U.S. Supreme Court
EISNER v. MACOMBER, 252 U.S. 189 (1920)
The Sixteenth Amendment must be construed in connection with the taxing clauses of the original Constitution and the effect attributed to them before the amendment was adopted. In Pollock v. Farmers' Loan & Trust Co., 158 U.S. 601 , 15 Sup. Ct. 912, under the Act of August 27, 1894 (28 Stat. 509, 553, c. 349, 27), it was held that taxes upon rents and profits of real estate and upon returns from investments of personal property were in effect direct taxes upon the property from which such income arose, imposed by reason of ownership; and that Congress could not impose such taxes without apportioning them among the states according to population, as required by article 1, 2, cl. 3, and section 9, cl. 4, of the original Constitution.
Afterwards, and evidently in recognition of the limitation upon the taxing power of Congress thus determined, the Sixteenth Amendment was adopted, in words lucidly expressing the object to be accomplished:
'The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among [252 U.S. 189, 206] the several states, and without regard to any census or enumeration.'
As repeatedly held, this did not extend the taxing power to new subjects, but merely removed the necessity which otherwise might exist for an apportionment among the states of taxes laid on income. Brushaber v. Union Pacific R. R. Co., 240 U.S. 1 , 17-19, 36 Sup. Ct. 236, Ann. Cas. 1917B, 713, L. R. A. 1917D, 414; Stanton v. Baltic Mining Co., 240 U.S. 103 , 112 et seq., 36 Sup. Ct. 278; Peck & Co. v. Lowe, 247 U.S. 165, 172 , 173 S., 38 Sup. Ct. 432.
So, the 16th Amendment removed the "necessity which otherwise might exist for an apportionment among the states of taxes laid on income." It granted Congress the abililty to tax income "without apportionment among the several states, and without regard to any census or enumeration" which didn't previously exist.
There are plenty of other rulings that say the same thing if you ever get out of 1916.
LOL, whatever YN. It is a distinction without a difference.
For bottomline, all that is required is to tax activity or exchanges of services and/or goods to convert you direct tax into an excise. A transaction tax on the transfer of funds would be sufficient to meet the requirement, either side or bothsides paying the tax.
Sorry the Pollock decision was a dead issue before it was even written and the Courts were well on their way to totally reversing any effect it had before the 16th was ever proposed.
However, if you wish to believe the 16th actually has some substanbive significance as to whether you can be taxed on value transfered as rents, dividends or intrest or not, you are free to believe whatever your little heart desires may. It's a moot issue. Some folks need a security blanket, and other's don't I guess.