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Pointers For Pundits

Focusing on the facts makes for great journalism.

DEBUNKING, CORRECTING AND FORESTALLING the promulgation of misinformation about the tax is a public good, and its own reward. So is conveying accurate information about this hugely-important subject. Doing either one offers great opportunities for some very worthwhile and wide-interest journalism.

For instance, two hundred (or two thousand) articles will be written by MSM and "alt-media" hacks in which it is asserted or implied that the income tax began with the adoption of the 16th Amendment in 1913. Every such article will be wrong in this regard, and some enterprising pundit is thus presented with a great opportunity to capture a lot of eyes by focusing attention on this bizarrely-ubiquitous error.

After all, the facts are clear and unmistakable. No one can plausibly claim to know enough about the tax to write on the subject while not knowing that the tax began in 1862 and the 16th Amendment merely closed a loophole affecting only two applications of the tax-- to taxable dividends and rent-- temporarily opened by the Supreme Court in an 1895 ruling in Pollock v. Farmer's Loan & Trust.

As Treasury Department legislative draftsman F. Morse Hubbard summarizes the amendment’s effect for Congress in hearing testimony in 1943, with language making clear that the amendment merely closed the Pollock loophole and allowed the pre-existing tax to resume as it had operated before 1895:

"[T]he amendment made it possible to bring investment income within the scope of the general income-tax law, but did not change the character of the tax. It is still fundamentally an excise or duty..."

Here are summaries by Cornell and Harvard of a unanimous Supreme Court ruling (Brushaber v. Union Pacific RR Co., 240 U.S. 1 (1916)) in response to a challenge to the resumption of the tax under a post-amendment enactment which argued that the amendment provided for a new tax (and one which was direct and yet  unapportioned):

"The Amendment, the [Supreme] court said, judged by the purpose for which it was passed, does not treat income taxes as direct taxes but simply removed the ground which led to their being considered as such in the Pollock case, namely, the source of the income. Therefore, they are again to be classified in the class of indirect taxes to which they by nature belong."

Cornell Law Quarterly, 1 Cornell L. Q. 298 (1915-16)

"In Brushaber v. Union Pacific Railroad Co., Mr. C. J. White, upholding the income tax imposed by the Tariff Act of 1913, construed the Amendment as a declaration that an income tax is "indirect," rather than as making an exception to the rule that direct taxes must be apportioned."

Harvard Law Review, 29 Harv. L. Rev. 536 (1915-16)

Legislative Attorney of the American Law Division of the Library of Congress Howard M. Zaritsky in his 1979 Report No. 80-19A, entitled 'Some Constitutional Questions Regarding the Federal Income Tax Laws', put it this way:

"The Supreme Court, in a decision written by Chief Justice White, first noted that the Sixteenth Amendment did not authorize any new type of tax, nor did it repeal or revoke the tax clauses of Article I of the Constitution, quoted above.  Direct taxes were, notwithstanding the advent of the Sixteenth Amendment, still subject to the rule of apportionment…"

The Supremes repeated themselves many times over the years, just to be sure no one missed the message, for example:

"The Sixteenth Amendment, although referred to in argument, has no real bearing and may be put out of view. As pointed out in recent decisions, it does not extend the taxing power to new or excepted subjects..."

Peck v. Lowe, 247 U.S. 165 (1918)

"[T]he settled doctrine is that the Sixteenth Amendment confers no power upon Congress to define and tax as income without apportionment something which theretofore could not have been properly regarded as income." 

Taft v. Bowers, 278 US 470, 481 (1929)

"[T]he sole purpose of the Sixteenth Amendment was to remove the apportionment requirement for whichever incomes were otherwise taxable. 45 Cong. Rec. 2245-2246 (1910); id. at 2539; see also Brushaber v. Union Pacific R. Co., 240 U. S. 1, 240 U. S. 17-18 (1916)"

So. Carolina v. Baker, 485 U.S. 505 (1988)

And just to put the icing on this cake, look at the derivation tables published by Congress showing the enactments of which today's income tax is comprised, a huge portion of which pre-date the 16th Amendment.

Thus, anyone writing about the tax-- in the media or, for that matter, in the "tax honesty" community or any other venue-- who fails to acknowledge the true origin of the tax long pre-dating the 16th Amendment is simply lying. They are either lying deliberately about the tax, or lying in their pretense of knowing the subject.

THE QUESTION OF WHY THE STATE VIGOROUSLY ENCOURAGES that lie about the origin of the tax-- so much so that it has become part of our modern American historical mythology-- will make for some good journalism by anyone who knows the answer.* But even properly snarky (or skeptical) articles focusing on nothing but the fact that it IS misinformation, and yet vigorously encouraged to the point of near-universal embrace, will be good and useful journalism.

Quality in journalism, after all, doesn't rely on having answers. Quality in journalism only requires asking the right questions.


*The falsehood that today's income tax began in 1913 obscures the fact that what qualifies as "income" for purposes of the tax was actually established decades before the 16th Amendment, in a context that sharply clarifies the meaning of the term. It is that old definition-- gains from the conduct of privileged activities, as required in the imposition of the indirect excise that the tax was created to be-- that was used in writing and ratifying the amendment.

That old definition controls the meaning and effect of the 16th amendment (thereby allowing the otherwise inherently conflicting co-existence of the amendment and the un-repealed and unmodified pair of Constitutional provisions requiring apportionment for all capitations and other direct taxes, as was relied upon by the unanimous Brushaber court in upholding the resumption of the income tax in 1913). That old definition also controls the scope and limitations of the income tax today-- limitations the modern state very much wishes Americans to misunderstand. Learn the whole subject here.