From: Jerry Nicolas
Subject: BREAKTHROUGH OF THE CENTURY by Otto Skinner

Last Updated: December 14, 1998

The Biggest BREAKTHROUGH OF THE CENTURY
to understanding the language
of the 16TH AMENDMENT

by Otto Skinner

How can it be said that an "income" tax (or taxation on income) is an indirect excise tax which is not on the tangible fruit, but on the happening of an event; that the income is not the subject of the tax, but that it is an excise tax which is collected from certain activities and privileges which is measured by reference to the income which they produce? How can all this be said and still call it taxation on income? How can the Internal Revenue Code state that there is hereby imposed on the taxable income, if the income is not the subject of the tax; if the income is not the thing being taxed? How can it be said that taxes on personal property are subject to the requirement of apportionment, when the "income" tax is not apportioned? Isn't your income your personal property? (Of course it is.) How is it possible for the United States Supreme Court, the lower courts, the Congressional record, the original Constitution, the Sixteenth Amendment, and the Internal Revenue Code to each make one or more of the following statements without them collectively being terribly inconsistent? Without one statement being in irreconcilable conflict with another?

A.The conclusion reached in the Pollock Case recognized the fact that taxation on income was in its nature an excise entitled to be enforced as such; 1
B.The Sixteenth Amendment simply prohibited the power of income taxation from being taken out of the category of indirect taxation; 2
C.The Congress shall have power to lay and collect taxes on incomes ... without apportionment among the several States; 3
D.The Amendment contains nothing repudiating or challenging the ruling in the Pollock Case; 4
E.The requirement of apportionment is pretty strictly limited to taxes on real and personal property and capitation taxes; 5, 11
F.Indirect taxes are laid upon the happening of an event as distinguished from its tangible fruits; 6
G.The income is not the subject of the tax: it is the basis for determining the amount of tax; 7
H.Excise taxes are in the class of indirect taxes; 1, 2, 8
I.Excise taxes are collected from the same activities as those reached by the States; 9 and,
J.There is hereby imposed on the taxable income; 10
How can it appear that the so-called "income" tax is imposed on property (income), and yet say the income is not the subject of the tax? If the income (property) is not the thing being taxed, why does it appear that way in the Sixteenth Amendment and in the Internal Revenue Code?
All of this doesn't even make any sense, unless there is a particular definition for the word "on" which is being used in the Sixteenth Amendment and the Internal Revenue Code whenever phrases such as "taxation on incomes" or "a tax on income" or "there is hereby imposed on the taxable income" are stated; a special definition for the word "on" of which most people are not even aware.
One of the definitions given in my Webster's Seventh New Collegiate Dictionary (1971) shows that the word "on" means "with regard or respect to". The dictionary also shows that the word "regard" means "an aspect to be taken into consideration".
So the Sixteenth Amendment could just as easily read as follows:
Congress shall have power to lay and collect taxes with regard to or with respect to or in consideration of or measured by the income, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.
The above definitions reasonably and logically explain Chief Justice Edward Douglas White's statements in the Brushaber and Stanton Cases regarding taxation on income, wherein he explained that taxation on income was in its nature an indirect excise.
But let's dig a little further. Let's see what some other well respected dictionaries have to say.
on ... 22. a. In regard to, in reference to, with respect to, as to.
The Oxford English Dictionary, Second Edition, 1989, pg. 795.
on ... 12. with respect or regard to. Random House Unabridged Dictionary, Second Edition, 1993, pg. 1352.
on ... (5) the object in connection with which payment, computation of interest, reduction or similar settlement is
made. ... 7 a : with regard to : with reference or relation to : about.
Webster's Third New International Dictionary of the English Language, Unabridged, 1993, pg. 1575.
As used in the phrase "taxes on incomes", only if the word "on" means "with reference to" (the income which is to be used to measure the amount of tax due from indirect taxes such as duties, imposts and excises) can it be explained that the income (property) is not the thing being taxed, but that it is on some taxable activity upon which an excise can be imposed. This is the only way to explain how Chief Justice Edward Douglas White could justifiably state in Brushaber and Stanton that taxation on income was in its nature an excise tax and that the Sixteenth Amendment simply prohibited the power of income taxation from being taken out of the category of indirect taxation to which it inherently belongs.
Of course, this now clearly opens the way for the question as to which activity, if any, has there been an excise tax imposed, and which section of the Internal Revenue Code, if any, imposes a tax on that activity. It certainly raises the question now as to which of your activities, if any, would make you subject to (liable for) this tax which is merely called an "income" tax.
Is learning of a special definition for the word "on" really the biggest breakthrough of the century to being able to understand the language of the Sixteenth Amendment? You already have my opinion. What do you think? Ask your friends. What do they think? Maybe you can find an English professor's professor who will give an expert opinion on the issue. If you do, let me know what he or she says. Of course, the professor will have to understand that the United States Supreme Court has ruled that the "income" tax is an excise, that excise taxes are collected from activities, that the property is never the thing being taxed by an excise tax, and that property taxes (on real and personal property) must still be apportioned among the States according to population. Once he or she understands these facts, it should be easy to render an expert opinion regarding this special definition for the word "on" as used in the Sixteenth Amendment.
If this really is a valid conclusion, then this is information regarding the so-called "income" tax and the Sixteenth Amendment that the entire nation desperately needs.

Footnotes.

1.Moreover in addition the conclusion reached in the Pollock Case did not in any degree involve holding that income taxes generically and necessarily came within the class of direct taxes on property, but on the contrary recognized the fact that
taxation on income was in its nature an excise entitled to be enforced as such....
Brushaber v. Union Pacific R.R. Co., 240 U.S. 1, at 16-17 (1916). (Emphasis added.)
2.[B]y the previous ruling [Brushaber Case] it was settled that the Sixteenth Amendment conferred no new power of taxation but simply prohibited the previous complete and plenary power of income taxation possessed by Congress from the beginning [of our national government under the Constitution] from being taken out of the category of indirect taxation
to which it inherently belonged....
Stanton v. Baltic Mining Co., 240 U.S. 103, at 112 (1916). (Emphasis and explanation added.)
3.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. United States Constitution, Sixteenth Amendment.
4.The Amendment contains nothing repudiating or challenging the ruling in the Pollock Case....
Brushaber, supra, at 19. (Emphasis added.)
5.Indeed, the requirement for apportionment is pretty strictly limited to taxes on real and personal property and capitation taxes.
Penn Mutual Indemnity Co. v. C.I.R., 277 F.2d 16, at 19-20 (3rd Cir. 1960). (Emphasis added.)
6.A tax laid upon the happening of an event, as distinguished from its tangible fruits, is an indirect tax.
Tyler v. United States, 281 U.S. 497, at 502 (1930).
7.The income tax is, therefore, not a tax on income as such. It is an excise tax with respect to certain activities and privileges which is measured by reference to the income which they produce. The income is not the subject of the tax: it is the basis for determining the amount of tax. House Congressional Record, March 27, 1943, page 2580.
8."The Congress shall have power to lay and collect taxes, duties, imposts and excises." Art. 1, 8. If the tax is a direct one, it shall be apportioned according to the census or enumeration. If it is a duty, impost, or excise, it shall be uniform throughout the United States. Together, these classes include every form of tax appropriate to sovereignty.
Steward Machine Co. v. Davis, 301 U.S. 548, at 581 (1937).
9.We must remember, too, that the revenues of the United States must be obtained in the same territory, from the same people, and excise taxes must be collected from the same activities. as are also reached by the States in order to support their local government.
Flint v. Stone Tracy Co., 220 U.S. 107, at 154. (Emphasis added.)
10.There is hereby imposed on the taxable income of-[every individual] 26 U.S.C. 1. (In part. Emphasis and explanation added.)

Our conclusions may, therefore, be summed up as follows:

First...
We adhere to the opinion already announced, that, taxes on real estate being indisputably direct taxes, taxes on the rents or income of real estate are equally direct taxes.

Second...
We are of opinion that taxes on personal property, or on the income of personal property, are likewise direct taxes.

Third...
The tax imposed by sections twenty-seven to thirty-seven, inclusive, of the act of 1894, so far as it falls on the income of real estate and of personal property, being a direct tax within the meaning of the Constitution, and, therefore, unconstitutional and void because not apportioned according to representation, all those sections, consisting of one entire scheme of taxation, are necessarily invalid.
Pollock v. Farmers' Loan & Trust Co., 158 U.S. 601, at 637 (1895). (Emphasis added.)