It is disappointing to see one of our self-anointed “constitutional conservatives”, meaning Ted Cruz, is found to fall far short of constitutional conservatism when it comes to tax reform.
Surely a “constitutional conservative” knows that proposing a flat tax on incomes would not close down the IRS as Cruz claims, but more importantly, it perpetuates today’s violation of our Constitution which requires any direct tax to be apportioned among the States.
The very purpose of requiring direct taxes to be apportioned was to insure that Congress, if and when it decided to enter the States and tax the citizens directly, the tax would turn out to be an equal per capita tax and not the socialist type of tax which Cruz proposes, which is to seek out and place a larger tax burden upon the most productive members of our society. Cruz’s tax plan is more in line with what Bernie Sanders would support than what our founders intentionally rejected.
keep in mind that the rule requiring direct taxes to be apportioned is still very much part of our Constitution and any “constitutional conservative” knows this.
Shortly after the 16th Amendment was adopted the Court in Eisner v. Macomber 252 U.S. 189, 206 (1920), a case dealing with an income tax and direct vs. indirect taxation, the tax was struck down as being direct and not apportioned. The Court stated:
A proper regard for its genesis, as well as its very clear language, requires also that this amendment shall not be extended by loose construction, so as to repeal or modify, except as applied to income, those provisions of the Constitution that require an apportionment according to population for direct taxes upon property, real and personal. This limitation still has an appropriate and important function, and is not to be overridden by Congress or disregarded by the courts.
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Thus, from every point of view, we are brought irresistibly to the conclusion that neither under the Sixteenth Amendment nor otherwise has Congress power to tax without apportionment a true stock dividend made lawfully and in good faith, or the accumulated profits behind it, as income of the stockholder. The Revenue Act of 1916, insofar as it imposes a tax upon the stockholder because of such dividend, contravenes the provisions of Article I, § 2, cl. 3, and Article I, § 9, cl. 4, of the Constitution, and to this extent is invalid notwithstanding the Sixteenth Amendment.
A few years later in another case dealing with income taxation and direct vs. indirect taxation, in BROMLEY VS MCCAUGHN, 280 U.S. 124 (1929), the Court emphatically stated “As the present tax is not apportioned, it is forbidden, if direct.”
And let us not forget that even Justice Roberts stated in the Obamacare case:
The shared responsibility payment is thus not a direct tax that must be apportioned among the several States.
The truth is, Article 1, Section 9, Clause 4 has never been repealed and declares:
No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or Enumeration herein before directed to be taken.
So, how may Congress tax “incomes” without the tax being a direct tax which requires apportionment? The answer to this is found in In Flint v. Stone Tracy Co., 220 U.S. 107, (1911). In Flint the court confirmed Congress could impose an excise tax on the privilege of being a corporation making it an indirect tax and not having to apportion it, and the amount to be paid by each tax payer was measured from the profits realized under the privilege granted by government.
This is how a tax on incomes can be laid without having to apportion the tax ___ the tax is not a generically named “income tax” which is not mentioned in our Constitution but an excise tax which is one of the specifically named taxes found in our Constitution and does not require apportionment, rather, it requires uniformity throughout the United States when laid and every “constitutional conservative” ought to know this.
The bottom line is, the 16th Amendment merely confirmed what was found by the Court in Flint, that Congress could lay and collect a tax on income without having to apportion it. However, the amendment by its crystal clear wording did not create a generically named “income tax”.
Cruz’s tax plan intentionally keeps alive the socialist friendly tax calculated from profits, gains, salaries and other lawfully earned incomes. Real tax reform is found in the Fair Share Balanced Budget Amendment which begins as follows:
“SECTION 1. The Sixteenth Amendment is hereby repealed and Congress is henceforth forbidden to lay
any tax or burden calculated from profits, gains, interest, salaries, wages, tips, inheritances or any other lawfully realized money.
NOTE: these words would return us to our founding father’s ORIGINAL TAX PLAN as they intended it to operate! They would also end the failed experiment with allowing Congress to lay and collect taxes calculated from lawfully earned “incomes” which now oppresses America‘s economic engine and robs the bread which working people have earned when selling their labor!
“Honest money and honest taxation, the Key to America’s future Prosperity“ ___ from “Prosperity Restored by the State Rate Tax Plan”, no longer in print.***