DeAnneIncome Tax - Is it Constitutional?
January 30th 2008 16:58
The 2006 documentary America From Freedom to Facism, by Arron Russo, poses the question of the constitutionality of income tax in America. Supreme Court cases are cited to make the point that it is not. The main point is that income tax is a direct tax, which accordint to the Constitution must be apportioned, or distributed equally among the states. Russo asks "where's the law?" and argues with those who cite the 16th amendment, stating that the Supreme Court said that the 16th amendment "does not give the congress any new powers of taxation."
What Russo doesn't tell us is that the Supreme Court, before the ratification of the 16th amendment, declared income taxes to be excise taxes. As excise taxes, income taxes are not required to be apportioned, and therefore are legal under the Constitution.
In his documentary, Russo also states that income doesn't include wages from labor. The definition of income is profit from the sale of goods or services. The Supreme Court has upheld that income from wages is included in that definition.
I will agree that income tax - as it is today - is not entirely FAIR. And I would like to think that is is NOT legal under the Constituion. My research, however, tells me it is legal whether it is fair or not.
Mainy still maintain that the income tax is a direct tax, and therefore unconstitutional. Personally, I agree, but that's not what the Supreme Court has said in the past. Until taxation of income from wages is determined, legally, to be a direct tax, it will continue to be legal and required. It's not worth losing everything and going to jail over. It is, however, worth the effort to contact your representatives and ask them to make changes to the law.
The information is out there, it's just difficult to decide what is true, what is hype, and what needs further investigation. My personal opinion on the matter is that our Congress needs to clearly define - in truthful terms - what is income. I feel that Russo is correct in stating that money earned from labor (or the sale of services) is a fair trade for a person's personal property. The problem, however, is that it can't be supported by the cases he cites. The Internal Revenue Code is too complicated. If we are going to have an income tax, it needs to be simplified, and fair.
More information can be found on the following websites.
Constitutional Income: Do you have any?
History of the Income Tax in The United States
U.S. Treasury - Fact Sheet on the History of the US Tax System
Natioanl Retail Sales Tax Alliance - History of the 16th Amendment
16th Amendment - Rush Online
What Russo doesn't tell us is that the Supreme Court, before the ratification of the 16th amendment, declared income taxes to be excise taxes. As excise taxes, income taxes are not required to be apportioned, and therefore are legal under the Constitution.
In his documentary, Russo also states that income doesn't include wages from labor. The definition of income is profit from the sale of goods or services. The Supreme Court has upheld that income from wages is included in that definition.
I will agree that income tax - as it is today - is not entirely FAIR. And I would like to think that is is NOT legal under the Constituion. My research, however, tells me it is legal whether it is fair or not.
Mainy still maintain that the income tax is a direct tax, and therefore unconstitutional. Personally, I agree, but that's not what the Supreme Court has said in the past. Until taxation of income from wages is determined, legally, to be a direct tax, it will continue to be legal and required. It's not worth losing everything and going to jail over. It is, however, worth the effort to contact your representatives and ask them to make changes to the law.
The information is out there, it's just difficult to decide what is true, what is hype, and what needs further investigation. My personal opinion on the matter is that our Congress needs to clearly define - in truthful terms - what is income. I feel that Russo is correct in stating that money earned from labor (or the sale of services) is a fair trade for a person's personal property. The problem, however, is that it can't be supported by the cases he cites. The Internal Revenue Code is too complicated. If we are going to have an income tax, it needs to be simplified, and fair.
More information can be found on the following websites.
Constitutional Income: Do you have any?
History of the Income Tax in The United States
U.S. Treasury - Fact Sheet on the History of the US Tax System
Natioanl Retail Sales Tax Alliance - History of the 16th Amendment
16th Amendment - Rush Online
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Comment by DeAnne
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Re-reading some of those links I included above, and found FLINT V. STONE where the Supreme Court DOES define excise taxes:
Indirect taxation includes a tax on business done in a corporate capacity; the difference between it and direct taxation imposed on property because of its ownership is substantial, and not merely nominal.
The only limitations on the power of Congress to levy excise taxes are that they must be for the public welfare and must be uniform throughout the United States; they do not have to be apportioned.
How does that apply to wages earned from labor? I don't think it does. If wages earned from income can't be called excise taxes, then income tax - as applied today - is not legal. The problem is that it is not likely to be easy to get away with the argument as a defense. What we need to do is demand that Congress makes changes to reflect this so that we are not put in the position of defending ourselves against the IRS!
Comment by DeAnne
Public Journalist
Simple Gift Guide
Blogging American
Home Cooking on Recipeyz
Work From Home Online
Really Long Link
This site claims that the only taxable wages are those earned by federal employees - even claims that this is what the internal revenue code defines.