From The Taxable Income Report
Brief mention should be made of the 16th Amendment to the Constitution, since there is a common but erroneous belief that the 16th Amendment expanded Congress power to tax incomes. The purpose of the 16th Amendment, according to the Supreme Court in Brushaber v. Union Pacific (240 U.S. 1), and again in Stanton v. Baltic Mining (240 U.S. 103) was to make it clear that the income tax is, and has always been, an indirect excise tax, which never required apportionment (a cumbersome process required for all direct taxes, in which the tax is divided up among the states according to populations). The Secretary of the Treasury agreed with the Court in Treasury Decision 2303.The provisions of the sixteenth amendment conferred no new power of taxation, but simply prohibited [Congress original power to tax incomes] from being taken out of the category of indirect taxation, to which it inherently belonged, and being placed in the category of direct taxation subject to apportionment. [Treasury Decision 2303]
An in-depth explanation of direct and indirect taxes, and how they must be imposed, is not necessary here. The only relevant point is that Congress taxing jurisdiction was not expanded by the 16th Amendment.
As pointed out in recent decisions, [The Sixteenth Amendment] does not extend the taxing power to new or excepted subjects... [Peck v. Lowe, 247 U.S. 165 (1918)]
The income tax had been rejected several times by the USSC. Prior to 1916.
"What I find interesting about this whole debate is that repeal of the 16th Amendment wouldn't mean an end to the income tax - the courts have already ruled that it didn't expand Congress' taxing power, it just made it clear, as the courts had previously ruled, that an income tax is not a direct tax, but an indirect excise tax on the economic activity of remuneration of labor."
That is why Congressman Linder, the FairTax bill's primary sponsor, has always spoken of the need for an "aggressive repeal", which means that we don't just turn back the clock to 1813, but that we explicitly state that any and all income taxes are illegal.