Trump Wants To Eliminate Income Taxes

[tahuyaman]

They should have never created the federal income tax

 

[tahuyaman]

Only for the wealthy.

Why would you make such a stupid comment?

 

[johnwk]

They should have never created the federal income tax

Keep in mind that "income tax" does not appear in the wording of our Constitution. However, Congress is allowed to tax income without apportionment. But, the wording does not declare "The Congress shall have power to lay and collect "direct" taxes on incomes, from whatever source derived, without apportionment."

Additionally, there is no repeal of Art. 1, Sec. 9, Clause 4 . . . "No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or enumeration herein before directed to be taken."

So, how may Congress lay and collect a tax on income without apportionment, and not violate the direct tax protection provision in our Constitution?

The answer is found in FLINT v. STONE TRACY CO., 220 U.S. 107 (1911).

The Court explained with reference to the corporate excise tax, a tax calculated from "income" :



"The tax under consideration, as we have construed the statute, may be described as an excise upon the particular privilege of doing business in a corporate capacity, i. e., with the advantages which arise from corporate or quasi corporate organization; or, when applied to insurance companies, for doing the business of such companies. As was said in the Thomas Case, 192 U. S. supra, the requirement to pay such taxes involves the exercise of [220 U.S. 107, 152] privileges, and the element of absolute and unavoidable demand is lacking. If business is not done in the manner described in the statute, no tax is payable."



"If we are correct in holding that this is an excise tax, there is nothing in the Constitution requiring such taxes to be apportioned according to population. Pacific Ins. Co. v. Soule, 7 Wall. 433, 19 L. ed. 95; Springer v. United States, 102 U.S. 586 , 26 L. ed. 253; Spreckels Sugar Ref. Co. v. McClain, 192 U.S. 397 , 48 L. ed. 496, 24 Sup. Ct. Rep. 376."

The tax was considered an "indirect tax" which taxed the "privilege" of a corporate charter, making it "indirect", and calculated the amount to be paid from the profits earned under the privilege of a corporate charter.

Keep in mind, to this very day, any direct tax is still required to be apportioned and this has repeatedly been confirmed by our Supreme Court.

Direct taxes are still required to be apportioned.

In Eisner v. Macomber 252 U.S. 189, 206 (1920), which ruled on a tax asserted by Congress to be an income tax, was struck down as being a direct tax and requiring an apportionment. The Court stated:

“Thus, from every point of view we are brought irresistibly to the conclusion that neither under the Sixteenth Amendment nor otherwise has Congress power to tax without apportionment a true stock dividend made lawfully and in good faith, or the accumulated profits behind it, as income of the stockholder. The Revenue Act of 1916, in so far as it imposes a tax upon the stockholder because of such dividend, contravenes the provisions of article 1, 2, cl. 3, and article 1, 9, cl. 4, of the Constitution, and to this extent is invalid, notwithstanding the Sixteenth Amendment.”

And in BROMLEY VS MCCAUGHN, 280 U.S. 124 (1929), the Court found the tax there to be an “excise” tax. but emphatically stated “As the present tax is not apportioned, it is forbidden, if direct.”

And let us not forget that even Justice Roberts stated in the Obamacare case dealing with what is called “The shared responsibility payment”:

“The shared responsibility payment is thus not a direct tax that must be apportioned among the several States.”