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Little Big Man
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How Often does the USSC Rule a Tax Unconstitutional?
Feb 9th, 2019 at 8:10pm
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Eh, about once every one hundred and twenty years.

On April 8, 1895, the Supreme Court declared that the federal income tax was unconstitutional, and the wealthy were off the hook…At least for a while.  The Supreme Court’s unpopular decision eventually led to the ratification of the Sixteenth Amendment in 1913, which in no uncertain terms gave Uncle Sam the power to tax incomes “from whatever source derived.”

Why was that ruling so, "unpopular?"  Because the geniuses of the time thought a tax millionaires was the perfect solution to the problems of the middle class.

Then . . . only a short century and two decades later, the court finally found another tax it didn't like:

Comptroller of the Treasury of Maryland v. Wynne, 575 U.S. ___ (2015), is a 2015 U.S. Supreme Court decision which applied the dormant Commerce Clause doctrine to Maryland's personal income tax scheme and found that the failure to provide a full credit for income taxes paid to other states was unconstitutional.


It's almost as if the courts were just another part of the same government.  Go figure!
  

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Jeff
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Re: How Often does the USSC Rule a Tax Unconstitutional?
Reply #1 - Feb 9th, 2019 at 10:36pm
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Little Big Man wrote on Feb 9th, 2019 at 8:10pm:
Eh, about once every one hundred and twenty years.

On April 8, 1895, the Supreme Court declared that the federal income tax was unconstitutional, and the wealthy were off the hook…At least for a while.  The Supreme Court’s unpopular decision eventually led to the ratification of the Sixteenth Amendment in 1913, which in no uncertain terms gave Uncle Sam the power to tax incomes “from whatever source derived.”


It's almost as if the courts were just another part of the same government.  Go figure!
Yeah, the Pollock case was decided with no legal Constitutional substance behind it.

It was foolish and has since been entirely overturned, piecemeal. That works. Overturned is overturned.

  
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Little Big Man
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Re: How Often does the USSC Rule a Tax Unconstitutional?
Reply #2 - Feb 9th, 2019 at 11:32pm
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Jeff wrote on Feb 9th, 2019 at 10:36pm:
Yeah, the Pollock case was decided with no legal Constitutional substance behind it.

It was foolish and has since been entirely overturned, piecemeal. That works. Overturned is overturned.



Wait, what?  I thought you would have agreed with the Pollack case:

Pollock v. Farmers' Loan & Trust Company, 157 U.S. 429 (1895), affirmed on rehearing, 158 U.S. 601 (1895), with a ruling of 5–4, was a landmark case in which the Supreme Court of the United States ruled that the unapportioned income taxes on interest, dividends and rents imposed by the Income Tax Act of 1894 were, in effect, direct taxes, and were unconstitutional because they violated the provision that direct taxes be apportioned.

It was not overturned piecemeal, the constitution was changed so that a tax on income would not be unconstitutional:


The decision was superseded in 1913 by the Sixteenth Amendment to the United States Constitution. A separate holding regarding the taxation of interest income on certain bonds was overruled by the Supreme Court in 1988 in the case of South Carolina v. Baker.

  

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Re: How Often does the USSC Rule a Tax Unconstitutional?
Reply #3 - Feb 10th, 2019 at 8:50am
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Little Big Man wrote on Feb 9th, 2019 at 11:32pm:
Wait, what?  I thought you would have agreed with the Pollack case:

Pollock v. Farmers' Loan & Trust Company, 157 U.S. 429 (1895), affirmed on rehearing, 158 U.S. 601 (1895), with a ruling of 5–4, was a landmark case in which the Supreme Court of the United States ruled that the unapportioned income taxes on interest, dividends and rents imposed by the Income Tax Act of 1894 were, in effect, direct taxes, and were unconstitutional because they violated the provision that direct taxes be apportioned.

It was not overturned piecemeal, the constitution was changed so that a tax on income would not be unconstitutional:


The decision was superseded in 1913 by the Sixteenth Amendment to the United States Constitution. A separate holding regarding the taxation of interest income on certain bonds was overruled by the Supreme Court in 1988 in the case of South Carolina v. Baker.

Yes, you are correct, the instant solution to the Pollock decision was the 16th Amendment, designed to restore Congress' power to tax profits earned by using property without apportionment, because a tax on profits is not a Direct tax and was never thought to be until the S. Ct. went nuts in the Pollock case.

The Pollock decision was overturned piecemeal after the 16th Amendment was in place, rendering the 16th Amendment superfluous.

https://www.oyez.org/cases/1987/94_orig

I think South Carolina v. Baker was wrongly decided. A federal tax on the interest earned on state issued bonds interferes with the power of the states to raise revenue, which the federal government should not be permitted to do. Neither should the states be allowed to tax interest on federal bonds.

They did say this in the Baker decision:

"The Court found that its subsequent decisions overruled Pollock..."

Edit: The Constitution always permitted unapportioned taxes on the income earned on profits from the use of property, it was the Pollock decision that changed the Constitution, and SCOTUS didn't have the authority to do that.
  
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Re: How Often does the USSC Rule a Tax Unconstitutional?
Reply #4 - Feb 10th, 2019 at 9:46am
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Jeff wrote on Feb 10th, 2019 at 8:50am:
Yes, you are correct, the instant solution to the Pollock decision was the 16th Amendment, designed to restore Congress' power to tax profits earned by using property without apportionment, because a tax on profits is not a Direct tax and was never thought to be until the S. Ct. went nuts in the Pollock case.

The Pollock decision was overturned piecemeal after the 16th Amendment was in place, rendering the 16th Amendment superfluous.

https://www.oyez.org/cases/1987/94_orig

I think South Carolina v. Baker was wrongly decided. A federal tax on the interest earned on state issued bonds interferes with the power of the states to raise revenue, which the federal government should not be permitted to do. Neither should the states be allowed to tax interest on federal bonds.

They did say this in the Baker decision:

"The Court found that its subsequent decisions overruled Pollock..."

Edit: The Constitution always permitted unapportioned taxes on the income earned on profits from the use of property, it was the Pollock decision that changed the Constitution, and SCOTUS didn't have the authority to do that.


You may well be right about all that.  Since you may be right, let's say for the sake of argument that you are right. 

So, my question would be:  If Jeff is right about that, why don't the learned jurist of the USSC realize it?  The answer is simple.

There are two types of lawyers (basically).  Both are very smart, but each has a completely different approach to their vocation.  There is is the bookish nerdy kind of stereotype lawyer who otherwise would have been a Talmudic scholar or a philosopher specializing in rhetoric.  Then there is the highly competitive, dominant person who grew up either taking lunch money from classmates or having his lunch money taken until he got tired of it and found the magic of fighting back.  I would say the ones who started by fighting back from bullying would realize that lawyers are often the most successful bullies and since they were already book smart decided to go that way.

Being good at using force to accomplish goals doesn't require strong intelligence, but it doesn't preclude it either.  Our government is made of men and women who understand the use of force and have the brains to make the most of it.  Except for the courts, which are largely the more studious type since the forceful lawyers prefer more lucrative careers.

The judges fully understand that they would never be able to wear judicial robes, sit above the regular people, demand to be called "your honor," and jail people who disagree with them if not for the power of their more aggressive counterparts.  They know that the government that provides for them depends on taxes at gunpoint, so they are very reluctant to interfere with that.  Pollack (1895) was a surprising ruling in that regard.  The 2015 case that finally overturned a tax again was not so surprising since it was yet another example federal government controlling state governments. 

If nothing else, the USSC knows which side its bread is buttered on on which side its bread is buttered.

   


  

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Re: How Often does the USSC Rule a Tax Unconstitutional?
Reply #5 - Feb 10th, 2019 at 2:32pm
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Little Big Man wrote on Feb 10th, 2019 at 9:46am:
They know that the government that provides for them depends on taxes at gunpoint, so they are very reluctant to interfere with that.  Pollack (1895) was a surprising ruling in that regard. 
Unless you're paranoid and think that Pollock was decided as it was to pave the way for the 16th Amendment, which could then be used to claim that the rule of Apportionment for all Direct taxes had been removed from the Constitution by that amendment (which many lower courts have claimed, but which it has not), thus allowing the taxation of wages and salaries as income", which they are not.

And yes, a redefinition of the term "income"was required and accomplished by the IRS.

If you want to continue in a paranoid vein, you can imagine that the establishment and intentional inflation of fiat money had as one of it's purposes the destruction of the supposed protection from the "income tax" provided to working people by the standard "exemption" and the standard "deductions".
  
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