Income Tax

Arguing that a national wealth tax is warranted and constitutional. 

Arguing that the Sixteenth Amendment was legally and politically necessary at the time of its ratification. Arguing that Pollock v. Farmers’ Loan & Trust Co., which struck down such a tax, was altered by the Sixteenth Amendment, but its core was not overturned. Discussing the legal and political significance of the Amendment at the time of its ratification.

Defending the first ruling in Murphy v. Internal Revenue Service, which held that a whistleblower’s recovery for emotional distress could not be reached by the income tax because it is not “income.”

Discussing the D.C. Circuit’s decision in Murphy v. Internal Revenue Service as one that shocked the tax community by holding a provision excluding personal injury recoveries from gross income when calculating taxes. Discussing the purpose of the Sixteenth Amendment: to remove the apportionment requirement from federal income taxes, not to redefine the meaning of “direct tax.” Looking to the text and original intent of the Amendment, as well as early decisions interpreting it.

Reading constitutional provisions on taxation, as amended by the Sixteenth Amendment, to conclude that the apportionment requirement only applies to a federal direct tax that is not an income tax. Discussing the early cases that the Sixteenth Amendment overturned. Citing the legislative history of the discussions of Section 2 of the Fourteenth Amendment to argue that the Framers of the Sixteenth Amendment operated under the assumption that the direct-tax apportionment requirement was not being abolished. Concluding that the apportionment requirement for taxation cannot be broadly construed.

Rejecting conventional wisdom to argue that some consumption taxes would violate the Constitution. Studying debates at the founding to assess the meaning of “direct taxes.” Arguing that a national tax such as a wealth tax will need to be apportioned rather than falling under the “tax on incomes” phrase of the Sixteenth Amendment, which would shield it from this process.

Arguing that the Sixteenth Amendment was an essential modification of the Direct Tax Clauses. Analyzing the text of the Tax Clauses and Sixteenth Amendment. Contending that the Amendment was not intended to repeal the Direct Tax Clauses because they were not understood by the ratifiers to be “taxes on incomes.” Also noting that a wealth tax could be enacted, but that it would have to be apportioned. Responding to Calvin Johnson’s arguments about the Taxing Clause and Sixteenth Amendment.

Responding to Calvin Johnson’s response on his interpretation of the Direct Tax Clauses and the Sixteenth Amendment. Arguing that serious constitutional constraints do exist on the national taxing power. Challenging Johnson’s characterization of what the Sixteenth Amendment did to the Direct Tax Clauses. Arguing that Johnson’s conception of the original meaning of the Direct Tax Clauses is too narrow.

Responding to Erik Jensen’s argument that Congress cannot properly tax wealth or adopt a national sales tax. Arguing that the Sixteenth Amendment allows Congress to tax income without the “hobbling apportionment requirement” and that a federal wealth or consumption tax would be constitutional. Arguing that the Court should say that Pollock v. Internal Revenue Service is no longer good law and that the Sixteenth Amendment would not require apportionment when it is impossible or unreasonable.

Examining the original meaning of “taxes on incomes.” Arguing that the income tax amendment was a response to the perceived inadequacies of taxes based on consumption. Analyzing the 1894 income tax. Noting that a wealth tax is not an income tax and that courts and scholars should defer to the understanding of “incomes” at the time of ratification.

Discussing the historical background of taxation throughout the English and colonial eras. Providing context underlying the Sixteenth Amendment. Also discussing early cases interpreting the tax provisions.

Analyzing whether the Sixteenth Amendment gives Congress power to tax incomes from bonds and other state-issued securities. Arguing that the very word “tax” implies apportionment from its Greek roots. Discussing early drafts of the Sixteenth Amendment and how it was edited to omit “direct” in front of taxes.