Hendrickson Explains the 16th Amendment

[fortinbras]

It is not absolutely clear that a tax on income is a 'direct' tax. There are conflicting authorities. Some say that an income tax is indirect. Although I tend to agree that it is indirect, there seems to be a majority opinion that it is direct.

And that's pretty much the point. The Sixteenth Amendment was, in large part, intended to skip any debate about whether an income tax is direct (which would require, under Art. I, § 9, cl. 4, proportional apportionment) or indirect (in which case it would not require any apportionment). In essence, the 16th Amendment says "it doesn't matter; even if the income tax is direct, we are making an exception for it, and it can be applied without apportionment."

[Gregg]

I would posit, that at least since the 16th Amendment, that an income tax is neither a direct nor indirect tax, it is, well, an income tax, an entirely separate class of tax created by the 16th Amendment.

Whether that is technically true or not, it is the effective reality.

[Cpt Banjo]

I would posit, that at least since the 16th Amendment, that an income tax is neither a direct nor indirect tax, it is, well, an income tax, an entirely separate class of tax created by the 16th Amendment.

Whether that is technically true or not, it is the effective reality.

This would be the case only so long as the tax were geographically uniform throughout the Unuited States. A nonuniform tax would raise the question whether the income tax is an excise, duty, or impost, or otherwise had to satisfy the Uniformity Clause. I doubt that a court would hold that an income tax didn't have to satisfy either uniformity or apportionment.

Compare the following:

If there are any other species of taxes that are not direct, and not included within the words duties, imposts, or excises, they may be laid by the rule of uniformity, or not; as Congress shall think proper and reasonable. If the framers of the Constitution did not contemplate other taxes than direct taxes, and duties, imposts, and excises, there is great
inaccuracy in their language. If these four species of taxes were all that were meditated, the general power to lay taxes was unnecessary. If it was intended, that Congress should have authority to lay only one of the four above enumerated, to wit, direct taxes, by the rule of apportionment, and the other three by the rule of uniformity, the expressions would have run
thus: 'Congress shall have power to lay and collect direct taxes, and duties, imposts, and excises; the first shall be laid according to the census; and the three last shall be uniform throughout the United States.' The power, in the eighth section of the first article, to lay and collect taxes, included a power to lay direct taxes, (whether capitation, or any other) and also duties, imposts, and excises; and every other species or kind of tax whatsoever, and called by any other name. Duties, imposts, and excises, were enumerated, after the general term taxes, only for the purpose of declaring, that they were to be laid by the rule of uniformity. I consider the Constitution to stand in this manner. A general power is given to Congress, to lay and collect taxes, of every kind or nature, without any restraint, except only on exports; but two rules are prescribed for their government, namely, uniformity and apportionment: Three kinds of taxes, to wit, duties, imposts, and excises by the first rule, and capitation, or other direct taxes, by the second rule.

I believe some taxes may be both direct and indirect at the same time. If so, would Congress be prohibited from laying such a tax, because it is partly a direct tax?
Justice Chase, in Hylton v. U.S., 3 U.S. 171, 173 (1791).

The term taxes, is generical, and was made use of to vest in Congress plenary authority in all cases of taxation. The general division of taxes is into direct and indirect. Although the latter term is not to be found in the Constitution, yet the former necessarily implies it. Indirect
stands opposed to direct. There may, perhaps, be an indirect tax on a particular article, that cannot be comprehended within the description of duties, or imposts, or excises; in such case it will be comprised under the general denomination of taxes. For the term tax is the genus, and includes,
1. Direct taxes.
2. Duties, imposts, and excises.
3. All other classes of an indirect kind, and not within any of the classifications enumerated under the preceding heads.
The question occurs, how is such tax to be laid, uniformly or apportionately? The rule of uniformity will apply, because it is an indirect tax, and direct taxes only are to be apportioned.
Justice Paterson, in Hylton, 3 U.S. at 176

The Congress possess the power of taxing all taxable objects, without limitation, with the particular exception of a duty on exports. There are two restrictions only on the exercise of this authority: 1. All direct taxes must be apportioned. 2. All duties, imposts, and excises must be uniform. If the carriage tax be a direct tax, within the meaning of the Constitution, it must be apportioned. If it be a duty, impost, or excise, within the meaning of the Constitution, it must be uniform. If it can be considered as a tax, neither direct within the meaning of the Constitution, nor comprehended within the term duty, impost or excise; there is no provision in the Constitution, one way or another, and then it must be left to such an operation of the power, as if the authority to lay taxes had been given generally in all instances, without saying whether they should be apportioned or uniform; and in that case, I should presume, the tax ought to be uniform; because the present Constitution was particularly intended to affect individuals, and not states, except in particular cases specified...
Justice Irdell, in Hylton , 3 U.S. at 181

And although there have been, from time to time, intimations that there might be some tax which was not a direct tax, nor included under the words 'duties, imports, and excises,' such a tax, for more than 100 years of national existence, has as yet remained undiscovered, notwithstanding the stress of particular circumstances has invited thorough investigation into sources of revenue.
Pollock v. Farmers' Loan and Trust Co.157 U.S. 429, 557 (1895)

[Pottapaug1938]

Given that the Hylton and Pollock cases predated the 16th Amendment, I would want to see similar cases from 1916, or afterwards, before deciding whether the standards in either case are still valid.

[Cpt Banjo]

I doubt if there are any, because the income tax has never been held to violate the Uniformity Clause. There are unfortunate dicta in some cases that refer to the income tax as a direct tax that, per the 16th Amendment, needn't be apportioned. Dan has explained this in his FAQ:
http://evans-legal.com/dan/tpfaq.html#individual

[Dr. Caligari]

No. This is an old, old tax protester misconception – that the reference to "apportioned among the states" means "apportioned among the state GOVERNMENTS", and that somehow the state governments are the entities liable for the tax. Totally false.

I'd like to see some proof of that assertion. A state might have a different way of raising the tax other than taking an equal share from each person. And indigent person has no share to give. Would the state throw him in jail and pay for his support because he didn't pay the tax? I doubt it. More likely the state would raise the money through an additional property tax or sales tax, on the assumption that those who own land or can buy things have the money to contribute to the tax.

"Apportionment among the states" seems to put the state governments in control of raising their share of the dough. But of course which states would tolerate such a tax when they no longer have a say in the federal government?

Bob:
We actually had an apportioned direct tax during the War of 1812, when many of the authors of the Constitution were still serving. It was not collected from, or by, the states. The way it worked was this:
Congress voted first to raise a certain sum (I think it was $4 million). They then divided that figure by the states' populations under the Census of 1810, to get an amount to be collected in each state. They then provided for the Treasury Department to send federal tax collectors into each state to raise that state's share of the tax by assessing the real property in the state and taxing it.