In 1895 the Constitutionality of a then enacted income tax was challenged in the Supreme Court in Pollock v. Farmers Loan And Trust Company, 15 S. Ct. 673,Message 1 of 1 , Jan 6, 2006View Source
In 1895 the Constitutionality of a then enacted “income tax” was challenged in the Supreme Court in Pollock v. Farmers' Loan And Trust Company, 15 S. Ct. 673, 157 U.S. 429 (1895). Prior to the decision is this wonderful brief that discusses the intent of the founders respecting provisions in the Federal Constitution for taxes. Counsel for Pollock shows pretty conclusively that it was the founders’ intent that direct taxes springing from the Federal Government would be by apportionment only. I thought this would make excellent material to put into a due process hearing and then take up on judicial review. I hope you can make some use of this, Bear
 Mr. Clarence A. Seward for Pollock, appellant in 893, and Hyde, appellant in 894.
 Is an income tax a direct tax within the provisions of the Federal Constitution? This is a
question of fact, to be determined by the meaning of the term "direct tax" at the time of the
adoption of the Constitution.
 There is no doubt that that term as used in state statutes and constitutions at the present
day is universally construed not to be limited to a tax on land, but to include also a tax on
income. How was it in the year 1787? The theory that the words "direct taxes," as used in the
Constitution, did not include a tax on income was first judicially voiced in the Springer case,
decided in 1880, 102 U.S. 586. This case was founded upon Hylton v. United States , 3 Dall.
171, decided in 1796. Alexander Hamilton, as counsel for the government in that case,
undertook to define the phrase "direct taxes" so as to exclude from it a tax on carriages. He
said: "The following are presumed to be the only direct taxes: Capital or poll taxes; taxes on
lands and buildings; general assessments, whether on the whole property of individuals, or on
their whole real or personal property. All else must of necessity be considered as indirect
 When the case passed into the hands of the court, Mr. Justice Paterson said: "Whether
direct taxes, in the sense of the Constitution, comprehend any other tax than a capitation tax
and a tax on land, is a questionable point." Mr. Justice Chase said: "I am inclined to think, but
of this I do not give a judicial opinion, that the direct taxes contemplated by the Constitution
are only two; to wit, a capitation or poll tax simply, and a tax on land. I doubt whether a tax
by a general assessment of personal property within the United States is included within the
term 'direct tax.'" Mr. Justice Iredell said: "Perhaps a direct tax, in the sense of the
Constitution, can mean nothing but a tax on something inseparably annexed to the soil. A land
or poll tax may be considered of this description. In regard to other articles, there may
possibly be considerable doubt."
 There was no evidence adduced by Mr. Hamilton in support of his presumption. The
question arose solely and wholly upon the statement by him that that was his presumption. It
is upon this presumption of Mr. Hamilton and these three doubtful expressions of judicial
opinion that the subsequent decisions of this court in Pacific Insurance Company v. Soule, 7
Wall. 433; Veazie Bank v. Fenno, 8 Wall. 533; Scholey v. Rew, 23 Wall. 331; and Springer v.
United States, 102 U.S. 586, were founded.
 If the conclusion reached in the Hylton case was unsupported by evidence -- was in
direct antagonism to the evidence as it exists -- and which was not produced or passed upon
-- and if a time of peace is more favorable for an absolute disassociation from political
atmosphere than was possible when the Springer case was decided, then the rule of stare
decisis ought not to constitute a bar to a new examination of the question involved, upon
grounds not heretofore presented, nor the reaching of a different conclusion, if such a
conclusion can be judicially justified. Leloup v. Mobile , 127 U.S. 640.
 In considering this question, this court has supplied in Martin v. Hunter's Lessee, 1
Wheat. 304, 323; Gibbons v. Ogden , 9 Wheat. 1, 188; and Rhode Island v. Massachusetts ,
12 Pet. 657, 721, rules for the interpretation of the Constitution. Words are to be taken in their
natural sense, and the courts may resort to such sources of judicial information as are
resorted to by all courts in construing statutes.
 Is there any persuasive evidence that the framers of the Constitution did not use the
words "direct taxes" in their "natural and obvious sense?" Would there be any absurdity or
injustice in holding that they did so use them, and that they intended precisely what they said?
Is there any persuasive evidence that they intended to restrict the present meaning of the
phrase to a more limited signification, and to reject therefrom the inclusion of a tax on
 It would seem, from a reference to such sources of judicial information as are resorted to
by the courts in construing the Constitution, that these questions must be answered in the
negative. There is no evidence that either the constitutional convention or the assenting
conventions of the several States, or the people who attended both, used the words "direct
taxes" with any restricted meaning, in an unnatural sense, or that they intelligently excluded a
tax on incomes therefrom. The only qualification of this explicit statement is to be found in
the language of this court in Veazie Bank v. Fenno, 8 Wall. 533, 546, where, in treating of the
decision in the Hylton case, the court spoke of Mr. Justice Paterson's statements as
"testimony." There is nothing either in Elliott's Debates or Madison 's Reports which shows
that the question of the definition of the words "direct tax" or "direct taxes" ever came before
the Philadelphia convention. It was not there discussed, debated, or decided. Under these
circumstances, any opinion which Justice Paterson expressed was an opinion rendered nine
years after the convention had ceased its labors -- was his individual opinion, and was not
fortified by any reference to the evidence. Such an opinion ought not to be construed as
"testimony." Apart from this so-called testimony no evidence has been produced before the
courts in antecedent cases tending to show that a tax upon incomes was intentionally
excluded by the people and by the framers of the Constitution from the meaning of the phrase
"direct taxes," or that such taxes were limited to taxes on land only. This conclusion has been
reached only as a matter of opinion, and not as a conclusion founded upon the weight of
 At the date of the Constitution (1787) the words "direct taxes" and "indirect taxes" were
household words. They were borrowed from the literature and practice of Great Britain and
the continent of Europe . They are to be found in the literature of the period, and in the
debates of both Federal and state conventions. They had been used in Europe as meaning
taxes which fell directly upon property and its owner, like a land tax or a tax on incomes, and
as meaning taxes of which the ultimate incidence might fall upon another than the one who
originally paid them, like taxes upon consumption. The inquiry, therefore, now is, whether,
when adopted in this country, they carried with them the signification which universally
obtained elsewhere, or whether they were accepted with a limited and restricted signification,
which confined the meaning of the words to taxes on land and capitation taxes.
 The Articles of Confederation, as originally adopted, provided for a common treasury,
to be supplied by the several States, in proportion to the value of all land within each State,
the taxes for paying that proportion to be levied by the authority and direction of the state
legislatures. But in 1783 this was amended by providing that this treasury should be "supplied
by the several States in proportion to the whole number of white and other free citizens and
inhabitants, of every age, sex, and condition, including those bound to servitude for a term of
years, and three-fifths of all other persons, not comprehended in the foregoing description,
except Indians not paying taxes, in each State; which number shall be triennially taken and
transmitted to the United States in Congress assembled, in such mode as they shall direct and
appoint." 1 Ell. Deb. 95.
 Why was this phrase "land, buildings, and improvements thereon," in the original
Articles, stricken out by this amendment? Mr. Refus King answers this inquiry. He said:
"According to the Confederation, ratified in 1781, the sums for the general welfare and
defence should be apportioned according to the surveyed lands and improvements thereon in
the several States; but that it hath never been in the power of Congress to follow that rule, the
returns from the several States being so very imperfect." 2 Ell. Deb. 36. "In 1778, Congress
required the States to make a return of the houses and lands surveyed; but one State only
complied therewith -- New Hampshire . Massachusetts did not. Congress consulted no rule. It
was resolved that the several States should be taxed according to their ability." 2 Ell. Deb. 45.
" Massachusetts has paid while other States have been delinquent. . . . Requisitions on the
States for that money were made. Who paid them? Massachusetts and a few others. . . .But
$1,200,000 have been paid. And six States have not paid a farthing of it." 2 Ell. Deb. 56.
 Therefore, there is this concurrent testimony that the words "land, buildings, and
improvements thereon" were intelligently rejected by the Confederate Congress as not being
either a just, an equal, or a convenient source of revenue for the Federal government, and if
that was the opinion prior to the adoption of the Constitution, how comes it at a later day that
the phrase "direct taxes" is to be interpreted as relating only to a tax on "land, buildings, and
improvements thereon," and thus to place the tax back upon that which had been previously
rejected as the only source of Federal taxation?
 In his letter to the Georgia convention of the 10th of October, 1787, Governor Randolph
said: "There is another consideration not less worthy of attention -- the first rule for
determining each quota by the value of all lands granted or surveyed, and of the buildings and
improvements thereon. It is no longer doubted that an equitable, uniform mode of estimating
that value is impracticable; and therefore twelve States have substituted the number of
inhabitants, under certain limitations, as the standard according to which money is to be
furnished." 1 Ell. Deb. 484.
 This amendment to the Articles of Confederation was sent forth by Congress to the
people, accompanied by an address prepared by Messrs. Madison, Ellsworth, and Hamilton.
In this, when speaking of population as the rule of taxation, they said: "This rule, although not
free from objection, is liable to fewer than any other that could be devised. The only material
difficulty which attended it in the deliberations of Congress was to fix the proper difference
between the labor and industry of free inhabitants and of all other inhabitants. The ratio
ultimately agreed to was the result of mutual concessions."
 Two of the States accepted these amendments in full. All the others accepted the first
part, which related to the appropriation by them of substantial and effectual revenues for the
support of the general government, as they might deem most convenient. Two of the States,
New York and Georgia, did not act upon the amendments at all (Jour. of Congress, 1783-4);
but the fact remains that from the time of their adoption by the Confederate Congress until the
decision in the Hylton case, land and buildings and improvements thereon were never
thereafter regarded as the source of revenue for the Federal government. It results, therefore,
that after "land, buildings, and improvements thereon" were withdrawn as a subject of Federal
taxation, the requisitions of Congress were met by the States by their own system of taxation.
What was that system?
 A careful examination of state legislation prior to 1787 establishes that the States of
Vermont, Massachusetts , Connecticut , Pennsylvania , Delaware , New Jersey , Virginia , and
South Carolina assessed their citizens upon their profits from their professions, trades, and
employments, and collected a tax thereon for the benefit of the States and of the general
 In addition to these taxes upon income, nearly all the States imposed poll taxes, taxes on
lands, on cattle of all kinds, and various kinds of personal property.
 How were all these taxes known to the people of the States at the time when they were
 The Century Dictionary says: "In the United States , all state and municipal taxes are
direct, and are levied upon the assessed valuations of real and personal property." Cooley
and the American Cyclopaedia also assert that all state taxes are direct taxes. But there is
more persuasive evidence as to what kind of taxes the people at the time called those which
they were paying in the States for the joint support of the States and of the general
 In the Massachusetts convention, Mr. Dawes said: "Congress had it not in their power to
draw a revenue from commerce, and therefore multiplied their requisitions on the States.
Massachusetts, willing to pay her part, made her own trade law, on which the trade departed
to such of our neighbors as made no such impositions on commerce; thus we lost what little
revenue we had, and our only course was, to a direct taxation." 2 Ell. Deb. 41.
 Mr. Nicholas, in Virginia , said: "Nine-tenths of the revenues of Great Britain and France
are raised by indirect taxes; and were they raised by direct taxes, they would be exceedingly
oppressive. At present the reverse of this proposition holds in this country, for very little is
raised by indirect taxes. The public treasuries are supplied by means of direct taxes, which
are not so easy for the people." 3 Ell. Deb. 99.
 Mr. Iredell, of North Carolina , said: "Our state legislature has no way of raising any
considerable sums but by laying direct taxes. Other States have imports of consequence.
This may afford them a considerable relief; but our State, perhaps, could not have raised its
full quota by direct taxes without imposing burdens too heavy for the people to bear." 4 Ell.
 Gouverneur Morris, in his observations on the Finances of the United States , says, two
years after the Constitution was adopted: "There is a concurrent jurisdiction respecting
internal or direct taxes."
 In his report to Congress, in 1812, Albert Gallatin said: "The direct taxes laid by the
several States during the last years of the Revolutionary War were generally more heavy than
could be paid with convenience; but during the years 1785 to 1789, an annual direct tax of
more than two hundred thousand dollars was raised in Pennsylvania , which was not
oppressive, and was paid with great punctuality."
 This establishes the fact that all the taxes which the people were paying in 1787 were,
according to their common understanding, expressed in their conventions, and expressed
afterwards in the writings of those who had been constituents of the State at the time, direct
taxes; that such direct taxes were paid out of income, and were so paid for the support of the
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