Continuing with Famspear

[Imalawman]

Actually, on the state level, some states referred to their tax as a death tax regularly. You'll even find it in some state administrative decisions. But you'll never hear that term used for the estate tax in professional circles.

[SteveSy]

We adopted our basic principles of law from other countries, namely England. To most that would seem like a logical conclusion. However, we have people like you that dismiss this common sense fact so you can pretend your position is reasonable. The term "Direct tax" is not something the founders invented or thought of on their own. They obviously adopted the term from somewhere else. That type of tax includes the earnings of a working man in every single country we could have adopted that term from.

What is your source for the conclusion other countries included the earnings of working people in the definition of 'direct tax?'

Both Springer and Pollock show 'incomes' were always considered 'excises' under English tax law. Where am I mistaken?

- POLLOCK v. FARMERS' LOAN & TRUST CO., 157 U.S. 429 (1895)

Man, I'm not quite sure where you got your info from but its seriously flawed.

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 ad istinction 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.

[SteveSy]

More importantly, why does it matter?

It is clear that the power to tax under Article I includes the power, vested in Congress, to impose a direct tax. If this is not the case, why does Article I, Section 9 say that a direct tax is subject to apportionment?

I never said they couldn't lay one...why would you even presume I said they couldn't. In fact right above I argue such a tax has always been a direct tax.

The 16th Amendment clearly states that an income tax is not subject to the apportionment requirement of Article I, Section 9, meaning that it is completely irrelevant if you call the income tax a direct tax, an excise, etc. it is within Congress' power and it is not subject to apportionment.

Ummm....so which is it, the 16th gave congress the power to tax incomes as a direct tax without apportionment or congress always had the power to tax incomes without apportionment. Seems you guys can't keep your arguments straight.

As soon as you take a solid position on the subject we can discuss the finer points.

[SteveSy]

Dropping the legal point for just a moment, ask yourself this practical question: How would a wage earner for the year 1913 (or, more specifically, for the period March 1 - December 31, 1913, which was the period covered by the 1913 income tax) whose total wage amounts happened to far exceed the amounts of exemptions, deductions, etc. for the year (and I am gonna go out on a limb here and assume that there must have been at least a few such individuals) have known how to apply your argument -- that some or all of his "wages" were not "income," based on the word "derived"? I mean, how would that have actually worked, when he or she was reading the instructions and filling out the form?

It's simple none of his wages were taxed. Income derived from his wages was taxed. If he put his wages to use in some form as capital the increase or gain severed from it for his own use and benefit is what is taxed, not the wage itself. It's nonsensical to say "wages are 100% income and that is what is taxed" and in your next breath say "income derived from wages is taxed" as if they mean the same thing. Again its akin to saying "I have a cup of liquid and I'm going to derive a cup of water from it. When asked what the liquid is you say "water". It's so obvious you're wrong....to derive something you are taking something different from the thing you are deriving it from. Simply changing the name doesn't make the statement rational.

In a nation of millions of people (even back in early 1914, when people would have been completing the forms) how would people have known to "take out" the part of the "wage" that was supposedly not "income"?

How do you take out your earnings out of your investments now on a 1040?

[Cpt Banjo]

It's simple none of his wages were taxed. Income derived from his wages was taxed.

Except that this bit of sophistry is belied by the fact that the 1913 law required an employer to withhold taxes on the wages.

It's nonsensical to say "wages are 100% income and that is what is taxed" and in your next breath say "income derived from wages is taxed" as if they mean the same thing. Again its akin to saying "I have a cup of liquid and I'm going to derive a cup of water from it. When asked what the liquid is you say "water". It's so obvious you're wrong....to derive something you are taking something different, a change in state, from the thing you are deriving it from. Simply changing the name doesn't make the conclusion rational.

If this piece of drivel is correct, then it follows that when the 1913 Act taxed income derived from dividends, interest, and rents, it didn't intend to tax the dividends, interest, and rents themselves, but only what the recipient derived from them. Who knew that Congress was giving the rich such a break?

[SteveSy]

It's simple none of his wages were taxed. Income derived from his wages was taxed.

Except that this bit of sophistry is belied by the fact that the 1913 law required an employer to withhold taxes on the wages.

That's wrong....

Please get your facts straight or at least be more specific. Employers in general were not required to withhold taxes from wages in 1913.

It's nonsensical to say "wages are 100% income and that is what is taxed" and in your next breath say "income derived from wages is taxed" as if they mean the same thing. Again its akin to saying "I have a cup of liquid and I'm going to derive a cup of water from it. When asked what the liquid is you say "water". It's so obvious you're wrong....to derive something you are taking something different, a change in state, from the thing you are deriving it from. Simply changing the name doesn't make the conclusion rational.

If this piece of drivel is correct, then it follows that when the 1913 Act taxed income derived from dividends, interest, and rents, it didn't intend to tax the dividends, interest, and rents themselves, but only what the recipient derived from them. Who knew that Congress was giving the rich such a break?

Income derived from wages, salaries or compensation for services was included in net income everything else was just plain "income from". Income being the gain or profit over expense.

All persons, firms, copartnerships companies, corporations, joint- stock companies or associations, and insurance companies, in whatever capacity acting, including lessees or mortgagors of real or personal property, trustees acting in any trust capacity, executors, administrators, agents, receivers, conservators, employers, and all officers and employees of the United States having the control, receipt custody, disposal, or payment of interest, rent, salaries, wages, premiums, annuities, compensation, remuneration, emoluments, or other fixed or determinable annual gains, profits, and income of another person, exceeding $3,000 for any taxable year, other than dividends on capital stock, or from the net earnings of corporations and joint-stock companies or associations subject to like tax, who are required to make and render a return in behalf of another, as provided herein, to the collector of his, her, or its district, are hereby authorized and required to deduct and withhold from such annual gains, profits, and income such sum as will be sufficient to pay the normal tax imposed thereon by this section, and shall pay to the officer of the United States Government authorized to receive the same; and they are each hereby made personally liable for such tax. In all cases where the income tax of a person is withheld and deducted and paid or to be paid at the source, as aforesaid, such person shall not receive the benefit of the deduction and exemption allowed in paragraph C of this section ex- cept by an application for refund of the tax unless he shall, not less than thirty days prior to the day on which the return of his income is due, file with the person who is required to withhold and pay tax for him, a signed notice in writing claiming the benefit of such exemption and thereupon no tax shall be withheld upon the amount of such exemption:

- 1913 Tax act

[Quixote]

Please get your facts straight or at least be more specific. Employers in general were not required to withhold taxes from wages in 1913.

Nice half truth, Steve. Only employers who paid more than $3,000 in wages to an employee were required to withhold tax from those wages.

[SteveSy]

Please get your facts straight or at least be more specific. Employers in general were not required to withhold taxes from wages in 1913.

Nice half truth, Steve. Only employers who paid more than $3,000 in wages to an employee were required to withhold tax from those wages.

Ummm where do you see that? The only requirement that I saw was for people who were required to file for someone else. They were required to withhold the tax on incomes greater than $3,000. I quoted the relevant section above.

Besides the law clearly makes a distinction between "income" and "wages" in the above quote. Even if there were some kind of requirement that doesn't mean wages were taxed or even considered as income, it just means the government was going to insure it got a tax on the potential income via gross earnings and refunds would be issued on withheld money that wasn't to be taxed.

[Cpt Banjo]

If this piece of drivel is correct, then it follows that when the 1913 Act taxed income derived from dividends, interest, and rents, it didn't intend to tax the dividends, interest, and rents themselves, but only what the recipient derived from them. Who knew that Congress was giving the rich such a break?

Income derived from wages, salaries or compensation for services was included in net income everything else was just plain "income from". Income being the gain or profit over expense.

A non sequitur. If you say that when the statute purported to tax income derived from wages, it didn't intend to tax the wage itself, then to be consistent (never one of your strong points), you must also take the position that when the statute purported to tax income derived from dividends, interest, and rent, it didn't intend to tax the dividends, interest, and rent themselves.

All persons, firms, copartnerships companies, corporations, joint- stock companies or associations, and insurance companies, in whatever capacity acting, including lessees or mortgagors of real or personal property, trustees acting in any trust capacity, executors, administrators, agents, receivers, conservators, employers, and all officers and employees of the United States having the control, receipt custody, disposal, or payment of interest, rent, salaries, wages, premiums, annuities, compensation, remuneration, emoluments, or other fixed or determinable annual gains, profits, and income of another person, exceeding $3,000 for any taxable year, other than dividends on capital stock, or from the net earnings of corporations and joint-stock companies or associations subject to like tax, who are required to make and render a return in behalf of another, as provided herein, to the collector of his, her, or its district, are hereby authorized and required to deduct and withhold from such annual gains, profits, and income such sum as will be sufficient to pay the normal tax imposed thereon by this section, and shall pay to the officer of the United States Government authorized to receive the same; and they are each hereby made personally liable for such tax. In all cases where the income tax of a person is withheld and deducted and paid or to be paid at the source, as aforesaid, such person shall not receive the benefit of the deduction and exemption allowed in paragraph C of this section ex- cept by an application for refund of the tax unless he shall, not less than thirty days prior to the day on which the return of his income is due, file with the person who is required to withhold and pay tax for him, a signed notice in writing claiming the benefit of such exemption and thereupon no tax shall be withheld upon the amount of such exemption:

- 1913 Tax act[/quote]

And the requirement to make and render a return was as follows:

…and also all persons, firms, companies, copartnerships, corporations, joint-stock companies or associations, and insurance companies, except as hereinafter provided, in whatever capacity acting, having the control, receipt, disposal, or payment of fixed or determinable annual or periodical gains, profits, and income of another person subject to tax, shall in behalf of such person deduct and withhold from the payment an amount equivalent to the normal income tax upon the same and make and render a return, as aforesaid, but separate and distinct, of the portion of the income of each person from which the normal tax has been thus withheld, and containing also the name and address of such person or stating that the name and address or the address, as the case may be, are unknown: Provided, That the provision requiring the normal tax of individuals to be withheld at the source of the income shall not be construed to require any of such tax to be withheld prior to the first day of November, nineteen hundred and thirteen: Provided further, That in either case above mentioned no return of income not exceeding $3,000 shall be required…

[SteveSy]

If this piece of drivel is correct, then it follows that when the 1913 Act taxed income derived from dividends, interest, and rents, it didn't intend to tax the dividends, interest, and rents themselves, but only what the recipient derived from them. Who knew that Congress was giving the rich such a break?

Income derived from wages, salaries or compensation for services was included in net income everything else was just plain "income from". Income being the gain or profit over expense.

A non sequitur. If you say that when the statute purported to tax income derived from wages, it didn't intend to tax the wage itself, then to be consistent (never one of your strong points), you must also take the position that when the statute purported to tax income derived from dividends, interest, and rent, it didn't intend to tax the dividends, interest, and rent themselves.

I am consistent, you are not.

No it did not mean to tax them if it said income derived from those things. For instance rent isn't 100% income, it also include securities along with rents in the same line. Are you saying securities were taxed as income?

All persons, firms, copartnerships companies, corporations, joint- stock companies or associations, and insurance companies, in whatever capacity acting, including lessees or mortgagors of real or personal property, trustees acting in any trust capacity, executors, administrators, agents, receivers, conservators, employers, and all officers and employees of the United States having the control, receipt custody, disposal, or payment of interest, rent, salaries, wages, premiums, annuities, compensation, remuneration, emoluments, or other fixed or determinable annual gains, profits, and income of another person, exceeding $3,000 for any taxable year, other than dividends on capital stock, or from the net earnings of corporations and joint-stock companies or associations subject to like tax, who are required to make and render a return in behalf of another, as provided herein, to the collector of his, her, or its district, are hereby authorized and required to deduct and withhold from such annual gains, profits, and income such sum as will be sufficient to pay the normal tax imposed thereon by this section, and shall pay to the officer of the United States Government authorized to receive the same; and they are each hereby made personally liable for such tax. In all cases where the income tax of a person is withheld and deducted and paid or to be paid at the source, as aforesaid, such person shall not receive the benefit of the deduction and exemption allowed in paragraph C of this section ex- cept by an application for refund of the tax unless he shall, not less than thirty days prior to the day on which the return of his income is due, file with the person who is required to withhold and pay tax for him, a signed notice in writing claiming the benefit of such exemption and thereupon no tax shall be withheld upon the amount of such exemption:

- 1913 Tax act

And the requirement to make and render a return was as follows:

…and also all persons, firms, companies, copartnerships, corporations, joint-stock companies or associations, and insurance companies, except as hereinafter provided, in whatever capacity acting, having the control, receipt, disposal, or payment of fixed or determinable annual or periodical gains, profits, and income of another person subject to tax, shall in behalf of such person deduct and withhold from the payment an amount equivalent to the normal income tax upon the same and make and render a return, as aforesaid, but separate and distinct, of the portion of the income of each person from which the normal tax has been thus withheld, and containing also the name and address of such person or stating that the name and address or the address, as the case may be, are unknown: Provided, That the provision requiring the normal tax of individuals to be withheld at the source of the income shall not be construed to require any of such tax to be withheld prior to the first day of November, nineteen hundred and thirteen: Provided further, That in either case above mentioned no return of income not exceeding $3,000 shall be required…

Right, with this provision "who are required to make and render a return in behalf of another, as provided herein, to the collector of his, her, or its district".

Are you implying employers and corporations withholding the tax were required to file a return on behalf of the taxpayer back then.....Man that would be nice.

[Quixote]

No, Steve, there is no such provision in that paragraph. If there were, you could highlight it and would have, as you did with that provision in paragraph E. Such a provision would make no sense in paragraph D, because paragraph D decribes who must file a return for someone else.

Are you implying employers and corporations withholding the tax were required to file a return on behalf of the taxpayer back then.....Man that would be nice.

There's no need to imply anything. The requirement that an employer withhold and file a return on behalf of the employee is right there in black and white.

[SteveSy]

Nice half truth, Steve. Only employers who paid more than $3,000 in wages to an employee were required to withhold tax from those wages.

Ummm where do you see that? The only requirement that I saw was for people who were required to file for someone else. They were required to withhold the tax on incomes greater than $3,000. I quoted the relevant section above.

And who was required to file for someone else? Well, paragraph D, the one right above paragraph E from which you quoted, says anyone who pays more than $3000 has to file a return for the payee.

Treasury, shall prescribe, setting forth specifically the gross amount of income from all separate sources and from the total thereof, deducting the aggregate items or expenses and allowance herein authorized; guardians, trustees, executors, administrators, agents, receivers, conservators, and all persons, corporations, or associations acting in any fiduciary capacity, shall make and render a return of the net income of the person for whom they act, subject to this tax, coming into their custody or control and management, and be subject to all the provisions of this section which apply to individuals:

- Paragraph D


This is all silly because they withheld on gross earnings.

[Quixote]

Ummm where do you see that? The only requirement that I saw was for people who were required to file for someone else. They were required to withhold the tax on incomes greater than $3,000. I quoted the relevant section above.

And who was required to file for someone else? Well, paragraph D, the one right above paragraph E from which you quoted, says anyone who pays more than $3000 has to file a return for the payee.

Treasury, shall prescribe, setting forth specifically the gross amount of income from all separate sources and from the total thereof, deducting the aggregate items or expenses and allowance herein authorized; guardians, trustees, executors, administrators, agents, receivers, conservators, and all persons, corporations, or associations acting in any fiduciary capacity, shall make and render a return of the net income of the person for whom they act, subject to this tax, coming into their custody or control and management, and be subject to all the provisions of this section which apply to individuals:

- Paragraph D


This is all silly because they withheld on gross earnings....You can't honestly be saying that everything that was withheld was considered "income" by the government.

That passage has nothing to do with what I'm saying. Cpt Banjo provided the relevant passage, but you didn't bother to read it.

[Famspear]

Steve: Earlier, you wrote:

It's nonsensical to say "wages are 100% income and that is what is taxed" and in your next breath say "income derived from wages is taxed" as if they mean the same thing. Again its [sic] akin to saying "I have a cup of liquid and I'm going to derive a cup of water from it. When asked what the liquid is you say "water". It's so obvious you're wrong....to derive something you are taking something different, a change in state, from the thing you are deriving it from. Simply changing the name doesn't make the conclusion rational.

Cpt Banjo responded as follows:

If this piece of drivel is correct, then it follows that when the 1913 Act taxed income derived from dividends, interest, and rents, it didn't intend to tax the dividends, interest, and rents themselves, but only what the recipient derived from them [ . . . ]

(bolding added by Famspear).

You, Steve, then responded with:

Income derived from wages, salaries or compensation for services was included in net income[;] everything else was just plain "income from". Income being the gain or profit over expense.

(bolding added by Famspear). Steve, I don't follow you here. What about the year 1913 amounts derived from interest on notes, mortgages or securities? What about amounts derived from coupons, checks or bills? What about amounts derived from sales or dealings in property? Are you saying that the term "derived" wouldn't apply to those amounts? Wouldn't the term "derived" apply to those amounts as well as to wages, etc.?

[SteveSy]

Steve: Earlier, you wrote:

It's nonsensical to say "wages are 100% income and that is what is taxed" and in your next breath say "income derived from wages is taxed" as if they mean the same thing. Again its [sic] akin to saying "I have a cup of liquid and I'm going to derive a cup of water from it. When asked what the liquid is you say "water". It's so obvious you're wrong....to derive something you are taking something different, a change in state, from the thing you are deriving it from. Simply changing the name doesn't make the conclusion rational.

Cpt Banjo responded as follows:

If this piece of drivel is correct, then it follows that when the 1913 Act taxed income derived from dividends, interest, and rents, it didn't intend to tax the dividends, interest, and rents themselves, but only what the recipient derived from them [ . . . ]

(bolding added by Famspear).

You, Steve, then responded with:

Income derived from wages, salaries or compensation for services was included in net income[;] everything else was just plain "income from". Income being the gain or profit over expense.

(bolding added by Famspear). Steve, I don't follow you here. What about the year 1913 amounts derived from interest on notes, mortgages or securities? What about amounts derived from coupons, checks or bills? What about amounts derived from sales or dealings in property? Are you saying that the term "derived" wouldn't apply to those amounts? Wouldn't the term "derived" apply to those amounts as well as to wages, etc.?

Where does it say income derived from those things? As far as I see it the only time derived from is used is in relation to wages, salaries and compensation for services.

[Doktor Avalanche]

As far as I see it...

That's part of the greater problem at large, Steve.

[SteveSy]

As far as I see it...

That's part of the greater problem at large, Steve.

lol....Well I have the same problem with all of you.

[Quixote]

The problem here is that Steve has once again forgotten the meaning of the word income. In addition, he has forgotten that, even in the 1913 act, the income subject to the tax was income "derived from any source whatever". Even if he cannot understand the difference between property (such as wages) and the income derived from the receipt of that property, he must accept that the income derived from labor is subject to the income tax. But he won't. So I guess the problem is not Steve's periodic pretense of ignorance, but rather his refusal to let reality get in the way of his world view.

[SteveSy]

To clarify because you're doing a good job confusing the issue.

Even if it is income derived from rents and interest its not the entire rent or interest that is taxed as income. It's income derived from those things. Rent itself is not income, first you must deduct the capital invested. It also lists securities, does that mean all securities were counted as income?

[SteveSy]

The problem here is that Steve has once again forgotten the meaning of the word income. In addition, he has forgotten that, even in the 1913 act, the income subject to the tax was income "derived from any source whatever". Even if he cannot understand the difference between property (such as wages) and the income derived from the receipt of that property, he must accept that the income derived from labor is subject to the income tax. But he won't. So I guess the problem is not Steve's periodic pretense of ignorance, but rather his refusal to let reality get in the way of his world view.

That's fine....

What you're trying to imply is that just because wages, salaries and compensation for services is listed that means they are income. That's simply not the case, securities and sales are also listed. Does that mean all sales and securities are considered net income? Of course not, that's ridiculous. The might render an income, but they are not by default net income.