An income tax is a form of...?

Custom duty

Indirect tax

excise tax

or

direct tax?

3 Answers

Relevance
  • 1 decade ago
    Favorite Answer

    It is an indirect tax. Neither direct nor indirect tax is defined in the constitution, leaving Alexander Hamilton to lament "It is a matter of regret that terms so uncertain and vague in so important a point are to be found in the Constitution. We shall seek in vain for any antecedent settled legal meaning to the respective terms. There is none. We shall be as much at a loss to find any disposition of either which can satisfactorily determine the point." Hylton v. United States, 3 U.S. 171 (1796). He suggests that the boundary line between direct and indirect taxes be settled by "a species of arbitration," and that direct taxes be held to be only "capitation or poll taxes, and taxes on lands and buildings, and general assessments, whether on the whole property of individuals or on their whole real or personal estate. All else must, of necessity, be considered as indirect taxes."

    When the income the Revenue Act of 1864, the precursor to our current income tax system, was challenged by an attorney, the Supreme Ct. ultimately held that the tax on his income was an excise or a duty (i.e. indirect tax). Springer v. US 102 U.S. 586.

    People who claim that the income tax is a direct tax do so usually based on a misreading of the Pollock case. The Pollock case centered around the question of whether tax on the income from property was anything more than the tax on the property itself (a direct tax). The court decided that this was a direct tax, and was thus unconstitutional. If this revenue stream was cut from the tax act, the entire tax burden would fall on wages of workers, and the court did not feel this was the intent of congress. So the court struck down the entire tax act. However, wages at no point in our history, have ever been considered a direct tax.

    • Login to reply the answers
  • 1 decade ago

    Well it is a direct tax but it has been redefined as an indirect tax. This was done because if it was Direct it would not be Constitutional the way they use it today.

    Its not hard to tell the difference a Direct Tax is directly on your property! IE , you have Income of X then you must pay X.

    The "indirect" definition used by the courts for the current Income tax system is total BS. In effect they are saying that you are not being taxed directly on the money you earn but indirectly on the act of earning said money. Legal mumbo jumbo so they could get around the Constitution!!

    • Login to reply the answers
  • 1 decade ago

    An income tax is a form of tax that allows the government to take from you and give to the non working poor that feel they are entitled to a house, car, and health care. Thank You liberal democrats for being so stupid in trying to create a fictional false hood called a UTOPIA... Let me know when you idiots come back from Never Never Land and Cpt. Hook is dead.

    • Login to reply the answers
Still have questions? Get your answers by asking now.