Forgive me if you've already posted this information, but do you know why it is that "income" for corporations is defined as what comes in minus what goes out, whereas "income" for humans is defined just as what comes in? How do they get away with attaching two definitions to the same term?
Forgive me if you've already posted this information, but do you know why it is that "income" for corporations is defined as what comes in minus what goes out,
Business deductions for purposes of income tax calculation is definded by Congress.
whereas "income" for humans is defined just as what comes in?
Personal deductions and exemptions for purposes of individual income tax calculation is defined by Congress.
How do they get away with attaching two definitions to the same term?
Same definition, Taxable Income = Gross Income - Allowed deductions and exemptions.
PACIFIC INS. CO. v. SOULE, 74 U.S. 433 (1868),7 Wall. 433
- "Congress may prescribe the basis, fix the rates, and require payment as it may deem proper. Within the limits of the Constitution it is supreme in its action. No power of supervision or control is lodged in either of the other departments of the government."
Furthermore, income is merely the means used to determine how much the tax will be. It is not the basis of the tax, commercial activity is:
e.g. humans sale of own service or product to another;
e.g. business sale of own service or product to another.
House Congressional Record, March 27, 1943, pg. 2580:
- "The income tax is, therefore, not a tax on income as such. It is an excise tax with respect to certain activities and privileges (the type 3 and 4 taxes) which is measured by reference to the income which they produce. The income is not the subject of the tax; it is the basis for determining the amount of tax."
An indirect tax under Article I Section 8 of the Constitution.
Champion v. Ames(1903), 186 U.S. 321
- 'But if what Congress does is within the limits of its power, and is simply unwise or injurious, the remedy is that suggested by Chief Justice Marshall in Gibbons v. Ogden [21 US 1, 9 Wheat. 1, 6 L. ed. 23], when [195 U.S. 27, 56] he said: 'The wisdom and the discretion of Congress, their identity with the people, and the influence which their constituents possess at elections, are, in this, as in many other instances, as that, for example, of declaring war, the sole restraints on which they have relied, to secure them from its abuse. They are the restraints on which the people must often rely solely, in all representative governments."