Constitutional taxation

Constitutional Taxation.  A study by Steven Miller.

Prerequisites to understanding this essay:
•  Read my essay The Constitution Does Not Change, so that you will not be deceived by the false narrative.
•  To understand the purpose of Direct Taxation read my essay The Constitution Requires a Balanced Budget.
•  Read my comments on usury to understand that accepting bank interest on savings accounts is a government granted privilege, NOT a right. Rights cannot be taxed. Privileges can be taxed. You will need to know this to understand the phrase “incomes, from whatever source derived“ and the IRS phrase “income derived from labor”.  My comments on usury are included in my essay Banks are the Enemy of Capitalism.

U.S. Constitution Article 1, section 2 requires the proportion of congressmen and the proportion of direct taxes to be based on state populations determined by a census:

“Representatives and direct Taxes shall be apportioned among the several States which may be included within this Union, according to their respective Numbers, which shall be determined by adding to the whole Number of free Persons, including those bound to Service for a Term of Years, and excluding Indians not taxed, three fifths of all other Persons.”

Article 1, section 8:

“Section. 8. The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States; …”

Article 1, section 8 also tells us the territory over which the U.S. Legislature can make laws:

“To exercise exclusive Legislation in all Cases whatsoever, over such District (not exceeding ten Miles square) as may, by Cession of Particular States, and the Acceptance of Congress, become the Seat of the Government of the United States, and to exercise like Authority over all Places purchased by the Consent of the Legislature of the State in which the Same shall be, for the Erection of Forts, Magazines, Arsenals, dock-Yards and other needful Buildings;—And To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.”

Article 1, section 8 also tells us that only Congress has the power

“…To coin Money, regulate the Value thereof, …”

•  Only Congress was given the authority to coin lawful money of the United States. The Federal Reserve Bank does not have this authority.
•  Only Congress has the duty to regulate the value of money (not the Federal Reserve). Yet today’s value of a Federal Reserve dollar is less than 2% of a U.S. dollar.
•  Hint #1: the IRS 1040 tax form line on which wages and salaries are to be entered has not had a dollar sign since 1964 when our coins stopped being silver.
•  Hint #2: It is your fault for using non-lawful money. The official policy on this is found in the 1933 Senate Document Number 43 “Contracts Payable in Gold” after our gold was seized but you could still be paid in silver. “The fact that citizens, at a given time, may prefer specie to currency, or vice versa, can not prevent Congress from enacting those laws which it deems necessary to the maintenance of a proper monetary system.”

Notice the word “Proper”. They actually thought their pre-arranged conspiracy made their non-constitutional monetary system proper.

Article 1, section 9 provides for an import tax on slaves prior to 1808.
Article 1, section 9 also requires that:
•  “No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census of Enumeration herein before directed to be taken.”
• “No Tax or Duty shall be laid on Articles exported from any State.”
• “No Preference shall be given by any Regulation of Commerce or Revenue to the Ports of one State over those of another: nor shall Vessels bound to, or from, one State, be obliged to enter, clear or pay Duties in another.”

Article 1, section 10:

“No State shall … emit bills of credit.”

Commentary: Your state’s debt should be zero.

Fourteenth Amendment, section 2 requires the census to be reduced by those who are denied the right to vote for electors to the Electoral College. (thereby affecting the proportion of congressmen and direct taxes required by Article 1, section 2):

“Representatives shall be apportioned among the several States according to their respective numbers, counting the whole number of persons in each State, excluding Indians not taxed. But when the right to vote at any election for the choice of electors for President and Vice President of the United States, Representatives in Congress, the Executive and “Judicial officers of a State, or the members of the Legislature thereof, is denied to any of the male inhabitants of such State, being twenty-one years of age, and citizens of the United States, or in any way abridged, except for participation in rebellion, or other crime, the basis of representation therein shall be reduced in the proportion which the number of such male citizens shall bear to the whole number of male citizens twentyone years of age in such State.”

Sixteenth Amendment is often called the Income Tax Amendment:

“The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.


Note: Government employees have had their wages taxed since 1862, long before the 16th amendment. The comments here do not apply to government wages.

The 1040 forms originally told taxpayers to enter income “derived from salaries, wages, or compensation for personal service …”.  Do not be fooled.

If state citizens’ wages were not taxed before the 16th Amendment, then the 16th amendment did not confer a new power of taxation. The Constitution does not change. Those who swore an oath-of-office to uphold it cannot have any authority to change what they swore to uphold.


This amendment’s words are very different from the original proposed amendment in Senate Joint Resolution 39 as published in Congressional Record June 11, 1909 page 3377.”The Congress shall have power to lay and collect direct taxes on incomes without apportionment among the several states according to population
[italics added to help you spot the changes]

The Senate Finance Committee revised it as Senate Joint Resolution 40, to what we have today. (published on Page 3900 of the Congressional Record of June 28, 1909)

The word “direct” was removed from the original proposed amendment.

The words “from whatever source derived” were added.  The words “and without regard to any census or enumeration.” were added.

Nothing was changed by the 16th Amendment. There is no new taxing authority.

The amendment DID NOT eliminate apportionment, nor convert direct taxes into indirect taxes.

The tax is still on the income, not on the source.

Since the word direct was deleted, it can never be argued that it authorized a direct tax that is unapportioned among the states.

There is not now, nor can there ever be an unapportioned direct tax on incomes. (except for federal employees who are already subject to fed jurisdiction — and who’s wages were taxed since 1862 — long before the 16th Amendment).

The Senators who swore oaths to uphold and perpetuate the Constitution did not circumvent it.

Since tax collectors could always seize assets without regard to their source, no new taxing authority was created.



The income tax was intended to be a tax on the profits earned from capital gains and savings accounts of the wealthy. When the States ratified the 16th Amendment, they did so only upon the assurance, over and over again, that salaries would not be taxed. Only profit from savings was to be taxed, and only then as an indirect tax. Not as a direct tax on people.

If you want to repeat the false narrative that everyone’s wages are taxed, then you are part of the problem. Stockholm syndrome is a real mental disorder. Stop thinking like a slave.

The word income in the income tax amendment was meant only to include interest on savings accounts and capital gains of the wealthy. Here are proofs that the 16th Amendment was never intended to tax wages:

• New York Times August 3, 1909 front page. Excerpt. “The only interruption to his speech was a query by Representative Glover… – who wanted to know if the amendment would affect salaries.” If you have the same question, then read the response. You may safely ignore the part of the answer that said “unless Congress passed a law including salaries.”   because four years later the Senate debates show the intent of Congress, below:

• Senate ratification debates in the Congressional Record, August 28 1913, Senator Lawrence Y. Sherman on page 3843 debating the income tax amendment, insisted that the word “income” referred only to earnings on savings accounts: “The savings from the income by professional effort or by any form of skilled labor or unskilled hand becomes property. At the end of any given period that saving is a principal, and any income derived from it is an income from property, not an income from the earning capacity or the personal ability of the taxpayer in question… Those investments that produce an income from a property I think are properly to be distinguished from those arising from the earning capacity of the individual.”

• Also on page 3843 Senator Cummins :”I assume that every lawyer will agree with me that we cannot legislatively interpret the meaning of the word ‘income’. That is purely a judicial matter. We cannot enlarge the meaning of the word ‘income’. The word ‘income’ had a well-defined meaning before the amendment … If we could call anything income that we pleased, we could obliterate all the distinction between income and principal…. Congress can not affect the meaning of the word ‘income’ by any legislation whatsoever…. obviously the people of this country did not intend to give to Congress the power to levy a direct tax upon all the property of this country without apportionment.”

That’s right. There is no apportioned direct tax on anyone.  Any income derived from savings accounts becomes taxable.

And the courts agree:

• U.S. v. Ballard 400 F2d 404:
“The general term ‘income’ is not defined in the Internal Revenue Code.”

• Wilby v. Mississippi, 47 S 465:
“It certainly was not the intention of the legislature to levy a tax upon honest toil and labor.”

• Edwards v. Keith, 231 Fed 1:
“One does not derive income by rendering services and charging for them…. IRS cannot enlarge the scope of the statute”

• US Supreme Court in Evens v. Gore, 253 US 245 concerning a tax on salary:
“After further consideration, we adhere to that view and accordingly hold that the Sixteenth Amendment does not authorize or support the tax in question”.

• US Supreme Court in Lucas v. Earl 281 US 111:
“The claim that salaries, wages, and compensation for personal services are to be taxed as an entirety… is without support either in the language of the Act or in the decisions of the courts construing it. Not only this but it is directly opposed to provisions of the Act and to regulations of the Treasury Department… It is to be noted that by the language of the Act it is not ‘salaries, wages or compensation for personal services’ that are to be included in gross income. That which is to be included is ‘gains, profits and income derived’ from salaries… ”

• US Supreme Court in M.E. Blatt Co. v. U.S. 59 SCt190: “Treasury regulations can add nothing to income as defined by Congress.”

• Oliver v. Halstead 86 SE 2d 859:
“Compensation for labor cannot be regarded as profit within the meaning of the law.”

• Olk v. United States, Fed 18 (1975) (don’t use this, it has been overturned):
“Tips are gifts and therefore are not taxable.”

• Penn Mutual Indemnity Co. v. Commissioner (32 Tax Court page 681):
“that which is not income in fact manifestly cannot be made such by the legislative expedient of calling it income …”

• Spring Valley Water Works v. Barber 33 P 735:
“A right common in every citizen such as the right to own property or to engage in business of a character not requiring regulation CANNOT, however, be taxed as a special franchise by first prohibiting its exercise and then permitting its enjoyment upon the payment of a certain sum of money.”

• Tennessee Supreme Court in Jack Cole v. Commissioner MacFarland 337 SW2d 453 (1960):
“The right to receive income or earnings is a right belonging to every person, and realization and receipt of income is therefore not a “privilege that can be taxed.” [from:Taxation West Key 933]

In this 1960 case, the Tennessee Supreme Court also quoted prior decisions that defined the term `privilege’ in contradistinction to a right:
“Legislature … cannot name something to be a taxable privilege unless it is first a privilege.” “Privileges are special rights, belonging to the individual or class, and not to the mass; properly, an exemption from some general burden, obligation or duty; a right peculiar to some individual or body”

• U.S. Supreme Court in Butcher’s Union v. Crescent City, 111 U.S. 746:

“The property which every man has in his own labor, as it is the original foundation of all other property, so it is the most sacred and inviolable. … to hinder his employing this strength and dexterity in what manner he thinks proper without injury to his neighbor, is a plain violation of this most sacred property.”

• In the 1959 Tax Court case Penn Mutual Indemnity Co. v. Commissioner (32 Tax Court page 681):
“The rule of Eisner v. Macomber has been reaffirmed on so many occasions that citation of the cases to this effect would be unnecessarily burdensome… Moreover, that which is not income in fact manifestly cannot be made such by the legislative expedient of calling it income….”

• Laureldale Cemetery Assoc. v. Matthews, 345 A 239, and 47 A.2d 277 (1946):
“Reasonable compensation for labor or services rendered is not profit.”

• US Supreme Court in Murdock v. Pennsylvania, 319 US 105, at 113 (1943):
“A state may not… impose a charge for the enjoyment of a right granted by the Federal constitution.”

• Spreckels Sugar Ref. Co. v. Mclain, 24 SCt 382 (1904):
“the citizen is exempt from taxation unless the same is imposed by clear and unequivocal language”.

• Oregon Supreme Court in Redfield v. Fisher, 292 P 813, pg 819 (1930):
“The individual, unlike the corporation, cannot be taxed for the mere privilege of existing. The corporation is an artificial entity which owes its existence and charter powers to the state: but the individuals’ right to live and own property are natural rights for the enjoyment of which an excise cannot be imposed.”

• Long v. Ramussen, 281 F 236, 238 (1922):
“The revenue laws are a code or system in regulation of tax assessment and collection. They relate to taxpayers, and not to non-taxpayers. The later are without their scope. No procedure is prescribed for non-taxpayers, and no attempt is made to annul any of their rights and remedies in due course of law. With them Congress does not assume to deal, and they are neither of the subject nor of the object of the revenue law.” Reaffirmed in Gerth v. US, 132 F Supp 894 (1955) and in Economy Heating Co. v. US, 470 F2d 585 (1972)



The current income tax law has been amended over the years, but it all started with one sentence written by congress to implement the Income Tax Amendment. This is the first paragraph of the 1913 Income Tax law 38 Stat 166. This is the ONLY law that the government says applies to federal citizens. It is only one sentence. The rest of the 37 pages are for income tax of corporations.

As you study this sentence, remember that Congressmen cannot and do not impose direct taxation contrary to the Constitution Article 1, Section 9 — which did not change with the 16th Amendment — ”

And keep in mind that the 16th amendment conferred no new powers of taxation” according to Stanton v. Baltic Mining Co. 240 US 103 (1915).

Here is the first paragraph of the 1913 Income Tax law 38 Stat 166. This is the ONLY law that the government says applies to federal citizens:

“That there shall be levied, assessed, collected and paid annually upon the entire net income arising or accruing from all sources in the preceding calendar year to every citizen of the United States , whether residing at home or abroad, and to every person residing in the United States , though not a citizen thereof , a tax of 1 per centum per annum upon such income, EXCEPT as herein after provided; and a like tax shall be assessed, levied, collected, and paid annually upon the entire net income from all property owned and of every business, trade or profession carried on in the United States by persons residing elsewhere.”


TwentyFourth Amendment:

“SECTION. 1. The right of citizens of the United States to vote in any primary or other election for President or Vice President, for electors for President or Vice President, or for Senator or Representative in Congress, shall not be denied or abridged by the United States or any State by reason of failure to pay any poll tax or other tax.”


1913 Form 1040 page 1


1913 Form 1040 page 2



Now that you know there is no unapportioned direct tax on anyone, you might be interested in how the IRS gets away with collecting from you an indirect excise tax. Read my essay Revenue Taxable Activity.

My essay From Whom do the Kings of the Earth Exact Tribute explains that direct taxation of citizens throughout history has always been prohibited since Biblical times.