The Sixteenth Amendment:

After passage of the Sixteenth Amendment, Congress immediately wrote a new income tax law, which was quickly challenged (as with all previous challenges, by someone with federally-connected income). In its decision the Supreme Court, in speaking of the confusion created, said:

"We are of opinion, however, that the confusion is not inherent, but rather arises from the conclusion that the Sixteenth Amendment provides for a hitherto unknown power of taxation; that is, a power to levy an income tax which, although direct, should not be subject to the regulation of apportionment applicable to all other direct taxes. And the far reaching effect of this erroneous assumption..." (Brushaber v. Union Pacific Railroad Co. 240 US 1) (1916)

This ruling has been referenced more than 50 times in later rulings. Later the court also wrote:

"The Sixteenth Amendment, although referred to in argument, has no real bearing and may be put out of view. As pointed out in recent decisions, it does not extend the taxing power to new or excepted subjects, but merely removes all occasion, which otherwise might exist, for an apportionment among the states of taxes laid on income, whether it be derived from one source or another." (Peck v. Lowe, 247 U.S. 165) (1918)

The court was reinforcing what had been the case all along: the federal government always had the right to indirectly tax 'income', properly understood as earnings derived from federal privilege. The Sixteenth Amendment gave Congress no new powers of taxation, it merely removed from future Court decisions any consideration of the 'source' of that income. In this sense, the Sixteenth Amendment is not the basis of the current income tax, though the government would like you to believe it is.


Why does the government want you think that the Sixteenth Amendment is the source of the income tax? Because you will then look no further than the text of the amendment, which, as we noted, is easy to misinterpret. And you will then believe the IRS when it claims that the Sixteenth Amendment authorized a direct, non-apportioned tax on incomes.

This claim is made in numerous places on the IRS website. For example, in 2009 the Taxpayer Advocate Service, a part of the IRS, said, "Income taxes are direct taxes, but do not have to be apportioned because of the Sixteenth Amendment" here (PDF, p.67, footnote 155).

The IRS also defines a direct tax as one "that is paid directly to the government" (laughably wrong as indirect taxes such as excises are also paid to the government) and an indirect tax as one "that can be passed on--or shifted--to another person or group by the person or business that owes it" (also wrong; he who owes the tax must pay it). Do not be deceived by these false and ahistorical definitions that deflect attention from true nature of the tax.

Why do they tell such blatant lies? Because they lead away from the truth that the tax is properly limited in application to the exercise of federal privilege.