What type of tax must be paid by the person who owes the tax?

Answer 1

Direct Tax! The type of tax paid by the person who owes it has no relevance until the subject of the tax is known. In the United States Congress has the complete and plenary power to tax whatever is taxable which can be discerned by the two great classes of taxation from which they tax. One class of taxes is the direct tax and the other class is indirect taxation. Direct taxes are either capitation taxes or tax on property and both are subject to the rule of apportionment. Indirect taxes are excise taxes, imposts. and duties which are subject to the rule of uniformity. Generally direct taxes are taxes that must be paid by the person who owes the tax and indirect taxes are taxes that may be passed on to the consumer who accepts the liability imposed upon the manufacturer as the price of doing business. These two distinctions were easy to understand prior to the passage of the 16th Amendment which was a direct response to a Supreme Court Ruling in 1895 where the entire income tax portion of the revenue laws was struck down as un-constitutional. (Pollack v. Farmers Loan and Trust Co.)

The Pollack decision was based on the presumption that a tax on income was a tax on property and since the revenue act had passed an unapportioned tax the Supreme Court struck down that portion of the revenue laws. Shortly there after Congress passed the 16th Amendment which states:

Congress shall have the power to lay and collect taxes on income, from whatever source derived, without apportionment among the several states and without regard to enumeration of a census.

16th Amendment

The Constitution of the United States

There are many people who will argue that the 16th Amendment allowed Congress to tax income directly without regard to apportionment but this is not what the Amendment says. Those people who advocate a direct unapportioned tax will claim that this is what the Supreme Court has ruled and that the 16th Amendment is wholly constitutional. While they are right in asserting that the 16th Amendment is constitutional it is not so because a direct unapportioned tax was authorized by Congress through Constitutional legislation. If this were the case the 16th Amendment would most certainly have been struck down as unconstitutional. What the Supreme Court has stated and affirmed time and time again is that Congress was not granted any new power of taxation nor was any new burden placed upon the people and the 16th Amendment mindful of Constitutional constraints sought to keep the courts from ever viewing an unapportioned tax on income as a direct tax ever again. In other words, the 16th Amendment gave no new power to Congress but instead prohibited the courts from viewing unapportioned income tax as a direct tax and instead placing it in the category of indirect taxation where all income taxes inherently belong.

What this means in terms of subject of the tax is that income is not the subject of the so called Personal Income Tax. Income tax as we know it is an indirect tax where in certain people subject to the income tax laws and liable for a tax, known by the code as taxpayers, because they are engaged in a specific activity identified by the code as a taxed activity. It is unclear how the vast majority of people living and working in the United States today became liable for this tax to begin with. It is unclear how people who are not engaged in any specific activity where a tax has been imposed became subject to the income tax laws. For those activities where a tax is imposed it is perfectly clear how one becomes liable for and subject to, for everybody else it is implied, suggested and ultimately inferred that all people who earn income are liable for the Personal Income Tax and subject to it's laws.

There have been many arguments put forth how a few specifically defined taxed activities became window dressing for a vague and misleading revenue law that has allowed the government to take advantage of law abiding people and counts on their ignorance to expand the reach of jurisdiction and ultimately revenue. However this unfortunate turn of events came to pass, most people today believe themselves to be liable for the income tax and dutifully file returns and pay the taxes they have assessed. Here is a law so circulatory in its definitions that the better you come to understand the language the more it resembles a "Who's on First" routine by Abbot and Costello. Understanding the Code and dealing with the tax collectors who follow is nothing close to funny or even amusing. The Internal Revenue Service has become so powerful, so vicious in its zeal for prosecution and tax collection I hesitate to post this answer for fear of reprisal. What has happened to the people in this country that when a tax collection agency regularly investigates church's for things pastors said upon the pulpit, no one even notices or sees anything wrong with this? How have we gotten to this point is the relevant question while the lawyers and Accountants who profit from this "law" encourage the questions similar to the question originally asked. what type of tax must paid by the person who owes the tax? For the taxpayer who is not specifically made liable for a tax or subject to the tax laws in question then the question should first be, what is the subject of the tax? Is it people, property or activities and where specifically has there been a tax imposed upon that subject?