User talk:Fireatsea

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Welcome to Wikipedia. Regarding your edits to Legal history of income tax in the United States and the other article, please discuss on the applicable talk page before making these kinds of edits.

For example, the "quote" that you provided on the "ruling" from the Flint case is a fake quote. That language does not appear in the text, and it's not a ruling by the Court. The Pollock case did not overrule the holding in the Springer case, and the holding in the Springer case was not what you described it to be. I'll be glad to explain all this in more detail later if you like. Famspear (talk) 03:04, 3 December 2014 (UTC)

The Court in Springer held that the federal income tax imposed on the income of Mr. Springer (which happened to consist of his income from his profession of the practice of law and interest income on U.S. bonds, as the Court later noted in Pollock) was not a direct tax and was not required to be apportioned. Nowhere in the Springer case did the Court rule that excises or duties were limited to "non-licensed and/or non-corporate activities", contrary to what the language you provided seemed (at least to me) to imply.

Pollock in NO WAY "overturned the last remaining vestiges of the Springer case." In the two Pollock cases, the Court held ONLY that an income tax on interest income, dividend income and rent income was to be treated as a direct tax (a tax on the income from property was treated as a tax on the property itself), and was required to be apportioned. This was only a partial overruling of Springer. The Pollock Court did NOT hold that the income tax in general was a direct tax. The Pollock holdings were limited ONLY to taxes on income from property (meaning interest income, dividend income, and rent income).

The only part of Springer overruled in Pollock was the portion of the Springer holding dealing with the income tax on interest income from bonds.

More to come later. Famspear (talk) 03:38, 3 December 2014 (UTC)

I want to correct myself: The material you quoted from Flint was indeed a quote from Flint. (I was searching on the wrong page when I checked on that. Sorry about that.) However, as explained below, the quote was not a ruling by the Court in that case.

The material you provided stated that a definition of "excises" was given in the Flint case -- namely that excises are "taxes laid upon the manufacture, sale, or consumption of commodities within the country, upon licenses to pursue certain occupations, and upon corporate privileges."

That definition is not "THE" official definition provided by the Supreme Court. That was merely ONE definition provided by the Court for a particular TYPE of excise -- a definition provided by as dicta in a particular case -- the Flint case. Courts make flat statements all the time, but that doesn't mean that the Court is RULING that a particular definition is the official one and only definition applicable to the term being defined.

Your material also stated: "To date, nobody has challenged the federal income tax on the grounds that it embraces activities that fall outside of the offical [sic] Supreme Court definition of "excises" as provided in the Flint decision."

Many people have challenged the federal income tax in federal courts on the grounds that the tax has been (at least in their minds) improperly imposed on activities that fall outside of that very definition. For example, the federal income tax on ordinary compensation for labor or personal services has been challenged HUNDREDS of times. Of course, the courts have rejected these challenges almost every time -- and certainly in the modern era every time since the year 1954. In the constitutional law sense, the federal income tax is considered by most federal courts (not all, but most) to be an indirect tax -- an excise. Same for the federal gift tax and the federal estate tax. Indeed, as far as we know, all taxes imposed under the current Internal Revenue Code are excises in the constitutional law sense of "impost, duty or excise" (an indirect tax).

Part of the confusion also lies in the multiple meanings for the term "excise." In the Internal Revenue Code itself, generally only the taxes imposed under Subtitles D and E are called "excises" -- even though the income tax (Subtitle A) and the gift tax and estate tax (Subtitle B) are also "excises" (indirect taxes) in the constitutional law sense.

The matter is made even more confusing in that some courts in the modern era have still referred to the federal income tax as a "direct tax."

More later. Yours, Famspear (talk)

In a case involving payroll taxes, the U.S. Court of Appeals for the Fifth Circuit made this clear:

.....appellants are neither historically nor etymologically correct in their claim in substance that excises are limited to taxes laid on the manufacture, sale or consumption of commodities within the country, upon licenses to pursue certain occupations and upon corporate privileges only. It is true that taxes of the kind referred to are excise taxes but it is also true, as was held in Steward Machine Co. v. Davis, that the excises which congress has power to impose are not limited to vocations or activities which may be prohibited altogether[,] or to those which are the outcome of franchise, but extend to vocations or activities pursued as of common right. The term "excise" is and was before and at the time of the adoption of the Constitution a term of very wide meaning.

--from Abney v. Campbell, 206 F.2d 836 (5th Cir. 1953), cert. denied, 346 U.S. 924 (1954) (bolding added), at [1]. Famspear (talk) 05:11, 3 December 2014 (UTC)

One very common frivolous argument raised by tax protesters is to take the kind of blanket language you quoted from the Flint case and to argue that the U.S. federal income tax cannot be validly imposed on income that is not connected to the exercise of a "government privilege" or even more specifically to a "federal privilege." But, that's not what the U.S. Supreme Court ruled in Pollock or Flint or in any other case. And that's not what the Constitution says.

No federal court has ever ruled that the federal income tax is limited in its scope to amounts received in connection with the exercise of a "privilege" -- federal or otherwise. Indeed, every single time the federal courts have ruled on this issue, the courts have rejected the argument. Period. No exceptions. I have been studying federal income tax law for about 36 years, and I have been studying these issues with particular intensity for the past 15 of those years. I have studied the texts of literally thousands upon thousands of federal cases, and I have never found even one case where this argument was upheld. Famspear (talk) 05:19, 3 December 2014 (UTC)

Dear Famspear: You have mischaracterized many of my conclusions, so I guess I'll just take one thing at a time. At least we both agree that the quote I provided from the Flint case is not a fake quote. That's good. Let's begin with the Springer case. Section 116 of the Revenue Act of 1864 imposed taxes on "the gains, profits, and income of every person residing in the United States, or of any citizen of the United States residing abroad, whether derived from any kind of property, rents, interest, dividends, or salaries, or from any profession, trade, employment, or vocation, carried on in the United States or elsewhere, or from any other source whatever [ . . . ]" The court in Springer held that this Revenue Act was not a direct tax, and was instead an excise or duty (without specifying which one). Do you agree? Fireatsea (talk) 23:55, 4 December 2014 (UTC)

To be precise, the Springer court ruled as follows: "Our conclusions are, that direct taxes, within the meaning of the Constitution, are only capitation taxes, as expressed in that instrument, and taxes on real estate; and that the tax of which the plaintiff in error complains is within the category of an excise or duty." The tax of which the plaintiff complained was a tax on income from his profession and on interest from bonds. Therefore, we can reasonably summarize the court's decision:

1. Direct taxes, within the meaning of the Constitution, are only capitation taxes and taxes on real estate.

2. Taxes on income from professions and on interest from bonds are excises or duties.

Do you agree? Fireatsea (talk) 01:12, 5 December 2014 (UTC)

Do you agree with everything that I wrote? In other words, what specific conclusions of yours do you believe I have mischaracterized? Famspear (talk) 04:16, 5 December 2014 (UTC)

When I reverted your posts from the other day in the article on the history of the tax, I reverted the entire thing, rather than just the parts that in my view were not supported by the source material. I apologize for that as well. I am now going back and restoring the corrections you made that I didn't intend to remove.

Regarding this language:

"In the 1895 Supreme Court case Pollock v. Farmers' Loan & Trust Co., the court determined that "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, imposts, 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." In other words, Congress has four powers of taxation, namely direct taxes, duties, imposts and excises. Congress has no additional taxation powers."

I would just suggest putting most of that back in, but changing the word "determined" to "stated." The term "determined" may be misconstrued by a reader as a ruling or holding. This statement was simply dicta. Also, the phrase direct taxes, duties, imposts and excises" really describes different categories or classifications of taxes. Tax law scholars generally do not refer to them as four separate "powers" of taxation. So, I would suggest something like this revised language:

"In the 1895 Supreme Court case Pollock v. Farmers' Loan & Trust Co., the court stated that "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, imposts, 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." In other words, the federal taxing power covers four broad categories of taxes: direct taxes, duties, imposts and excises (with the latter three categories sometimes called simply "excises" or "indirect taxes")."

What do you think? Famspear (talk) 05:02, 5 December 2014 (UTC)

By the way, regarding the material that I at first thought was a fake quote: I didn't mean to imply that you had knowingly posted a fake quote. In Wikipedia, we have had a long-time problem with the posting of fake quotes from court cases involving U.S. federal taxation over the years, and many times the people who post the quotes don't realize that the quote is fake, because they copied it from some tax protester web site that they were relying on. Tax protester web sites are full of garbage like that.

Also, the specific reason I incorrectly identified the Flint material as being "fake" was that I had Flint and Springer and both of the Pollock opinions up on my screen at the same time, and I ran the Control-F search (using an excerpt of the quote) on the wrong text. Famspear (talk) 05:19, 5 December 2014 (UTC)

I like your revised language with a few minor exceptions. The Constitution itself clearly makes a distinction between imposts, duties, and excises, and I am unaware of the court referring to duties and imposts as "excises" so I would suggest removing that word so it reads: "with the latter three categories sometimes called simply 'indirect taxes'" That statement seems factually correct to me. Anyway, I would prefer that it read as follows:

"In the 1895 Supreme Court case Pollock v. Farmers' Loan & Trust Co., the court stated that "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, imposts, 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." In other words, the federal taxing power consists of four categories: direct taxes, duties, imposts and excises (with the latter three categories sometimes called simply "indirect taxes")."

Regarding your critique of my conclusions, I admit that my statement about nobody challenging the federal income tax was erroneous (perhaps I should have said "successfully challenged"). However, I have always found it far better to discuss this issue one case at a time in chronological order. If we can reach some common ground one decision at a time, then I think you may find we agree more often than not. Having said that, I would like to restate my interpretation of the Springer decision:

1. Direct taxes, within the meaning of the Constitution, are only capitation taxes and taxes on real estate.

2. Taxes on income from professions and on interest from bonds are excises or duties.

Is that your understanding of Springer also? Fireatsea (talk) 06:35, 5 December 2014 (UTC)

The result in Springer was essentially that only capitations and taxes on real estate were considered direct taxes, and all other taxes were considered not to be direct taxes. In the common parlance, any tax that is not a direct tax is considered to be a "indirect tax." Since the only constitutional categories other than direct tax are duty, impost, and excise, the term "indirect tax" is often used to mean "duty, impost and excise." To make matters more complex, the term "excise" itself is often used as a sort of "shorthand" way of saying "indirect tax."

In Pollock, the Court essentially treated income from property -- from all property, not just from real estate -- as being treated as income from the property itself. Thus, a tax on income from any kind of property was considered by the Pollock court to be a direct tax -- a tax that had to be apportioned. The Pollock court viewed the source of the income as a determining factor in deciding whether the related tax had to be apportioned.

The Sixteenth Amendment overruled Pollock by making the source of the income constitutionally irrelevant in determining whether the tax had to be apportioned.

The courts in the modern era (after about 1916) have interpreted the Sixteenth Amendment (1913) and the Brushaber decision (1916) in a couple of ways. Some courts take the literal language of Brushaber and say: all income taxes are excises (indirect taxes), and thus no income tax must be apportioned.

By contrast, a few courts (in a very few cases) have rejected arguments by tax protesters who claim that the federal income tax is direct tax. This is almost like saying that the income tax -- or at least some income taxes -- are still "direct" taxes.

But ALL federal courts reach the same result: NO FEDERAL INCOME TAX is required to be apportioned, whether you call that tax a "direct tax" or an "excise" (indirect tax).

All the litigation (mainly since the mid-1970s) over the "direct tax" versus "excise" label brings us to the same conclusion: Because of the Sixteenth Amendment, the labels are irrelevant if the tax is an INCOME tax. Famspear (talk) 12:57, 5 December 2014 (UTC)

Oh, and yes, to answer your question: I do agree with your revision of the text, to read as follows:

"In the 1895 Supreme Court case Pollock v. Farmers' Loan & Trust Co., the court stated that "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, imposts, 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." In other words, the federal taxing power consists of four categories: direct taxes, duties, imposts and excises (with the latter three categories sometimes called simply "indirect taxes")."

Yours, Famspear (talk) 15:11, 5 December 2014 (UTC)

Well, this is what I was afraid of. I was hoping to discuss Springer with you and then move on to Pollock, but you managed to bring in Pollock and the 16th Amendment and Brushaber while skipping Flint entirely. We'll never get anywhere that way. If you would like to discuss Springer in depth before moving on to subsequent decisions, please let me know.

Anyway, I'm glad you agree with my revised text. Feel free to add it to the page. Thanks. Fireatsea (talk) 19:45, 5 December 2014 (UTC)

Also, the Wilson-Gorman Tariff of 1894 passed without the signature of Grover Cleveland. Feel free to make that correction as well. Fireatsea (talk) 19:56, 5 December 2014 (UTC)

I have corrected the material on the signature/non-signature point you made, and I added a citation; thanks. Obviously, this article, Legal history of income tax in the United States, needs closer monitoring. Famspear (talk) 03:45, 6 December 2014 (UTC)

Thanks for making those corrections. I would like to propose a change to the section entitled First income tax law: "The Supreme Court concluded that the tax on income from professions and on interest income from bonds was an excise or duty, and was neither a capitation tax (based on population) nor a property tax. The court also concluded that direct taxes, within the meaning of the Constitution, were only capitation taxes and taxes on real estate." Fireatsea (talk) 20:55, 8 December 2014 (UTC)

To be more precise, how about this language:

"The Supreme Court concluded that the federal income tax (in the Springer case, on income from professions and on interest income from bonds) was an excise or duty, and was neither a capitation tax (based on population) nor a property tax. The court also concluded that direct taxes, within the meaning of the Constitution, were only capitation taxes and taxes on real estate."

The reason I worded it that way is that the sources of the income (Springer's professional income and the interest income) were not actually mentioned by the Court in its decision. Therefore, the holding of the Court, the decision of the Court needs to be carefully stated in this respect. Famspear (talk) 01:48, 9 December 2014 (UTC)

I am a big believer in precision and I appreciate your attention to detail. To be even more precise, how about this:

"The Supreme Court concluded that the tax of which Mr. Springer complained (i.e. a tax on professional earnings and on interest from bonds) was within the category of an excise or duty, and was neither a capitation tax (based on population) nor a property tax. The court also concluded that direct taxes, within the meaning of the Constitution, were only capitation taxes and taxes on real estate." Fireatsea (talk) 02:35, 9 December 2014 (UTC)

Looks good to me. Famspear (talk) 19:53, 9 December 2014 (UTC)

Great, I'll make the change. Fireatsea (talk) 20:59, 9 December 2014 (UTC)

I would like to propose a change to the section entitled “Direct” income tax unconstitutional: Pollock v. Farmers’ Loan Trust Company. This is the sentence I would like to change: “The Court (sic) held that taxes on rents from real estate, on interest income from personal property and other income from personal property (which includes dividend income) were treated as direct taxes on property, and therefore had to be apportioned.” It is my opinion that this sentence does not fully explain the Pollock holding nor does it examine the relationship between Pollock and Springer. I would like to change it to the following:

"The court held that taxes on the rents or income of real estate, on personal property, or on the income of personal property (e.g. interest and dividends), were direct taxes within the meaning of the Constitution. Springer had previously held that direct taxes within the meaning of the Constitution were only capitation taxes and taxes on real estate, therefore Pollock overruled this provision of the Springer decision by expanding the definition of direct taxes. Also, Springer had previously held that a tax on interest income from bonds was an excise or duty, so Pollock overruled this provision as well since direct taxes now embraced taxes on income from personal property (e.g. interest and dividends). In fact, the only provision of the Springer decision that was not overruled by Pollock was the holding that a tax on professional earnings was an excise or duty. Pollock refined this conclusion by suggesting that a tax on professional earnings was an excise (not a duty): 'We have considered the act only in respect of the tax on income derived from real estate, and from invested personal property, and have not commented on so much of it as bears on gains or profits from business, privileges, or employments, in view of the instances in which taxation on business, privileges, or employments has assumed the guise of an excise tax and been sustained as such.'" Fireatsea (talk) 00:28, 11 December 2014 (UTC)

The comments regarding taxes on business, privileges or employments, etc., were not part of the holding of the Court. The only issues presented to and decided by the Court in Pollock were the issues regarding the federal income tax on interest income, dividend income, and rental income (in short, taxes on income from property, as opposed to all other kinds of income). So, the article as written does state the complete holding of the Court. However, you could add the other material by labeling it for what it is: dicta. It could go something like this:

In Springer, the Court had held that direct taxes within the meaning of the Constitution were only capitation taxes and taxes on real estate. In Pollock, the Court partially overruled a portion of the Springer decision by expanding the definition of direct taxes. The portion of the Springer decision that was not overruled by the Court in Pollock was the portion of the holding that applied to taxes on income other than income from property. For example,, in non-binding dicta, the Court in Pollock stated (consistently with the effect of the holding in Springer) that a tax on income from employments was not a direct tax. The Court stated: 'We have considered the act only in respect of the tax on income derived from real estate, and from invested personal property, and have not commented on so much of it as bears on gains or profits from business, privileges, or employments, in view of the instances in which taxation on business, privileges, or employments has assumed the guise of an excise tax and been sustained as such."

I'd have to go back and re-read it, but from memory I don't recall that the Court in Pollock made any meaningful distinction between "duty" and "excise." Many writers (and perhaps some courts as well) simply use the term "excise" as an alternative for "indirect tax," which means "impost, duty or excise" -- in short, any tax that is not a direct tax. The Constitution does not really treat a "duty" materially different from an "excise." Whether it's an impost or a duty or an excise, it's treated the same from the standpoint of apportionment. That is, it's not required to be apportioned. And whether it's an impost, duty or excise, it's treated the same from the standpoint of uniformity. That is, it's required to be geographically uniform. Famspear (talk) 02:04, 12 December 2014 (UTC)

By the way, this discussion has developed into some depth, so I think that any future discussion of the article, Legal history of income tax in the United States, should be done on the talk page for the article itself, instead of on this talk page. Also, since Pollock (like Springer) has its own article, we probably don't want to go into too much more detail on Pollock in the "Legal history" article. Famspear (talk) 02:11, 12 December 2014 (UTC)

I agree that this discussion should take place on the talk page for the article itself, so I will make future posts on that page. Anyway, you are correct that the language I quoted is non-binding dicta and it's probably unnecessary, so I removed it in an effort to streamline the text and stick to the core holdings:

"The Court held that taxes on the rents or income of real estate, on personal property, or on the income of personal property (e.g. interest and dividends), were direct taxes within the meaning of the Constitution, and therefore had to be apportioned. In Springer, the Court had held that direct taxes within the meaning of the Constitution were only capitation taxes and taxes on real estate. Therefore in Pollock, the Court overruled a portion of the Springer decision by expanding the definition of direct taxes. The portion of the Springer decision that was not overruled by the Court in Pollock was the portion of the holding that applied to taxes on professional earnings." Fireatsea (talk) 01:18, 13 December 2014 (UTC)

Agreed. Famspear (talk) 04:06, 13 December 2014 (UTC)