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Art. I, § 8, cl. 1

Art. I, § 8, cl. 1. The Congress shall have Power To lay and collect. Art. I, § 8, cl. 1.

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Art. I, § 8, cl. 1

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  1. Art. I, § 8, cl. 1 The Congress shall have PowerTo lay and collect . . .

  2. Art. I, § 8, cl. 1 . . .Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States

  3. Art. I, § 2, cl. 3 Representatives and direct Taxes shall be apportioned among the several States which may be included within this Union

  4. Art. I, § 9, cl. 4 No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or Enumeration herein before directed to be taken

  5. 1894 Income Tax Act28 Stat. 509, ch. 349, § 27 “There shall be assessed, levied, collected, and paid annually upon the gains, profits, and income received in the preceding calendar year by every citizen of the United States, whether residing at home or abroad, and every personresiding therein, whether said gains, profits, or income be 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, a tax of two per centum on the amount so derived over and above four thousand dollars, and a like tax shall be levied, collected, and paid annually upon the gains, profits, and income from all property owned and of every business, trade, or profession carried on in the United States by persons residing without the United States”

  6. Pollockv.Farmers’ Loan & Trust Co.,157U.S. 429, 558 (1895)

  7. Pollock v. Farmers’ Loan & Trust Co., 157 U.S. 429, 558 (1895) “We inquire, therefore, what, at the time the constitution was framed and adopted, were recognized as direct taxes?What did those who framed and adopted it understand the terms to designate and include?”

  8. Pollock v. Farmers’ Loan & Trust Co., 157 U.S. 429, 559-573 (1895) Madison, Jay, Franklin, Wilson, Hamilton, Turgot, Adam Smith, Oliver Wolcott, Charles Pinckney, Randolph, Paterson, Gov. Morris, Ellsworth, Wilson, King, Gerry, Langdon, Luther Martin, Theophilus Parsons, Dawes, Sumner, Sedgwick, Chancellor Livingston, Marshall, George Nicholas, Sedgwick, Dexter, Fisher Ames, Albert Gallatin

  9. Pollock v. Farmers’ Loan & Trust Co., 157 U.S. 429, 574 (1895) “We proceed, then, to examine certain decisions of this court under the acts of 1861 and following years. . . .”

  10. Pollock v. Farmers’ Loan & Trust Co., 157 U.S. 429, 575-579 (1895) Cohens v. Virginia, 6 Wheat. 264 Carroll v. Carroll's Lessee, 16 How. 275 Genesee Chief, 12 How. 443 Thomas Jefferson, 10 Wheat. 428 Orleans v. Phoebus, 11 Pet. 175, Insurance Co. v. Soule, 7 Wall. 433 Society v. Coite, 6 Wall. 594 Van Allen v. Assessors, 3 Wall. 573 Home Ins. Co. v. New York, 134 U. S. 594 Pullman's Palace Car Co. v. Pennsylvania, 141 U. S. 18 Bank v. Fenno, 8 Wall. 533 National Bank v. U. S., 101 U. S. 1 Scholey v. Rew, 23 Wall. 331 Springer v. U.S., 102 U. S. 586 Mager v. Grima, 8 How. 490 Railroad Co. v. Collector, 100 U. S. 595 License Tax Cases, 5 Wall. 462 Hylton v. U.S., 3 Dall. 171 Railroad Co. v. Collector, 100 U. S. 595

  11. Pollock v. Farmers’ Loan & Trust Co., 157 U.S. 429, 579 (1895) “[I]t is conceded in all these cases” Taxes on land are direct taxes Silent as to rent or income derived from the land

  12. Pollock v. Farmers’ Loan & Trust Co., 157 U.S. 429, 581-582 (1895) Weston v. City Council, 2 Pet. 449 Almy v. California, 24 How. 169 Philadelphia & S. S. S. Co. v. Pennsylvania, 122 U. S. 326 Leloup v. Port of Mobile, 127 U. S. 640

  13. Pollock v. Farmers’ Loan & Trust Co., 157 U.S. 429, 583 (1895) “We are of opinion that the law in question, so far as it levies a tax on the rents or income of real estate, is in violation of the constitution, and is invalid.”

  14. Pollock v. Farmers’ Loan & Trust Co., 157 U.S. 429, 583 (1895) “Another question is directly presented by the record as to the validity of the tax levied by the act upon the income derived from municipal bonds.”

  15. Pollock v. Farmers’ Loan & Trust Co., 157 U.S. 429, 586 (1895) “Applying this language to these municipal securities, it is obvious that taxation on the interest therefrom would operate on the power to borrow before it is exercised, and would have a sensible influence on the contract, and that the tax in question is a tax on the power of the states and their instrumentalities to borrow money, and consequently repugnant to the constitution.”

  16. Pollock v. Farmers’ Loan & Trust Co., 157 U.S. 429, 586 (1895) “Upon each of the other questions argued at the bar, to wit: (1) Whether the void provisions as to rents and income from real estate invalidated the whole act; (2) whether, as to the income from personal property, as such, the act is unconstitutional, as laying direct taxes; (3) whether any part of the tax, if not considered as a direct tax, is invalid for want of uniformity on either of the grounds suggested,-the justices who heard the argument are equally divided, and therefore no opinion is expressed.”

  17. Pollock v. Farmers’ Loan & Trust Co., 157 U.S. 429, 615-617 (1895) JUSTICE WHITE IN DISSENT The only direct taxes embraced within the Constitution are capitation taxes and taxes on land.

  18. Pollock v. Farmers’ Loan & Trust Co.,158 U.S. 601 (1895)On Rehearing “We are now permitted to broaden the field of inquiry, and to determine to whichof the two greatclassesa tax upon aperson's entire income - whether derived from rents or products, or otherwise, of real estate, or from bonds, stocks, or other forms of personal property-belongs; . . .

  19. Pollock v. Farmers’ Loan & Trust Co., 158 U.S. 601, 618 (1895) . . . and we are unable to conclude that the enforced subtraction from the yield of all the owner's real or personal property, in the manner prescribed, is so different from a tax upon the property itself that it is not a direct, but an indirect, tax, in the meaning of the constitution.”

  20. Pollock v. Farmers’ Loan & Trust Co., 158 U.S. 601, 628 (1895) “Nor can we perceive any ground why the same reasoning does not apply to capital in personalty held for the purpose of income, or ordinarily yielding income, and to the income therefrom.”

  21. Pollock v. Farmers’ Loan & Trust Co., 158 U.S. 601, 630 (1895) “Admitting that this act taxes the income of property, irrespective of its source, still we cannot doubt that such a tax is necessarily a direct tax, in the meaning of the constitution.”

  22. Pollock v. Farmers’ Loan & Trust Co., 158 U.S. 601, 637 (1895) “Our conclusions may therefore be summed up as follows:

  23. Pollock v. Farmers’ Loan & Trust Co., 158 U.S. 601, 637 (1895) “First. We adhere to the opinion already announced,-that, taxes on real estate being indisputably direct taxes, taxes on the rents or income of real estate are equally direct taxes.”

  24. Pollock v. Farmers’ Loan & Trust Co., 158 U.S. 601, 637 (1895) “Second. We are of opinion that taxes on personal property, or on the income of personal property, are likewise direct taxes.”

  25. Pollock v. Farmers’ Loan & Trust Co., 158 U.S. 601, 637 (1895)On Rehearing “Third. The tax imposed by sections 27 to 37, inclusive, of the act of 1894, so far as itfalls on the income of real estate, and of personal property, being adirect tax, within the meaning of the constitution, and therefore unconstitutional and void, because not apportioned according to representation, all those sections, constituting one entire scheme of taxation, are necessarily invalid.”

  26. Pollock v. Farmers’ Loan & Trust Co., 158 U.S. 601, 638-716 (1895) Mr. Justice HARLAN, dissenting. Mr. Justice BROWN, dissenting. Mr. Justice JACKSON, dissenting. Mr. Justice WHITE, dissenting. The only direct taxes embraced within the Constitution are capitation taxes and taxes on land.

  27. Pollock v. Farmers’ Loan & Trust Co., 158 U.S. 601, 634-635 (1895) “If it be true that the Constitution should have been so framed that a tax of this kind [adirect income tax] could be laid[without apportionment], the instrument defines the way for its amendment.”

  28. 1909 SPECIAL SESSION OF CONGRESS In 1909, President Taft called a special session of Congress and asked Congress to propose a constitutional amendment to overcome the Pollock decision.

  29. CONGRESSIONAL RECORD  -  SENATE  -  JUNE 16, 1909[From Pages 3344 – 3345] “. . .it is now proposed to make up the deficit by the imposition of a general income tax, in form and substance of almost exactly the same character as, that which in the case of Pollock v. Farmer’s Loan and Trust Company (157 U.S., 429) was held by the Supreme Court to be a direct tax, and therefore not within the power of the Federal Government to Impose unless apportioned among the several States according to population.”

  30. CONGRESSIONAL RECORD  -  SENATE  -  JUNE 16, 1909[From Pages 3344 – 3345] I therefore recommend to the Congress that both Houses, by a two-thirds vote, shall propose an amendment to the Constitutionconferring the power to levy an income tax upon the National Government without apportionment among the States in proportion to population.

  31. SIXTEENTH AMENDMENT The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration

  32. Brushaber v. Union Pac. R. Co.,240 U.S. 1 (1916). NO NEW POWER OF TAXATION

  33. Brushaber v. Union Pac. R. Co.,240 U.S. 1, 17-18 (1916). “It is clear on the face of this text that it does not purport to confer power to levy income taxes in a generic sense,-an authority already possessed and never questioned, -or to limit and distinguish between one kind of income taxes and another, . . .

  34. Brushaber v. Union Pac. R. Co.,240 U.S. 1, 17-18 (1916). . . . but that the whole purpose of the Amendment wasto relieve all income taxes when imposed fromapportionment…

  35. Brushaber v. Union Pac. R. Co.,240 U.S. 18 (1916). “[T]here is no escape from the conclusion that the Amendment was drawn for the purpose of doing away for the future with the principle upon which the Pollock Case was decided; . . .

  36. LAW UNDER POLLOCK A TAX ON INCOME IS A DIRECT TAX.

  37. LAW UNDER BRUSHABER A TAX ON INCOME, AFTER THE 16TH AMENDMENT, DOES NOT VIOLATE THE TAXING CLAUSES OF THE CONSTITUTION

  38. In the absence of the 16th Amendment, a tax on your income, regardless of the source, is an unapportioned direct taxand just as unconstitutional today as it was in 1895.

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