The Temporary Victory Tax ghost of 1943 lives on

Liberty323 · 2023-02-20T16:39:01.659Z

On a much, much smaller note, a neighboring city enacted a restaurant tax of 3% for all eateries in the city limits to pay for the $28 million construction of a new sports park utilized by travel teams. 12 years after the park opened the tax remains despite the park (privatized years ago) actually having been paid off several years ago and bringing in huge profits every year.
My point is there are no temporary taxes.

johnwk2 · 2023-02-20T23:23:20.957Z

Nemesis:

We can pontificate and dream all we like it but regardless of how unconstitutional any of us think taxation is, the truth is its here to stay.

No Administration whether Republican or Democrat will ever upset the status quo of how we are taxed. As much as I want them to I know its just a pipe dream.

Pontificate and dream? Is that your appraisal of the documented facts and self-evident truths posted in the OP?

And then you go on to declare that wage earners are doomed to eternally suffer under an unconstitutional tax which robs them of the bread they earn by the sweat of their labor?

I can say with some certainty you would not be welcome among our Founding Fathers.

JWK

“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 him from 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.” ___ Butchers’ Union Co. v. Crescent City Co., 111 U.S. 746 (1884)

Samson_Corwell · 2023-02-20T23:53:55.077Z

johnwk2:

Your posts are getting longer, John. Fewer people will engage with them.

Supreme_War_Pig · 2023-02-20T23:59:32.071Z

Samson_Corwell:

johnwk2:

Your posts are getting longer, John. Fewer people will engage with them.

On the plus side, they tend to be very repetitive; if you read the first one, you are up to speed.

Nemesis · 2023-02-21T00:22:39.811Z

I am not saying you are wrong just that the reality of the world we live in is that the tax system is here to stay. There will never be a radical change in the way we collect taxes.

Safiel · 2023-02-21T01:03:44.430Z

Just two points to make.

Pollock v Farmer’s Loan and Trust Company has long been repudiated by the Supreme Court, not to mention having been explicitly overruled by the 16th Amendment. It’s holding was excoriated by its four dissenters. The five Justice majority opinion was likely in the top five bad opinions by a Supreme Court that was also responsible for horrible decision such a the Insular Cases and Plessy v Ferguson. The Supreme Court specifically repudiated Pollock as being in error when they decided Stanton v Baltic Mining Company (1916) and Bowick v Kerbaugh-Empire Company (1926). From Stanton, “Sixteenth 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.” The 16th Amendment was merely a prophylactic, correcting a bad decision, Pollock, and ensuring no future Supreme Court could errantly kneecap Congress’ taxation power.
Direct Tax vs Indirect Tax

a. There are only three types of Direct Tax that require apportionment under the Constitution. A capitation tax. A tax on wealth or the value of non-real property. A tax on the value of real property.

b. Indirect taxes are everything else, including transactional taxes, excises, imposts, tariffs and tonnages. Income, including that from labor is transactional. A job is nothing more than you selling your time/labor to your employer for a price. That is a transaction. A tax on income is thus a transactional tax and thus is an indirect tax, not subject to apportionment.

A real life example of Direct Tax vs Indirect Tax. Joe Smith owns a house on one acre worth $250,000. He rents that to Bubba Sixpack for $2,000 a month.

The Federal Government can tax that rent as income, as the paying of rent from a tenant to a landlord is transactional. That is an indirect tax and need not be apportioned.

However, the government could not lay a millage directly on the $250,000 that the house and land are worth. That would constitute a direct tax and thus could not be laid without apportionment.

Senator Waren’s wealth tax would also require apportionment as a direct tax.

Samson_Corwell · 2023-02-21T01:13:21.354Z

Safiel:

Just two points to make.

Pollock v Farmer’s Loan and Trust Company has long been repudiated by the Supreme Court, not to mention having been explicitly overruled by the 16th Amendment. It’s holding was excoriated by its four dissenters. The five Justice majority opinion was likely in the top five bad opinions by a Supreme Court that was also responsible for horrible decision such a the Insular Cases and Plessy v Ferguson. The Supreme Court specifically repudiated Pollock as being in error when they decided Stanton v Baltic Mining Company (1916) and Bowick v Kerbaugh-Empire Company (1926). From Stanton, “Sixteenth 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.” The 16th Amendment was merely a prophylactic, correcting a bad decision, Pollock, and ensuring no future Supreme Court could errantly kneecap Congress’ taxation power.

Direct Tax vs Indirect Tax

a. There are only three types of Direct Tax that require apportionment under the Constitution. A capitation tax. A tax on wealth or the value of non-real property. A tax on the value of real property.

b. Indirect taxes are everything else, including transactional taxes, excises, imposts, tariffs and tonnages. Income, including that from labor is transactional. A job is nothing more than you selling your time/labor to your employer for a price. That is a transaction. A tax on income is thus a transactional tax and thus is an indirect tax, not subject to apportionment.

A real life example of Direct Tax vs Indirect Tax. Joe Smith owns a house on one acre worth $250,000. He rents that to Bubba Sixpack for $2,000 a month.

The Federal Government can tax that rent as income, as the paying of rent from a tenant to a landlord is transactional. That is an indirect tax and need not be apportioned.

However, the government could not lay a millage directly on the $250,000 that the house and land are worth. That would constitute a direct tax and thus could not be laid without apportionment.

Senator Waren’s wealth tax would also require apportionment as a direct tax.

Thanks for the insight, Saf.

It’s amazing to me that a court decision regarding taxation would have an impact on segregation of public facilities.

Reading your analysis, I now share your view that an income tax is an indirect tax. I just accepted that it was a direct tax this whole time.

On a related note, the degree to which Republican-leaners recoil at the idea of an income tax is bizarre given they are okay with sales taxes, which could be looked at as the inverse of an income tax. I guess the singling out of income taxation as especially evil is just irrational.

Safiel · 2023-02-21T01:24:10.858Z

Samson_Corwell:

(snipped)

Reading your analysis, I now share your view that an income tax is an indirect tax. I just accepted that it was a direct tax this whole time.

On a related note, the degree to which Republican-leaners recoil at the idea of an income tax is bizarre given they are okay with sales taxes, which could be looked at as the inverse of an income tax. I guess the singling out of income taxation as especially evil is just irrational.

The direct tax vs indirect tax can be confusing, as the colloquial meaning is different than the Constitutional meaning.

The Constitutional meaning is as I described in the previous post.

In colloquial usage, direct tax refers to taxes that an individual or business cannot shift to another person or business, while indirect tax refers to a tax you can shift.

That difference in usage tends to cause confusion, as people try to carry over the colloquial usage of those terms to Constitutional usage.

As for the income tax versus sales tax thing, I am in the income tax camp at the national level. It is simple to create a progressive income tax. It would be difficult and unwieldy to do so in a sales tax system. A sales tax system requires “prebates” for low income people, meaning you STILL must file a return with all your information.

johnwk2 · 2023-02-21T02:06:53.032Z

Safiel:

Direct Tax vs Indirect Tax

a. There are only three types of Direct Tax that require apportionment under the Constitution. A capitation tax. A tax on wealth or the value of non-real property. A tax on the value of real property.

Thank you for your above unsubstantiated opinion concerning direct vs indirect taxation, an opinion not in harmony with one of our notable founders who actually attended the Convention. 1787.

From the OP:

”Direct taxation can go but little way towards raising a revenue. To raise money in this way, people must be provident; they must constantly be laying up money to answer the demands of the collector. But you cannot make people thus provident. If you would do any thing to the purpose, you must come in when they are spending, and take a part with them. This does not take away the tools of a man’s business, or the necessary utensils of his family: it only comes in when he is taking his pleasure, and feels generous; when he is laying out a shilling for superfluities, it takes twopence of it for public use, and the remainder will do him as much good as the whole.”

Elsworth goes on to note:

“The experiments, which have been made in our own country, show the productive nature of indirect taxes. The imports into the United States amount to a very large sum. They never will be less, but will continue to increase for centuries to come. As the population of our country increases, the imports will necessarily increase. They will increase, because our citizens will choose to be farmers; living independently on their freeholds, rather than to be manufacturers, and work for a groat a day.”

”On the other hand, direct taxes are not voluntary, nor, in general, are they avoidable. And with respect to direct taxes, the anti-federalist minority of the Convention of Pennsylvania warned that direct taxation “…is a tax that, however oppressive in its nature, and unequal in its operation, is certain as to its produce and simple in its collection; it cannot be evaded like the objects of imposts or excise …” ___ See Connecticut ratification debates Elliot’s VOL II, page 191

So, a characteristic of an indirect tax is one which is voluntarily paid during the taxpayer’s consumption, and safe because no man is obliged to consume more than he pleases, and such a tax are costs added by government to things which individuals are free to acquired or reject, while direct taxes are those which are assessed to the individual by government, are oppressive, and not avoidable.

Rurudyne · 2023-02-21T04:33:08.043Z

Though it has been a while I think I’ve got him beat on length.

Gaius · 2023-02-21T05:39:10.537Z

Very interesting,
except that this part is completely untrue

johnwk2:

then every taxpayer across the United States is to pay the exact same amount, i.e., one man, one vote, and, one vote, one dollar!

If each state’s share of a total amount being raised by Congress by a direct tax is proportionately equal to its representation in Congress then
each state would STILL remain free to collect that tax by any means it wants.

Nothing in the Constitution implies all related taxes must be head taxes, “one person one vote one dollar.”

Since 4.2% of the population lives in NY, NY must pay 4.2% of the Federal tax.
NY would remain free to collect that any way it wants e.g. only a sales a tax, or only a property tax, or an income tax only on high incomes.

++++
I am not sure a state-based national head tax would be a good idea anyway.

According to the Debt clock, current Federal tax revenues from all sources (corporate taxes, tariffs, income taxes etc.) are $13,793 per person.

So, if any state chose to enact the “head tax” you are proposing,

$13,793 per person per year, would be quite a burden to a typical social security recipient. US retirees receive an average $2,485/month)
A family of 4 would pay $55,000/year in taxes.
– Based on a 40 hour work week that works out to $26 an hour.

Safiel · 2023-02-21T06:58:58.463Z

johnwk2:

Thank you for your above unsubstantiated opinion concerning direct vs indirect taxation, an opinion not in harmony with one of our notable founders who actually attended the Convention. 1787.

Actually, the Supreme Court, in Hylton v United States (1796) established a NARROWER definition of what constitutes a direct tax, encompassing only capitation and land, when they upheld Congress’s tax on carriages for personal conveyance. And that precedent was used to uphold income taxes during and after the Civil War, until, temporarily, struck down by the errant Pollock decision. Hylton was resurrected by the Stanton and Bowick decisions in 1916 and 1926 respectively, ultimately being relied on by Chief Justice Roberts in the Obamacare case.

Hylton was temporarily displaced by Pollock, but Pollock is now dead while Hylton is again controlling precedent.

Two of the four Justices participating in Hylton were attendees at the Constitutional Convention and all four played a role in the ratification debates, one as an anti-Federalist. All four are considered Founding Fathers. All four were deeply familiar with the Constitution’s structure of taxation.

All four unanimously upheld the carriage tax, emphatically agreeing that the tax was indirect.

So my view is substantiated by four Founding Fathers.

Safiel · 2023-02-21T07:08:47.487Z

Hylton also answers the question of why direct taxes are subject to a rule of apportionment, rather than to the more logical rule of uniformity, as are indirect taxes.

The south had two things it wanted to protect. Its land (plantations) and its slaves. If Congress had been able to lay a capitation tax or land tax without apportionment, it would have been able to wipe out slavery by taxation very easily. The slaveholding delegates to the Constitutional Convention were aware of this.

To prevent this from happening, they added direct taxes to the apportionment formula. Thus, a capitation tax would have fallen more heavily on the people of the north, were there were more people and few slaves. A land tax would have failed as well because of the vast difference in total land area between north and south, such as tax would have been all but impossible to apportion. Capitation and land taxes were thus effectively stopped and slavery was able to continue.

Slavery was the reason for the existence of the apportionment rule and Justice William Patterson, a delegate to the Constitutional Convention, stated as such in his opinion of the court on Hylton.

Publius · 2023-02-21T12:34:40.485Z

Check and mate. Well done.

johnwk2 · 2023-02-21T13:06:05.608Z

Gaius:

Very interesting,
except that this part is completely untrue

johnwk2:

then every taxpayer across the United States is to pay the exact same amount, i.e., one man, one vote, and, one vote, one dollar!

It appears you have misconstrued what I actually wrote. I posted the two formulas which govern apportionment. I then went on to summarize our Founders intentions with regard to the rule of apportioning a direct tax i.e.,

“each state’s share of a total amount being raised by Congress by a direct tax is proportionately equal to its representation in Congress”

I then went on to write . . . And if the tax is laid directly upon the people by Congress rather than Congress sending each state a bill for its apportioned share, then every taxpayer across the United States is to pay the exact same amount, i.e., one man, one vote, and, one vote, one dollar!

What I wrote is entirely accurate. Seems to me you overlooked, “intended by our founding fathers”,
“if” and “rather than”.

In any event, seven of our Constitution’s State Ratification documents express the following legislative intent.

“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 Hampshire; June 21, 1788

And HERE is an example of the apportioned direct tax being laid by Congress and each state’s fair share of the $3MILLION being raised:

Let us also review some of our Founder’s thinking regarding the rule of apportionment:

Pinckney addressing the S.C. ratification convention with regard to the rule of apportionment :

“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 see:
“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.

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 confusion about the rule of apportionment intentionally designed to insure that the people of each state are to be taxed proportionately equal to their representation in Congress, 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

JWK

SixFoot · 2023-02-21T13:08:42.028Z

Nemesis:

I am not saying you are wrong just that the reality of the world we live in is that the tax system is here to stay. There will never be a radical change in the way we collect taxes.

There really will be, but it will be such that the government ends up with more revenue.

The only reason it hasn’t changed yet is because no one has figured out how to fleece a clear majority with whatever they’re after.

Gaius · 2023-02-21T13:11:51.924Z

The taxes are (or rather would be) apportioned to the states
the states can then pay it via

enacting a per person head tax
or
enacting zero tax on the middle class and a big tax on the rich
or
enacting a sales tax
or
enacting a giant fossil fuels tax, etc.

Agreed?

johnwk2 · 2023-02-21T13:17:09.412Z

Contrary to your unsubstantiated assertion about Hylton and making an assertion about Hylton without providing supportive documentation, let us now look at the actual facts.

In regard to the Hylton case which you mentioned, I researched this case many, many years ago!

The carriages in question were consider articles of luxury and a “duty” was laid upon luxury making the tax indirect. 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.”

Taxes laid upon property are generally 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

I hope the above documentation has been helpful to you and others interested int the thread.

JWK

"The Constitution is the act of the people, speaking in their original character, and defining the permanent conditions of the social alliance; and there can be no doubt on the point with us, that every act of the legislative power contrary to the true intent and meaning of the Constitution, is absolutely null and void. ___ Chancellor James Kent, in his Commentaries on American Law , 1858.

johnwk2 · 2023-02-21T13:23:56.443Z

The expressed intentions of the Founders were to allow each state to raise its share of the direct tax in its own chosen way, and I imagine how it is raised, is determined by each state’s constitution and its unique taxing provisions.

JWK

Nemesis · 2023-02-21T13:28:59.385Z

Sits back with popcorn and Pepsi to watch this debate play out between @Safiel and @johnwk2