Thursday, May 12, 2005
Here is some interesting information that I have read.
Under the Constitution, it seems, Congress DOES NOT have the ability to impose an income tax on incomes derived from purely domestic commerce.
NOTE: The Constitution makes specific statements that gives Congress the power to tax AND the power to regulate interstate commerce (commerce between the states). These are found in Article I, Section 8, Clauses 1 and 3:
"The Congress shall have power to lay and collect taxes, duties, imposts, and excises, to pay the debts and provide for the common defense and general welfare of the United States; but all duties, imposts, and excises shall be uniform throughout the United States." [Article I, Section 8, Clause 1]
"To regulate commerce with foreign nations, and among the several states*, and with the Indian tribes;" [Article I, Section 8, Clause 3]
The clause that specifically gives Congress the power to tax together with the clause that specifically gives Congress jurisdiction over interstate commerce would give Congress the power to tax incomes that are derived from interstate commerce if not for another specific statement.
The exception where Congress is specifically prohibited from taxing that which it was given the power to regulate is found in Article I, Section 9, Clause 5. Congress is specifically prohibited from taxing exports from any state:
"No Tax or Duty shall be laid on Articles exported from any State." [Article I, Section 9, Clause 5]
These are the ONLY sections that address Congress' powers to tax. What is important to recognize is what is missing. Congress is NOT given the power to regulate intrastate commerce (commerce that occurs within the 50 states, from which most incomes are derived). Therefore, the absence of the power to regulate intrastate commerce AND the restriction on taxing exports from the states makes it impossible for Congress to impose a tax on incomes derived from purely domestic commerce (commerce that occurs inside or between the states).
The income tax law is completely consistent with this conclusion. Subchapter N, Section 861 of the federal income tax law (26 USC § 861(b) and 26 CFR § 1.861-8 and following) DOES NOT show that Congress imposed an income tax on incomes derived from purely domestic commerce.
Therefore, by careful examination of the Constitution alone, the reader discovers that the power to impose a broad income tax on the domestically earned incomes of residents of the United States that the public has been “led to believe” Congress possessed does not exist in the Constitution (therefore this power cannot exist in the law). There are two different TYPES of taxes that the Constitution permits Congress to levy - Direct and Indirect.
"Direct" taxes are per capita taxes or taxes on property.
- They must be apportioned.
"Indirect" taxes are taxes imposed upon the "importation, consumption, manufacture, and sale of certain commodities, privileges, particular business transactions, vocations, occupations, and the like" (Flint v. Stone Tracy, 220 U.S. 107 (1911)).
- They must be geographically uniform.
Apportionment means that the tax is divided up among the states according to population (which means that each person pays the same amount of tax).
Geographically uniform means that the tax applies the same regardless of geographical location in the United States (the same in Texas as in Ohio, etc.).
NOTE: The 16TH Amendment DID NOT change these Constitutional limits
By RLF at 7:48 AM