Last Updated: Sunday, 14-vii-MMII 17:8:9 GMT
Literal 16th Amendment Translation
by: Maximo Lachman
Used with permission

The 16th amendment says:

 The Congress shall have power to lay and collect taxes on incomes, 
 from whatever source derived,
 without apportionment among the several States,
 and without regard to any census or enumeration.

As there is a comma after 'incomes', the first subordinate clause does not modify 'incomes' in the nature of an adjective. Like the two clauses that follow, it refers to the nature of the 'taxes'. Otherwise it would have been incorporated into the main clause by removing the first comma:

"...taxes on incomes from whatever source derived".  

Even so, the word 'derived' modifies 'source', and not 'incomes' otherwise it would have been written as:

"...taxes on incomes derived from whatever source at all".

The courts have held that Congress is presumed to know the rules of grammar, and will not change the language of the laws for them, as the courts have no function of legislation. See Montello Salt Co. v. Utah (221 US 452) The onus is on Congress to rewrite the law in order to change its meaning. However, Congress cannot rewrite the 16th amendment by legislation.

The 16th amendment allows income tax to be layed like an excise (taxes . . . without apportionment . . . and without regard to any census or enumeration) as long as it is collected like an excise (taxes . . . from whatever source). The decision in Brushaber v. Union Pacific R.R. Co. (240 US 1) underlined this interpretation, when it said that income tax in the U.S. had always been levied as an excise, was duly interpreted by the courts as an excise, and is thereby entitled to be enforced as an excise. The 16th amendment spells that out, so it is more of an interpretive regulation, rather than an extension of taxing power. It pre-empts any court from interpreting an excise tax on income as a direct tax in substance, the way the Pollock court had done earlier, as long as the tax is levied in the form of an excise. In other words, form is more important than substance. The Pollock court ruled otherwise, such that substance was more important than form. It is a well-documented fact that the intent of the 16th was to overturn this interpretation by the Pollock court, rather than give new powers to tax, such as a direct tax on income. (For example, the 44th Congressional Record documents why "direct taxes on incomes" in a draft proposal for the 16th amendment was replaced by "taxes on incomes, from whatever source derived" in the final version. Excerpts from that Record may be found in Irwin Schiff's book The Great Income Tax Hoax.)

So the only ones subject to the current federal income tax are those who derive their sources of income, such as title to all or part of a business, or if their business had derived licences, permits, or grants such as copyrights. Therefore, laborers should not have to pay income tax, as long as they have derived no ownership interests (for example, those in a profit sharing arrangement). Otherwise, a federal income tax may be collected "directly" in the Constitutional sense from those who derive an ownership interest in their sources of income: if Congress lays the tax in the FORM of an "excise", it may still be a direct tax in SUBSTANCE, such as when it is collected from their derived sources. However, no laborer ever "derived" his source of income, namely his labor, from anyone else: it was a property right that he was born with, and so should remain unalienable.

Davis v. Boston & Maine Railroad Co. (89 F2d 368, 376) ruled likewise:

"Working by an artisan at his trade, carrying on an ordinary business, or enga-
ging in a common occupation cannot be subjected to a licence fee or excise....
The rights to labor and to do ordinary business are natural, essential and 
inalienable, partaking of the nature both of personal liberty and of private 
property.

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