Comment: About the Direct vs. Indirect thing ...

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About the Direct vs. Indirect thing ...

Hey guys, I'm all for getting rid of the the income tax. Throw it out because it wasn't ratified, is not interpreted correctly, is downright immoral ... I'm all for it.

BUT ...

There is an issue that gets repeated amongst libertarians all the time that is simply NOT TRUE.

Here's the deal:

(1) The Constitution (pre-16th Amendment) said there are two types of taxes: direct and indirect.

(2) The framers understood that a direct tax was on a person or his property (mere ownership), while an indirect tax was on an activity (such as buying moonshine).

(3) In Pollack vs. Farmers (1895), the SCOTUS struck down the 1894 Income Tax Act because ONE PART of it was a direct tax without apportionment. That ONE PART was where they were taxing dividends and rental income. The SCOTUS said that income DERIVED FROM the ownership of something (corporate stock or rental property) was the same as taxing the ownership, which means it was a direct tax ... BUT, BUT, BUT ... all the REST OF the 1894 Income Tax Act was constitutional because the "other" incomes being taxed were indirect taxes, which were OK. But because one part was unconstitutional, the whole thing was thrown out, which was the right thing to do.

(4) In Brushaber vs. Union Pacific RR (1916), the court said that the 16th Amendment (assuming it was properly ratified, which was not a question in this case) made ANY form of income an indirect tax, not direct tax, even if the income was DERIVED from the ownership of something (which, they said, is why the amendment said "without regard to source"). "Source," contrary to what some people say, is not a PLACE, but rather is an ACTION which has a place. (The Brushaber court did not say that last part, but it is they way "source" is interpreted.)

So ...

I'm all for throwing the whole damn thing out. BUT, it is just factually wrong to say that the SCOTUS's position is that it's a direct tax. I think the SCOTUS got it WRONG ... but that is what they said.

I do not believe for even a MILLISECOND that the current SCOTUS will do a damn thing, unless they make things even worse.

But we should be as accurate with the facts as we can be.