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
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
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
"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.
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
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
| 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]
meaning was that all taxes are direct
which are paid by the citizen
without being recompensed by the consumer; but that, where the
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
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
| From the foregoing it is
(1) that the distinction between
direct and indirect taxation was well
understood by the framers of the constitution and those who
(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
(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.
- 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 produce. The
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
tax is a "privilege" tax "measured" by the