Income tax what type of tax?

Answer 1

The 16th amendment is a moot point. All it did was to confirm Congress' taxing power concerning income tax as an indirect tax!

Income Tax is an INDIRECT tax. It is NOT a direct tax as others here have suggested. 2 US Supreme Court Cases in 1916 settled this very question. They are:

BRUSHABER v. UNION PACIFIC R. CO., 240 U.S. 1 (1916)

AND

STANTON v. BALTIC MINING CO, 240 U.S. 103 (1916)

The Court said specifically in the Stanton case the following:

" it manifestly disregards the fact that by the previous ruling it was settled that the provisions 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 indirecttaxation to which it inherently belonged, "

And as a side note, most tax professionals do NOT read the law to determine who is liable for the tax. Most tax professionals read IRS publications and just ASSUME anyone who makes money now owes an Income Tax.

IRS Publications are sort of like "New Letters" put out by the IRS to the tax industry, including mostly ALL CPA's and Tax "Professionals". The IRS has a manual available on their website which any one can go read. Here's what THEIR OWN manual says about their own publications:

4.10.7.2.8 (01-01-2006)

IRS Publications

"IRS Publications explain the law in plain language for taxpayers and their advisors. They typically highlight changes in the law, provide examples illustrating Service positions, and include worksheets. Publications are nonbinding on the Service and do not necessarily cover all positions for a given issue. While a good source of general information, publications should not be cited to sustain a position."

The IRS has plainly stated in their OWN manual that Publications are NOT to be cited to sustain positions about the LAW even though that is what all tax professionals do anyway. This is because IRS publications and pamphlets are NOT the law. The IRS has already vindicated themselves from people who WRONGLY use publications like law.

So hopefully this has gotten you on the proper path to actually understanding what the "Income Tax" actually is and especially what it ISN'T!