i.e., infra).

Additionally, in Gompers v. United States, 233 U.S. 604,610 (1914):

“But the provisions of the Constitution are not mathematical formulas having their essence in their form; they are organic, living institutions transplanted from English soil. Their significance is vital, not formal; it is to be gathered not simply by taking the words and a dictionary, but by considering their origin and the line of their growth.”

Additionally, in Bain Peanut Co. v. Pinson, 282 U.S. 499, 501 (1931):

“The interpretation of constitutional principles must not be too literal. We must remember that the machinery of government would not work if it were not allowed a little play in its joints.”

Additionally, in United States v. Lefkowitz, 285 U.S. 452, 467 (1932):

“And this Court has always construed provisions of the Constitution having regard to the principles upon which it was established. The direct operation or literal meaning of the words used do not measure the purpose or scope of its provisions.”

And most importantly, yes we can (see we too can hang just like “President Barack Obama”):

1a. Declaration of Independence: “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. —That to secure these rights, Governments are instituted among Men…”

1b. U.S. Constitution (A1,S9,C3): “No capitation, or other direct, tax shall be laid, unless in proportion to the census or enumeration herein before directed to be taken.” (Noting that I had previously written upon the various types of direct taxes—including other direct taxes—a few posts back.)

1c. Fifth Amendment (as to the respect of due process): “…nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.”

1d. All respective rights are respectfully enumerated in historical context by such documents as: Code of Hammurabi (1772 B.C.), Magna Carta (1215), English Bill of Rights (1689), Virginia Declaration of Rights (1776), Declaration of the Rights of Man (France, 1789), et al.

1e. Being further emphasized in Robertson v. Baldwin, 165 U.S. 275, 281-282 (1897):

“The law is perfectly well settled that the first ten amendments to the Constitution, commonly known as the “Bill of Rights,” were not intended to lay down any novel principles of government, but simply to embody certain guaranties and immunities which we had inherited from our English ancestors, and which had, from time immemorial, been subject to certain well recognized exceptions arising from the necessities of the case. In incorporating these principles into the fundamental law, there was no intention of disregarding the exceptions, which continued to be recognized as if they had been formally expressed. …”

1f. Hamilton stating in Federalist No. 84:

“The truth is, after all the declamations we have heard, that the constitution is itself in every rational sense, and to every useful purpose, A BILL OF RIGHTS. . . . Here, in strictness, the people surrender nothing, and as they retain everything, they have no need of particular reservations. ‘WE, THE PEOPLE of the United States, to secure the blessings of liberty to ourselves and our posterity, do ORDAIN and ESTABLISH this Constitution for the United States of America.’”

2a. This point is frivolous, it makes a presumption that the prior establishing of common law on a specific subject-matter is a first element required in establishing ripeness to set-forth a legal action, seek redress, or protest—it is not; if that be true there would be no common law; there would be no grievances; and there would never be any protesting, as there would just be no point, at all.

2b. Not that specifically use the term ‘wages’, but there are dozens of U.S. Supreme Court cases (also including a myriad of constitutional debates, legislative histories, major economical writings, and other such persuasive authorities) that directly address the tenets of private labor, property, capital, and competency.

3. If the Court has never addressed the matter of “wages”—as you had just asserted above—the Court could not have rejected it; because, obviously, they have never bothered addressing it in the first place.

 

[Sonny Tufts]

The only one being dishonest is you who ignores the documented facts, especially the legislative intent under which the tax upon carriages was adopted.

If the reason why the carriage tax was an indirect tax is that it was imposed on luxuries, why didn't the Justices use that as the basis for their opinions? Why instead was their rationale (a) only taxes that can be reasonably apportioned are direct taxes; (b) the only direct taxes are capitations and taxes on land (Chase and Paterson)?

 

[Sonny Tufts]

The fact the Justices collectively upheld an income tax is also not relevant; ergo, there was nothing bad or wrong about the income tax until around the 1940’s—because up to that point, it had been imposed in a manner that was perfectly constitutional, at least until Pollock and later corrected by the Sixteenth Amendment.

Glad you have finally conceded that a tax on pay-for-work (which was included in every revenue act from 1861 to 1940) is constitutional.

While the decisions pertinent to the subject-matter presented before the Court in Pollock, including its rehearing, is, at least largely, no longer applicable, what still retains its applicability however, is the Court’s in-depth and thoughtfully researched context, its myriad of references, quotations, citations, and responsible logic that the Justices had wisely, and at great length dispersed throughout its findings.

Its "logic" was rejected by the 16th Amendment and later by the Court itself. When the entire rationale for a decision is rejected, there's not much left of the case except as an historical relic.

Regardless, dictum that is profound holds value in itself; while not controlling, it is authoritative. Sonny is in error for asserting that by labeling something as mere ‘dicta’/‘dictum’ (consisting of various classifications, such as ‘obiter dictum’, which is more an instance of being an opinionated side-thought, observation, or commentary) it should just be outright ignored.

Then you should have no problem with the dicta from the second Pollock decision recognizing the validity of a tax on pay-for-work:

We have considered the act only in respect of the tax on income derived from real estate, and from invested personal property, and have not commented on so much of it as bears on gains or profits from business, privileges, or employments, in view of the instances in which taxation on business, privileges, or employments has assumed the guise of an excise tax and been sustained as such...

According to the census, the true valuation of real and personal property in the United States in 1890 was $65,037,091,197, of which real estate with improvements thereon made up $39,544,544,333. Of course, from the latter must be deducted, in applying these sections, all unproductive property and all property whose net yield does not exceed $4,000; but, even with such deductions, it is evident that the income from realty formed a vital part of the scheme for taxation embodied therein. If that be stricken out, and also the income from all invested personal property, bonds, stocks, investments of all kinds, it is obvious that by far the largest part of the anticipated revenue would be eliminated, and this would leave the burden of the tax to be borne by professions, trades, employments, or vocations; and in that way what was intended as a tax on capital would remain, in substance, a tax on occupations and labor. We cannot believe that such was the intention of congress. We do not mean to say that an act laying by apportionment a direct tax on all real estate and personal property, or the income thereof, might not also lay excise taxes on business, privileges, employments, and vocations. But this is not such an act, and the scheme must be considered as a whole.

 

[Weston White]

So this is your response? It is nearly laughable; although, leaves itself wanting.

 

[johnwk]

Originally Posted by johnwk View Post

The only one being dishonest is you who ignores the documented facts, especially the legislative intent under which the tax upon carriages was adopted.

If the reason why the carriage tax was an indirect tax is that it was imposed on luxuries, why didn't the Justices use that as the basis for their opinions? Why instead was their rationale (a) only taxes that can be reasonably apportioned are direct taxes; (b) the only direct taxes are capitations and taxes on land (Chase and Paterson)?

If this and if that. Your question is irrelevant when reviewing the documented intentions under which the carriage tax was adopted. You place too much stock in a Court decision which is not supported by the expressed intentions relevant to the tax.

Now, take your time and study the legislative intent as expressed during its adoption which I previously posted for you. I wrote:

In the Hylton Case, the carriages were consider articles of luxury and the excise was upon luxury and therefore indirect just like the tax in Flint was not upon income but upon the privilege of being a corporation making the tax indirect while the amount of tax to be paid was measured by the income realized under the privilege. And this distinction to tax carriages as a luxury is made known in crystal clear language in the “Act laying duties upon carriages for the conveyance of persons.”

Provided always, That nothing herein contained shall be construed to charge with a duty, any carriage usually and chiefly employed in husbandry, or for transporting or carrying, goods, wares, merchandise, produce or commodities.”

However, taxes laid upon property are considered to be direct taxes and this fact was also stated during the House Debates with reference to a tax upon carriages!

Mr. Sedgwick said that "a capitation tax, and taxes on land and on property and income generally, were direct charges, as well in the immediate as ultimate sources of contribution. He had considered those, and those only, as direct taxes in their operation and effects. On the other hand, a tax imposed on a specific article of personal property, and particularly if objects of luxury, as in the case under consideration, he had never supposed had been considered a direct tax, within the meaning of the Constitution."SEE: House of Representatives, Tuesday, May 6th, 1794,page 644

JWK



Those who reject and ignore abiding by the intentions and beliefs under which our Constitution was agree to, as those intentions and beliefs may be documented from historical records, wish to remove the anchor and rudder of our constitutional system so they may then be free to “interpret” the Constitution to mean whatever they wish it to mean.

 

[johnwk]

Glad you have finally conceded that a tax on pay-for-work (which was included in every revenue act from 1861 to 1940) is constitutional.

If you make a statement as you did above, it should be accompanied with the appropriate documentation. Now, post the documentation.

JWK

 

[johnwk]

The 16th Amendment and Victory Tax of 1942

Seems that Sonny is not familiar with the intentions for which the 16th Amendment was adopted, nor what the Victory Tax of 1942 was intended by deception to accomplish. Let us look at the historical facts.


To fully understand this issue one must first recall the progressive movement of the late 1800s and early1900s, a movement which was, among other things, intentionally designed by its leadership to enslave the working class person, not to mention seizing an iron fisted regulatory control over America’s businesses and industries.

In 1913 the leadership of the progressive movement convinced the working person [that’s your ordinary working person] to get behind the 16th Amendment. It was sold to the working person as a means to get those greedy corporations to pay their “fair share” in taxes.

During the 16th Amendment debates we find Mr. HEFLIN agitating the working class people into supporting the amendment by saying “An income tax seeks to reach the unearned wealth of the country and to make it pay its share.”44 Cong. Rec. 4420 (1909). Note the wording “unearned wealth“ as distinguished from earned wages.

And this was shortly after Mr. BARTLETT of Georgia had begun the class warfare attack by preaching to the working poor: As I see it, the fairest of all taxes is of this nature [a tax on gains, profits and unearned income], laid according to wealth, and its universal adoption would be a benign blessing to mankind. The door is shut against it, and the people must continue to groan beneath the burdens of tariff taxes and robbery under the guise of law.” 44Cong. Rec. 4414 (1909).

But what these cunning con artists really had in mind was to create a tax allowing the expansion of the federal government’s manipulative iron fist over the economy which would eventually be used to squeeze the working people’s earned wages from their pockets in a more devastating manner than any tariff had ever done, and make them dependent upon government for their subsistence! But they cleverly waited for one generation to pass after the adoption of the 16th Amendment and a war to begin before completing their mission which was the imposition of the Temporary Victory Tax of 1942!

Roosevelt’s class warfare tax expanded the “income tax” upon corporations and businesses to include a 5 percent “temporary” tax upon working people’s earned wages. And although the 16th Amendment was sold as a way to tax “unearned income”, the temporary tax on working people’s earned wages was sold as a patriotic necessity in the war effort. But somehow Roosevelt’s class warfare tax, which robs the bread working people earned by the sweat of their brow, is still to this very day being collected, and its burden has constantly increased over the years, forcing millions upon millions of poor working people into a state of poverty and then dependency upon government for their subsistence, an outcome which is needed by corrupted political leaders to maintain a permanent and captive voting block!


JWK



If we can make 51 percent of America’s population dependent upon an Obama, welfare, food stamp, section 8 housing, college loan check, and now free Obamacare along with FREE BACON, we can blackmail them for their vote, keep ourselves in power and keep the remaining portion of America’s productive population enslaved to pay the bills ____ Obama’s Marxist Free Stuff Party, which is designed to establish a federal plantation and redistribute the wealth which wage earners, business and investors have worked to create.

 

[Weston White]

I would only further add that:

1. Judges and juries may only consider the evidence as presented before them; ultimately it is the “framing” of a case that is central to its breadth (i.e., its pleading (‘complaint’/’petition’) as filed or amended—then ‘answered’ by the other party or parties), not the specific subject-matter being argued before the court. The outcome or successfulness of a case is pinned by its evidence as submitted and arguments made by the parties involved within that established breadth (e.g., this is largely why pro se parties so frequently loose against government attorneys, the court (or judge) cannot aid either side; ergo, it is not that they are necessarily in the wrong on the issues involved, but that they just don’t have the resources and familiarity with the legal system that professional attorneys do).

2. It is clear that the only visible reference made to items of “luxury” within Hylton is at 180-181 in quoting a passage from Dr. Smith—which exception was made for by the 1794 act:

“Consumable commodities, whether necessaries or luxuries, may be taxed in two different ways: … the coach tax and plate tax are examples of the former method [“the consumer may either pay an annual sum on account of his using or consuming goods of a certain kind”] of imposing”

3. Individuals have since set forth a compelling argument that the Hylton case had been conspired by the Federalists, with Alexander Hamilton serving as their mouthpiece, so as to gain favor in expanding the Nation’s powers of taxation (e.g., also considering that Hylton had complied with their desires (Witness tampering?), and likely lied about owning 125-carriages—that he only actually owned 1-carriage—which is plausible, as really why would an individual own so many carriages for non-business use? And raising many flags as well: where would they all be stored at; how long would it have taken for them all to be manufactured; imagine the investment and maintenance (and tax) costs involved).

4. The Court has since on many occasions gone on to find that Congress may not impose indirect taxes upon an activities shadow in order to avoid a source that if otherwise itself taxed would either require apportionment or find itself constitutionally exempted from taxation.

ETA:

Springer v. United States, 102 U.S. 586, 597 (1880):

Perhaps the two most authoritative persons in the convention touching the Constitution were Hamilton and Madison. The latter, in a letter of May 11, 1794, speaking of the tax which was adjudicated upon in Hylton v. United States, 3 Dall. 171, said,

"The tax on carriages succeeded in spite of the Constitution by a majority of twenty, the advocates of the principle being reinforced by the adversaries of luxury."

2 Mad. Writings (pub. by Congress) p. 14. In another letter, of the 7th of February, 1796, referring to the case of Hylton v. United States, then pending, he remarked:

"There never was a question on which my mind was better satisfied, and yet I have very little expectation that it will be viewed in the same light by the court that it is by me."

Id., 77. Whence the despondency thus expressed is unexplained.