Provoking the Populace
The Test
I am indebted to attorney Larry Becraft for his excellent research on this topic. You can find his work here.
A foundational principle of America’s system of law is that rules that forbid actions must not be so poorly worded that the average person has to guess as to their meaning. Notice the language in Lanzetta v. New Jersey, 1939, 306 U.S. 451, 453, 59 S.Ct. 618, 83 L.Ed. 888:
That the terms of a penal statute creating a new offense must be sufficiently explicit to inform those who are subject to it what conduct on their part will render them liable to its penalties is a well-recognized requirement . . . and a statute which either forbids or requires the doing of an act in terms so vague that men of common intelligence must necessarily guess at its meaning and differ as to its application violates the first essential of due process of law.
Ethereally constructed ordinances violate of substantive due process requirements by not to conveying with reasonable certainty the law’s intended scope.
In United States v. Harriss, 1954, 347 U.S. 612, 617, 74 S.Ct. 808, 812, 98 L.Ed. 989, we find this:
The underlying principle is that no man shall be held criminally responsible for the conduct which he could not reasonably understand to be proscribed.
Narrowing It Down
According to the U.S. Constitution, the Congress is authorized to impose two different types of taxes—direct and indirect.
Indirect taxes (excises, duties and imposts) via Art. 1, §8, cl. 1, of the Constitution, must be uniformly imposed throughout the country.
Direct taxes are required via Art. 1, §2, cl. 3, and Art. 1, §9, cl. 4, to be imposed pursuant to the regulation of apportionment.
These tax categories are mutually exclusive and any given tax must rightly fit within one category or the other.
To which constitutional category does the federal income tax belong—direct or indirect tax?
Do American courts speak with unity about this basic query regarding the nature of this tax?
First Steps
The first step is to see if there is any ambiguity or opposition of decisions about the nature of the federal income tax and if it is limited or far-reaching. This requires a look at the relevant decisions concerning this specific issue.
In 1894, Congress adopted an income tax act which was declared unconstitutional in Pollock v. Farmers' Loan & Trust Co., 157 U.S. 429, 15 S.Ct. 673, aff. reh., 158 U.S. 601, 15 S.Ct. 912 (1895). The Pollock Court found that the income tax was a direct tax which could only be imposed if the tax was apportioned; since this tax was not apportioned, it was found unconstitutional.
In an effort to circumvent this decision, the 16th Amendment was proposed by Congress in 1909 and allegedly ratified by the states in 1913. As a result, diverse opinions arose regarding the legal ramifications of the amendment. Some groups contended that the 16th Amendment simply did away with the apportionment requirement for one specific direct tax known as the income tax, while others claimed that the amendment simply withdrew it from the direct tax category and placed the income tax in the indirect, excise tax class.
Division in the Ranks
Here are some examples of the conflicting messages from the courts.
In the First Circuit (federal appellate court for Maine, Massachusetts, New Hampshire, Puerto Rico and Rhode Island) in United States v. Turano, 802 F.2d 10, 12 (1st Cir. 1986), that court held that the
16th Amendment eliminated the indirect/direct distinction as applied to taxes on income.
In the Second Circuit (Connecticut, New York, and Vermont), there is uncertainty revealed by three completely inconsistent cases.
In Jandorf's Estate v. Commissioner, 171 F.2d 464, 465 (2nd Cir. 1948), that court declared,
It should be noted that estate or inheritance taxes are excises . . . while surtaxes, excess profits and war-profits taxes are direct property taxes.
Surtaxes are the graduated taxes of the income tax, so this court holds that the personal income tax is a direct tax.
But in Ficalora v. Commissioner, 751 F.2d 85, 87 (2nd Cir. 1984), that court stated that the personal income tax was an indirect tax:
[T]he Supreme Court explicitly stated that taxes on income from one's employment are not direct taxes and are not subject to the necessity of apportionment.
But compare United States v. Sitka, 845 F.2d 43, 46 (2nd Cir. 1988)(citing Parker, infra, for the proposition that the tax is direct).
In the Third Circuit (Pennsylvania, New Jersey, Delaware, and the Virgin Islands), it has been held in one case that all income taxes are direct, but in another that only some are direct;
see Keasbey & Mattison Co. v. Rothensies, 133 F.2d 894, 897 (3rd Cir. 1943)
[A]n income tax is a direct tax upon income therein defined
Penn Mutual Indemnity Co. v. Commissioner, 277 F.2d 16, 19 (3rd Cir. 1960)
Pollock. . . only held that a tax on the income derived from real or personal property was so close to a tax on that property that it could not be imposed without apportionment. The Sixteenth Amendment removed that barrier.
We’ll look at more cases in the future, but as we can see so far, the Courts have not spoken with one accord on the issue of federal income tax. How is the average U.S. citizen supposed to follow the law when his own government cannot clearly articulate what they require?