Some of these frivolous tax arguments include:. Ultimately, judges look unkindly upon frivolous tax arguments, and those who attempt to use them to get out of paying income tax tend to find themselves serving lengthy prison sentences for tax evasion.
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We and our partners process data to: Actively scan device characteristics for identification. I Accept Show Purposes. Then, three-fourths of the state legislatures would have to ratify it. Only after ratification would Congress have the clear power to pass an income tax law. At first, few thought the income tax amendment had much of a chance surviving a vote in Congress.
But the unpopularity of high tariffs eased the amendment through both the Senate and the House. In just a few days during the summer of , the proposed 16th Amendment was approved by the Senate and the House Thirty-six state legislatures had to ratify the 16th Amendment before it could go into effect. The public and most newspapers seemed to favor it.
The main argument for ratification was that the amendment would force the wealthy to take on a fairer share of the federal tax burden that had in the past been largely carried by those earning relatively little. Only a few critics spoke out forcefully against the amendment. John D. Rockefeller , one of the country's richest men, stated: "When a man has accumulated a sum of money within the law. Ratification moved slowly but steadily through the state legislatures.
Some of the states had already passed income tax laws of their own in seeking new ways to finance public schools and other social needs. Surprisingly, the income tax amendment drew widespread support in cities and in rural areas alike, from both Democrats and Republicans, and in all geographical regions. Even New York ratified the amendment despite the state's reputation as the capital of "money power" with numerous millionaires among its residents including John D. By early , 42 states six more than needed had ratified the income tax amendment.
Only six states rejected it. Cordell Hull introduced the first income tax law under the newly adopted Sixteenth Amendment. The House Ways and Means Committee called upon citizens to "cheerfully support and sustain this, the fairest and cheapest of all taxes. The first tax collection day under the new law took place on March 1, Deductions and exemptions further shrank the pool of taxpayers. Millionaire John D. All in all, most Americans thought the new tax was a great idea.
One taxpayer wrote to the Bureau of Internal Revenue, "I have purposely left out some deductions I could claim, in order to have the privilege and the pleasure of paying at least a small income tax. In colonists objected when the British government imposed stamp taxes, and American tax protests have occurred periodically ever since then.
Some protests have attempted to set limits on state and local taxes. Organized groups have lobbied Congress and endorsed candidates for office who promised to lower taxes. There have also been proposals to repeal the Sixteenth Amendment.
Whether one agrees with these objectives or not, their advocates have proceeded in a legal manner. The more extreme tax protesters have been willing to break the law by refusing to pay their taxes on the grounds that the federal income tax itself is illegal. These tax resisters offer numerous reasons for their risky actions. Some of them argue that the Constitution still prohibits direct taxes like the income tax because the Sixteenth Amendment was never properly ratified.
They regard the discrepancies in spelling and capitalization by the various states during the ratification process as invalidating the amendment. Some claim that being forced to provide information on their income tax returns violates their Fifth Amendment right against self-incrimination.
Some have convinced themselves that there are no laws requiring individuals to pay taxes, that filing taxes is a voluntary act, and that people can simply choose not to pay. A few tax protesters have attempted to revoke their U. Although asserted passionately, and often in excruciating detail, these arguments have been rejected as bogus by the federal courts.
Judges accept the Sixteenth Amendment as a fully legitimate part of the Constitution that grants the federal government the ability to require all citizens to pay taxes on their earnings. Nevertheless, with the case on the books—whether rightly decided or not—an unapportioned income tax was impossible without a constitutional amendment.
If Pollock was wrong, the Amendment was legal surplusage. If Pollock was right, the Amendment changed the law. What direct taxes remain subject to apportionment?
In any event, the Supreme Court has had no recent occasion to focus on the Amendment. But that view would permit Congress to define the limits on its own power. The preeminent example is Eisner v. Macomber , where the Court struck down an unapportioned income tax as applied to certain stock dividends. Although the income tax as a whole was valid—it was direct, but exempted from apportionment by the Amendment—the Court held that the tax on stock dividends effectively fell on property, not income.
Rejected though they are by most scholars today, those old cases might still have life. By citing Pollock , the Court accepted the proposition that a tax on any property including the income from that property , not just land, is direct.
That was a slight, but reasonable, expansion of Hylton. Interest on bonds should be treated the same as rents from land. But Chief Justice Roberts may not have been thinking about any of this; the citation to Macomber might just have been a throwaway. And, even if the distinctions between direct and indirect taxes and between taxes on income and other taxes retain constitutional significance, and I think they do, characterization issues have declined in importance because of the Sixteenth Amendment.
If Congress does look to new sources of revenue, however—because of burgeoning budget deficits, say—the old interpretive issues may return. The Constitution does not exist in a vacuum, sealed off from the Court and the People who interpret it and reason from it over time. To really understand what the Sixteenth Amendment is about, one needs to understand its context: the intense conflict in the late nineteenth and early twentieth century over the future of the American economic system—a conflict that still echoes today.
This was the period in American history in which powerful, nation-spanning corporations first took control of large swaths of the national economy. Think of the railroads, or monopolies like Standard Oil. These corporations were more powerful than state governments. The dynasties that owned them had great political clout and more concentrated wealth than Americans had ever seen.
Inequality was rising to the point that many Americans began to fear that our constitutional democracy might be lost, replaced by an economic and political oligarchy. In response, waves of reformers sought major changes. One was a change to the tax code. Instead of relying exclusively on consumption taxes that fell most heavily on ordinary people, the Populists and later the Progressives wanted a federal income tax that would fall most heavily on the enormous new fortunes of the era.
At the time, few thought there was any constitutional problem with an income tax. Precedents from as far back as and as recently as made that clear. As lawyers, they had handled the work of the new large corporations and monopolies. They feared the federal income tax as a form of socialism, and in Pollock they found a way to strike it down.
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