Numerous lawsuits are filed every year alleging the imposition of a federal income tax is unconstitutional, and most are regarded as frivolous. But are they really? The Supreme Court has been hearing cases regarding the constitutionality of a federally imposed income tax since 1881. (Springer v United States https://supreme.justia.com/cases/federal/us/102/586/case.html) After a constant 126 years of litigation, would it not make sense to give in to the big Washington machine and simply forget what the Founding Fathers wrote in the U.S. Constitution? Absolutely not! Right is right and wrong is wrong, even if it does take centuries to get the point across.
The fourth clause of Article I, Section 9 of the United States Constitution (U.S. CONST. art. I, § 9, cl. 4.) states that, or should I say, used to state, that “No capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or Enumeration herein before directed to be taken. A capitation is a head tax charged to each individual in the population. This clause required that any taxes levied by Congress be based on a state’s population and not based on any individual income or any other standard. Seems pretty straight forward, does it not? In other words, pursuant to the Constitution as written by the Founding Fathers and ratified by the states, the federal government was precluded from imposing an income tax based upon personal income. As we progress through the next century or so of litigation and legislation, please remember, the Constitution of the United States was written as a LIMITING document, intended to limit the powers of government, not to be a complete accounting of the rights afforded to the we the people.
The Revenue Act of 1861, (Act of August 5, 1861, Chap. XLV, 12 Stat. 292), introduced the first federal income tax in our nation’s history, it’s purpose was to help fund the civil war. The tax imposed was a flat tax, with a rate of 3% on incomes above $800, and was signed into law by Abraham Lincoln. The income tax provision was repealed by the Revenue Act of 1862, which replaced the flat rate with a progressive scale of 3% on annual incomes beyond $600, and 5% on incomes above $10,000. It was explicitly temporary, specifying termination of income tax in 1866. The income tax was later reformed and named the Wilson-Gorman act for William L. Wilson, Representative from West Virginia, and Senator Arthur P. Gorman of Maryland, both Democrats. The Wilson-Gorman Act imposed the first peacetime income tax (2% on income over $4,000).
Pollock v. Farmers’ Loan & Trust Company, (157 U.S. 429 (1895), affirmed on rehearing, 158 U.S. 601 (1895), with a ruling of 5–4, was a landmark case in which the Supreme Court of the United States ruled that the unapportioned income taxes on interest, dividends and rents imposed by the Income Tax Act of 1894 were, in effect, direct taxes, and were unconstitutional because they violated the provision that direct taxes be apportioned. The decision was superseded in 1913 by the Sixteenth Amendment to the United States Constitution, which gave Congress authority to levy income tax without apportioning it among the states or basing it on the United States Census. This amendment exempted income taxes from the constitutional requirements regarding direct taxes, after income taxes on rents, dividends, and interest were ruled to be direct taxes in the court case of Pollock v. Farmers’ Loan & Trust Co. (1895). Wow, so what was the purpose of having a limiting document to serve as the foundation of our nations rules and laws if its limitations can be eliminated?
By now you are probably asking where the party politics and subsequent backfire come in with regard to federal income taxes. In the early 1900’s multiple bills to enact a federal income tax were introduced by the Democratic Party, and until 1909 each bill had been shot down by the Republicans, believing that, based upon the rebellion against taxes by the Founding Fathers, they were opposed to such an income tax unless it was, as written into the constitution, apportioned by population. The 16th Amendment, proposed by Republicans, began as no more than an instrument in the fight against a permanent federal income tax. Senator Joseph Bailey, a conservative Democrat from Texas who was opposed to income taxes, proposed an income tax bill assuming it would see the same opposition by Republicans as prior such bills. He believed that he would embarrass Republicans by forcing them to openly oppose the bill. To his surprise, the bill garnered more support than expected and the Democrats decided, in an attempt to save face and make the Republicans look bad, they would offer that while they were in favor of a federal income tax, they would only support such a measure in the form of a constitutional amendment. Meanwhile, in their own attempt to force Democrats into a corner and make them look bad, Republicans had drafted their own amendment (yes, that would be what we now know as the 16th Amendment). A congressman from New York introduced the Amendment, which passed easily in both the House and the Senate and was later ratified by the states.
The political nonsense we see today from those elected to represent our interests is nothing new. More than a century ago, it was good old party politics that backfired on everyone involved that gave us the 16th Amendment and the graduated federal income tax. The politicians played their game and we the people got screwed. And I for one, still believe it is unconstitutional.