Is the Income Tax Legal? Voluntary?

by on April 15, 2015 at 7:25 am in Current Affairs, Economics, History, Law | Permalink

Just in case you are tempted to go all Wesley Snipes and refuse to pay your taxes on “constitutional” grounds, the income tax is legal and mandatory. Sorry.

Jonathan Siegel, professor of law at GWU has carefully examined all the primary tax protester arguments. All are wrong. Some are quite interesting

Some tax protestors claim that [the 16th] amendment is not really part of the Constitution — it was never ratified! Therefore, they say, the income tax is unconstitutional. This argument was popularized by Bill Benson in a book called “The Law That Never Was.”

Surprisingly enough, this argument has a little something to it. When the Sixteenth Amendment was ratified by state legislatures in the early twentieth century, the versions that some states voted on contained minor textual errors. Some of them neglected to capitalize the word “States,” one had “income” in place of “incomes,” one said “remuneration” instead of “enumeration,” one said “levy” instead of “lay,” and so on.

If the states didn’t all vote on the same, identical text for the Sixteenth Amendment, can the amendment really be considered ratified? When Congress makes a law, the House and the Senate must vote on the same text. Similarly, if the states didn’t vote on the right text, one could argue that they didn’t ratify the amendment. No Sixteenth Amendment, no income tax, the argument goes.

However, it seems that the amendment really was ratified. The alleged defects in the ratification process were considered at the time of ratification in 1913. The Solicitor of the Department of State convincingly explained why the minor textual variations in the versions the states voted on should be disregarded.

First, it seems that the state legislatures intended to ratify the amendment as proposed by Congress. They understood themselves to be voting to approve the proposed Sixteenth Amendment. The text set forth in their instruments of ratification was for recitation purposes only. The errors in the text were not proposals to change the text being ratified; they were just inadvertent errors that do not detract from the intention of the state legislatures to ratify the amendment as proposed.

Benson denies this. He claims that states deliberately altered the text of the proposed amendment. But the evidence just isn’t there. In one of his court filings, Benson singles out Oklahoma as a particularly clear case. He says the facts “unequivocally show that Oklahoma intentionally amended what the United States Congress had proposed” (see page 2 of Benson’s filing). But looking at Benson’s own book (pp. 61-67), one can see that the Oklahoma legislature adopted what it called “A resolution ratifying an amendment proposed by the sixty-first Congress of the United States” (emphasis added). This resolution then begins its ratification by reciting that “Whereas . . . Congress . . . on Monday the fifteenth day of March, one thousand nine hundred and nine, by joint resolution proposed an amendment to the constitution of the United States, in words and figures as follows:” Then, it’s true, the resolution misstates the text of the amendment (and pretty badly too). But it sure looks as though the Oklahoma legislatorsthought they were ratifying the amendment that Congress had proposed on the specified date and just misstated it. So even in a case that Benson himself singles out, it seems quite clear that the state legislature thought it was ratifying the Sixteenth Amendment, not proposing to change it.

…For all these reasons, it seems clear that the Sixteenth Amendment really is part of the Constitution.

Certainly that has been the uniform holding of the courts in cases in which this argument has been raised. For some representative cases, see United States v. Benson, 941 F.2d 598 (7th Cir. 1991) (rejecting these arguments in a criminal case brought against the author of the “Law that Never Was” book); United States v. Foster, 789 F.2d 457 (7th Cir. 1986); Cook v. Spillman, 806 F.2d 948 (9th Cir. 1986) (calling the argument that the Sixteenth Amendment was never ratified “frivolous” and imposing sanctions of $1,500 on the party making it); United States v. House, 617 F.Supp. 237, 238-39 (W.D. Mich.1985).

So while this argument is not as utterly absurd as most tax protestor arguments, one can be confident that it would not succeed in any actual court proceeding.

1 Handle April 15, 2015 at 7:34 am

Hard to pay judges’ salaries without income tax revenues. But that’s not considered a conflict of interest.

2 Art Deco April 15, 2015 at 8:52 am

I think the federal courts have a budget of around $6 bn. You might be able to get by with the liquor tax.

3 prior_approval April 15, 2015 at 10:40 am

‘Hard to pay judges’ salaries without income tax revenues.’

Tell that to the state courts of Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming.

4 Sigivald April 15, 2015 at 5:10 pm

They managed to do that before the Income Tax…

Excise taxes didn’t disappear, after all.

5 Yoba the American April 15, 2015 at 11:27 pm

“But that’s not considered a conflict of interest.”

The Constitution is unfortunately silent on how to deal with a Constitutional issue involving the Courts themselves. Of course the fact that the Courts have the last word on a matter like this is unfortunate. Perhaps not something the writers of it thought thru very well.

6 Adrian Ratnapala April 16, 2015 at 12:30 am

The US founders were probably split on judicial review of legislation, at least they said nothing explicit about it in their constitution. Of course a *lack* of judicial review has its own problems.

That consitution and other insitutions founded then are mixtures of design and evolution. The judiciary does have the flaws one might expect from any panel of unelected philosopher-kings. Yet in practice that does much less damage than I would have expected. So lacking an obvious and well-tested alternative, we have confidence in judges.

7 dan1111 April 15, 2015 at 7:42 am

This just in: someone who doesn’t want to pay their bills has a lame excuse.

8 Michael April 15, 2015 at 11:29 am

Eh, his arguments may be wrong, but at least he’s fighting the good fight. He’s a lot like Sarah Silverman, or Sabrina Rubin Erdely in that way.

9 cowboydroid April 17, 2015 at 4:58 pm

This just in: someone thinks government system of revenue generation via taxation is the equivalent of the market system of revenue generation via billing for services rendered.

10 BC April 15, 2015 at 7:44 am

What about the argument that the Constitution is a living, breathing thing? If we wish that the Constitution didn’t allow income taxes, shouldn’t that be enough to ignore the text written by a bunch of dead white guys one hundred years ago?

11 fwiw April 15, 2015 at 9:31 am

Who’s ‘we’?

12 NPW April 15, 2015 at 10:00 am

What if it was dead black women? Would that be different?

And a history book might be in order. 100 years?

13 Dan Weber April 15, 2015 at 11:28 am

100 years ago for the Sixteenth Amendment is a good measure.

14 NPW April 15, 2015 at 1:21 pm

Yes, but the Constitution is 220+.

15 Sigivald April 15, 2015 at 5:11 pm

Dead black women are never wrong.

Because science.

16 JWatts April 15, 2015 at 7:23 pm

That’s the consensus. And that’s what science is all about.

17 ckb April 16, 2015 at 10:19 pm

Wow. Poke the id of this commentariat…it’s like turning over rocks after a rainstorm.

18 charlie April 15, 2015 at 7:53 am

Might be illuminating to compare this language, versus the current Obamacare care (King v. Burwell), versus, say, the congressional rider on prohibiting spending by the District on marijuana legalization.

What was the case that involved $50M and a missing comma?

19 Stephen Carter April 15, 2015 at 8:37 am

I have little sympathy for the tax protestors. Yet, as I used to point out to my constitutional law students, when the Congress votes to approve legislation that includes errors (in the sense that the members thought they were voting on something else), we have traditionally been understood to be stuck with the language of whatever was actually adopted. See, for example, United States Railroad Retirement Board v. Fritz, 449 U.S. 166 (1980). I quite understand that King v. Burwell might overturn this longtime understanding. But one advantage of the traditional approach has been that it creates an incentive for legislators actually to read and understand the legislation on which they are called to vote.

This isn’t to say that the Solicitor of the Department of State is wrong. But it’s at least an interesting question why, in this respect at least, adoption of a constitutional amendment should be treated differently from adoption of legislation.

20 Enrique Guerra-Pujol April 15, 2015 at 1:24 pm

But as the great Oliver Wendell Holmes once said, “The prophecies of what the courts will do in fact, and nothing more pretentious, are what I mean by the law.”

21 a April 15, 2015 at 10:04 pm

Even Scalia subscribes to a limited version of the scrivener’s error doctrine. The stringency you claim exists, doesn’t.

22 Adrian Ratnapala April 16, 2015 at 12:34 am

One reason to cut amendments a little more slack than ordinary legislation is the process behind them: the process of passing it is not confined to one Captiol building, it is distributed all over the country. Data must go hither and thither, being copied and subject to error.

23 mulp April 16, 2015 at 2:57 pm

If the amendment was declared ratified in error when word of the Feb 3 ratification reached DC, then the amendment was now dead and forever invalid and the ratification on Feb 3 by New Mexico and Wyoming are invalid on word reaching DC, and the ratification on Fed 4 by the New Jersey legislature was illegal, the actions of Vermont on Fed 19 and Mass on March 4 were outrages by those legislatures.

But then again, the amendment was declared ratified on Feb 25 when 40 out of a required 36 States had ratified it.

And by the time the Revenue Act of 1913 was passed by Congress Oct 3, 42 out of 36 States had ratified it, so to declare it invalid requires getting 7 State ratifications declared invalid.

Note that the 18th Amendment does not authorize the income tax, but merely authorizes raising more in income taxes from New York, California, Mass, Conn than are raised in Alabama, Georgia, Texas on a per capita basis.

If Congress had set the tax rates lower for New York and California residents and the rates in Alabama and Texas higher, then the income taxes if 1909 would have clearly been constitutional.

Does anyone think those calling for the repeal of the 18th want the income tax rates in red states hiked and in blue states lowered so the direct taxes on income revenue from each State are proportional to the population of the States?

24 J.Bogart April 15, 2015 at 8:44 am

There were variations of a similar sort in the ratifications of the Second Amendment.

25 Kerwin April 15, 2015 at 11:54 am

The alleged “14th Amendment” is a genuine case of fraudulent ratification.

26 collateral April 15, 2015 at 10:05 pm

Not fraud, duress. But no one ever claimed an amendment was invalid because of duress.

27 Pshrnk April 15, 2015 at 12:53 pm

Oh crap! Can’t keep the revenuers at bay without guns.

28 Art Deco April 15, 2015 at 8:54 am

Ours appears to be an age of twoofers. Many people find the idea that they have the inside scoop very seductive. Among academics and journalists, these types favor articles with titles and subtitles containing the phrase “The Myth of…”.

29 Todd April 15, 2015 at 9:05 am

Once 3/4 of the state legislatures ratify the amendment, it doesn’t matter what happens in the rest. 36 states were required to ratify the 16th amendment. 42 did. 6 did not. Even if a subsequent court found that Oklahoma’s ratification was void for some reason, it would not have mattered. The law would have applied to Oklahoma, and every other state, as if it had. Just like every other amendment that has ever been ratified by 3/4 of the states.

30 Cliff April 15, 2015 at 9:10 am

Sounds like they thought they were ratifying something different from what they did. Presumably those “recitations” are what they believed the amendment actually was.

31 Jim April 15, 2015 at 10:17 am

Why a grown man feels a need to tithe some of his earnings to this god in government is beyond me. It’s words on paper, like scripture. And to disobey would be blasphemy, or cage time.

32 mulp April 16, 2015 at 3:05 pm

Why someone thinks I should care if you are robbed and your kids killed based on the god of republican government and rule of law is beyond me. If you can’t defend yourself from barbarians, commies with bombs, religious radicals determined to die killing you, then you deserve to suffer and die….. Every man for himself, survival of the fittest, the law of the jungle….

As has been said, taxes are the price of civilization.

Classically conservatives seem to think civilization came from god and thus they need not pay for it in taxes. ISIS is implementing gods civilization and taking whatever they want with guns reflecting the classic conservative view of government.

33 Kerwin April 15, 2015 at 11:41 am

The huge legal/constitutional problems with the Federal Income Tax dwell in its practical implementation rather than the red herring of 16th Amendment ratification.

The Federal tax rules are incomprehensible and change daily.
The tax statutes, IRS regulations, and caselaw are over 100,000 pages; no one on the planet understands all this or can reliably predict how the IRS and courts will interpret such complexities on any given day.

Also, your 5th Amendment rights (e.g., protection from self incrimination) are largely abolished by the IRS and its own court system. You are forced to sign your tax returns (testify) and are forced to routinely report every private detail of your finances, which will be aggressively used against you in any prosecutions. You are the best witness against yourself that the IRS has, if the IRS decides to go after you.

The waste, fraud and criminality within the IRS is legendary.

But it’s so convenient and profitable to operate outside the Constitution.

34 e abrams April 15, 2015 at 6:03 pm

well I agree with some of what you say, the ” tax statutes, IRS regulations, and caselaw are over 100,000 pages; no one on the planet understands all this ” seems like a red herring, as most of this paper refers to highly specific and unusual cases that most of us will never ever see, like adjusting AMT capital gains by depreciation for Puerto Rican bonds…I mean, just not a lot of people in that category

35 Ricardo April 15, 2015 at 8:26 pm

This doesn’t, for the most part, count as a defense of people who cheat on their taxes. The principle of the income tax is quite simple: if you earn money from wages, interest on your bank account or investments you pay income tax or, in the latter case, the applicable capital gains tax. If you are merely getting reimbursed for legitimate business expenses, you don’t pay tax on the reimbursement. For 90+% of the population, filling out a tax return is annoying but it is fairly clear to them whether money they receive from various sources is taxable or not.

Most people get into trouble because they try to get smart and claim deductions, credits and exemptions for things they probably should not. If you are into that sort of thing, then yes, you had better read up on all those rules because they are going to be what your conduct is judged against.

36 Brandon Berg April 15, 2015 at 11:48 am

The real weakness in this argument, even if it were correct, is the idea that a government lawless enough to enforce an illegal income tax for a hundred years is just going to roll over and admit defeat if you say the magic words.

That the Federal Government is overstepping the limits of its enumerated powers with most of what it does is indisputable. The War on Drugs? Unconstitutional. Great Society? Unconstitutional. Department of Education? Social Security? Medicare? Obamacare? Nothing in the Constitution grants the Federal Government to do any of those things. The arguments that the Interstate Commerce or Tax and Spending (AKA General Welfare) Clauses authorize these things are ridiculous and clearly contradicted by contemporary sources and 150 years of pre-New-Deal history.

None of this matters, because the powers that be want the Federal Government to have those powers. If it were true and probable beyond a shadow of a doubt that the Sixteenth Amendment had never been properly ratified, it wouldn’t matter. The required number of Supreme Court Justices would make up some rationalization for why it doesn’t really matter, and that would be that.

When it comes to Constitutional law, correctness doesn’t matter. All that matters is whether five members are on your side.

37 Brandon Berg April 15, 2015 at 11:49 am

“Provable beyond a shadow of a doubt,” not “probable.”

38 JW April 15, 2015 at 1:24 pm

“That the Federal Government is overstepping the limits of its enumerated powers with most of what it does is indisputable. The War on Drugs? Unconstitutional. Great Society? Unconstitutional. Department of Education? Social Security? Medicare? Obamacare? Nothing in the Constitution grants the Federal Government to do any of those things. The arguments that the Interstate Commerce or Tax and Spending (AKA General Welfare) Clauses authorize these things are ridiculous and clearly contradicted by contemporary sources and 150 years of pre-New-Deal history.”

Your interpretation is that these acts are unconstitutional. Don’t act like you have a monopoly on the truth. It is the Supreme Court’s role to interpret the law starting with the Constitution and it has been their determination that these acts are constitutional.

39 Sigivald April 15, 2015 at 5:41 pm

The Supreme Court can say anything it wants, but lacking an enumerated power, that just supports Mr. Berg’s point – that something popular and/or powerful can ignore the Constitution’s mere “enumerated powers” limits. The Court goes along with it – the Court doesn’t actually transcend the Constitution itself, no matter what airs it puts on itself.

(Though as Mr. Deco says, the War on Drugs would be Constitutional if restricted to Interstate commerce.

That an Amendment was needed for Prohibition but somehow is not to ban heroin and marijuana should be a giant red flag, should it not?

If we needed one to ban beer, why don’t we need one to ban “drugs”?

And if we don’t need one to ban “drugs”, why did we need one to ban beer?

There’s no Constitutional difference I can see. Because it’s a matter of practical power grabs and popularity, not Constitutional correctness.)

40 Charger April 15, 2015 at 10:07 pm

Meaning is socially constructed. Once you understand that maybe you and Berg will be able to unclench

41 Art Deco April 15, 2015 at 1:46 pm

he War on Drugs? Unconstitutional.

It’s not unconstitutional to ban the importation of street drugs or their transshipment across state lines.

42 cowboydroid April 17, 2015 at 5:12 pm

Sure it is. The federal government’s “Commerce Clause” powers were designed to protect free trade and prevent trade restrictions between States. It does the very opposite of that these days.

43 e abrams April 15, 2015 at 6:05 pm

“We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare..”

Who made you god, and gave you the sole power to interpret this clause ?

44 cowboydroid April 17, 2015 at 5:12 pm

That is not a clause. That is a preamble.

45 RustySynapses April 15, 2015 at 1:27 pm

On a more pragmatic level (and without ranting about a “lawless government”), it’s amazing to me that anyone thinks fighting the government over whether the income tax is legal will do anything other than make you miserable (although maybe in a self-righteous way). People really destroy their own lives over this (although I suppose it takes all kinds – certainly more kinds than can be explained by any model).

46 cowboydroid April 17, 2015 at 5:08 pm

Yep, much more efficient to simply find ways around it, as anyone with any amount of money realizes. You’re not going to win an argument against government by citing its own laws against it.

47 dmarkey April 15, 2015 at 2:15 pm

The first line just make me think of Lamar’s To Pimp a Butterfly.

48 Butler Reynolds April 15, 2015 at 4:24 pm

Even if you don’t think that it is legal, and I’ve heard some good arguments along those lines, I think we can all agree that the income tax is mandatory.

49 Paul April 15, 2015 at 11:26 pm

No, we cannot all agree that the income tax is mandatory. A number of theories discussed at the site Alex links to argue that it is voluntary.

50 cowboydroid April 17, 2015 at 5:06 pm

The debate exists precisely because we cannot all agree that it is mandatory.

The federal government existed and functioned for over a century without a direct tax on the citizens of the States. It doesn’t need the income tax to do the job it was intended to do.

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