It's a consumption tax, not a property tax. So when you tell us "we all know that the SCOTUS has repeatedly struck down attempts by the federal government to lay a general across the board tax calculated from the value of property," you are not presenting any argument which impunes the FairTax. Look at the bold print in my excerpted quote just above this paragraph. It is a tax calculated on the use or consumption of taxable property or services. And by the way, the addition of the remaining language implies that the use or consumption of some types of property or the use or consumption of some types of services will not be taxable; it has nothing to do with taxing the property or service itself. It is the event of consumption which is taxed, not the property itself.
You’re funny! It is irrelevant what you want to call the tax if it violates the intentions and beliefs under which our Constitution was adopted.
If, by calling a tax indirect when it is essentially direct, the rule of protection could be frittered away, one of the great landmarks defining the boundary between the nation and the states of which it is composed, would have disappeared, and with it one of the bulwarks of private rights and private property. See: POLLOCK v. FARMERS' LOAN & TRUST CO., 157 U.S. 429 (April 8, 1895 )
Your beloved socialist tax proposes to extend the iron fist of the federal government, which now taxes “income” within the States, to also reach the property of citizens, real and personal, and do so in a general tax among the states without apportionment among the several States and without regard to any census or enumeration!
We all know socialists worked very hard to have the 16th Amendment adopted to gain access by taxation to the financial wealth of individuals within the various states and do so without having to observe the rule of apportionment in laying the tax. Seems that our socialist friends are now back and want to extend their reach to property, real and personal, with a new primary tax to fill the national treasury, and once again want to do so without observing the rule of apportionment!
But the SCOTUS has told you guys, and has done so in crystal clear language in POLLOCK v. FARMERS' LOAN & TRUST CO., 158 U.S. 601 (1895):
It is said that a tax on the whole income of property is not a direct tax in the meaning of the constitution, but a duty, and, as a duty, leviable without apportionment, whether direct or indirect. We do not think so. Direct taxation was not restricted in one breath, and the restriction blown to the winds in another.
We are not here concerned with the question whether an income tax be or be not desirable, nor whether such a tax would enable the government to diminish taxes on consumption and duties on imports, and to enter upon what may be believed to be a reform of its fiscal and commercial system. Questions of that character belong to the controversies of political parties, and cannot be settled by judicial decision. In these cases our province is to determine whether this income tax on the revenue from property does or does not belong to the class of direct taxes. If it does, it is, being unapportioned, in violation of the constitution, and we must so declare. Our conclusions may therefore be summed up as follows:
First. We adhere to the opinion already announced,-that, taxes on real estate being indisputably direct taxes, taxes on the rents or income of real estate are equally direct taxes.
Second. We are of opinion that taxes on personal property, or on the income of personal property, are likewise direct taxes.
Third. The tax imposed by sections 27 to 37, inclusive, of the act of 1894, so far as it falls on the income of real estate, and of personal property, being a direct tax, within the meaning of the constitution, and therefore unconstitutional and void, because not apportioned according to representation, all those sections, constituting one entire scheme of taxation, are necessarily invalid.
The decrees hereinbefore entered in this court will be vacated. The decrees below will be reversed, and the cases remanded, with instructions to grant the relief prayed
Aside from the fact that the tax is calculated from the value of property, real and personal, and is therefore considered direct by the SCOTUS and requires apportionment if laid, there is yet another irrefutable reason the tax described in H.R. 25 is un-constitutional. It violates the new rule the founding fathers intended by which the states could be called upon to fill the national treasury.
BIRTH OF THE RULE OF APPORTIONMENT
Under the Articles of Confederation a general across-the- board tax to fill the national treasury was agreed upon. The amount to be contributed by each state was to be calculated from each state’s assessed land value.
Article VIII. of the Articles of Confederation states:
“All charges of war, and all other expences that shall be incurred for the common defence or general welfare, and allowed by the united states in congress assembled, shall be defrayed out of a common treasury, which shall be supplied by the several states in proportion to the value of all land within each state, granted to or surveyed for any Person, as such land and the buildings and improvements thereon shall be estimated according to such mode as the united states in congress assembled, shall from time to time direct and appoint. The taxes for paying that proportion shall be laid and levied by the authority and direction of the legislatures of the several states within the time agreed upon by the united states in congress assembled.”
NOTE: each state was to make its contribution into the common treasury based upon the value of land within the state, and the value of land included an estimate of the “buildings and improvements thereon”. Hence ___ personal property is taken into account in the assessment of land when taxed.
The various reasons for which a Constitutional Convention was called are well known. One of the reasons being, the existing Congress under the Articles of Confederation had no authority to enforce the collection of and payment of taxes from the states, nor had power to tax the people and their property directly.
‘This imperatively demanded a remedy; but the opposition to granting the power of direct taxation in addition to the substantially exclusive power of laying imposts and duties was so strong that it required the convention, in securing effective powers of taxation to the Federal government, to use the utmost care and skill to so harmonize conflicting interests that the ratification of the instrument could be obtained.” See: POLLOCK,157 U.S. 429
On July 2nd of the Convention there was an impasse concerning how the states would be represented in Congress. The Convention adjourned till July 5th.
The following quotes from Madison’s Notes on the Convention of 1787 tells us how and why the rule by which the states agreed to contribute into the common treasury in a general tax was changed.
On July 5th, a proposition for fixing the representatives in the 1st branch , one member for every 40,000 inhabitants, was taken up.
Mr. Govr. MORRIS … thought property ought to be taken into the estimate as well as the number of inhabitants. Life & liberty were generally said to be of more value, than property. An accurate view of the matter would nevertheless prove that property was the main object of Society. . . . These ideas might appear to some new, but they were nevertheless just. If property then was the main object of Govt. certainly it ought to be one measure of the influence due to those who were to be affected by the Governmt. … He thought the rule of representation ought to be so fixed as to secure to the Atlantic States a prevalence in the National Councils….”
Mr. RUTLIDGE. The gentleman last up had spoken some of his sentiments precisely. Property was certainly the principal object of Society. If numbers should be made the rule of representation, the Atlantic States will be subjected to the Western. He moved . . . "that the suffrages of the several States be regulated and proportioned according to the sums to be paid towards the general revenue by the inhabitants of each State respectively.”
July 6
Mr. DAVY, was for committing the clause in order to get at the merits of the question arising on the Report. He seemed to think that wealth or property ought to be represented in the 2d. branch; and numbers in the 1st. branch.
July 9
Mr. Govr. MORRIS “…the Legislature shall possess authority to regulate the number of Representatives in any of the foregoing cases, upon the principles of their wealth and number of inhabitants."
Mr. BUTLER urged warmly the justice & necessity of regarding wealth in the apportionment of Representation.
Mr. KING had always expected that as the Southern States are the richest, they would not league themselves with the Northn. unless some respect were paid to their superior wealth. If the latter expect those preferential distinctions in Commerce & other advantages which they will derive from the connection they must not expect to receive them without allowing some advantages in return. Eleven out of 13 of the States had agreed to consider Slaves in the apportionment of taxation; and taxation and Representation ought to go together.
July 10
Genl. PINKNEY dwelt on the superior wealth of the Southern States, and insisted on its having its due weight in the Government.
July 11
Mr. WILLIAMSON was for making it the duty of the Legislature to do what was right & not leaving it at liberty to do or not do it. He moved that Mr. Randolph's proposition be postpond. in order to consider the following "that in order to ascertain the alterations that may happen in the population & wealth of the several States, a census shall be taken of the free white inhabitants and 3/5 ths. of those of other descriptions on the 1st. year after this Government shall have been adopted and every year thereafter; and that the Representation be regulated accordingly."
Mr. RUTLIDGE contended for the admission of wealth in the estimate by which Representation should be regulated. …. He moved that "at the end of years after the 1st. meeting of the Legislature, and of every years thereafter, the Legislature shall proportion the Representation according to the principles of wealth & population"
Mr. SHERMAN thought the number of people alone the best rule for measuring wealth as well as representation; and that if the Legislature were to be governed by wealth, they would be obliged to estimate it by numbers. He was at first for leaving the matter wholly to the discretion of the Legislature; but he had been convinced by the observations of [Mr. Randolph & Mr. Mason,] that the periods & the rule, of revising the Representation ought to be fixt by the Constitution
Mr. MADISON, Future contributions it seemed to be understood on all hands would be principally levied on imports & exports. …He could not agree that any substantial objection lay agst. fixig numbers for the perpetual standard of Representation…It was said that Representation & taxation were to go together; that taxation and wealth ought to go together, that population & wealth were not measures of each other.
July 12
Mr. Govr. MORRIS moved to add to the clause empowering the Legislature to vary the Representation according to the principles of wealth & number of inhabts. A "proviso that taxation shall be in proportion to Representation."
Mr. Govr. MORRIS having so varied his Motion by inserting the word "direct." It passd. nem. con. as follows-"provided the always that direct taxation ought to be proportioned to representation."
From the preceding documentation and the ratification of the Constitution, the following facts are drawn:
The Convention intentionally made an attempt to agree, and did in fact agree, upon a new rule by which the various states would contribute into the federal treasury. In agreeing upon the new rule, the subject of the varying and superior wealth between the states including land value and property, was a bone of contention and carefully considered in establishing the new rule by which the states agreed to contribute in a general tax among the states.
A general agreement was understood that future contributions into the common treasury would be principally levied on imports & exports.
The new rule by which the various states agreed to contribute into the federal treasury is stated in our Constitution in Article 1, Section 2, Clause 3, part of which states:
“Representative and direct Taxes shall be apportioned among the several States…”
In view of our Constitution having been amended, the formula by which to determine each state’s contribution in a general tax among the states may be expressed as follows:
States’ population
------------------------------------- X SUM TO BE RAISED = STATE’S SHARE
Total U.S. Population
The language contained in H.R. 25 seeks to allow Congress to enter the states to impose a tax in such a manner as would defeat the intentions and beliefs under which the states agreed to contribute in a general tax to fill the national treasury.
H.R. 25 would specifically subjugate, if adopted and enforced, the protection the states agreed upon to fix contributions with respect to the “varying and superior wealth between the states” ___ the protection being, that those states contributing the major portion into the common treasury, would also exercise a proportionate voting strength in Congress when determining how their money would be spent equal to their contribution ___ a rule which socialists and the friends of big government dread!
Regards.
JWK
ACRS