Direct taxation vs indirect taxation, Pollock and the unnecessary 16th Amendment

Politics
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Well, we are here talking about the current federal tax calculated from “incomes” which has proven to be a patently evil system of taxation.

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When a system of taxation allows the force of government to directly tax one citizen and require that citizen to pay two dollars, and then tax a neighbor directly for one dollar, that is an evil system of taxation

When a system of taxation can be used as a political weapon to criminally prosecute political opponents, that is an evil system of taxation

When a system of taxation has become so complex that it requires high priced lawyers to decipher its rules and regulations, a knowledge of which can be used to avoid paying taxes, that is an evil system of taxation

When the definition of “taxable income” can be manipulated to exclude identifiable groups and the friends and donors of certain politicians, that is an evil system of taxation

When a system of taxation makes citizens spend, over 3.24 billion hours a year preparing and filing tax-returns, that is an evil system of taxation.

When a system of taxation costs $37 billion a year in administrative and compliance costs, that is an evil system of taxation

When a system of taxation invites billions of dollars to be spent on lobbying members of Congress in return for privileged tax relief, for those who can afford it, that is an evil system of taxation

When a system of taxation tells a minister of church what may and may not be said during a sermon, that is an evil system of taxation

When a system of taxation is so intrusive that a taxpayer must disclose some of their most personal and intimate information and spending habits, that is an evil system of taxation

When a tax system gives people back more money than they paid in, that, my friend, is an evil system of taxation.

When a tax confiscates the bread which a working person earns by the sweat of their labor that, my fired, is an evil system of taxation.

Why on earth would anyone other than evil doers at the helm of government support such an evil system of taxation, and reject returning to our Constitution’s original tax plan which would end the miseries we now suffer from income taxation?

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And?

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Well, I look forward to a productive discussion!

JWK

Why is Mitch McConnell complicit in filling scarce public housing with illegal aliens when America’s needy Citizens, including U.S. Military Veterans, are going homeless?

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Got me some popcorn for the show.

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Typically, a direct tax would be a capitation tax or a tax on real property.

But, it can be, not typically, but it can be a tax on non-real property or on accumulated wealth.

And in particular, in 1787, one form of non-real property were slaves. Imagine if the apportionment clause did not exist. Congress could have enacted a ruinous level of taxation on individual slaves, thus effectively abolishing slavery. Southerners new this and this is PRECISELY the reason the requirement for apportioning direct taxes exists at all. By both reducing the basis of slaves to 3/5th’s and requiring apportionment, it effectively prevented Congress from enacting such a direct tax. Because slaves were sparse to nearly non-existent in the North, it would have been impossible to apportion such a tax.

Otherwise, an apportionment clause for direct taxes makes no ■■■■■■■ sense. Why would the convention adopt such an absurd limitation on the central government’s taxing authority, unless it had to to satisfy some political bloc, in this case slave owners. If your going to pass a capitation tax, tax on real property or a tax on non-real property (wealth, etc.), then just set the rate for everybody in the country, since Article I requires that taxes be consistent around the country.

An apportionment clause only makes sense if your trying to prevent taxation of vastly unequally distributed property (slaves).

To close this post, I will state that I unequivocally oppose ANY modern direct tax, be it capitation, real property or non-real property. Transactional taxes are sufficient.

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A transactional tax is an indirect tax, freely passable by Congress.

Section. 8. The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

The Constitution grants Congress carte blanche to lay and collect any kind of tax it wishes. It restricts direct taxes to apportionment, but any other tax that exists may be levied, such only to the uniformity requirement.

The drafters remembered that the States were frequently delinquent in their share of revenues to the Congress of the Confederation and they knew that Congress needed a powerful and robust power to raise revenue, thus the wide ranging tax clause.

The fact that Congress did not significantly exercise that power until the Civil War does not mean the power did not exist. Early on, Congress could get buy on excises, tariffs and tonnages. We were a third rate agrarian nation and we had few expenses.

Today we are a superpower and we have developed a robust and utilitarian tax system to finance those expenses.

Congress’s tax power is essentially unlimited. The only significant restrictions are the uniformity requirement and the apportionment requirement for direct taxes (capitation, real property, non-real property).

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I write four big checks a year and one smaller check to the IRS. Each of those four checks is in the 5 figure range. I am in the 37% tax bracket.

At the same time, I am aware that many people not only pay 0% income tax, but effectively have a negative tax rate (i.e. net money from the government).

Like it or not, our government has chosen to engage in redistributive behavior. An income tax is of far the most utility in doing so.

But even if they were not engaging in redistributive behavior, a poor person cannot bear the tax burden of the middle class or the rich. Each person is taxes as equitably as possible.

Both Republicans and Democrats have contributed to the design of this system and society as a whole supports it.

No, I don’t support every feature and there are things I would change, but society as a whole tends to agree that the current system is NOT oppressive.

I would like to reduce the burden for EVERYONE.

But I would do that by reducing the size and scope of government, thus allowing taxes to be reduced across the board.

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I appreciate your opinions but it would help if you substantiated them with historical evidence as I have done and is what I draw my beliefs and conclusions from. My objective is to not project my personal opinions as being within the meaning of our Constitution as that would defeat the very purpose of having a written constitution agreed to by the States and people therein, and suggest our Constitution is susceptible to the whims and fancies of those assigned a duty to support and defend it.

The tax which you embrace as a federal transactional tax is nowhere to be found in the wording of the Constitution, nor have I ever found reference to a grant of power to lay and collect a “transactional” tax mentioned during the framing and ratification debates as a delegated power granted to Congress. I’m curious why you mention a “transactional” tax. Is it a taxing power you would like to grant to Congress?

In your above comments with regard to a direct tax apportioned among the states, you say such a tax “ . . makes no ■■■■■■■ sense. Why would the convention adopt such an absurd limitation on the central government’s taxing authority . . . “

Well, to partly answer your question, let us review some of our Founder’s thinking regarding the grant of power to lay and collect an apportioned direct tax among the states.

Pinckney addressing the S.C. ratification convention states the following with the tax in question:

“With regard to the general government imposing internal taxes upon us, he contended that it was absolutely necessary they should have such a power: requisitions had been in vain tried every year since the ratification of the old Confederation, and not a single state had paid the quota required of her. The general government could not abuse this power, and favor one state and oppress another, as each state was to be taxed only in proportion to its representation.” 4 Elliot‘s, S.C., 305-6

And then there is this:

“The proportion of taxes are fixed by the number of inhabitants, and not regulated by the extent of the territory, or fertility of soil”3 Elliot’s, 243, “Each state will know, from its population, its proportion of any general tax” ___ 3 Elliot’s, 244 ___ Mr. George Nicholas, during the ratification debates of our Constitution.

And then, Mr. Madison goes on to remark about Congress’s “general power of taxation” that, "they will be limited to fix the proportion of each State, and they must raise it in the most convenient and satisfactory manner to the public."3 Elliot, 255

And if there is any uncertainty about the rule requiring any direct tax to be apportioned, and thus ensure the people of each state are taxed proportionately equal to their representation in Congress when a direct tax is laid, Mr. PENDLETON says:

“The apportionment of representation and taxation by the same scale is just; it removes the objection, that, while Virginia paid one sixth part of the expenses of the Union, she had no more weight in public counsels than Delaware, which paid but a very small portion”3 Elliot’s 41

So, according to our Founders, the rule of apportionment does make a lot of sense and boils down to Representation with a proportional financial obligation when any direct tax is laid among the States.

Here are the two formulas regarding apportionment:

States’ population
---------------------------- X SUM TO BE RAISED = STATE’S FAIR SHARE
Total U.S. Population

And . . .

State`s Pop.

------------------- X House size (435) = State`s No. of Representatives
U.S. Pop.

And let us not forget the power to lay and collect a direct tax among the States was used a number of times in our nation’s history, .e.g, see the: FIRST DIRECT TAX LAID BY CONGRESS, 1798 which shows each state’s fair apportioned share of the tax!

JWK

If, by calling a tax indirect when it is essentially direct, the rule of protection [apportionment] could be frittered away, one of the great landmarks defining the boundary between the nation and the states of which it is composed, would have disappeared, and with it one of the bulwarks of private rights and private property. POLLOCK v. FARMERS’ LOAN & TRUST CO., 157 U.S. 429 (1895) JUSTICE FULLER

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Safiel,

I am disappointed you have not yet shared the historical documentation you must have happened upon to arrive at your conclusions which I quoted HERE

In addition, after answering your question as to why would “… the convention adopt such an absurd limitation on the central government’s taxing authority . . .” and you asserting that such a tax “makes no ■■■■■■■ sense…”___ all of which is answered by the very words of our Founders which I provided for you ___ I am left puzzled as to why no reaction is forthcoming from you.

Does the documentation I provided not answer your question and explain the wisdom and brilliance of applying the rule of apportionment to both representation and direct taxation?

Seem to me the principles behind the Founders adopting the rule of apportionment are as valid today as when they were adopted in 1789, i.e., Representation with a proportional financial obligation whenever a direct tax is laid. Was there not a similar declaration which helped to inspire kicking King George’s ass?

JWK

Why is Mitch McConnell complicit in filling scarce public housing with illegal aliens when America’s needy Citizens, including U.S. Military Veterans, are going homeless?

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Well, here it is Monday morning and still no explanation why our Constitution’s rule requiring direct taxation to be apportioned “makes no ■■■■■■■ sense” as asserted by the author of the OP.

In THIS POST I offered some documentation as to why it does make sense, which has not been responded to. And now, I will offer some new evidence confirming the very intentions of our Founders was to ensure that each state, if and when a direct tax was laid by Congress, the States would be left to raising their share in their own chosen way.

Leaving the States at liberty to raise their share of the direct tax

A number of the various states, seven to be exact, indicated in their ratification document of our Constitution, that if Congress laid a direct tax, the States ought to be allowed to raise their share of the tax in their own chosen way, within a time period set by Congress, but if any state refused or neglected to pay their apportioned share on time, then Congress ought to enter the state and collect the tax with interest thereon. For documentation showing this intention see, e.g.,

· Ratification of the Constitution by the State of Massachusetts; February 6, 1788

Fourthly, That Congress do not lay direct Taxes but when the Monies arising from the Impost & Excise are insufficient for the publick exigencies nor then until Congress shall have first made a requisition upon the States to assess levy & pay their respective proportions of such Requisition agreeably to the Census fixed in the said Constitution; in such way & manner as the Legislature of the States shall think best, & in such case if any State shall neglect or refuse to pay its proportion pursuant to such requisition then Congress may assess & levy such State’s proportion together with interest thereon at the rate of Six per cent per annum from the time of payment prescribed in such requisition;

· Ratification of the Constitution by the State of New Hampshire; June 21, 1788

Fourthly That Congress do not lay direct Taxes but when the money arising from Impost, Excise and their other resources are insufficient for the Publick Exigencies; nor then, untill Congress shall have first made a Requisition upon the States, to Assess, Levy, & pay their respective proportions, of such requisitions agreeably to the Census fixed in the said Constitution in such way & manner as the Legislature of the State shall think best and in such Case if any State shall neglect, then Congress may Assess & Levy such States proportion together with the Interest thereon at the rate of six per Cent per Annum from the Time of payment prescribed in such requisition-

· Ratification of the Constitution by the State of New York; July 26, 1788

And that the Congress will not lay direct Taxes within this State, but when the Monies arising from the Impost and Excise shall be insufficient for the public Exigencies, nor then, until Congress shall first have made a Requisition upon this State to assess levy and pay the Amount of such Requisition made agreably to the Census fixed in the said Constitution in such way and manner as the Legislature of this State shall judge best, but that in such case, if the State shall neglect or refuse to pay its proportion pursuant to such Requisition, then the Congress may assess and levy this States proportion together with Interest at the Rate of six per Centum per Annum from the time at which the same was required to be paid.

· Ratification of the Constitution by the State of North Carolina; November 21, 1789

III. When Congress shall lay direct taxes or excises, they shall immediately inform the executive power of each state, of the quota of such State, according to the census herein directed, which is proposed to be thereby raised: And if the legislature of any state shall pass a law, which shall be effectual for raismg such quota at the time required by Congress, the taxes and excises laid by Congress shall not be collected in such state.

· Ratification of the Constitution by the State of Rhode Island; May 29, 1790.

that the Congress will not lay direct taxes within this State, but when the monies arising from the Impost, Tonnage and Excise shall be insufficient for the publick exigencies, nor until the Congress shall have first made a requisition upon this State to assess, levy and pay the amount of such requisition, made agreeable to the census fixed in the said constitution, in such way and manner, as the legislature of this State shall judge best, and that the Congress will not lay any capitation or poll tax.

· Ratification of the Constitution by the State of South Carolina; May 23, 1788.

Resolved that the general Government of the United States ought never to impose direct taxes, but where the monies arising from the duties, imposts and excise are insufficient for the public exigencies nor then until Congress shall have made a requisition upon the states to Assess levy and pay their respective proportions of such requisitions And in case any state shall neglect or refuse to pay its proportion pursuant to such requisition then Congress may assess and levy such state’s proportion together with Interest thereon at the rate of six per centum per annum from the time of payment prescribed by such requisition-

· Ratification of the Constitution by the State of Virginia; June 26, 1788.

Third, When Congress shall lay direct taxes or excises, they shall immediately inform the Executive power of each State of the quota of such state according to the Census herein directed, which is proposed to be thereby raised; And if the Legislature of any State shall pass a law which shall be effectual for raising such quota at the time required by Congress, the taxes and excises laid by Congress shall not be collected, in such State.

For an example of this apportioned tax being utilized by Congress, and documentation of each state’s bill for their apportioned share of the tax: see an Act laying a direct tax for $3 million in which the rule of apportionment is applied.

And then see Section 7 of the direct tax of 1813 allowing each state to raise its share of the tax in their own chosen way and then pay their respective quota while being entitled to certain deductions in meeting their payment on time.

Also see: Wailes vs. Smith, Comptroller, 1893, in which the Court states:


Robinson, J., delivered the opinion of the Court.

“By an Act of Congress, approved 5th August. 1861, a direct tax of twenty millions of dollars [LINK see Section 8] was levied upon real property, and this tax was apportioned amongst the several States according to representation, as prescribed by the Federal Constitution—the apportionment of this State being $436,823.33. Provision was made for the assessment and collection of this tax against the individual owners of such property, but any State was allowed to assume and pay its quota of said tax; and under this provision the State of Maryland assumed and paid into the Treasury of the United States $371,299.83, being its apportionment, less fifteen per cent, allowed by the Act for the cost of collection. And thus the tax against the property of her citizens was thereby satisfied and extinguished.”

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Tell us again about how Congress will send its “officers” into the States to seize real property to collect their apportioned tax bills!

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Our tax system’s goal should be maximum freedom and simplicity. If high taxes were the answer Cal’s roads would be not be falling apart and the schools would not be lousy. It actually seems like giving govt too much money makes the govt worse and the people poor.

1 Like
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You are spot on about California and the same applies on a federal level!

On a federal level it is absolutely insane to allow our federal government to confiscate, through taxation, the financial wealth out of each state, use billions upon billions of that money to pay the outrageous salaries, health care benefits, and retirement packages of federal employees, who then return a small fraction of the money confiscated from the states to pay for those objects which, in the ordinary course of affairs, concern the lives, liberties, and properties of the people, and the internal order, improvement, and prosperity of the State all of which the federal government has no constitutional bases for which to tax and spend.

Seems to me our current federal tax scheme is being used to allow federal employees to live large on wealth confiscated from the citizens of each state, while these federal employees refuse to carry out their constitutional assigned duties, .e.g., protect the United States against invasions.

So yes, the current system of taxation, which is far different from our Constitution’s original tax plan, is encouraging folks in our federal government to not act in the best interests of the people of the United States and is helping to make the States and people therein poorer.

JWK

Why is our federal government filling scarce public housing with illegal aliens when America’s needy Citizens, including U.S. Military Veterans, are going homeless?

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non real property tax leaves too much to the imagination…

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Are those words supposed to have some meaning within the subject being discussed?

JWK

Is Mitch McConnell complicit in filling scarce public housing with illegal aliens when America’s needy Citizens, including U.S. Military Veterans, are going homeless?

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in the “note” of the opening post, Safiel says “Above, I talked about non-real property tax being a a possible direct tax, but even here it is weak at best.”

that is the reference

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I still have no idea what you are inferring .

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Again?

What post in the thread are you referring to? Aside from that, I imagine you know under existing federal “income taxation” the IRS does seize property. Additionally, federal income taxation is used as a weapon by folks in government to attack political opponents.

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It’s from one of your many earlier, repetitive threads on the subject.

So, the IRS can seize property from individual taxpayers who don’t pay their taxes. How does that translate into Congressional “officers” going into a state to seize what the state as a whole owes? Who are these officers, and what would they seize, exactly, and how?

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Exactly.

Under existing federal “income taxation” the IRS does seize property. Additionally, federal income taxation is used as a weapon by folks in government to attack political opponents.

Adding the following words to our constitution would put an end to the current tax calculated from profits, gains, sales, wages, tips and other “incomes” and all the current miseries suffered under current federal income taxation.

The Sixteenth Amendment is hereby repealed and Congress is henceforth forbidden to lay any tax or burden calculated from profits, gains, sales, interest, salaries, wages, tips, inheritances or any other lawfully realized money.

JWK