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Amendment 16: Graduated Income Tax vs. Flat Increase Tax

Amendment 16: Graduated Income Tax vs. Flat Increase Tax

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Nearly everyone opposes the Sixteenth Amendment’s income tax to one degree or another. However, with few exceptions, most people object on invalid grounds.
Nearly everyone opposes the Sixteenth Amendment’s income tax to one degree or another. However, with few exceptions, most people object on invalid grounds.

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Published by: Mission to Israel Ministries on Sep 28, 2010
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Bible Law vs. The United States ConstitutionA Christian PerspectiveTed R. WeilandChapter 25
Amendment 16Graduated Income Tax vs
Flat Increase Tax
Section 1
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.
In order to overturn
 Pollock v. Farmers¶ Loan & Trust Co.
³whereby the attempt of Congress the previous year to tax incomes uniformly throughout the United States was held by a divided court to be [adirect tax and therefore] unconstitutional « which Congress under the terms of Article I, Sec. 2, and Sec.9, could impose only by the rule of apportionment according to population«.´,
Congress needed anamendment to the Constitution:
Dissenting justice John Harlan [in
] said that there would have to be a constitutionalamendment for the existence of a federal income tax«.
As early as 1896, such an amendment was already a plank in the Democratic Party¶s platform.³Democratic Representative Cordell Hull of Tennessee introduced income tax legislation in 1907, and theDemocratic Party called for an income tax amendment in its 1908 platform´:
[W]e favor an income tax as part of our revenue system, and we urge the submission of aconstitutional amendment specifically authorizing congress to levy and collect a tax uponindividual and corporate incomes, to the end that wealth may bear its proportionate share of the burdens of the federal government.
Republican Presidents Roosevelt and Taft were also in favor of an income tax:
Support for an income tax had been building among Republicans as well. In 1906 TheodoreRoosevelt stated that a ³graduated income tax of the proper type would be a desirable feature of federal taxation, and it is to be hoped that one may be devised which the supreme court willdeclare constitutional.´ «William Howard Taft, also appeared to accept the constitutionality anddesirability, at least in emergencies, of an income tax. In accepting the Republican nomination in1908, Taft said, ³I believe that income tax, when the protective system of customs and the internalrevenue tax shall not furnish enough for governmental needs, can and should be devised which,under the decisions of the Supreme Court, will conform to the Constitution.´
That some states were enacting income tax laws also contributed to amending the federal Constitution:
«states, like New York, were enacting their own income tax laws. Some states found that theyneeded more revenue, other than from property taxes, to support public services like education.
«Wisconsin was the first to adopt a permanent income tax in 1911, a 1% rate to incomes morethan $800 for individuals and $1,200 for married couples.
 Not everyone, of course, supported a federal income tax. In 1910, Senator Richard E. Byrd, Speaker of the Virginia House of Delegates, made a prophetic indictment regarding the ratification of the SixteenthAmendment:
teenth Amendment 
] means that the state actually invited the Federal government to invadeits territory, to oust its jurisdiction and to establish Federal dominion within the innermost citadelof reserved rights of the Commonwealth. This amendment will do what even the
did not do ± it will extend the federal power so as to reach the citizens inthe ordinary business of life. A hand from Washington will be stretched out and placed upon everyman¶s business; the eye of a Federal inspector will be in every man¶s counting house.The law will of necessity have inquisitorial features, it will provide penalties. It will create acomplicated machinery. Under it businessmen will be hauled into courts distant from their homes.Heavy fines imposed by distant and unfamiliar tribunals will constantly menace the taxpayer.An army of Federal inspectors, spies and detectives will descend upon the state. They will compelmen of business to show their books and disclose the secrets of their affairs. They will dictateforms of bookkeeping. They will require statements and affidavits«.When the Federal government gets a stranglehold on the individual businessman, state lines willexist nowhere but on the map. Its agents will everywhere supervise the commercial lives of thestates«.
The Sixteenth Amendment was nevertheless ratified on February 3, 1913:
To raise revenue to fund the Civil War, the income tax was introduced in the United States withthe Revenue Act of 1861. It was a flat tax of 3% on annual income above $800. The followingyear, this was replaced with a graduated tax of 3-5% on income above $600 in the Revenue Act of 1862, which specified a termination of income taxation in 1866«.Prior to the U.S. Supreme Court¶s decision in
 Pollock v. Farmers¶ Loan & Trust Co.
, all incometaxes had been considered to be indirect taxes, required to be imposed with geographicaluniformity, rather than direct taxes, required to be apportioned among the states according to population.
 The Sixteenth Amendment « to the United States Constitution allows the congress to levy anincome tax without apportioning it among the states or basing it on Census results. Thisamendment exempted income taxes from the constitutional requirements regarding direct taxes,after income taxes on rents, dividends, and interest were ruled to be direct taxes in
 Pollock v. Farmers¶ Loan & Trust Co.
 Soon after the amendment was ratified, Congress established a new personal income tax with ratesranging from 1-7 percent on income in excess of $3,000 for a single individual.
tanton v. Balt 
c M 
ng Co.
, (1916), the court ruled that ³the Sixteen 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 towhich it inherently belonged.´
Although the Sixteenth Amendment is often cited as the ³source´ of the Congressional power totax incomes, at least one court has reiterated the point in
v. Un
on Pac
c Ra
(1916)] and other cases that the Sixteenth Amendment itself did not grant the Congress the power to tax incomes (a power the Congress has had since 1789), but only removed the requirement,
, that any income tax be apportioned among the states according to their respective populations. In the
 Penn Mutual Indemn
case, the United States Tax Court said: ³In dealingwith the scope of the taxing power the question has sometimes been framed in terms of whether something can be taxed as income under the Sixteenth Amendment. This is an inaccurateformulation « and has led to much loose thinking on the subject. The source of the taxing power is not the Sixteenth Amendment; it is Article I, Section 8, of the Constitution.´
 Bowers v. Kerbaugh-Emp
re Co.
(1926), Justice Pierce Butler defined income:
After full consideration, this court declared that income may be defined as gain derived fromcapital, from labor, or from both combined, including profit gained through sale or conversion of capital.
oner v. Glenshaw Glass Co.
(1955) explained what is encompassed in the term ³gross income´:
«the Supreme Court laid out what has become the modern understanding of what constitutes³gross income: to which the Sixteenth Amendment applies, declaring that income taxes could belevied on ³accessions to wealth, clearly realized, and over which the taxpayers have completedominion.´
Under this definition,
increase in wealth ± whether through wages, benefits, bonuses, sale of stock or other property at a profit, bets won, lucky finds, awards for punitivedamages in a lawsuit, qui tam actions ± are all within the definition of income, unless the Congressmakes a specific exemption, as it has for items such as life insurance proceeds received by reasonof the death of the insured party, gifts, bequests, devises and inheritances, and certainscholarships.
One of the reasons the income tax was proposed was to replace sales tax, which was inequitable to the poor. Under Constitutional government today, United States citizens pay both income and sales taxes, inaddition to other sundry taxes. So much for concern for the poor, or anyone else for that matter.
The Tax Protest Movement
With such an all-encompassing tax, is it any wonder that the tax protest movement is so large? Nearlyeveryone opposes the Sixteenth Amendment¶s income tax to one degree or another. However, with fewexceptions, most people object on invalid grounds. The vast majority of grumblers¶ and dissenters¶opposition to income taxes is predicated upon the simple fact that they do not like parting with their hard-earned money ± which, in some instances, amounts to nothing more than covetousness or greed. Thisremonstrance has no basis in law, constitutional or biblical, for the simple reason that the ³money´ thegovernment demands from us is not and never was ours to begin with ± it belongs to the government.For those of us who serve Yahweh
as God, the increase tithe (a 10% flat tax) does not belong to useither. In fact, neither does what remains after the tithe. Because ³the earth « and the fullness thereof, theworld and they that dwell therein´ (Psalm 24:1)
belong to Yahweh, His servants are merely stewards of everything He provides us (Deuteronomy 18:17-18, Proverbs 10:22). Yahweh has pre-assigned the first10% of our increase to go directly to His kingdom work. What remains is ours to utilize and invest for ourselves and our families as we best see fit (within moral and kingdom limits) on His behalf.Gary North explains that the tithe is essentially a rental fee to Yahweh and an acknowledgment of Hissovereignty:

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