Judicial Meaning of the Word "Income"

 

Sec. 30 Judicial definition of income. By the rule of construction, nosctiur a socilis, however, the words in this statute must be construed in connection with those to which it is joined, namely, gains and profit; and it is evidently the intention, as a general rule, to tax only the profit of the taxpayer, not the whole revenue. Roger Forster, A Treaties on the Federal Income Tax under the Act of 1913, 143 (Lawyers Co-operative Publishing Co., 1914). Emphasis mine

 

Definitions applied in law:

nosctiur a sociis

a doctrine or rule of construction: the meaning of an unclear or ambiguous word (as in a statute or contract) should be determined by considering the words with which it is associated in the context.

 

Capitation tax:

“The private revenue of individuals, it has been shewn in the first book of this Inquiry, arises ultimately from three different sources: Rent, Profit, and Wages. Capitation taxes, so far as they are levied upon the lower ranks of people, are direct taxes upon the wages of labor.” Adam Smith, Wealth of Nations, pgs. 534, 540 (Prometheus Books, Amherst, New York 1991) (1776).

 

Direct tax:

Direct taxes fall directly on the person or property taxed. The person or property is taxed solely because the person or property exists. The person or property is diminished by the tax. The tax cannot be shifted or avoided. It is not a tax on consumption, or in the event, or an activity nor on the privilege.

 

Here, the Supreme Court explains what the meaning of Capitation [head] tax is as used in the reference to Direct tax in the Constitution.  NOTICE nowhere in the court’s decision is there any reference to a capitatuin tax being applicable to Citizens of this country!:

“The Constitution declares, that a capitation tax is a direct tax; and, both in theory and practice, a tax on land is deemed to be a direct tax. … The provision was made in favor of the southern States. They possessed a large number of slaves; they had extensive tracts of territory, thinly settled, and not very productive. A majority of the states had but few slaves, and several of them a limited territory, well settled, and in a high state of cultivation. The southern states, if no provision had been introduced in the Constitution, would have been wholly at the mercy of the other states. Congress in such case, might tax slaves, at discretion or arbitrarily, and land in every part of the Union after the same rate or measure: so much a head in the first instance, and so much an acre in the second. To guard them against imposition in these particulars, was the reason of introducing the clause in the Constitution, …” Hylton v. US, 3 US 171 (1796)

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Indirect tax:

Indirect taxes are either avoidable taxes or taxes that can be passed on. Indirect taxes may be avoidable by either reframing from the event, activity or privilege that is taxed, or from reframing from the consumption of the article taxed. Constitutionally, indirect taxes includes excise, duties and imposts.

Privilege:

Anything you do not have a right to do. “A special benefit, exemption from a duty, or immunity from penalty, given to a particular person, a group or class of people.  Law.com Dictionary.

 

“The term ‘excise tax’ and ‘privilege tax’ are synonymous.  The two are often used interchangeably.” American Airways v. Wallace, 57 F.2d 877, 880

 

“the obligation to pay an excise is based upon the voluntary action of the person taxed in performing the act, enjoying the privilege or engaging in the privilege which is the subject of the excise, and the element of absolute unavoidable demand is lacking.” People ex rel, Atty Gen v. Naglee, 1 Cal 232; Bank of Commerce & T. Co. Senter, 149 Tenn 441SW, 144

 

Republican form of government:

“A government constructed on the principle that the supreme power resides in the body of the people. A government which derives all its power directly or indirectly from the people in which is administered by persons holding their office for a limited period of time or during good behavior.” (Citation omitted.) Ballantine’s Law Dictionary, (3^rd ed. 1969)

 

Oh! Almost forgot one important definition “EXTORTION”:

1. Illegal use of one's official position or powers to obtain property, funds, or patronage.

2. The act or an instance of extorting something, as by psychological pressure.

3. An excessive or exorbitant charge.