A Hovind on Income TaxA FKH Trump Graphic

Proposition #61

Donald Trump said “income tax” is/was UNconstitutional.

Kent Hovind: Affirm

Robert Baty: Deny

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See graphic above from Kent’s FreeKentHovind.com website for reference.

I propose that the U.S. Constitution originally contained authority for an “income tax” despite anything Donald Trump had to say about it, and that for all that was written in the above referenced article from Kent’s anonymous and cowardly surrogates, nothing was presented actually quoting Donald Trump as saying that “income tax is/was UNconstitutional”.

There seems to be a common misconception regarding the constitutionality of the income tax and the role the 16th amendment to the U.S. Constitution plays.  I propose that the U.S. Constitution, prior to the 16th amendment, authorized an “income tax”.

What the 16th amendment did was remove a barrier as to how a personal income tax might be administered.

The 16th amendment reads:

“The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.”

Congress already had the power to “lay and collect taxes on incomes”, but what was desired was such a tax “without apportionment among the several States, and without regard to any census or enumeration”.

And so it was!

Dan Evans discusses this important topic on his website at: http://evans-legal.com/dan/tpfaq.html#direct

(Begin quote. – Format may change via cut and paste method used!)

Constitutional Fallacies

The federal income tax is unconstitutional because it is a “direct tax” that must be apportioned among the states in accordance with the census.

False. It is true that there is an apportionment requirement in the Constitution for “direct taxes,” but the 16th Amendment clearly eliminates the apportionment requirement for all taxes on incomes.

Before the adoption of the 16th Amendment, the constitutionality of an income tax was determined under Article I, Section 9, Clause 4 of the Constitution, which states that:

“No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or Enumeration herein before directed to be taken.”

The reference to the “Census or Enumeration” was a reference to Article I, Section 2, of the Constitution, which directs that:

“Representatives and direct Taxes shall be apportioned among the several States which may be included within this Union, according to their respective Numbers, which shall be determined by adding to the whole Number of free Persons, including those bound to Service for a Term of Years, and excluding Indians not taxed, three fifths of all other Persons.”

(“All other Persons” meant slaves.)

Whether or not an income tax should have been considered to be a “direct tax” that must be apportioned will be discussed below, but the 16th Amendment to the Constitution, ratified in 1913, removed all doubt about apportionment because it clearly states that:

“The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.”

And so, following the ratification of the 16th Amendment, Congress enacted an unapportioned income tax, and the constitutionality of that tax was challenged, but the Supreme Court held unanimously that the income tax was constitutional because “in express terms the Amendment provides that income taxes, from whatever source the income may be derived, shall not be subject to the regulation of apportionment.” Brushaber v. Union Pacific R.R. Co., 240 U.S. 1 (1916).

The arguments that tax protesters make about the validity and meaning of the 16th Amendment will be dealt with in other sections of this FAQ. (See “Related Topics,” below.)

But because tax protesters continue to insist that a tax on incomes was a “direct tax” both before the ratification of the 16th Amendment and even afterwards, a brief history of the Supreme Court’s interpretation of “direct tax” is appropriate.

Meaning of “Direct Tax” Before the 16th Amendment

Exactly what the framers of the Constitution meant by “direct Taxes” has been subject of much debate.

The phrase “direct taxation” appears many times in James Madison’s Notes of Debates in the Federal Convention of 1787, because the convention had agreed that representation in Congress and “direct taxes” should both be apportioned among the states in the same way, according to population, but with slaves being counted as three-fifths of a person. (By contrast, the power of Congress to impose duties, imposts, and excises received very little discussion, except to agree that those kinds of taxes should be “uniform throughout the United States.”) And yet, on August 20, 1787, on the same day that the convention approved the final version of the Constitution, Madison reports that “Mr King asked what was the precise meaning of direct taxation. No one answerd.”

To understand the context of the debates about “direct taxes” in the constitutional convention, it is important to note that, under Article VII of the Articles of Confederation that were in force before the Constitution was ratified, the states were required to supply the funds that Congress required “in proportion to the value of all land within each State,” and yet each state had only one vote, so the larger states were required to contribute more to the defense of the United States and yet could be outvoted by smaller states on how the contributions would be spent.

An early draft of the new Constitution, proposed to the convention by William Paterson of New Jersey, provided for the apportionment of “requisitions” among the states using the same language eventually adopted for the apportionment of “direct Taxes.” This suggests that “direct Taxes” were considered to be substitutes for, or perhaps equivalent to, the requisitions previously exacted by Congress from the states.

Taking the debates reported in Madison’s Notes as a whole, it appears that the required apportionment of “direct Taxes” was intended to address the concerns of the relatively wealthy southern states of the new United States, with large plantations owned by relatively few people and larger number of slaves than the northern states, that taxes imposed by a certain amount per person (i.e., capitations and poll taxes) should be adjusted for slaves, and that taxes on land should be allocated among the states in proportionate to their populations, not their values.

There are several statements in the Federalist Papers in which “direct taxes” are equated with taxes on wealth.

For example, in Federalist #12, Alexander Hamilton (who had been a delegate to the constitutional convention) wrote:

“In so opulent a nation as that of Britain, where direct taxes from superior wealth must be much more tolerable, and, from the vigor of the government, much more practicable, than in America, far the greatest part of the national revenue is derived from taxes of the indirect kind, from imposts, and from excises. Duties on imported articles form a large branch of this latter description.”

(Emphasis added.)

And, in Federalist #21, Alexander Hamiton wrote:

“Impositions of this kind [taxes on articles of consumption] usually fall under the denomination of indirect taxes, and must for a long time constitute the chief part of the revenue raised in this country. Those of the direct kind, which principally relate to land and buildings, may admit of a rule of apportionment.”

(Emphasis added.)

And, in Federalist #54, Hamilton or Madison wrote that the apportionment of taxes “has reference to the proportion of wealth,” and is applied “to the relative wealth and contributions of the States.”

Each of these statements is consistent in their understanding that a “direct taxes” were (a) capitations and poll taxes, and (b) taxes on wealth (primarily the value of land).

Only nine years after the constitutional convention, the Supreme Court affirmed this understanding in Hylton v. United States, 3 U.S. 171 (1796). Three of the four justices who decided the case wrote opinions (separate opinions was the usual practice of that day), and all four justices agreed that “direct tax” did not apply to an annual tax on the private ownership of carriages.

Justice Chase wrote that:

“I am inclined to think, but of this I do not give a judicial opinion, that the direct taxes contemplated by the Constitution, are only two, to wit, a capitation, or poll tax, simply, without regard to property, profession, or any other circumstance; and a tax on LAND. I doubt whether a tax, by a general assessment of personal property, within the United States, is included within the term direct tax.”

Hylton v. United States, 3 U.S. 171 (1796), (opinion of Justice Chase; emphasis in original).

Justice Paterson (who was a delegate to the constitutional convention and, as discussed above, presented one of the first drafts of the constitution, including a provision for the apportionment of “requisitions”), expressed a similar opinion:

“Whether direct taxes, in the sense of the Constitution, comprehend any other tax than a capitation tax, and tax on land, is a questionable point. … I never entertained a doubt, that the principal, I will not say, the only, objects, that the framers of the Constitution contemplated as falling within the rule of apportionment, were a capitation tax and a tax on land.”

Hylton v. United States, 3 U.S. 171 (1796), (opinion of Justice Paterson).

Finally, Justice Iredell (who was not a delegate to the constitutional convention, but was a delegate to the North Carolina convention that debated ratification of the Constitution) expressed his opinion that:

“Perhaps a direct tax in the sense of the Constitution, can mean nothing but a tax on something inseparably annexed to the soil: Something capable of apportionment under all such circumstances.

A land or a poll tax may be considered of this description.”

Hylton v. United States, 3 U.S. 171 (1796), (opinion of Justice Iredell).

Justice Wilson, who was also a member of the constitutional convention, wrote a brief opinion joining in the decision, but did not explain his decision beyond saying that he “had before expressed a judicial opinion on the subject, in the Circuit Court of Virginia” in which he upheld the constitutionality of the tax. (No copy of his opinion in the Circuit Court of Virginia survives.)

The question of whether a tax on income was a “direct tax” within the meaning of the Constitution, or a “duty,” “impost,” or “excise,” did not arise until the Civil War began, when the Union enacted additional taxes, some on incomes, in order to pay for the war.

The first of these new taxes to reach the Supreme Court was a tax on the gross amounts of premiums received by insurance companies. Writing for a unanimous court, Justice Swayne quoted from the opinions of Chase and Paterson in Hylton case, as well as other authorities on the meaning of “duties,” “imposts,” and “excises,” and concluded that:

“If a tax upon carriages, kept for his own use by the owner, is not a direct tax, we can see no ground upon which a tax upon the business of an insurance company can be held to belong to that class of revenue charges.”

Pacific Ins. Co. v. Soule, 74 U.S. 433 (1868) (holding that a tax on insurance company income was a “duty or excise”).

In 1869, reviewing the acts of Congress that had imposed “direct taxes” since the Hylton decision, as well as the opinions in the Hylton case itself, the Supreme Court confirmed that:

“This review [of the history of Congressional impositions of “direct taxes”] shows that personal property, contracts, occupations, and the like, have never been regarded by Congress as proper subjects of direct tax.”

Veazie Bank v. Fenno, 75 U.S. 533, 543 (1869).

And:

“[I]t may further it may further be taken as established upon the testimony of Paterson, that the words direct taxes, as used in the Constitution, comprehended only capitation taxes, and taxes on land, and perhaps taxes on personal property by general valuation and assessment of the various descriptions possessed with the several States.”

Veazie Bank v. Fenno, 75 U.S. 533, 546 (1869).

Finally, in a challenge to a general income tax imposed on individuals, the Supreme Court followed the opinions from the Hylton decision and ruled unanimously that an income tax was an “excise or duty,” and not a “direct tax,” and did not need to be apportioned among the states. Springer v. United States, 102 U.S. 586 (1880).

That would seem to have settled the issue, except that the Supreme Court decided to re-examine the question of whether an income tax was a “direct tax” just 14 years later, and decided to limit (or “distinguish” ) the Hylton and Springer decisions.

In the first Pollock decision, a majority of the court (7 of the 9 justices) began with the premise that a tax on the income from property is the same as a tax on the value of the property itself, a premise completely inconsistent with every other Supreme Court decision before or since (and repudiated by the Supreme Court in New York v. Graves, 300 U.S. 308 (1937)). The Court then concluded that a tax on rents received from real property was a “direct tax” and unconstitutional unless apportioned. Pollock v. Farmers’ Loan and Trust Co., 157 U.S. 429 (1894). On rehearing, a narrower majority (5 of the 9 justices) decided that a tax on dividends, interest, and other income from personal property (i.e., property other than land) was also a “direct tax” and so unconstitutional unless apportioned. Pollock v. Farmers Bank and Trust Co., 158 U.S. 601 (1895).

As will be discussed in more detail below, the Pollock court was very clear that it was only a tax on the incomes from property that was a “direct tax,” and other forms of income could be taxed without apportionment. This was confirmed in Brushaber v. Union Pacific R.R. Co., 240 U.S. 1 (1916). Nevertheless, the Pollock decisions limited the ability of Congress to impose a taxes on incomes, because it was necessary to determine the source of the income. Wages, salaries, and other earned incomes could be taxed, and income from manufacturing and other business activities could be taxed, but rents, interest, dividends, and other incomes from property could not be taxed without apportionment (a very awkward process). The 16th Amendment was therefore proposed by Congress, and ratified by the states, so that Congress could tax incomes “from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.”

Tax Protester “Evidence”

Most tax protester arguments that a tax on incomes is a “direct tax” rely in one way or another on the decisions of the U.S. Supreme Court in Pollock v. Farmers’ Loan and Trust Co., 157 U.S. 429 (1894), on reh’ng 158 U.S. 601 (1895), discussed above.

However, the Pollock decisions were rendered in 1894 and 1895 and there is no question but that the 16th Amendment, which was proposed in 1909 and ratified by the required three-fourths of the states in 1913, slightly less than four years later, was intended to over-rule the Pollock decisions.

“[T]there is no escape from the conclusion that the Amendment was drawn for the purpose of doing away for the future with the principle upon which the Pollock Case was decided….”

Brushaber v. Union Pacific R.R. Co., 240 U.S. 1 (1916).

Any argument that relies upon the Pollock decisions is therefore almost certainly wrong.

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Proposition #61 – Hovind v. Trump & “Income Tax”! — 1 Comment

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