Otto Skinner
The Constitution of the United States has provided Congress with the power of taxation, or to impose a tax. The Supreme Court has referred to this power as a plenary power, which means:
Webster’s Dictionary, 1828 Edition
“PLE'NARY, a. [L. plenus.]
Full; entire; complete; as a plenary license; plenary consent; plenary indulgence. The plenary indulgence of the pope is an entire remission of penalties to all sins.”
I will be using the 1828 Webster’s Dictionary for definitions, when- ever possible, so that we will have the same meaning that the Founding Fathers assigned to these words, except for any words that entered the Constitution at a later date.
Congress has a plenary power of taxation; therefore, Congress can do whatever it chooses, right? Not exactly! We will soon learn that some strings are attached which actually bind this power. These details stipu- late that Congress must follow some clear rules regarding this plenary power of taxation.
Before we explore these rules, we will review some definitions of the words used within these rules, or grants of power. The power of Congress that relates to taxation is contained in three short sections of the Constitution, which contain the following words:
tax
impost
duty
excise
direct
indirect (not in the Constitution, but nessary to understand the direct tax)
apportion
uniform
capitation
custom
The words above must be completely understood in order to fully comprehend the power of taxation that has been granted to Congress. Let us begin with the definition of the word tax.
“TAX, n. [L. taxo, to tax.]
1.A rate or sum of money assessed on the person or prop- erty of a citizen by government, for the use of the nation or state. Taxes, in free governments, are usually laid upon the property of citizens according to their income, or the value of their estates. Tax is a term of general import, including almost every species of imposition on persons or property for supplying the public treasury, as tolls, tribute, subsidy, excise, impost, or customs. But more generally, tax is limited to the sum laid upon polls, lands, houses, horses, cattle, professions and occupa- tions. So we speak of a land tax, a window tax, a tax on carriages, &c. Taxes are annual or perpetual.
2.A sum imposed on the persons and property of citizens to defray the expenses of a corporation, society, parish or company; as a city tax, a county tax, a parish tax, and the like. So a private association may lay a tax on its members for the use of the association.”
To fully understand the subject of taxation, we will first divide all taxes into two categories: the first being direct taxes, the second being indirect taxes. All federal taxes belong in either one category or the other.
“DIRECT, a. [L., to make straight. See Right.]:
Direct tax, is a tax assess on real estate, as houses and lands.”
INDIRECT', a. [L. indirectus; in and directus, from dirigo.]
Indirect tax is a tax or duty on articles of consumption, as an excise, customs, &c.”
From what you have learned so far, can you determine whether an impost tax is a direct or indirect tax? Now we will look at the definitions of some more words that are from within the Constitution.
“IM'POST, n. [L. impositum, impono.]
Any tax or tribute imposed by authority; particularly, a duty or tax laid by government on goods imported, and paid or secured by the importer at the time of importation. Imposts are also called customs.”
“DUTY, n.:
Tax, toll, impost, or customs; excise; any sum of money required by government to be paid on the importation, exportation, or consumption of goods. An impost on land or other real estate, and on the stock of farmers, is not called a duty, but a direct tax.”
(Continued on next post)
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