by Randall White
The answer is both “Yes” and “No”. This is because our national Constitution divides federal taxation into two categories: direct taxes, and indirect taxes; and further imposes two rules on Congress concerning these two categories of taxes. So the answer is “Yes” as long as Congress is following the rules, and “No” if Congress violates them.
What we have in place today concerning federal taxation of our wages of labor and earnings from self-employment is a big, ugly, unconstitutional policy and statutes that violate the Constitution, which are essentially stealing an average of $1,000 per month from every working-class American. This is a multi-trillion-dollar-tax-scam involving all three branches of our representative government, which hits us directly in the pocketbook.
The following is a memorandum of law explaining the issue.
A tax is an authorized public taking—not a theft. We the People authorize our representatives to levy taxes for the purpose of serving and protecting our rights and interests. As the creators of government, we certainly possess the inherent authority to nullify unconstitutional taxes through our juries, and to apply sufficient political pressure through various means to force our representatives to repeal unconstitutional statutes, and to reverse unacceptable policies and practices.
In the U.S. Supreme Court case, Hylton v. United States, 3 U.S. 171 (1796), the issue of direct and indirect taxation under the Constitution was fully argued and settled as a means to determining the nature and constitutionality of the carriage tax. See: Marcus, M. (Ed.). (2003). Hylton v. United States. The Documentary History of the Supreme Court of the United States, 1789-1800; Volume Seven; Cases: 1796-1797. (Vol 7, pp. 385-505). New York, NY: Columbia University Press.
In Hylton, the Court observed that the first Article in the Constitution authorizes Congress to lay and collect taxes, and determined that Article I divides federal taxation into two categories: direct, and indirect. The Court observed that:
a. The eighth section of Article I requires indirect taxes to be uniformly applied (‘The Congress shall have Power To lay and collect 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;’).
b. The second section of Article I requires a direct tax to be apportioned among the states according to their respective numbers (‘Representatives and direct Taxes shall be apportioned among the several States’).
c. The ninth section of Article I prohibits Congress from passing a direct tax unless it is apportioned among the states in proportion to the census or enumeration (‘No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or enumeration herein before direct to be taken’).
The Court defined a tax on land, and a capitation (or ‘head tax’), as direct taxes, and defined indirect taxes as “circuitous modes of reaching the revenue of individuals, who generally live according to their income.”
By and through this definition of an indirect tax, the Court established a bright-line legal reference for determining whether a tax is direct or indirect. This reference is how the tax reaches the revenue of individuals—either directly or circuitously.
The last time Congress levied a direct apportioned tax was in 1862, which expired in 1872. Since then, all taxes levied by Congress have been (or are at least supposed to be) of the indirect kind, which are uniformly applied, but not apportioned among the states.
In accordance with the Supreme Court’s definition of an indirect tax, any tax laid by Congress on the wages of labor or earnings from self-employment must necessarily reach the revenue of individuals indirectly, or the tax is unconstitutional.
In the Social Security Act of 1935, Congress included statutes levying federal taxes on “the wages income of every individual” and on “the self-employment income of every individual”, which are codified at 26 U.S.C. §§ 3101(a) and 1401(a). These statutes impose non-apportioned direct taxes laid in violation of the U.S. Constitution, Article I, sections two and nine.
The special interests and bureaucrats who drafted these unconstitutional statutes knew that the Supreme Court would strike them down, if legally challenged, so the Internal Revenue Service (IRS) was instructed to wait until the distraction of World War II to enforce these employment taxes under the guise of the so-called Victory Tax (imposed by the Revenue Act of 1942). When the War ended, these unconstitutional employment taxes continued unabated. By then, our Supreme Court was sufficiently corrupted to where it has never addressed this salient legal issue.
So, you ask, ‘Didn’t the 16th Amendment change the Constitution to permit Congress to directly tax our wages of labor and earnings from self-employment without the constitutional requirement of apportioning the tax among the states?’
The answer is an unqualified ‘No!’
The 16th Amendment states:
“The Congress shall have the 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.”
Facially, the 16th Amendment does not repeal or modify Article I in the Constitution. Accordingly, the U.S. Supreme Court reads the Amendment in light of Article I, sections two, eight, and nine. See Wright v. United States, 302 U.S. 583, 607 (1938):
“The Court has hitherto consistently held that a literal reading of a provision of the Constitution which defeats a purpose evident when the instrument is read as a whole, is not to be favored.—‘From whatever source derived,’ as it is written in the Sixteenth Amendment, does not mean from whatever source derived. Evans v. Gore, 253 U.S. 245.”
In other words, the U.S. Supreme Court stated in a polite and politically correct manner that the language in the 16th Amendment is deceptive because it doesn’t mean what it says, and that Congress cannot defeat the Constitution through deceptive language.
In the Wright v. United States and Evans v. Gore cases cited above, the U.S. Supreme Court was referencing the decision it rendered about the 16th Amendment in Brushaber v. Union Pacific. R.R., 240 U.S. 1, 12-19 (1916):
“[T]he contention that the Amendment treats a tax on income as a direct tax — thus destroying the two great classifications [of direct and indirect taxation under the Constitution] is — wholly without foundation.”
In other words, the 16th Amendment did not repeal or modify the first Article in the Constitution, and interpretation of the 16th Amendment is limited to the class of indirect taxation.
In Stanton v. Baltic Mining Co., 240 U.S. 103, 112-113 (1916), the U.S. Supreme Court further explained its decision in Brushaber by stating that the 16th Amendment did not confer any new power of taxation to Congress:
“[B]y the previous ruling [Brushaber] it was settled that the provision of the 16th Amendment conferred no new power of taxation, but simply prohibited the previous complete and plenary power of income taxation possessed by Congress from the beginning from being taken out of the category of indirect taxation [by the Supreme Court, as it did in Pollock v. Farmers’ Loan & Trust Co.] to which it inherently belonged.”
Through these opinions stated by the U.S. Supreme Court in Wright v. United States; Evans v. Gore; Brushaber v. Union Pacific. R.R.; and Stanton v. Baltic Mining Co.; we learn that the 16th Amendment is merely a public policy statement made by Congress with the object of restraining the Supreme Court from viewing a federal income tax (on the subjects of interest, dividends, and rents) as a direct tax because of its close effect on the underlying property, as it did in Pollock v. Farmers’ Loan & Trust Co., 157 U.S. 429, reh’g, 158 U.S. 601 (1895). Accordingly, the 16th Amendment does not affect Article I of the Constitution, which remains in full legal force and effect.
The rule concerning this issue is that the U.S. Constitution is the supreme law of the land, and for any statute to be valid, it must be in agreement. It is impossible for a law that violates the Constitution to be valid. In Marbury v. Madison, 5 U.S. 137, 180 (1803), the U.S. Supreme Court succinctly stated this principle: “[A] law repugnant to the Constitution is void.”
In summary, the federal taxes laid by Congress on “the wages income of every individual” and on “the earnings from self-employment of every individual” reach the revenue of individuals directly, thus these taxes fall into the category of direct taxes. Because these taxes are of the direct kind, and they are not apportioned among the states in proportion to the census or enumeration as required by the second and ninth sections of Article I in the Constitution, the statutes levying these taxes are unconstitutional, null and void.
The reason you are learning about this issue in an article instead of a legal proceeding is because all three branches of our federal government are working together in concert to enforce these unconstitutional taxes through unconstitutional policies.
Congress has established an unconstitutional internal revenue statutory and regulatory scheme that is framed to prevent citizens from accessing judicial remedy concerning the issue of unconstitutional taxation statutes. This scheme deprives state courts of jurisdiction concerning federal taxes, and the federal tax exception clause to the Declaratory Judgment Act (28 U.S.C. § 2201) deprives all Article III inferior federal courts of jurisdiction to adjudicate the constitutionality of federal taxation statutes.
For ordinary citizens, remedy in the U.S. Supreme Court is generally unavailable. The Court only hears about 100-to-150 of the 7,000-to-8,000 petitions for writ of certiorari filed annually, a practice that deprives ninety-eight percent of the petitioners of access to justice. Although the Supreme Court inherently possesses jurisdiction to declare the constitutionality of the federal statutes at issue, it is not motivated to do so. A legal challenge to the constitutionality of the federal taxes levied on our wages of labor and earnings from self-employment is a ‘hot potato’ issue that the Court has evaded for decades, and will not hear unless and until political pressure on the Court becomes so great that any further delay becomes untenable.
The IRS is tasked with the job of enforcing income taxes. The IRS publishes official propaganda asserting an erroneous legal interpretation of the 16th Amendment as authority for requiring all citizens to report their wages of labor and earnings from self-employment as taxable income on the IRS Form 1040, together with threatening taxpayers with a $5,000 frivolous penalty, a federal tax lien, and levy action if they question the constitutionality of the taxes being imposed.
The net result of these unconstitutional policies and practices is that we are being unconstitutionally taxed under color of law, and systematically deprived of access to declaratory relief concerning the issue of unconstitutional federal taxation statutes.
For these reasons, I have sent a letter request and memorandum of law to President Trump explaining the issues and asking him to:
1) Issue an executive order instructing the IRS to stop enforcing unconstitutional taxes on our wages of labor and on our earnings from self-employment, and to stop falsely claiming that the federal government derives its authority for income taxation from the 16th Amendment. (This executive action will almost certainly precipitate the U.S. Supreme Court hearing a petition in the matter.)
2) Direct his administration to vigorously lobby Congress to repeal the unconstitutional statutes levying the taxes codified at 26 U.S.C. §§ 3101(a) and 1401(a), and to amend the Declaratory Judgment Act (28 U.S.C § 2201) to permit citizens to sue the U.S. government for declaratory judgment concerning the issue of unconstitutional taxation statutes.
A copy of this letter is available at
https://countyconstitutions.com/products/letter-memorandum-to-president-trump?variant=43146767695962
In my civics education textbook, American Popular Sovereignty, I explain the Internal Revenue Code and federal income taxation, and cover Hylton v. United States, 3 U.S. 171 (1796), in detail.