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U.S. Federal Income Tax

Subjugation by taxation

Direct Taxes Are...

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        Since a direct tax must be laid by the rule of apportionment, In order to see what taxes must be laid by the rule of apportionment, we must discern what taxes are direct taxes.  The easiest way to start to understand what direct taxes are is to see what they are not.

        Direct taxes are NOT excise taxes.
Flint v. Stone Tracy Co., 220 U.S. 107 (1911)

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 privileges, and the element of absolute and unavoidable demand is lacking.

        The requirement to pay such taxes, such taxes being excise taxes, involves the exercise of privileges, and the element of absolute and unavoidable demand is lacking.

        In other words: An excise tax can be legally ducked by not doing the privileged activity.  A direct tax is a tax that can not be legally ducked.  A direct tax has the element of absolute and unavoidable demand.  A direct tax is an unavoidable tax.

Pollock v. Farmers' Loan & Trust Co., 157 U.S. 429 (1895)

Ordinarily, all taxes paid primarily by persons who can shift the burden upon some one else, or who are under no legal compulsion to pay them, are considered indirect taxes; but a tax upon property holders in respect of their estates, whether real or personal, or of the income yielded by such estates, and the payment of which cannot be avoided, are direct taxes.

         "A tax on property holders in respect of their estates...",  is actually a tax on the property of the estate that the property holder is required to pay because of their ownership of the estate.  In other words what we are looking at IS a tax on the property itself.  As the passage above shows, such a tax on property can not be avoided and such a tax IS a direct tax.

Tax on property = Direct Tax.

         The court continues:

Nevertheless, it may be admitted that, although this definition of direct taxes is prima facie correct, and to be applied in the consideration of the question before us, yet the constitution may bear a different meaning, and that such different meaning must be recognized.

        The court then goes through a very long winded examination of previous historical accounts that covers the drafting of the Constitution and the view afforded of the founder's thoughts on the meaning of a "direct" tax.  The following excerpts are from the Pollock case. Each excerpt is a citation from a different source that the Pollock court looked at to insure that its prima facie view of what a direct tax was, was the correct view.

Luther Martin, in his well known communication to the legislature of Maryland in January, 1788, expressed his views thus: 'By the power to lay and collect taxes they may proceed to direct taxation on every individual, either by a capitation tax on their heads, or an assessment on their property.

Mr. Dexter observed that his colleague 'had stated the meaning of direct taxes to be a capitation tax, or a general tax on all the taxable property of the citizens; and that a gentleman from Virginia [Mr. Nicholas] thought the meaning was that all taxes are direct which are paid by the citizen without being recompensed by the consumer; but that, where the tax was only advanced and repaid by the consumer, the tax was indirect.

He thought that both opinions were just, and not inconsistent, though the gentlemen had differed about them.

He thought that a general tax on all taxable property was a direct tax, because it was paid without being recompensed by the consumer.'

Albert Gallatin, in his Sketch of the Finances of the United States, published in November, 1796, said: 'The most generally received opinion, however, is that, by direct taxes in the constitution, those are meant which are raised on the capital or revenue of the people; by indirect, such as are raised on their expense.

The general line of observation was obviously influenced by Mr. Hamilton's brief for the government, in which he said: 'The following are presumed to be the only direct taxes: Capitation or poll taxes, taxes on lands and buildings, general assessments, whether on the whole property of individuals, or on their whole real or personal estate.

All else must, of necessity, be considered as indirect taxes.' 7 Hamilton's Works (Lodge's Ed.) 332.

Mr. Hamilton also argued: 'If the meaning of the word 'excise' is to be sought in a British statute, it will be found to include the duty on carriages, which is there considered as an 'excise.' ... An argument results from this, though not perhaps a conclusive one, yet, where so important a distinction in the constitution is to be realized, it is fair to seek the meaning of terms in the statutory language of that country from which our jurisprudence is derived.' 7 Hamilton's Works (Lodge's Ed.) 333.

If the question had related to an income tax, the reference would have been fatal, as such taxes have been always classed by the law of Great Britain as direct taxes.

        The Pollock court then sums up the lengthy review of the history of direct tax discussion as follows:

From the foregoing it is apparent

(1) that the distinction between direct and indirect taxation was well understood by the framers of the constitution and those who adopted it;

(2) that, under the state system of taxation, all taxes on real estate or personal property or the rents or income thereof were regarded as direct taxes;

(3) that the rules of apportionment and of uniformity were adopted in view of that distinction and those systems;

(4) that whether the tax on carriages was direct or indirect was disputed, but the tax was sustained as a tax on the use and an excise;

(5) that the original expectation was that the power of direct taxation would be exercised only in extraordinary exigencies; and down to August 15, 1894, this expectation has been realized.

        A direct tax is a tax on property.  Property is something you own. 

        You own:
  • your Right to Life
  • your Right to Liberty;
  • your Right to Property;
  • your body;
  • your mind;
  • your soul;
  • your gold;
  • your silver;
  • your money;
  • your Federal Reserve Notes;
  • your personal property;
  • your real property;
  • your labor;
  • your property traded for like valued property
  • your revenue.

        A Direct Tax is a tax on ANY of the above listed property. 

The income tax is, therefor, not a tax on income as such, It is an excise tax with respect to certain activities and privileges which is measured by reference to the income they produceThe income is not the subject of the tax: it is the basis for determining the amount of tax.
Page 2580 House Congressional Record March 27, 1943

        You have read the proof on Page 2580 House Congressional Record March 27, 1943 in chapter 3 that the "income" tax is an "excise" tax and that the "income" tax is a "privilege" tax "measured" by the "income". 

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