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Historical Perspectives on the Federal Income Tax


“The enlightened patriots who framed our Constitution, and the people who adopted it, must be understood to have employed words in their natural sense, and have intended what they have said.”

     Gibbons v. Ogden, 22 U. S. 9 Wheat


Apportionment:  Webster’s New Encyclopedic Dictionary 1996

            Apportion:  To divide and distribute proportionately

            Apportionment:  The apportioning of Representatives or taxes among States or districts according to population.     (In this way the states knew from their respective populations how many Representatives they would have and how much of a direct tax they would be responsible for paying)

            “But the acceptance of the rule of apportionment was one of the compromises which made the adoption of the Constitution possible, and secured the creation of that dual form of government, so elastic and so strong, which has thus far survived in unabated vigor.   If by calling a tax indirect when it is essentially direct, the rule of protection could be frittered away, one of the great landmarks defining the boundary between the Nation and the States of which it is composed, would have disappeared, and with it one of the bulwarks of private rights and private property.” Chief Justice Fuller, Opinion of the Court, Pollock v. Farmers 157 us 427 @ 583


Assess:   Webster’s New Encyclopedic Dictionary:

            Assessed:  1:  to fix the rate or amount of.  2:  to set the value on (as property) for tax purposes.  3: to lay a tax or charge on (the city assessed all car owners $5.00)


Business:  Blacks Law Dictionary

            Business:  Business is a very comprehensive term and embraces everything about which a person can be employed.  People ex. Rel. Hoyt v. Tax Comrs. 23 N.Y. 242, 244

Business:   1 Bouvier’s Law Dictionary page 273

            Business:   That which occupies the time, attention, and labor of men for the purpose of a livelihood or profit.

Business:  Webster’s New Encyclopedic Dictionary

            Business: 1a: an activity that takes a major part of the time, attention, or effort of a person or group.  b:  a commercial or mercantile activity engaged in as a means of livelihood.   [] Syn. Business, commerce, trade, industry mean activity in supplying commodities.  Business may be an inclusive term but specifically applies to the activities engaged in the sale and purchase of commodities or in related transactions.


Capitation:  Webster’s New Encyclopedic Dictionary

            Capitation: Poll:  from Latin “caput”  Head

            “…upon the person simply without any reference to his property, real or personal, or any business in which he may be engaged, or to any employment which he may follow.  It is rightfully imposed, because of the protection which the government affords to the person independently of the connection in relation of the person to anything else.”  Gardner v. Hall, 61 N. C. 21.   Pollock v. Farmers 157 US 427 @ 774 from briefs of U. S. Council Attorney General Richard Olney


Derive:   Webster’s New Encyclopedic Dictionary

            Derive:  1a: to receive or obtain from a source

Derived:  Eisner v. Macomber 252 U. S. 189 @207

            Derived:  “but a gain, a profit, something of exchangeable value proceeding from the capital, however invested or employed, and coming in, being “derived”, that is, received or drawn by the recipient (the taxpayer) for his own separate use, benefit, and disposal; that is income derived from property.

Direct Tax

Direct Tax:   Senator McLauren, Congressional Record - Senate July 5, 1909, Page 4109

            “I think the word “direct” there must be construed with reference to the word “Capitation”.   A Capitation Tax is a tax that is levied directly upon the individual without reference to property.   It is what is called in the States generally a “Poll Tax”.   When you speak of a “Capitation” tax as a direct tax then speak of “other direct taxes” the word “direct” in this connection must be construed ejusdem generis with reference to the word “Capitation” ---a Capitation” Tax; that is, a direct tax which operates upon the individual himself, without reference to any property at all---and the words “or other direct” of course, always, by the rules of construction, must be construed to mean a tax of the same kind.   Other direct taxes, that operate upon the individual without reference to any property at all.   Out of that confusion has grown all the trouble that has arisen in reference to the question of an income tax."

            Chief Justice Fuller summed up all of the arguments, relating to direct taxes, presented in the Pollock Cases with this statement from Polllock v. Farmers 158 US 601 @625-6:

            “He gives, however, it appears to us, 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 up on that property and is a direct tax in the meaning of the Constitution.”    (a tax upon all that comes in)


Employment:   Webster’s New Encyclopedic Dictionary:

Employment:  1: use. 1a, purpose; also: the action of using.  2a: the act of engaging a person for work: hiring.  b: the work in which one is employed: occupation


Excise:  Webster’s New Encyclopedic Dictionary:

            Excise: an internal tax levied on the manufacture, sale and consumption of a commodity within the country.

Excise Tax:  Hyde v. Continental Trust 157 U. S. 586:

            Excise Tax:  Excises are a species of tax consisting generally of duties laid upon the manufacture, sale or consumption of commodities within the country; or upon certain callings or occupations, often taking the form of exaction for licenses to pursue them.”

            “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 and profits from business, privileges, or employment’s, in view of the instances in which taxation on business, privileges, or employment’s has assumed the guise of an excise tax and been sustained as such.” Pollock v. Farmers 158 U.S. 601 @ 635

Indirect Tax

Indirect Tax:  Webster’s New Encyclopedic Dictionary

            indirect tax: a tax extracted from a person other than the one on whom the ultimate burden of the tax is expected to fall.

            “…that indirect taxes are levied upon consumption as it is called, always takes the thing in movement---transactions among men, in respect to which they are the masters of their own conduct, and therefore, are not regulated as to how much tax they will pay, according to the kind of business they choose to carry on, and the amount and value, etc. of the commodities they choose to consume.”   Mr. Edmonds

            Is not the distinction somewhat like this:  That direct taxes are paid by the taxpayer both immediately and ultimately; while indirect taxes are paid immediately by the taxpayer and ultimately by someone else?  Justice Brown Pollock v. Farmers 157 US 427 @ 786 of briefs.


Income:  Webster’s Dictionary 1934

            Income:  that gain or recurrent benefit (usually measured in money) which proceeds from labor, business or property:  commercial revenue or receipts of any kind.  The total receipts from any branch of business are known as gross income.   That portion of the receipts which remains after paying wages and for materials is known as net income, which is in turn subdivided into interest on the capital invested and profits over and above this interest.

Income:  Eisner v. Macomber  252 US 189 @ 207

            Income: may be defined as the gain derived from capital, from labor, or from both combined, provided it be understood to include profit gained through a sale or conversion of capital assets.

Income:  42 C.J.S. page 529 (1944)  “Generally or ordinarily the term means all that comes in; … something which is paid over and delivered to the recipient; … without reference to the outgoing expenditures.”  Cited in Lukhard v. Reed 481 U.S. 368 (1987).


Labor:  Bouvier’s Law Dictionary page 1811

            Labor:  Work requiring exertion or effort, either physical or mental; toil.   Labor and business are not synonymous; Labor may be business, but not necessarily so, and business is not always labor.  The labor and skill of one man are frequently used in a partnership, and valued as equal to the capital of another.

Labor:  Webster’s New Encyclopedic Dictionary

            Labor: b(1):  human activity that provides the good and services in an economy

                         (2):  the services performed by workers for wages as distinguished from those rendered by entrepreneurs for profits.


Occupation:  Webster’s New Encyclopedic Dictionary:

            Occupation: an activity in which one engages: esp. one’s business or vocation.


Profession:   Webster’s New Encyclopedic Dictionary:

            Profession: 4a: a calling requiring specialized knowledge and academic preparation.  b: a principal employment


Receipt:   Webster’s New Encyclopedic Dictionary

            Receipt:  2: the act or process of receiving   3: something received---usually used in plural   4:  a writing acknowledging the receiving of goods or money


Source:  Webster’s New Encyclopedic Dictionary

            Source:  b (1):  a point of origin.  2:  the point of origin of a stream of water:

Source: 16th Amendment:  Reference is to capital and or labor; that which produces the taxable receipts.


Subject:  Webster’s New Encyclopedic Dictionary

            Subject:  1: one that is placed under authority or control.  1a: one subject to a monarch and governed by the monarch’s law.  4: a noun or noun equivalent about which something is stated by the predicate.


Trade:  Webster’s New Encyclopedic Dictionary:

            Trade:  2a: the business or work in which one engages regularly: occupation.  3a:

the business of buying and selling or bartering commodities: commerce  b. business


Uniformity:  U. S. Constitution Article 2 Section 8

            “…but, all Duties, Imposts and Excises shall be uniform throughout the United States.”

            “…the phraseology of the previous resolution was changed so as to cause the word to have merely a geographical significance, viz., to require that whatever subject of taxation was assessed, the same subject should be taxed in every state, or, in other words, that the particular tax should operate generally throughout the United States.”   Knowlton V. Moore 178 US 41 @ 85-86

            “…but, simply requires whatever plan or method Congress adopts for laying the tax in question, the same plan and the same method must be made operative throughout the United States; that is to say, that wherever a subject is taxed anywhere, the same must be taxed everywhere throughout the United States, and at the same rate.”   Knowlton Supra

Uniformity:  United States v. Singer, 15 Wall. 111,121

            “The law is not in our judgment subject to any constitutional objection.  The tax imposed upon the distiller is in the nature of an excise, and the only limitation upon the power of Congress in the imposition of taxes of this character is that they shall be uniform throughout the United States.   The tax here is uniform in its operation; that is, it is assessed equally upon all manufactures of spirits, wherever they are.   The law does not establish one rule for one distiller and a different rule for another, but, the same rule for all alike.”

            “The tax is uniform when it operates with the same force and effect in every place where the subject of it is found.”  Justice Miller  Edye v. Robertson  Head Money Cases 112U. S. 580, 594

Uniformity:  Home Ins. Co. v. State of New York 134 U.S. 594 (1890)

            “There is the same rule, applicable to all under the same conditions, in determining the rate of taxation.  There is no discrimination in favor of one against another of the same class.


Vocation:   Webster’s New Encyclopedic Dictionary:

Vocation:  2a:  the work in which one is regularly employed: occupation

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