Talk:Direct tax

Untitled

If a company incporated in USA, it pays the commission to a person who is not a US resident. 1. Whether the person needs to pay US individual income tax or not ?? 2. Whether the commission can be deducted as expenses in order to calculate the tax profit for corporation income tax ??

Sixteenth Amendment to the United States Constitution

I reverted edit by BobHurt on 12 May 2006. The effect of the Sixteenth Amendment has been covered copiously in the article on that topic and in the article on Brushaber v. Union Pacific Railroad. Yours, Famspear 17:42, 12 May 2006 (UTC)

The section defining direct tax in the constitutional sense could use some clarification. "by reason of its ownership" is not clear.Loophole64 09:47, 14 February 2007 (UTC)

Guys i am not sure what was reverted here, but this line of reasoning is fatally flawed.

someone is reading this from another source.

The brushaber case CLEARLY shows that the 16th made NO taxation changes for the average person.

From this in substance it indisputably arises, first, that all the contentions which we have previously noticed concerning the assumed limitations to be implied from the language of the Amendment as to the nature and character of the income taxes which it authorizes find no support in the text and are in irreconcilable conflict with the very purpose which the Amendment was adopted to accomplish ( that is to say making ALL income taxable). Second, that the contention that the Amendment treats a tax on income as a direct tax although it is relieved from apportionment and is necessarily therefore not subject to the rule of uniformity as such rule only applies to taxes which are not direct, thus destroying the two great classifications which have been recognized and enforced from the beginning, is also wholly without foundation since the command of the Amendment that all income taxes shall not be subject to apportionment by a consideration of the sources from which the taxed income may be derived

240 US 1

We are of opinion, however, [240 U.S. 1, 11] that the confusion is not inherent, but rather arises from the conclusion that the 16th Amendment provides for a hitherto unknown power of taxation; that is, a power to levy an income tax which, although direct, should not be subject to the regulation of apportionment applicable to all other direct taxes. And the far-reaching effect of this erroneous assumption will be made clear by generalizing the many contentions advanced in argument to support it, as follows:

1.The Amendment authorizes only a particular character of direct tax without apportionment, and therefore if a tax is levied under its assumed authority which does not partake of the characteristics exacted by the Amendment, it is outside of the Amendment, and is void as a direct tax in the general constitutional sense because not apportioned.

2.As the Amendment authorizes a tax only upon incomes 'from whatever source derived,' the exclusion from taxation of some income of designated persons and classes is not authorized, and hence the '''constitutionality of the law must be tested by the general provisions of the Constitution as to taxation''', and thus again the tax is void for want of apportionment.

3.As the right to tax 'incomes from whatever source derived' for which the Amendment provides must be considered as exacting intrinsic uniformity, therefore no tax comes under the authority of the Amendment not conforming to such standard, and hence all the provisions of the assailed statute must once more be tested solely under the general and pre-existing provisions of the Constitution, causing the statute again to be void in the absence of apportionment.

But it clearly results that the proposition and the contentions [240 U.S. 1, 12] under it, if acceded to, would cause one provision of the Constitution to destroy another; that is, they would result in bringing the provisions of the Amendment exempting a direct tax from apportionment into irreconcilable conflict with the general requirement that all direct taxes be apportioned. Moreover, the tax authorized by the Amendment, being direct, would not come under the rule of uniformity applicable under the Constitution to other than direct taxes, and thus it would come to pass that the result of the Amendment would be to authorize a particular direct tax not subject either to apportionment or to the rule of geographical uniformity, thus giving power to impose a different tax in one state or states than was levied in another state or states.

So exactly how does anyone claim that this case upholds the 16th's power to lay direct tax on the average income or that it gave any NEW powers of taxation to the government ?

has anyone even read the cited cases?

there are many errors on this page. does anyone care to fix them ? I do not mean to sound combative but this is silly. The Supreme courts words are being fed to them here.

It pronounced, “Realizing and receiving income or earnings is not a privilege that can be taxed.” 206 Tenn. at 698. In justifying this conclusion, the Court stated that “[s]ince the right to receive income or earnings is a right belonging to every person, this right cannot be taxed as privilege.” 206 Tenn. at 699

Jack Cole Company v. MacFarland, 206 Tenn. 694, 337 S.W.2d 453 (1960)

There are many lawyers who are misquoting this. but if you look at it closely you will find that it Clearly and Plainly says the 16th amendment made no change to congress's ability to tax us.

I am quite open to anything proving otherwise. 69.245.136.69 05:06, 13 August 2007 (UTC)

Dear user: This is old, old stuff. With all due respect, your statement that the "brushaber case CLEARLY shows that the 16th made NO taxation changes for the average person" is totally incorrect. The case did not even involve personal income tax. Mr. Frank Brushaber was arguing about income taxes on corporations, not individuals. And Mr. Frank Brushaber LOST THE CASE. This has been covered over and over and over in Wikipedia. Please read the materials carefully. By the way, the Jack Cole Company case isn't even a Federal income tax tax. It's not a Federal court case at all.

No lawyers are misquoting the Brushaber case. Many tax protesters, however, take quotes from the case and then argue that the quotes mean something other than what they say. Yours, Famspear 10:10, 13 August 2007 (UTC)

---

I recommend that Direct and Indirect taxes sections be removed from the Taxation topic column. Since these terms only relate to the US constitution and not used anywhere else in the world. It has no relations to taxation in general. —Preceding unsigned comment added by 129.97.150.156 (talk) 15:10, 11 October 2007 (UTC)

Fair enough.. It doesn't look like a major topic in public finance, so I'm move it to the U.S. taxation template. Morphh ^(talk) 15:53, 11 October 2007 (UTC)

"Britannica" material on direct v. indirect

I removed a recent edit regarding the definition of direct versus indirect, for the following reasons. The following material was the source material, and is found in Encycl. Britannica regarding direct versus indirect taxes:

In the literature of public finance, taxes have been classified in various ways according to who pays for them, who bears the ultimate burden of them, the extent to which the burden can be shifted, and various other criteria. Taxes are most commonly classified as either direct or indirect, an example of the former type being the income tax and of the latter the sales tax. There is much disagreement among economists as to the criteria for distinguishing between direct and indirect taxes, and it is unclear into which category certain taxes, such as corporate income tax or property tax, should fall. It is usually said that a direct tax is one that cannot be shifted by the taxpayer to someone else, whereas an indirect tax can be.

The above discussion is not a discussion of the terms direct tax and indirect tax in the U.S. Constitutional law sense. This is a discussion regarding the "literature of public finance."

By contrast, legal scholars and, more importantly, the U.S. courts, have rejected the concept of a direct tax as being one that cannot be shifted to someone else.

Under the U.S. legal system, a federal direct tax is simply either a capitation (a head tax) or a "tax on property by reason of its ownership." Anything that does not fall into those two categories is an indirect tax. Period. From about 1895 to 1913, taxes on income from property were also treated as direct taxes, but that treatment ended with the Sixteenth Amendment in 1913.

Perhaps the removed material (on which the above quotation appears to be have been based) can be modified, however, to clarify the difference between a theoretical "public finance" view of direct taxes and the separate legal (constitutional law concept) of direct taxes. Yours, Famspear (talk) 17:27, 18 June 2008 (UTC)

OK, I've reworked the material and added it back, with some reorganization. Famspear (talk) 18:24, 18 June 2008 (UTC)

You are misinterpreting the literature and cases. That "literature of public finance" goes back to the 18th century, and informs the meaning of the terms as understood by the Framers. Do you think they introduced new terms in the Constitution that were not in common usage at the time? Any discussion of the meaning must begin with how they understood and used them. If courts later tried to change those meanings then that change should be noted. In fact, the courts did not change the meanings. They struggled to try to understand them, and did so by trying to find examples. If a court says it can only find head and property taxes as examples of direct taxes, that is not a change of the underlying definition, any more than finding only the examples of poodles and pointers would change the underlying definition of dogs, or that anything that is not a poodle or a pointer is not a dog. Nor did the court rule that no other examples might be found in some future case. A tax on breathing air would be direct even though the air was not the property of the breather before the breath is taken. Judges are not, in general, legal historians or philosophers. They are under pressure to quickly decide among positions presented to them, none of which may be competently argued.

If the Framers had meant "direct tax" to consist only of head or property taxes, they would have said so. It is not as though they hadn't thought of those examples. That they chose a more abstract term shows they intended a distinction that might include other examples they hadn't thought of. It is the job of competent scholars to research the historical record to try to discern what they meant. But I agree we could use more cites to support my position and I will provide those as future edits in support of this position. In the meantime, I would appreciate leaving my edits in place, as they are historically correct. Bracton (talk) 16:31, 25 June 2008 (UTC)

Dear Bracton: You would be correct to say that if a court says it "can only find" head and property taxes as "examples" of direct taxes, that might not be a "change" of the "underlying definition." However, that is not the situation here. The courts have made definitive rulings on the subject, and have done so for many years.

With perhaps two possible exceptions, the U.S. federal courts have ruled that "direct" taxes in the legal sense -- the U.S. constitutional law sense -- are indeed limited to "capitations" and "taxes on property by reason of ownership". The views of historians are "interesting" for a historical perspective, but historians, as historians, cannot render official legal rulings about what is or is not a direct tax in the legal sense. Courts of law can and do render such rulings. There are, as far as I know, two federal court cases where the courts ruled that a particular U.S. federal income tax was treated as a "direct" tax. One of those cases was later overruled, and the other case remains as a distinct minority position.

Whether a particular tax is a "direct" tax in the U.S. constitutional law sense is not a "historical" issue; it is a legal issue. And the courts have already decided that issue. Over and over and over. Under the rules of Wikipedia, we are not free, as Wikipedia editors, to substitute our own views about that merely because we believe the courts are "wrong" on "history," and we are not free to confuse someone's theory about some sort of historical definition of direct tax and the actual legal definition that has been set by the courts. The U.S. courts have rejected the numerous "historical" definitions. Whether the courts are "right" or "wrong" about "history" makes no difference; under the U.S. legal system, the law is what the courts rule the law to be.

And no, I am not misinterpreting the literature or the cases. Regarding this verbiage:

Any discussion of the meaning must begin with how they understood and used them. If courts later tried to change those meanings then that change should be noted. In fact, the courts did not change the meanings.

No, that is incorrect. We as Wikipedia editors do not need to "begin in the way you described. And the courts have not merely "tried" to "change" the meanings.

Again, the courts are the official interpreters of the law, not the historians. When a court rules on the definition of direct tax, that ruling or interpretation is the law, by definition. And whether the courts "changed" the historical meanings or not is perhaps "interesting," but is not determinative. What is material and determinative is that the courts have ruled. Yours, Famspear (talk) 16:55, 25 June 2008 (UTC)

Weird, unsourced fragmented, tangential material

The following largely unsourced commentary was moved from the article to here:

in order to correct this definition without taking away from others nor making remote accusations, which in this matter indicates high crimes and high treason, let us examine history closer. The Pollock case indicates a FACT of law in the United States of America, which has not changed for one second.

Macomber vs. Eisner was another defining moment in history, to stop that Congress from further prostituting their office to the fiat "junkies".

To explain that consider that to pass a law is a power of trust and faith in your elected officials being exerted by the inaction of the People.

However never forget the Constitution is maximum law to all in government and military positions..........so to speak out about injustice is a protection and a mandate of that protection.

By due process of law in the courts we avoid war and death and destruction of the innocent persons in any nation.

The United Nations was created by those who have been trying to destroy freedom in the United States of America........not that it is not needed nor desired (U.N. as a tool for world peace).......it can never deny nor disparage the rights of the citizens of this nation nor any place of it. because..........................Current laws through it are not the same as the law of nations mentioned in the Constitution for the United States of America. OUR Constitution protects freedom the U.N. charter impedes it and destroys it. Our Constitution is a better role model for nations, when truthful and faithfully administrated by oath to it. Thus who in government can be paid without a truthful oath to it. The 16th attempt to amend has no empowerment clause, which is what is to be examined as being pointed out in the Macomber Case and established (based on info then available) in the least as a flexible working fact subject to adjustment later. The treason of Aldrich should be pursued as a reasonable point to investigate, the murders of all Presidents before and after his lifetime. He is dead. Rockefeller is dead. Jp Morgan is dead and Rothchild, etc...Their lives are now part of history, for which all citizens are entitled to be left accurate and certain factors considered such as the right to privacy and the safety such gives citizens from "bullies" in the "classroom" so to speak.

USA economy has, ab initio, a 100% value based on gold and silver (coin, thus 100 -40= 60%retained by the citizens from government). Coin is the critical word here in assessing accurate values and identifing errors. The bridge of thought to that is the seignorage the People's treasury was cheated out of. There is more to discuss here, but consider as an employer that to issue any IRS tax forms in 2009 could be treasonous and in excusable. Labor as a part of the cost is deductable, not the citizen nor their right to keep the compensation for their labor (pay). Social Security is a promise that was to be maintained 75 years into the future. It howwever does not escape conta bonos mores judical review for adjustment and revision to total constitutionally. It creates zero jurisdiction upon a citizen, but does upon those not a citizen. Point in question......stolen identities and those funds to be given to the identity victim. There is much to discuss nationwide (thank God for our blessing of computers and the internet here), while preventing income tax till these matters are fully examined by de jure Grand juries both state and national......Federal is colloquial and inaccurate as a description of Our national government. See also Article 4 protections against prejudice of claims

December 13, 2008

see also Jefferson's Opinion (prophesy) about a national bank...............for the safety of the innocent, this augmentation to continue so the People have time to peacefully and calmly examine the facts.......past, present and future.

Wikipedia articles are not the place for this. Yours, Famspear (talk) 14:44, 13 December 2008 (UTC)

New tax protester literature

As I'm at 3RR, I won't do any more than tag the recent additions as biased and incorrect, there being no applicable exception, regardless of how much nonsense from Bracton (talk · contribs) has suddenly appeared in the article. — Arthur Rubin (talk) 17:11, 26 April 2009 (UTC)

Specifics:

• The list at the top should only reflect the definitions included in the article, or it must represent some reliable source's consensus as to the relevant definitions. Otherwise it's WP:OR.
• Wording used only by tax protestors, or only with those definitions by tax protestors, should not be in the article except as in a tax protester section.
• Calling Adam Smith's views "classical historical" views requires a source. Although, to some extent, I wish it were true, I don't think it is.

— Arthur Rubin (talk) 17:33, 26 April 2009 (UTC)

I reverted the material to the last version by Arthur Rubin. Although I assume that editor Bracton is not aware of this, the bulk of the edits relate to various tax protester scams. For example, the reference to Benson and the Sixteenth Amendment is a reference to a tax evasion scheme by an ex-con -- a scheme that has been ruled in federal court to be a fraud. This is already covered in the article on Benson's book, The Law that Never Was. Famspear (talk) 18:49, 26 April 2009 (UTC)

PS: Adam Smith was a Scottish economist; he has not been accepted as an authority on legal definitions for terms found in the United States Constitution. Specifically, when the United States Supreme Court was asked to consider Adam Smith's work as a source for the definition of the term "direct tax", the Court rejected Adam Smith, in the Pollock case. Famspear (talk) 18:56, 26 April 2009 (UTC)

This article is not limited to the meaning courts might give it. It is about the term as it is or has been used by many people. Lawyers and judges don't own the English language. Bracton (talk) 19:03, 26 April 2009 (UTC)

You are reverting too much material if what you are objecting to is the cite to the book by Benson and Beckman. You also need to support your claim that courts have ruled that book to be a fraud. They have not. Some trial courts have rejected the arguments, but that is not the same as rejecting the findings or the book as such. We as editors are obliged to report on disputes that exist, without regard to whether we think they have merit. The dispute exists. It can be moved to a tax protester section, but the book itself is not a tax protest, even if some tax protesters cite it. Bracton (talk) 18:59, 26 April 2009 (UTC)

I will leave out the sentence for the time being that there is a dispute concerning whether the amendment was ratified, because that better belongs in the article on the amendment itself. However, that has no bearing on the various historical usages of the term for various writers. Bracton (talk) 19:17, 26 April 2009 (UTC)

Dear Bracton: Yes, the book is a tax protest, and it is tax protester literature. Please review the article The Law that Never Was. The argument that the Sixteenth Amendment was not properly ratified has not merely been rejected by "some" courts; it has been rejected by every single court that has decided the issue.

And the statement that the U.S. Supreme Court has not "ruled" on the subject is actually technically correct, but misleading. The Supreme Court has not ruled on the vast majority of legal points argued in the United States -- and the Court never will. The Supreme Court could not possibly do so; there are simply too many issues -- even major ones -- that are never decided by the Court. In the leading case of Cheek v. United States, the Court noted that the taxpayer (John Cheek) had made that argument in prior cases that the Sixteenth Amendment did not authorize a tax on wages and salaries, but only on gain or profit. See Cheek, 498 U.S. at 196. The Supreme Court noted that Cheek's arguments were frivolous. The Supreme Court never stated that MR. Cheek ever presented the non-ratification argument to the Supreme Court itself -- and so the lack of a Supreme Court ruling on that point in that case is obvious.

Yes, rejecting the Benson arguments is the same as rejecting the findings of the Benson book. Benson's "findings" are not merely that there were discrepancies in the amendment process. Benson's main "finding" (albeit a false one) is that the Sixteenth Amendment was not properly ratified, from a LEGAL standpoint. And that is false.

Benson made the fraudulent argument that because of discrepancies in the ratification process, the ratification process was invalid. The courts have pointed out that Benson did not even "discover" the discrepancies -- the discrepancies were addressed by the Secretary of State in the case of the Sixteenth Amendment, just as discrepancies are addressed in the case of any amendment. The Secretary sought legal counsel and determined that the discrepancies were insignificant, certified the amendment, and the states had already accepted that for over sixty years prior to the time Benson came up with his supposed "theory." Benson's arguments have been ruled to be fraudulent in courts, and the specific rulings -- in quotations -- are cited in the Benson article. Benson is notorious for making false statements not only about the Sixteenth Amendment but also about fake quotations from at least one court case. He was even caught in a falsehood regarding his own criminal conviction (he implied that he "discovered" the supposed non-ratification AFTER he went to prison, when in fact he wrote the book before he was convicted, and even used the book at his own trial. The court rejected his "theory." Just a few weeks ago, Benson lost YET AGAIN in court on the same Sixteenth Amendment non-ratification argument.

This is an article on direct taxes. Tax protester arguments -- especially those about the Sixteenth Amendment and especially the classic tax protester arguments by Bill Benson -- belong in the applicable tax protester articles. Read the actual language of the courts' rulings on Benson and his arguments.

No, I am sorry, but lawyers and judges DO OWN the English language when it comes to the authoritative meanings of legal terms, just as scientists who are experts on physics would be authoritative on the use of terms as used in the science of physics. As used in the Constitution, the term "direct tax" is a LEGAL term, not an "economics term." For purposes of Wikipedia, the rulings of courts of law and the writings of LEGAL EXPERTS (lawyers) are authoritative on the meanings of legal terms. Lawyers would not be authoritative on the meanings of economic terms and, for economic terms, we might look to a leading authority on economics, as Adam Smith definitely is one. We as Wikipedia editors are not here to try to re-argue the LEGAL meaning of "direct tax." We are here only to report on what reliable, previously published third party sources have stated. To argue that Adam Smith, a foreign economist, is an authority on the LEGAL definition of "direct tax" as used in the U.S. Constitution is not only prohibited original research, it also lacks verifiability, as Adam Smith never claimed to be providing the LEGAL definition that would be used in American courts.

Finally, the court were asked to adopt Adam Smith's definition, and the courts rejected Adam Smith.

It's fine to point out that the term "direct tax" is used in both a legal sense and an economic sense. Adam Smith would be an authority on the meaning of the term as used in the economics realm -- but definitely not in the U.S. Constitutional law realm. Famspear (talk) 19:41, 26 April 2009 (UTC)

We must disagree concerning whether the practitioners of any specialized field own the terms used in their field. That includes physicists and economists. As for legal terms, legal historians and linguists have no less claim to be "experts" on the use of legal terms than lawyers are. Some lawyers may happen to be but most are not. It is annoying for lawyers to take that position, which is definitely in conflict with the spirit and rules of Wikipedia. You might aspire to be treated as minor deities but most of the rest of us aren't buying it. Finally, the term "direct tax" predates the United States or its Constitution. If lawyers want to seize ownership of a meaning that developed after any laws were adopted, they can try, and there is a section devoted to their preferred usages (which are inconsistent and muddled), but this is a general article not confined to legal meanings, whatever those might be. However, among those court decisions are the very alternative meanings that appear in other sections. The courts may support the income tax on wages or claims of the IRS, but court opinions on what is or is not a "direct" tax are far from settled. Bracton (talk) 20:45, 26 April 2009 (UTC)

By the way, your statements above concerning whether Philander Knox considered the defects are not correct. Some defects were pointed out to him by an assistent, but not all the ones found by Benson and Beckman. If Benson & Beckman's findings are correct as a matter of history then as a matter of history the amendment was not ratified. Lawyers may disagree. They may adopt laws against the inflowing of the tide, and hold the laws valid, but the tide doesn't care, as Cnut pointed out. I am just waiting for some of them to require the rest of us to accept that two plus two make five. Bracton (talk) 20:50, 26 April 2009 (UTC)

Dear Bracton: With all due respect, that's wrong -- on a variety of points. First, I am speaking of Wikipedia policies. For purposes of Wikipedia, a Scottish economist is not considered an authority on U.S. constitutional law. U.S. Court rulings are considered authority. That's what I mean when I refer to your comment about "owning" (or not owning) the English language.

Further, court opinions on what is considered to be a "direct tax" for U.S. constitutional law purposes are indeed well settled. To the extent that a legal doctrine is not well settled, the proper sources of authority for purposes of Wikipedia would be sources in that field. Again, Adam Smith, a Scottish economist, was not an expert on U.S. Constitutional law, and he never claimed that his definition of "direct tax" was the definition of "direct tax" that should be used for purposes of the U.S. Constitution. For a Wikipedia editor to claim that Smith's definition is the definition for purposes of the U.S. Constitution would be not only prohibited original research, it would be blatantly false original research. Not only that, but those who have taken Adam Smith's definition and argued it in federal courts have been rejected by the courts. No federal court has ever accepted Adam Smith's for the U.S. Constitutional law definition of "direct tax." Period.

I won't go into all the detail, but the primary purpose of the "direct tax" debate -- and it's a debate only with respect to tax protesters -- is that somehow Congress cannot validly impose the current federal income tax. That argument has been ruled frivolous over and over and over.

You are also misunderstanding the Benson-Beckman matter. As a matter of law, the Sixteenth Amendment was properly ratified -- regardless of what Benson and Beckman "found" (or say they found). That is what every single court has ruled. That matter was affirmatively decided back in the 1980s. It is not a proper subject of debate in a court of law - a litigant can be fined for even bring up the argument, and Benson is in fact fortunate that he was not fined for bringing it up again in the recent case. We here in Wikipedia are not here to reframe the "debate," such as it is. The argument that the Sixteenth Amendment was not properly ratified is a scam.

There is an entire article on Sixteenth Amendment tax protester arguments (largely devoted to the Benson scam), plus an entire separate argument on the Benson scam (specifically, on his book). This article on direct taxes is not the proper place to re-hash matters that have already been well sorted out in the other articles.

You have the matter backwards. It's not a matter of Cnut and the tide. The fact that the term "direct tax" predates the United States or its Constitution is irrelevant. For purposes of Wikipedia, the proper authority for the meaning of a U.S. legal term would be court rulings or scholarly treatises by LEGAL experts, not economics treatises by non-U.S. economists. There is no magical, authoritative economics definition of a term that somehow "must" be used by the legal system.

Lawyers are not trying "to seize ownership of a meaning that developed after any laws were adopted." You brought up the issue of "ownership." For purposes of Wikipedia (and the legal system), the law is what the courts rule the law to be -- not what Bill Benson wants the law to be.

Wikipedia consensus has been that because tax protester arguments (especially the Benson non-ratification argument) are not only extreme lunatic fringe positions but also involve criminal activity if those positions are actually followed in filng or not filing tax returns (and please note that at least two people have gone to federal prison for actually using Benson's argument) these arguments should be limited to the tax protester articles themselves -- of which there are several voluminous examples here in Wikipedia. Famspear (talk) 22:08, 26 April 2009 (UTC)

PS: Regarding Bill Benson and his phony non-ratification argument, this is from the article The Law that Never Was:

[ . . . . ] Benson appealed the decision of the District Court. Benson argued that prohibiting him from selling his “Reliance Defense Package” and his “16th Amendment Reliance Package” was a violation of his First Amendment Rights. The Court of Appeals for the Seventh Circuit rejected that argument in a ruling on April 6, 2009. The Court ruled that although Benson could sell his book, The Law that Never Was, the court order prohibiting him from selling his “Reliance Defense Package” and his “16th Amendment Reliance Package” did not violate his First Amendment Right, as the sale of those two items constituted "false commercial speech." Entry 58, p. 14, April 6, 2009, case no. 08-1312 and case no. 08-1586, United States v. Benson, United States Court of Appeals for the Seventh Circuit.

The Court of Appeals stated:

Benson knew or had reason to know that his statements were false or fraudulent. 26 U.S.C. [section] 6700(a)(2)(A). Benson's claim to have discovered that the Sixteenth Amendment was not ratified has been rejected by this Court in Benson's own criminal appeal. [ . . . . ] Benson knows that his claim that he can rely on his book to prevent federal prosecution is equally false because his attempt to rely on his book in his own criminal case was ineffective. Entry 58, pp. 8 & 9, April 6, 2009, case no. 08-1312 and case no. 08-1586, United States v. Benson, United States Court of Appeals for the Seventh Circuit. (bolding added).

Yours, Famspear (talk) 22:19, 26 April 2009 (UTC)

Sorry, but it is not I who am arguing for the pass-through definition of Adam Smith and others being some kind of authority for constitutional construction. It is an historical meaning of a term that is not confined to the field of law. Historians snd economists can own terms, too, especially when they used them first. You seem so alarmed by the inclusion of a mere cite to show that there is dispute on one point that you are attacking every other edit. I no longer include that cite, okay. We can carry that edit war to other articles. You are clearly POV on this matter. I am not and have not argued for the merits of anyone's positions. Merely reporting them straight, and you should do the same. It should be pointed out that all of the alternative usages have appeared in some U.S. case or another, or in the documents of the Founders. Your POV is not just about law vs. history or other fields, but a particular position on an issue of law that is only tengentially connected to the subject of this article. Whether a tax is direct or indirect is independent of whether the income tax or claims of the IRS are valid, or even whether there is an income tax or IRS. The vehemence of your statements almost makes it seem like you feel personally threatened by anything even remotely similar to a "tax protester" argument. Let's try to be disinterested scholars, here. Bracton (talk) 23:24, 26 April 2009 (UTC)

Dear Bracton: Please refrain from making comments about other editors; "let's try to be disinterested scholars," as you put it. And I'm not the one making the bulk of the edits (and reversions) to the article, so I'm not "alarmed" about something, and I'm not engaged in an edit war. Please review the edit history. And the suggestion that an edit war be carried to other articles, if not in jest, is not appropriate; indeed, to take an "edit war" anywhere would be violation of Wikipedia rules.

I respectfully disagree with the assertion that the legal definition of "direct tax" (for U.S. constitutional law purposes) is tangential to the article. The definition is central to the article (as is the definition for purposes of economics -- e.g., the Adam Smith definition). See my prior remarks regarding Adam Smith.

This is not about "my POV," this is about Wikipedia rules on Verifiability and Original Research. Famspear (talk) 00:59, 27 April 2009 (UTC)

PS: At the expense of appearing to beat a dead horse -- regarding these statements:

"If Benson & Beckman's findings are correct as a matter of history then as a matter of history the amendment was not ratified. Lawyers may disagree."

Those statements are incorrect. Legal history is an area of advanced study and, in fact, the professor who taught the course in American Legal History I took in law school had a Ph.D. in history (and, interestingly, no law degree). We did not study the history of the Sixteenth Amendment in that particular class, but I can assure you that there is no such thing as two different sets of rules regarding the ratification of U.S. Constitutional amendments -- one for purposes of "history" and another for purposes of "law." There is only one set of rules, and there is no "historical" theory under which Benson and Beckman could somehow be "correct" about the ratification "history" of the Sixteenth Amendment. Famspear (talk) 02:15, 27 April 2009 (UTC)

You can assure me all you want but I also have a background in both law and history and there are indeed two sets of rules. One set is to look at the historical evidence, in the income tax amendment question, on whether 3/4 of the states ratified, on the record. The other set is to take a position on the legal question and ignore or distort the evidence to assert it. That is called "legal realism", to hold that "the law" is whatever judges say it is, just as O'Brien had Winston Smith proclaim 2+2=5 as an act of submission to the Party, whose only rule was Power. Operationally distinct. I have also seen how judges, lawyers, and historians alike can shed their integrity to preserve their careers, so I let the evidence speak for itself and give little weight to the positions of those whose self-interest makes them suspect.

By the way, your statements above are not the way to persuade people. I had a few friends over today. All liberal Democrats who are all in favor of using the income tax to soak the rich and redistribute their wealth. They thought big government and the income tax to be cool. None of them knew much about tax protests. A couple had never even read a Wikipedia article. So I showed them this one, and the Talk page, with no comment, just to get their unbiased reactions. After about a half hour I got a lot of "Wow!" reactions, then a lot of questions, and a lot of following links (once I showed a couple how). Your statements really got some of them angry, and sympathetic and interested in tax protest. I doubt many of them are going to mount the ramparts, but you definitely made a more persuasive argument to them for the position you oppose than the tax protesters could have made directly.

You don't persuade people by coming on so strong. A little "on the one hand, on the other hand" goes a long way. Let the evidence speak for itself, with a minimum of commentary. Bracton (talk) 02:58, 27 April 2009 (UTC)

The latest news on United States v. Benson, No. 08-1312 (7th Cir. 4/6/2009) is interesting:

The government clarified that the injunction does not prevent Benson from promoting his opinion in the public square. Neither is Benson prohibited from selling his book, The Law That Never Was, according to the government's brief.2 Therefore, Benson is not prohibited from distributing his opinion that the Sixteenth Amendment was not ratified or public documents that he believes support his claim − both of which are contained in his book.

In other words, the book itself and its findings are not a tax protest under 26 U.S.C. § 6700. Only the commercial speech involved in the other things he was selling. Bracton (talk) 04:05, 27 April 2009 (UTC)

Dear Bracton: No, that is incorrect. Section 6700 relates to abusive tax shelters, not to whether Benson's book constitutes a tax protest. The fact that Benson is not prohibited from selling his book by the court order does not make his book "not be tax protester material." The distinction between Benson's commercial speech in the materials that he is prohibited from selling and the book itself is a distinction I believe I've already covered in the article on Benson's book -- that's from the court order. All the materials in question relate to Benson's fraud regarding the legal validity of the Sixteenth Amendment.

No, there are not "two sets of rules" to determine whether the Sixteenth Amendment was properly ratified.

In the relevant period on 26 April, I made one edit to the article itself; you made over fifty edits in less than 24 hours, you violated the three revert rule, and you have been blocked by an administrator. I am not here primarily to "persuade" you or to debate with you about your feelings about lawyers. I am here to discuss ways to improve the article. Again, my point is that Wikipedia consensus has been to keep the tax protester material --especially the Benson materials -- in the articles on tax protester materials. Famspear (talk) 12:25, 27 April 2009 (UTC)

Bracton edits of April, 2009

I see that Arthur Rubin's 3RR period has expired before mine and that he has arbitrarily reverted all my edits without discussion in this Talk page. I propose to restore them to the content at User:Bracton/Sandbox/Direct_tax, but I also propose we discuss this here and try to reach consensus. If we cannot, then I will ask for arbitration by editors who don't have a professional stake in the subject field.

You will note that the article in the Sandbox now contains a subsection on U.S. state and local direct taxes, cited to a 1796 U.S. government report that was previously cited but now has a link to the Library of Congress website, so editors may read it for themselves. I also recommend reading my cite, also online, of a comprehensive law review article on the subject by a Professor of Law at the University of Texas. I suggest that anyone arguing to revert my edits that cite this scholar read his article first.

Contrary to the WP:OR comments of some editors, the usage of this term, synonyms for it, or the same concept, are not confined to the national government of the United States. It is also used for U.S. state and local government, and in most other English-speaking countries. It is appropriate to bring in at least short passages on those instances of use, each cited.

All of the meanings listed at the outset have their own sections in the Sandbox version proposed, all of which are cited to reliable sources.

As for the objection that the description of Adam Smith as "classical" is not cited, his article is in the category of Classical economists, and the word "classical" is used 11 times in his article. His influence can be seen in such writings of the Founders as the Report on Manufactures by Alexander Hamilton, a cite to which I have also added. He was also quoted extensively by Justice Patterson in his opinion in the Hylton case, as discussed in the majority opinion in the Pollock case. (Note the link to justia.com, which seems to have a more accurate version than findlaw.com.)

As for the argument that U.S. courts have "rejected" the pass-through meaning, they have not. In Pollock the majority actually accepted it, as a definition, which would have required them to find the tax was indirect, but decided on the basis of mainly English precedents that held income taxes to be direct. One of the dissents quoted below highlighted this.

Several points need to be understood:

First, U.S. courts only decide national cases, not state or local. A court decision is law only for the parties to the case, not for the public in general. That power is reserved exclusively to Congress or state legislatures, or to constitutional conventions.

Second, even within a federal jurisdiction, finding for one definition is not a rejection of others, especially if they were not proposed by the litigants, and even more if they are only dicta. Different definitions can distinguish the same things in the same ways, and may be used in different situations for different purposes. Definitions that classify objects the same way can be considered equivalent and not in conflict, and it is not OR to summarize them in the way editors must do in the normal course.

Third, the Pollock case discusses most of these meanings, rejects none of them, and cites to the writings of English jurists and lawmakers in reaching its finding, which has not been overturned, even if the income tax amendment may have changed the need for it. For example this from the majority opinion of Fuller:

“ ... the Constitution divided Federal taxation into two great classes, the class of direct taxes, and the class of duties, imposts, and excises, and prescribed two rules which qualified the grant of power as to each class. ”

But this is not a definition. It is a statement of classification. It doesn't provide criteria for deciding what actual taxes might be properly included in any of the classes listed.

He further cited with apparent approval "Mr. Hamilton's judgment at that time all internal taxes, except duties and excises on articles of consumption, fell into the category of direct taxes." That is a somewhat different classification, since "on articles of consumption" indicates the pass-through definition. He then goes on to further quote Hamilton in his arguments in Hylton,

“ ... we shall seek in vain for any legal meaning of the respective terms "direct and indirect taxes," and after forcibly stating the impossibility of collecting the tax if it is to be considered as a direct tax, he says, doubtingly:

"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...."

”

So he arrives at the key finding with this statement:

“ [Hamilton] gives ... a definition which covers the question before us. A tax upon one's whole income is a tax upon the annual receipts from his whole property, and as such falls within the same class as a tax upon that property, and is a direct tax in the meaning of the Constitution. ”

Note that he is not saying income is part of the definition. A tax on property may be classified as direct by definition, but the conclusion that income on property is part of that property is not part of the definition, but a logically independent proposition, based on comments by English jurists such as Coke, and the conclusion is disputed by the dissenters.

He further cites to English sources that income on property is part of the property:

“ In England, we do not understand that an income tax has ever been regarded as other than a direct tax. In Dowell's History of Taxation and Taxes in England, admitted to be the leading authority, the evolution of taxation in that country is given, and an income tax is invariably classified as a direct tax. 3 Dowell (1884) 103, 126. The author refers to the grant of a fifteenth and tenth and a graduated income tax in 1435, and to many subsequent comparatively ancient statutes as income tax laws. 1 Dowell, 121. It is objected that the taxes imposed by these acts were not, scientifically speaking, income taxes at all, and that, although there was a partial income tax in 1758, there was no general income tax until Pitt's of 1799. Nevertheless, the income taxes levied by these modern acts -- Pitt's, Addington's, Petty's, Peel's -- and by existing laws, are all classified as direct taxes; and, so far as the income tax we are considering is concerned, that view is concurred in by the cyclopedists, the lexicographers, and the political economists, and generally by the classification of European governments wherever an income tax obtains. ”

The relevance of the Wolcott report, though not cited in Pollock, is thus seen as indicative of what kinds of taxes were deemed "direct":

“ The founders anticipated that the expenditures of the States, their counties, cities, and towns, would chiefly be met by direct taxation on accumulated property, while they expected that those of the Federal government would be, for the most part, met by indirect taxes. ”

Although dissenting, Justice Harlan gathered and commented on earlier cases in a way that made several points that are relevant to the definition of "direct tax" that are not impaired by him being in the minority:

This one expresses the apportionability criterion:

“ The rule of apportionment is only to be adopted in such cases where it can reasonably apply; and the subject taxed must ever determine the application of the rule. ”

He quoted Justice Chase in Hylton that he could find only two examples: a capitation tax and a land tax. And quoting Justice Iredell:

“ As all direct taxes must be apportioned, it is evident that the constitution contemplated none as direct but such as could be apportioned. If this cannot be apportioned, it is, therefore, not a direct tax, in the sense of the constitution. ”

That is a statement of apportionability being a definition, or defining criterion.

Justice Brown, also in dissent in Pollock, says:

“ If the question what is and what is not a direct tax were now for the first time presented, I should entertain a grave doubt whether, in view of the definitions of a direct tax given by the courts and writers upon political economy during the present century, it ought not to be held to apply not only to an income tax, but to every tax, the burden of which is borne, both immediately and ultimately, by the person paying it. It does not, however, follow that this is the definition had in mind by the framers of the constitution. ”

In other words, the pass-through meaning was one of the meanings in play, even if it wasn't the meaning for constitutional purposes for national taxation.

He goes on to make some key points:

“ To bring the tax within the rule of apportionment, it must not only be a tax upon land, but it must be a direct tax upon land. The constitution only requires that direct taxes be laid by the rule of apportionment. We have held that direct taxes include, among others, taxes upon land, but it does not follow from these premises that every tax upon land is a direct tax. A tax upon the product of land ... is ... a tax upon the land. 'For,' as Lord Coke said, 'what is the land but the profits thereof?' ... [It] is also subject to the other objection, that it is, in its nature, incapable of apportionment according to population. ”

And:

“ No tax, therefore, can be regarded as a direct tax, in the sense of [the Constitution], which is incapable of apportionment ... ”

Here is the dissenting complaint of accepting the economic definition but then ignoring it:

“ These decisions ... hold that the word 'direct,' in the constitution, refers only to direct takes on land, and therefore has a constitutional significance wholly different from the sense given to that word by the economists. The ruling now announced ... subverts the economic signification of the word 'direct,' which it seemingly adopts. Under that meaning, taxes on business gains, professional earnings, and salaries are as much direct, and indeed even more so, than would be taxes on invested personal property. ... Thus the adoption of the economic meaning of the word destroys the decisions, and they, in turn, destroy the rule established. ... the conclusion now announced rests neither upon the economic sense of the word 'direct,' nor the constitutional significance of that term. ”

From all this we can only summarize that several meanings were in play and still are. This article needs to present them all. Bracton (talk) 17:24, 30 April 2009 (UTC)

I agree that several meanings are at play, without determining if your quotes are on topic. Some of the ones you've added are clearly not accurately quoting the source, are clearly quoting a source without credibility at the time, or just don't support your interpretation of the meaning. For example, your statement that the Pollack Court found income taxes, in general, to be direct taxes is clearly false. The Court found that income taxes on income from property was a direct tax on the property. It specifically did not find that the income tax, except in regard income from property, was a direct tax. — Arthur Rubin (talk) 20:56, 30 April 2009 (UTC)

You need to be more specific. I did not state that the Pollock court found all income taxes to be direct. I accurately quoted from the Pollock opinions, which were quoting other persons in other cases and writings. Granted, the quotes are in the context of a more extended discussiion, and one needs to go back to the original to get the entire thing, but links are provided for anyone to do that. You have also not made a supported argument for not revising the article as I propose. Bracton (talk) 22:15, 30 April 2009 (UTC)

It is a Poll tax according to Websters dictionary, 1954...when did the meaning change?

Capital Levy - A general tax on capital property to meet government obligations in an ermergency. Same cite as above.

Capital - Principal available for investment.

A Capitalist - one using his capital in a proctive enterprise, employing labor.

The 1913 Individual income tax was not a laborer tax, it was a business tax on an individual bank, insurance company, capital stock (corporations, associations, partnerships and individuals).

The laborers income is based on a predetermined cost of living and should never be taxed,

Why??? They are the ones that fight so that capitalist can enjoy their freedom being a capitalist.

Shame on anyone who tries to imply anything other than the above as the "greater Good".

Health care should come at no cost. Those with slaves have no religion...a fool only fools himself. — Preceding unsigned comment added by 12.177.242.131 (talk) 02:32, 29 March 2012 (UTC)

Indirect labor

In business, how is a person who is defined as indirect labor (overhead) taxed, if indirect tax is paid by the consumer. — Preceding unsigned comment added by 12.177.242.131 (talk) 04:25, 15 April 2012 (UTC)

Definition

This article is wrong and should be amended.

A direct tax cannot be one that is "paid directly to the government by the persons on whom it is imposed" as this is a meaningless term. In the UK, Income tax is paid directly to the Government by the employer for an employee and so must be, using this definition, an indirect tax. However for a self-employed person income tax is paid by him directly to the government and so, again using this definition, is a direct tax. So UK Income tax is both a direct and an indirect tax, under this definition, hence the term is meaningless and the main differentiation term of taxes has no meaning.

This definition refers to the collection method not the tax itself. A directly collected tax would have this definition and UK income tax would be collected both directly and indirectly (as it is). Using the definition as given only Corporation tax and Capital gains tax and very minor taxes such as road fund and TV licence etc are direct taxes, in the UK, the bulk of the taxes have some element of deduction at source.

A direct tax is, and always has been, a tax that is assessed based on the circumstances of the taxpayer. So graduted poll taxes, income tax, corporation tax etc are direct taxes and "anonymous" taxes such as excise duties, customs duties, VAT, sales tax, poll taxes etc. are indirect taxes. — Preceding unsigned comment added by 87.113.202.75 (talk) 15:12, 28 April 2012 (UTC)

No, the term "direct tax" has different meanings. This is discussed in the article. A given tax can be a "direct tax" under one definition and an "indirect tax" under another definition. Even in a given taxation system, the term "direct tax" can have different meanings. Please re-read the article. Famspear (talk) 16:24, 28 April 2012 (UTC)

U.S. article?

This article appears to be primarily about direct taxation in the United States. Is it applicable elsewhere? 68.47.23.59 (talk) 13:15, 12 August 2012 (UTC)

The term "direct tax" is probably used in other nations where the primary language is English. The term may or may not mean the same thing in those countries. All Wikipedia articles are "works in progress," so it's possible expand the article to add information on how the term "direct tax" is used in countries other than the United States. Famspear (talk) 16:27, 12 August 2012 (UTC)

Direct and indirect are the same. Unless someone purposely makes indirect unaccountable.

If you were to throw a ball directly at one tree, purposely...that is a direct hit each time. If you were to miss the tree and a person was walking behind a tree, you hit that person directly but it was an indirect hit because you were not aiming at a person. You can account for hitting the tree, but you cannot account for hitting a person, because you never know when a person might be walking behind the tree. They may never or they may always walk. In order to have an indirect tax, it first must be direct and accountable...that's what makes direct and indirect the same tax. You may not be able to account for the indirect at first, but eventually the indirect becomes direct.

Taxes have been around long enough for any lawyer to understand that concept.

While talking about taxes...it is impossible for any government to assess every tax return within three years, unless you hire one person for each person that files a tax return. It becomes even more ridiculous once Fraud enters the picture. I'm sure every tax preparer understands that concept. Unless the Supreme Court, district court judges, understand the concept of ADP at the IRS, along with congress, the country will continue to fail. Which would account for hedging.

financial planning on tax

To help plan how much you pay for tax so you have enough left over. 102.249.2.203 (talk) 15:12, 6 March 2023 (UTC)