User talk:Famspear/Archive13

Excise in the United States

Dear Famspear, You are a very good writer and obviously have studied this subject. However, the "event" definition you provide under the "Constitutional Law" section has no references. It has no basis in constitutional history that I'm aware of. The Supreme Court has never ruled an excise to be an "event" tax. And the "event" definition, if acceded, would destroy the legal distinction between Direct and Indirect taxes (because then any "event" could be taxed as an excise, thus contradicting the logic of the Constitution and the intent of the founders.) On the other hand, the paragraphs I wrote cite the opinions of men who actually had a hand in creating the Constitution. The paragraphs I wrote cite U.S. Supreme Court and several lower court decisions--all of which define an excise as a tax on "privilege." The paragraphs I wrote maintain the logic behind Direct and Indirect taxes. I would therefore be interested in knowing what authority you are relying on for your definition, and how to explain the logic of an "event" tax vis-a-vis Direct and Indirect taxes. If you cannot explain the logic, and cite any authority higher than the Supreme Court and the men who authored the Constitution, I respectfully ask you to let stand my paragraphs or submit this for mediation. All the best. Dolphin52 (talk) 22:31, 20 April 2008 (UTC)

Famspear response

Dear Dolphin52: I assume that you are referring to the additions under user IP75.66.187.71, essentially resulting the following verbiage:

To understand the meaning of "excise" in the constitutional sense, we must first consider the categories of tax under the Constitution. Only two broad categories exist: Direct and Indirect. Direct taxes are those which cannot be avoided because they are imposed directly on the person, or upon the person’s exercise of any unalienable right (such as the right to own property.) Indirect taxes are those which can be avoided because they do not encumber unalienable rights, thus allowing the burden to be shifted to someone else.

According to Article I, Section 8, of the Constitution, excises belong to the Indirect category. Therefore, excises are strictly limited to taxing items of privilege and luxury. In other words, they may not tax any item or activity of common right.

Adam Smith, whose book, The Wealth of Nations, served as the economic bible of America’s founding fathers when the Constitution was written, is the source of this definition. Smith says excises may encumber "a few articles only" of things called "luxuries," and never on the "necessary expence" of the People. (See Book V, Chap. 2, Para. V.2.135/150/164/176/189.)

"Excises are taxes laid upon the manufacture, sale, or consumption of commodities within the country, upon licenses to pursue certain occupations, and upon corporate privileges... the requirement to pay such taxes involves the exercise of ’privileges '." Flint v. Stone Tracy Co. 220 U.S. 107 (1911)

“The term ‘excise tax’ is synonymous with ‘privilege tax’, and the two have been used interchangeably." (American Airways v. Wallace, 57 F.2d 877, 880)

“Whether a tax is characterized in a statute imposing it, as a privilege tax or an excise tax is merely a choice of synonymous words, for an excise tax is a privilege tax.” Foster & C. Co. v. Graham, 154 Tenn. 412, 285 S.W. 570, 47 ALR 971.

“An ‘excise tax’ is often used synonymous with ‘privilege’ or ‘license tax‘.” Shannon v. Streckus Steamers, 279 Ky. 649, 131 S.W.2d 833, 838.

Excises in America are therefore limited to non-essential, privileged items such as tobacco, alcohol, luxury automobiles, and certain federal licenses and activities. Any tax that reaches outside this parameter to items or activities of common right is no longer an Indirect tax, but "a direct tax upon the wages of labor." The Wealth of Nations, Bk. V, Ch. 2, V.2.150 and 135. Such a tax then must be apportioned among the states, or deemed unconstitutional. (See Brushaber v. Union Pacific Co. (1916).)

Although excises are often triggered by the transfer of property (under the so-called “event” definition), this is not always the case. Excises can also be triggered by the issuance of a federal license, or by the mere creation of special commodities. (For example, the excise on certain kinds of automobile tires, under 26 U.S.C. 4071(b).) Therefore, although an event can sometimes trigger an excise, it must be remembered that excises are defined by what they tax (privilege and luxury), not by how they are triggered.

Were the “event” definition permitted, virtually any event could be taxed as an excise, and the constitutional distinction between Direct taxes (pertaining to rights and requiring apportionment), and Indirect taxes (pertaining to privilege and requiring uniformity) would collapse.

Is this the verbiage that you're talking about (that I removed)? Famspear (talk) 23:05, 20 April 2008 (UTC)

Follow-up: The argument that direct taxes are those which cannot be avoided because they are imposed directly on the person, or upon the person’s exercise of any unalienable right (such as the right to own property is incorrect. The argument that indirect taxes are those which can be avoided because they do not encumber unalienable rights, thus allowing the burden to be shifted to someone else, is also incorrect. These were arguments that would put forward at one time as being possible definitions of direct tax and indirect tax. They are not the legal definitions for purposes of the United States Constitution.

Direct taxes have been defined by the U.S. Supreme Court as being limited to capitations and taxes on property by reason of its ownership, with one exception. The exception is that in Pollock in 1895, the Court stated that a tax on INCOME from property in th form of rents, dividends, or interest would be treated as a direct tax, and would be required to be apportioned. The Pollock ruling was overturned by the Sixteenth Amendment.

Note: ALL TAXES THAT ARE NOT DIRECT TAXES ARE DEEMED TO BE INDIRECT TAXES, ALSO KNOWN AS EXCISES.

Now, to the separate question: Are all excises “event taxes”? Is there an excise that is not an “event tax”?

An event tax is a tax on a “taxable event.” The term “taxable event” is a legal term that is used repeatedly. A search of all federal tax cases (income tax, gift tax, estate tax, and so on) in the CCH online database (which consists of federal court cases on taxation since the year 1913) yields a list of 942 cases where the term “taxable event” has been used since 1913. We are talking about United States Supreme Court, the various federal courts of appeal, the various federal district courts, the U.S. Bankruptcy Court, the U.S. Tax Court, the U.S. Court of Federal Claims, and all the predecessor courts.

Under the U.S. Constitution, there are only two kinds of taxes: direct taxes and “all others.” The “all others” category, which consists of “duties, imposts and excises,” is sometimes referred to as simply “excises” or “indirect taxes.” (There may be some question as to whether duties and imposts are even “taxes” at all, but that question is not germane to our discussion.)

Until Pollock in 1895, the federal courts ruled that direct taxes consisted only of taxes on property by reason of its ownership (which is not an event tax) and capitations. (A capitation is a head tax, not an event tax.)

First, property taxes: Property taxes are imposed by reason of ownership. If you own the property on January 1 of a given year (or whatever the date provided by the statute happens to be), then you owe the tax. Period. This is not an “event” tax. There is no “taxable event.” It’s a “state of being” tax. The “state of being” that is taxed is the “ownership.” The tax is simply imposed on the person who holds title to the property on the tax date. Nothing has “happened.” Nothing has “occurred.” You may have owned the property a year ago. You own it today. You are taxed, even though nothing has “changed.”

Almost anything that is not a property tax or a capitation is, almost by definition, an event tax. You are taxing an event, an occurrence. Something happens. The taxable event could be (A) an income realization (B) a transfer of ownership of something, (C) a sale of something, etc. Notice that these categories can be somewhat overlapping; if you sell something, there is also a transfer of ownership as well – and very possibly a realization of income by the seller. But the main point is that if the thing being taxed is not “a person by reason of him simply being a person” (i.e., a capitation) or “property by reason of its ownership” then you have an indirect tax, an excise. And all or almost all these kinds of taxes are probably “event taxes.” There has to be a taxable event: a sale, a transfer, an income realization – whatever.

Here’s an example of the federal income tax, which is an “event tax” – a tax on a “taxable event” (in this case, the realization of income). This is from one of the cases of Gaylon L. (“Whitey”) Harrell, a notorious tax protester:

On appeal Harrell challenges neither the assessed deficiencies and additions nor the §6673 penalty. Instead he incants the standard “tax protester” mantra that taxation without apportionment under the Sixteenth Amendment to the United States Constitution violates the Tenth Amendment and again insists that the receipt of Federal Reserve notes is not a taxable event. This court and others have rejected Harrell's "16th Amendment" theory countless times, and we do not hesitate to do so again here. See, e.g., Miller v. United States, 868 F.2d 236, 240 (7th Cir. 1988); Lysiak v. Commissioner, 816 F.2d 311, 312 (7th Cir. 1987); United States v. Foster, 789 F.2d 457, 462-63 (7th Cir. 1986); Quijano v. United States, 93 F.3d 26, 30 (1st Cir. 1996); United States v. Mundt, 29 F.3d 233, 237 (6th Cir. 1994); Sochia v. Commissioner, 23 F.3d 941, 944 (5th Cir. 1994). Harrell's protestation that Federal Reserve notes are exempt from taxation merits no discussion, other than to note that it, along with his "constitutional" argument, warrants the imposition of sanctions pursuant to Fed. R. App. P. 38.

--Harrell v. Commissioner, 99-2 U.S. Tax Cas. (CCH) paragr. 50,810 (7th Cir. 1999).

See the United States Supreme Court decision in United States v. Davis, 370 U.S. 65, 82 S. Ct. 1190, 62-2 U.S. Tax Cas. (CCH) paragr. 9509 (1962) (in determination of federal income tax effect of transfer of stock from a taxpayer to his former wife, the transfer was held to be a “taxable event” for federal income tax purposes). Another federal income tax case: the U.S. Supreme Court decision in James v. United States, 366 U.S. 213, 81 S. Ct. 1052, 61-1 U.S. Tax Cas. (CCH) paragr. 9449 (1961) (embezzlement by a taxpayer was a “taxable event” for purposes of federal income tax, even though the taxpayer did not own the money he embezzled, and even though he was required to return the money to its rightful owner). The receipt of “income” is a “taxable event” for purposes of the federal income tax -- see the U.S. Supreme Court decisions in Welch v. Henry, 305 U.S., 134, at 146-147 (1938) and United States v. Darusmont, 449 U.S. 292, 81-1 U.S. Tax Cas. (CCH) paragr. 9137 (1981). The “taxable event” language is also used by the U.S. Supreme Court as applying to realization of income for federal income tax purposes in Helvering v. Horst, 311 U.S. 112, 61 S. Ct. 144, 40-2 U.S. Tax Cas. (CCH) paragr. 9787 (1940).

For a federal estate tax case (the federal estate tax is a tax on the transfer of ownership of property by reason of the death of the owner), see United States v. Manufacturers Nat’l Bank, 363 U.S. 194, 80 S. Ct. 1103, 60-2 U.S. Tax Cas. (CCH) paragr. 11,954 (1960). For another estate tax case, see the United States Supreme Court decision in Tyler v. United States, 281 U.S. 497, 2 U.S. Tax Cas. (CCH) paragr. 532 (1930). In this case, the Court stated: “A tax laid upon the happening of an event, as distinguished from its tangible fruits, is an indirect tax which Congress, in respect of some events not necessary now to be described more definitely, undoubtedly may impose.”

Quoting Adam Smith (a Scot who wrote a very famous treatise on economics) or Hamilton (our first Secretary of the Treasury) is interesting, but not as authoritative as actual court rulings or legal scholars. The question of whether a particular tax is an excise or not is a legal question. You need to follow formal rules of legal analysis to determine a legal question.

Foster & C. Co. v. Graham, was apparently a Tennessee Supreme Court case, not a federal tax case. Shannon v. Streckus Steamers apparently was a Kentucky Supreme Court case, not a federal tax case.

Some of the cases you cited are indeed federal tax cases. In the Brushaber case you cited, the federal income tax was treated as an excise. The realization of income is a “taxable event,” as the Supreme Court has said over and over (see the cases I cited above).

If you can think of an excise (an indirect tax) that would not be a tax on some sort of event, then maybe the language in the article should be modified accordingly.

Regarding the last paragraph: Sorry, but virtually ANY EVENT CAN INDEED BE TAXED UNDER THE U.S. CONSTITUTION AS AN EXCISE. A notable example would be exports from a state – the Constitution forbids that, and the Supreme Court has indeed struck down some taxes as being impermissible taxes on exports. Famspear (talk) 03:27, 21 April 2008 (UTC)

Excise in the United States: Part II

Dear Famspear,
Apologies for taking so long. A proper response required more time than was available during the week.

I think the best way to approach this question is to first examine the cases you cited. These cases, I presume, were meant to support your position. But they don’t. After reviewing them briefly, we can then turn our attention to disproving the “event” theory, followed by a solid proof of the “privilege” theory. Finally, I will address some of the individual statements you made in your rebuttal which are obviously sincere, but nonetheless false.

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ON CASES THAT USE THE TERM “TAXABLE EVENT”
You cite a number of cases that use the term “taxable event.” Yet none of them provide a definition of the term, much less state that an “excise” strictly pertains to a “taxable event.” In fact, one of the cases you cite (Tyler) says just the opposite. I‘m not sure why you would offer such weak evidence and analysis, unless you really have nothing to back up your position. At any rate, they bear some dissection, if only to reinforce my position:

• You said - “See the United States Supreme Court decision in United States v. Davis, 370 U.S. 65, 82 S. Ct. 1190, 62-2 U.S. Tax Cas. (CCH) paragr. 9509 (1962) (in determination of federal income tax effect of transfer of stock from a taxpayer to his former wife, the transfer was held to be a “taxable event” for federal income tax purposes).”
  

Answer - ALTHOUGH CERTAIN TRANSFERS ARE INDEED TAXABLE, THE TERM ‘TAXABLE EVENT’ IS NOT HEREIN DEFINED.

• You said - “Another federal income tax case: the U.S. Supreme Court decision in James v. United States, 366 U.S. 213, 81 S. Ct. 1052, 61-1 U.S. Tax Cas. (CCH) paragr. 9449 (1961) (embezzlement by a taxpayer was a “taxable event” for purposes of federal income tax, even though the taxpayer did not own the money he embezzled, and even though he was required to return the money to its rightful owner).”
  

Answer - AGAIN ‘TAXABLE EVENT’ IS NOT HEREIN DEFINED.

• You said - “The receipt of “income” is a “taxable event” for purposes of the federal income tax -- see the U.S. Supreme Court decisions in Welch v. Henry, 305 U.S., 134, at 146-147 (1938) and United States v. Darusmont, 449 U.S. 292, 81-1 U.S. Tax Cas. (CCH) paragr. 9137 (1981).”
  

Answer - ALTHOUGH THE RECEIPT OF INCOME IS AN EXAMPLE OF A TAXABLE EVENT, THE TERM ‘TAXABLE EVENT’ IS NOT HEREIN DEFINED.

• You said - “The ‘taxable event’ language is also used by the U.S. Supreme Court as applying to realization of income for federal income tax purposes in Helvering v. Horst, 311 U.S. 112, 61 S. Ct. 144, 40-2 U.S. Tax Cas. (CCH) paragr. 9787 (1940).”
  

Answer - AGAIN ‘TAXABLE EVENT’ IS NOT HEREIN DEFINED.

• You said - “For a federal estate tax case (the federal estate tax is a tax on the transfer of ownership of property by reason of the death of the owner), see United States v. Manufacturers Nat’l Bank, 363 U.S. 194, 80 S. Ct. 1103, 60-2 U.S. Tax Cas. (CCH) paragr. 11,954 (1960).”
  

Answer - AGAIN, THE COURT GIVES AN EXAMPLE OF A TAXABLE EVENT, BUT THE TERM ‘TAXABLE EVENT’ IS NOT HEREIN DEFINED AS ‘ANY EVENT.’]

NOTE: The Supreme Court opinion in the above case actually supports MY position: “From its inception, the estate tax has been a tax on a class of events which Congress has chosen to label…‘the transfer of the net estate of every decedent.’ … [S]uch a tax has always "been treated as a duty or excise, because of the particular occasion which gives rise to its levy." Under the statute, the occasion for the tax is the maturing of the beneficiaries' right to the proceeds upon the death of the insured… The taxable "transfer," the maturing of the beneficiaries' right to the proceeds, is the crucial last step in what Congress can reasonably treat as a testamentary disposition by the insured in favor of the beneficiaries… The maturing of the right to proceeds is therefore…an appropriate occasion for taxing the transaction to the estate of the insured.”

In short, what makes the transfer taxable is the maturing of the right to proceeds--a privilege granted by the state--not the mere fact that a transfer has occurred.

• You said - “For another estate tax case, see the United States Supreme Court decision in Tyler v. United States, 281 U.S. 497, 2 U.S. Tax Cas. (CCH) paragr. 532 (1930). In this case, the Court stated: ‘A tax laid upon the happening of an event, as distinguished from its tangible fruits, is an indirect tax which Congress, in respect of some events not necessary now to be described more definitely, undoubtedly may impose.’”
  

Answer - ‘TAXABLE EVENT’ IS NOT HEREIN DEFINED AS ‘ANY EVENT.’ THE COURT IS SIMPLY SAYING THAT A TAX LAID UPON THE HAPPENING OF SOME EVENTS--AS OPPOSED TO A TAX LAID UPON THE PRODUCT OF THOSE EVENTS--IS AN INDIRECT TAX.

NOTE: The Supreme Court ruling actually contradicts your argument. Reading a little further down in the same opinion, the court defines exactly what sort of “happenings“ and “events“ are actually taxable:

“The question here, then, is, not whether there has been, in the strict sense of that word, a 'transfer' of the property by the death of the decedent, or a receipt of it by right of succession, [IN OTHER WORDS, THE MERE FACT THAT AN EVENT HAS OCCURRED DOESN’T MAKE THAT EVENT TAXABLE] but whether the death has brought into being or ripened for the survivor, property rights of such character as to make appropriate the imposition of a tax upon that result (which Congress may call a transfer tax, a death duty or anything else it sees fit)…”

[The word ‘rights,’ as used here, refers not to an ’unalienable right’ but to a legal right which is enforceable against other potential claimants. This is a privilege granted by the state.]

All you have done by citing these cases is to provide examples of SOME "taxable events." You have NOT defined what a "taxable event" is [hint: it pertains to privilege], and you certainly have not proven that "ANY event" can be taxed as an excise.

Let us now turn to actually disproving the “event” definition…

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DISPROVING THE ‘EVENT’ DEFINITION
You claim that an “excise” is defined as a tax on any event. If that’s true, then the following things must be demonstrated:

1. That a court has explicitly declared the term “excise” is defined by NOTHING but the fact that an event has occurred. This must be supported by…
2. Proof that NO EXCISE taxes something other than an event, and…
3. Proof that NO DIRECT TAX enters the (alleged) domain of excises, by taxing an “event.”

Failure to prove any one of these is enough to bury the so-called “event” definition for lack of exclusivity. I will negate all three.

COURT DEFINITION
This one is simple. No court has ever declared an excise to be NOTHING MORE THAN a tax on an event. No court has ever said: “The REQUIREMENT to pay an excise involves the occurrence of an EVENT.” If you know of such a ruling, please provide the reference so I may review it. I will even consider the opinion of a state court, although you seem to believe that only the opinion of federal courts bear weight in this matter. (I disagree. See notes following my CONCLUSION.)

In point of fact, one of the cases above actually says that excises are NOT defined by the mere happening of an event:

“The question here, then, is, not whether there has been, in the strict sense of that word, a 'transfer' of the property by the death of the decedent, or a receipt of it by right of succession, [IN OTHER WORDS, THE MERE FACT THAT AN EVENT HAS OCCURRED DOESN’T MAKE THAT EVENT TAXABLE] but whether the death has brought into being or ripened for the survivor, property rights of such character as to make appropriate the imposition of a tax upon that result…” Tyler v. United States, 281 U.S. 497, (1930)

[Note: The word ‘rights,’ as used here, refers not to any ‘unalienable right,’ but to a legal right granted by the state (i.e., a privilege) which is enforceable against other potential claimants.]

EXCISES TAX BOTH EVENTS AND NON-EVENTS
Although various excises do tax events, there are many excises which encumber NON-events, thus destroying the “event” definition for the lack of uniqueness or exclusivity which all definitions MUST have. (Else they are not definitions.) These include:

• Licenses and permits - Federal licenses confer special status (state of being) on the applicant. They do not tax a particular event. The tax must be paid regardless of whether the person then chooses to exercise the associated privilege. These are “state of being” taxes. The sheer number of federal licenses makes them too numerous to list. (By the way, fees associated with licenses ARE excises: “Excises are taxes laid upon…licenses to pursue certain occupations…” Flint v. Stone Tracy.)

• Excises under 26 IRC, Subtitle E, including:
• Sec. 5111 - Dealer Tax - “Every wholesale dealer in liquors (state of being) shall pay a special tax of $500 a year.”
• Sec. 5131- Eligibility Tax - Any person using distilled spirits on which the tax has been determined…on payment of a special tax per annum, shall be eligible (state of being) for drawback…”
• Sec. 5801 - Occupational Tax - “[E]very importer, manufacturer, and dealer in firearms (state of being) shall pay a special (occupational) tax for each place of business at the following rates…”
• Sec. 5731 - Occupational Tax - “Every person engaged in business as…a manufacturer (state of being) of tobacco products …of cigarette papers and tubes, or…an export warehouse proprietor, shall pay a tax...”
• Sec. 5081 - Occupational Tax - “Every proprietor of…a distilled spirits plant (state of being)…shall pay a tax of $1,000 per year in respect of each such premises.”
• Sec. 4411 - Occupational Tax - “There shall be imposed a special tax of $500 per year to be paid by each person who is liable for (state of being) the tax imposed under section 4401...”

SEVERAL DIRECT TAXES--WHICH ARE NOT EXCISES--DO, IN FACT, TAX EVENTS.
If the “event” definition of excise is correct, then no other tax should be able to tax an event. (Again, the exclusivity principle.) But this is not the case. For example, poll taxes--which encumber the event of “voting”--are considered Direct taxes, not excises:

• The Supreme Court says - “But even without this additional limitation [the prohibition on taxing exports by the states], one kind of tax that duties almost certainly did not encompass were "direct" taxes, such as property taxes and poll taxes.” Camps Newfound/Owatonna, Inc., Petitioner v. Town of Harrison, Maine, et al. on writ of certiorari to the supreme judicial court of Maine (1997).

• Do “poll” taxes refer to the “event” of voting? The Supreme Court seems to think so - “Judge Thornberry, speaking for the three-judge court which recently declared the Texas poll tax unconstitutional, said: ‘If the State of Texas placed a tax on the right to speak at the rate of one dollar and seventy-five cents per year, no court would hesitate to strike it down as a blatant infringement of the freedom of speech. Yet the poll tax as enforced in Texas is a tax on the equally important right to vote.’ 252 F. Supp. 234, 254 (decided February 9, 1966).” Justice Douglas of the Supreme Court quoting Texas Judge Thornberry in a supporting footnote in Harper v. Virginia Board of Elections, 383 U.S. 663 (1966).

Capitations also tax an assorted list of events (though most have been declared illegal on other grounds):

• The Supreme Court properly refers to a tax on the movement of people across state boundaries -- an event -- as a capitation. “In the Crandall Case, while the court…doubted whether a capitation tax imposed…upon persons leaving the state…violated the commerce clause…it was distinctly held that the tax did affect the rights of citizens under the federal government so as to invalidate the act imposing the tax.” Colgate v. Harvey, 296 U.S. 404 (1935) / Crandall v. State of Nevada, 73 U.S. 6 Wall. 35 35 (1867).

• The Supreme Court rules that a general tax on the right of people to conduct business would be a Direct tax on the exchange of property--requiring many “events”: “A tax upon the privilege of selling property at the exchange, and of thus using the [privileged] facilities there offered in accomplishing the sale, [is an excise and] differs radically from a tax upon every sale made in any place. The latter tax is really and practically [a Direct tax] upon property. It takes no notice of any kind of privilege or facility, and the fact of a sale [“event”] is alone regarded.” Nicol v. Ames, 173 U.S. 509 (1899)

• The Supreme Court calls a tax on the arrival of passengers in New York and Boston -- which is an “event” -- a capitation: “[Even if one were to] concede the full municipal power in the State to tax all persons within her territory…still she could not impose a capitation tax on these passengers by the hand of her own tax-collector… without violating the Constitution, various acts of Congress, and a most important commercial treaty.” Smith v. Turner, 48 U.S. 283 (1849).

• The Supreme Court rules that a tax on the exercise of any right guaranteed by the Constitution -- even though the exercise of these rights implies that “events” will take place -- is unconstitutional, and thus not taxable. NOT EVEN as an “excise on an event”: “The First Amendment…declares that 'Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press ....' It could hardly be denied that a tax laid specifically on the exercise of those freedoms would be unconstitutional.” Murdock v. Pennsylvania, 319 U.S. 105 (1943)

• The Supreme Court hints that capitations are not limited to the “state-of-being” formula, but encompasses other things [events?] as well: “But by the [Virginia] tax act of March 15, 1884, it was provided that…the several treasurers of the commonwealth should have the tax-bills in their counties and corporations so made out as to specify the amount of the tax due from each tax-payer…including the capitation taxes of whatever kind or nature…” (McGahey v. State of Virginia, 135 U.S. 662 (1890))

• Capitations are defined to include “direct taxes upon the wages of labor” (Adam Smith). This is speaking about getting paid in connection with earning a living, which consists of many related events.

SUMMARY
The “event” definition of excise is in error because it is not sufficiently exclusive. Excises are not limited to “events.” There exist other taxes which also tax “events.” And no court has ever declared an excise to be nothing more than a tax on an “event,” or strictly dependent on an “event” taking place.

Indeed the “event” definition seems to be a relatively recent construct, although the reason for its late deployment remains something of a mystery. I leave such speculation to others.

Rest assured, however, the Framers did NOT give Congress unlimited authority to tax any-and-all events which, under the “event” formulation of excises, it would possess. Any such ruling would effectively turn 350 million people into slaves of the federal government, which then could regulate our every move by simply imposing a corresponding “event” tax. In the Land of the Free, that proposition is both preposterous and repugnant. (Although it might work in Russia, China, or Cuba.)

Again, Murdock: “The First Amendment…declares that 'Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press ....' It could hardly be denied that a tax laid specifically on the exercise of those freedoms would be unconstitutional.”

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PROVING THE ‘PRIVILEGE’ DEFINITION
Now as to the “privilege” definition -- that is, the notion that excises are levied exclusively on special, privileged, or luxury items and activities -- I shall hold myself to the same standard. I must prove:

1. That at least one court has appositively ruled that an excise is defined STRICTLY as a tax on privilege or luxury, which is to say, not on any item or activity of common right. This must be supported by…
2. Proof that NO excise taxes an unalienable right, and…
3. Proof that NO DIRECT tax strays into the exclusive domain of the excise by taxing a privilege.

All of this is easy to do…

COURT DEFINITION
The Supreme Court has told us plainly that an excise BY DEFINITION is a tax on PRIVILEGE, not even mentioning the word “event”:

• “Excises are taxes laid upon the manufacture, sale, or consumption of commodities within the country, upon licenses to pursue certain occupations, and upon corporate privileges... the requirement to pay such taxes involves the exercise of privileges.” (Flint)

• “[I]mposts and duties…are essentially taxes on the commercial privilege of bringing goods into a country…” Michelin Tire Corp. v. Wages, 423 U.S. 276 (1976)

• “It has frequently been said that a use tax, like a sales tax, is an excise or privilege tax different in kind from a tax on property. E.g., Monamotor Oil Co. v. Johnson, 292 U.S. 86, 93 ; Bowman v. Continental Oil Co., 256 U.S. 642, 649 .” Sullivan v. United States, 395 U.S. 169 (1969). TRANSLATION: ‘USE TAXES’ AND ‘SALES TAXES’ ALL COME UNDER THE MUCH BROADER CATEGORY OF INDIRECT ‘EXCISES,’ WHICH IS TO SAY, ‘PRIVILEGE TAXES’-- NOT ‘EVENT TAXES.’ THIS WOULD HAVE BEEN THE PERFECT OPPORTUNITY TO USE THE PHRASE, IF THE ‘EVENT’ DEFINITION WERE TRUE.
  

Additional courts, whom I presume are staffed with and presided over by “legal scholars,” concur with that opinion:

• “The term ‘excise tax’ is synonymous with ‘privilege tax’, and the two have been used interchangeable.” (American Airways v. Wallace, 57 F.2d 877, 880)

• “Whether a tax is characterized in a statute imposing it, as a privilege tax or an excise tax is merely a choice of synonymous words, for an excise tax is a privilege tax.” (Foster & C. Co. v. Graham, 154 Tenn. 412, 285 S.W. 570, 47 ALR 971.)

• “An ‘excise tax’ is often used synonymous with ‘privilege’ or ‘license tax‘.” (Shannon v. Streckus Steamers, 279 Ky. 649, 131 S.W.2d 833, 838.)
  

For good measure, I will add the opinion of men who had a hand in the actual creation and defense of the Constitution. (Your objections to Adam Smith are addressed at the very end of this message. As for Hamilton, I have no idea why you would reject the opinions of a man who co-authored the Federalist, and who also served as our nation’s first tax czar.)

Adam Smith - The Wealth of Nations

• Excises may only tax luxuries

"The duties of excise are imposed briefly upon goods of home produce destined for home consumption. They are imposed only upon a few sorts of goods of the most general use. There can never be any doubt either concerning the goods which are subject to those duties, or concerning the particular duty which each species of goods is subject to. They fall almost altogether upon what I call luxuries, excepting always the four duties above mentioned, upon salt soap, leather, candles, and, perhaps, that upon green glass." [Book V, Ch. 2, Para. V.2.164]

• Excises tax only a few items, not all items

"In order that the greater part of the members of any society should contribute to the public revenue in proportion to their respective expence, it does not seem necessary that every single article of that expence should be taxed. The revenue which is levied by the duties of excise is supposed to fall as equally upon the contributors as that which is levied by the duties of customs, and the duties of excise are imposed upon a few articles only of the most general use and consumption." [Book V, Ch. 2, Para. V.2.176]

• The masses should not pay excises on essential items

"It must always be remembered, however, that it is the luxurious and not the necessary expence of the inferior ranks of people that ought ever to be taxed." [Book V, Ch. 2, Para. V.2.189]

• Excises are generally repugnant, and should be limited in scope

"Taxes upon luxuries generally are, and always may be, paid piecemeal, or in proportion as the contributors have occasion to purchase the goods upon which they are imposed… They offend in every respect against the fourth [maxim of fair taxation.]" [Book V, Ch. 2, Para. V.2.205]

• Any tax on a necessity is a direct tax, as opposed to an excise

"It is thus that a tax upon the necessaries of life operates exactly in the same manner as a direct tax upon the wages of labour… [Such taxes are] absurd and destructive." [Bk. V, Ch. 2, V.2.150 and 135]

Alexander Hamilton - The Federalist Papers

• No. 21 - Excises can only be placed on objects proper for such a tax

"There is no method of steering clear of this inconvenience, but by authorizing the national government to raise its own revenues in its own way. Imposts, excises, and, in general, all duties upon articles of consumption, may be compared to a fluid, which will, in time, find its level with the means of paying them. The amount to be contributed by each citizen will in a degree be at his own option, and can be regulated by an attention to his resources. The rich may be extravagant, the poor can be frugal; and private oppression may always be avoided by a judicious selection of objects proper for such impositions. If inequalities should arise in some States from duties on particular objects, these will, in all probability, be counterbalanced by proportional inequalities in other States, from the duties on other objects."

• No. 12 - Excises must be confined to a limited number of special items

"In America, it is evident that we must a long time depend for the means of revenue chiefly on such duties. In most parts of it, excises must be confined within a narrow compass. The genius of the people will ill brook [that is, not tolerate] the inquisitive and peremptory spirit of excise laws. The pockets of the farmers, on the other hand, will reluctantly yield but scanty supplies, in the unwelcome shape of impositions on their houses and lands; and personal property is too precarious and invisible a fund to be laid hold of in any other way than by the inperceptible agency of taxes on consumption…

"In this country, if the principal part [of revenues] be not drawn from commerce, it must fall with oppressive weight upon land. It has been already intimated that excises, in their true signification, are too little in unison with the feelings of the people, to admit of great use being made of that mode of taxation; nor… are the objects proper for excise sufficiently numerous to permit very ample collections in that way."

• No. 35 - Excises tax particular goods, not all goods

"They would not, therefore, in this mode alone contribute to the public treasury in a ratio to their abilities. To make them do this it is necessary that recourse be had to excises, the proper objects of which are particular [privileged, luxurious] kinds of manufactures."

NO EXCISE TAXES THE EXERCISE (EVENT) OF ANY UNALIENABLE RIGHT
The list of excises in the IRC is extensive. However, after some research, I am unable to find a single excise that taxes any unalienable right. If you know of one, I would appreciate a reference so I may review it. In the meantime, I feel confident in the position that…NO EXCISE departs the realm of “privilege” by taxing the exercise (“event”) of any natural right. This maintains the integrity and exclusivity of the “privilege“ definition.

NO DIRECT TAX STRAYS INTO THE DOMAIN OF EXCISES BY TAXING A PRIVILEGE
I am unaware of any Direct tax which encumbers a privilege. Direct taxes only encumber rights, leaving the taxation of privilege exclusively to excises, duties and imposts. Specific case law examples of Direct taxes are hard to come by, since Congress and the states rarely attempt to impose them. Nevertheless, the list below is sufficient to make the point:

• Poll Tax = Direct tax on the RIGHT to vote. (Too many cases to cite.)

• Border Crossing Tax = Direct tax (“capitation”) on the RIGHT to move across state boundaries. (Crandall)

• Port Entry Tax = Direct tax (“capitation”) on the RIGHT of citizens to enter a U.S. port. (Smith)

• Property Tax = Direct tax on the RIGHT to own real estate (must be apportioned).

• A tax on ANY unalienable RIGHT = Direct tax (Illegal. See Bill of Rights and Murdock.)

Again, the integrity and exclusivity of the “privilege” definition are preserved.

SUMMARY
The “privilege” definition of excise is correct. It is supported by the explicit statements of the U.S. Supreme Court, as well as by many other courts. It is supported by the fact that excises never stray from taxing “privilege” (by extending its reach to unalienable rights.) And the opposing class of taxes -- Direct taxes -- never infringe on the exclusive domain of excises by taxing a privilege.

Further, the known body of excises in the United States has always been limited to things of a special, privileged, or luxurious nature. These include excises (presently or formerly) on:

• Yachts
• Jewelry
• Playing Cards
• Sugar
• Gambling
• Tobacco
• Alcohol
• Fuel & Coal
• Special tires
• Special vaccines
• Foreign Insurance Policies
• Certain Recreational Items
• Luxury automobiles
• Luxury Cruises (defined as overnight cruises or those dedicated to gambling)
• All manner of federal licenses (privilege, not right)
• All manner of stamp taxes (privilege, not right)
• Transfers of estate (privilege, not right)
• Machine guns, and certain shotguns and other specially defined weapons

Thus, the statement that excises can be defined as taxes on “privilege” (meaning things not of common right) is correct.
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CONCLUSION
In view of all the above, I see no reason why you should not let my paragraphs stand, or submit this to mediation. I respectfully ask you to do one or the other.

All the best,

Dolphin52

U.S. SUPREME COURT - “Excises are taxes laid upon the manufacture, sale, or consumption of commodities within the country, upon licenses to pursue certain occupations, and upon corporate privileges... the requirement to pay such taxes involves the exercise of privileges.” (Flint)

PS - SEE MORE DISCUSSION BELOW…

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ON THE OPINIONS OF STATE COURTS
In your rebuttal you state that only the opinion of federal courts should be considered regarding the constitutional meaning of “excise.” This is in error. Indeed, if we’re going to pretend that a Wikipedia article must abide by strict rules of evidence in order to be valid, then the only court to which any of us should appeal regarding the meaning of a term found in the Constitution is the U.S. Supreme Court (Marbury). (In which case we’ll have to disallow the lower court [7th Cir.] ruling you cited in your own response.) However, I think we can agree that Wikipedia articles are not subject to the same rigorous standard as briefings presented to the Nine, and are meant only to provide the general public with an accurate grasp of the concept under consideration.

Therefore, unless we’re willing to stipulate that state benches are occupied by ignoramuses, citing the relevant opinions of the justices who serve on those benches fulfills the intended purpose of this article and is well within the guidelines of good research and scholarship.

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ON THE CLAIM THAT “VIRTUALLY ANY EVENT” IS TAXABLE AS AN EXCISE
The statement that “virtually any event“ is taxable as an excise is preposterous. That would mean that events such as attending school, or attending church, or making a political speech, or carrying arms for self-defense, or traveling from one place to another, or receiving medical care, or having children, or eating dinner, or the exercise of any other unalienable right, can be taxed. We all know better…

In truth, the “events” I just mentioned -- and many other similar “events,” previously cited -- are not taxable as excises, and no court in the United States has ever ruled otherwise. Were a court to do so, it would be in flagrant violation of the Constitution and the Bill of Rights:

U.S. SUPREME COURT - “The First Amendment…declares that 'Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press ....' It could hardly be denied that a tax laid specifically on the exercise [event] of those freedoms would be unconstitutional.” Murdock v. Pennsylvania, 319 U.S. 105 (1943)

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ON THE TERM “TAXABLE EVENTS”
The appearance of this term in less than 1% of all federal cases over the last century -- tax court cases included -- is hardly impressive. I should also point out that the mere use of a term does not magically confer validity on the concept. If it did, I should win the argument by simply mentioning the countless times the word “privilege” is used in connection with excises in the decisions of the same courts. At any rate…

It is true that certain events are taxable under an excise, and that courts have referred to so-called “taxable events” in many of these decisions. It is not true, however, that “virtually any event” can be taxed. The very phrase taxable event implies there are events which are NOT taxable as an excise, else the term would simply be event.

The thing which makes an event “taxable” as an excise is the involvement of privilege or luxury. Congress has never written a law deeming an event “taxable” as an excise simply because “something occurs.” Instead it specifically targets those things which are considered special, privileged, or luxurious. (See any excise under Title 26 IRC.) Once we understand this, we can determine which activities are “taxable events” in the constitutional sense and which aren’t. Without this understanding, the term “taxable event” has no constitutional meaning.

Simply put:

A) “Taxable events” are those activities pertaining to privilege or luxury. The taxes associated with them fall under the broader category of taxes known as “excises” or “privilege taxes.” [See my previous comments on Sullivan, Tyler, and Manufacturers National Bank.]

B) “Not-taxable events” DO exist, and include (at the very least) activities pertaining to unalienable rights. These may not be taxed without violating the Constitution. (The only exception is a tax on the right to own property, which must be apportioned. Certain capitations might also be taxable, but complying with the apportionment clause is problematic.)

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ON THE MEANING OF ‘DIRECT TAXES’
You correctly state in your rebuttal that “Direct taxes have been defined by the U.S. Supreme Court as being limited to capitations and taxes on property by reason of its ownership…” You then do a good job of expounding on property taxes, explaining the Pollock exception. But, critically, you completely gloss over the meaning of capitations, failing to mention ANY of the kinds of things that are taxable under a capitation. This cannot be overlooked, because we’re trying to establish whether “events” are the exclusive province of excises. In point of fact, they’re not. Capitations ALSO encumber events. These include poll taxes (voting taxes), port entry taxes, border crossing taxes, and any tax that would try to encumber the exercise of an unalienable right. Although such taxes are not permitted in the United States, they are nevertheless “Direct” within the constitutional meaning of term. And they encumber EVENTS.

Therefore, events are NOT the exclusive domain of excises.

And that means “excises” do not own the “event” definition, within the constitutional meaning of the term.

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ON ADAM SMITH
I’m not sure why you hold Adam Smith in such low esteem. The Supreme Court apparently thinks quite a lot of him. The Court has quoted or relied upon Smith in at least 7 rulings and dissents, from 1796 to 2007. I don’t have time to research every case, but I’d be willing to bet that aside from the founding fathers themselves, few people are quoted by the high court as an authority on the meaning of constitutional terms as often as Adam Smith is. If Adam Smith is good enough for the Supremes, he ought to be good enough for this article.

• UNITED STATES v. MILLER, 307 U.S. 174 (1939)

Justice McReynolds (opinion): “Adam Smith's Wealth of Nations, Book V. Ch. 1, contains an extended account of the Militia. It is there said: 'Men of republican principles have been jealous of a standing army as dangerous to liberty.'”

• UNION REFRIGERATOR TRANSIT CO. v. COM. OF KENTUCKY, 199 U.S. 194 (1905)

Justice Brown (opinion): “Most modern legislation upon this subject has been directed (1) to the requirement that every citizen shall disclose the amount of his property subject to taxation, and shall contribute in proportion to such amount; and (2) to the avoidance of double taxation. As said by Adam Smith in his Wealth of Nations, Book V. chap. 2, pt. 2, p. 371: 'The subjects of every state ought to contribute towards the support of the government as nearly as possible in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state.”

• POLLOCK v. FARMERS' LOAN & TRUST CO., 157 U.S. 429 (1895)

Justice Fuller (opinion): “The Federalist demonstrates the value attached by Hamilton, [157 U.S. 429, 559] Madison, and Jay to historical experience, and shows that they had made a careful study of many forms of government. Many of the framers were particularly versed in the literature of the period,-Franklin, Wilson, and Hamilton for example. Turgot had published in 1764 his work on taxation, and in 1766 his essay on 'The Formation and Distribution of Wealth,' while Adam Smith's 'Wealth of Nations' was published in 1776. Mr. Justice Paterson concluded: 'All taxes on expenses or consumption are indirect taxes A tax on carriages is of this kind, and, of course, is not a direct tax.' This conclusion he fortified by reading extracts from Adam Smith on the taxation of consumable commodities.”

• HYLTON v. U S, 3 U.S. 171 (1796)

Justice Paterson (seriatim opinion): “Indirect taxes are circuitous modes of reaching the revenue of individuals, who generally live according to their income. In many cases of this nature the individual may be said to tax himself. I shall close the discourse with reading a passage or two from Smith's Wealth of Nations.” [Goes on to quote from Smith extensively.]

• BELL ATLANTIC CORP. et al. v. TWOMBLY et al. (2007)

Justice Stevens (dissenting): “Even if I were inclined to accept the Court's anachronistic dichotomy and ignore the complaint's actual allegations, I would dispute the Court's suggestion that any inference of agreement from petitioners' parallel conduct is "implausible." Many years ago a truly great economist perceptively observed that ‘[p]eople of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.’“ A. Smith, An Inquiry Into the Nature and Causes of the Wealth of Nations, in 39 Great Books of the Western World 55 (R. Hutchins & M. Adler eds. 1952).

• CENTRAL HUDSON GAS & ELEC. v. PUBLIC SERV. COMM'N, 447 U.S. 557 (1980)

Justice Rehnquist (dissenting): “The view apparently derives from the Court's frequent reference to the ‘marketplace of ideas,’ which was deemed analogous to the commercial market in which a laissez-faire policy would lead to optimum economic decision-making under the guidance of the ‘invisible hand.’” See, e.g., Adam Smith, Wealth of Nations (1776).”

• IN RE SLAUGHTER-HOUSE CASES, 83 U.S. 36 (1872)

Justice Field (dissenting): “The fourteenth amendment, in my judgment, makes it essential to the validity of the legislation of every State that this equality of right should be respected… And it is to me a matter of profound regret that its validity (the validity of Louisiana’s contrary act) is recognized by a majority of this court, for by it the right of free labor, one of the most sacred and imprescriptible rights of man, is violated. [39] 'The property which every man has in his own labor,' says Adam Smith, 'as it is the original foundation of all other property, so it is the most sacred and inviolable. The patrimony of the poor man lies in the strength and dexterity of his own hands; and to hinder him from employing this strength and dexterity in what manner he thinks proper, without injury to his neighbor, is a plain violation of this most sacred property.’”

Dolphin52 (talk) —Preceding unsigned comment added by 75.66.187.71 (talk) 21:14, 28 April 2008 (UTC)

Famspear response

Dear Dolphin52: I didn't realize that you were going to all this trouble. I'm sorry, but the term "taxable event" is the term used by the courts. I think you are going off on a tangent by arguing that the term "taxable event" is not defined in the court cases (see below). Let's go back to some of the language that IP75.66.187.71 inserted:

Therefore, excises are strictly limited to taxing items of privilege and luxury. In other words, they may not tax any item or activity of common right.

That statement is incorrect under present federal constitutional law in the United States. The term excise in the constitutional sense means essentially any tax whatsoever (with one exception I'll describe in a moment) other than (1) a tax on property by reason of its ownership, or (2) a capitation.

Further, on the taxation of an "item or activity of common right," I would point out that tax protesters have tried to make arguments similar to that with respect to federal income tax -- for example, arguing that "labor" is an activity that someone may engage in as of common right (or words to that effect), and that therefore Congress may not properly impose a tax on income from labor. There is absolutely no valid legal basis for such an argument. None. Every single court that has ruled on that argument has rejected it. Every single time, since the Constitution was ratified.

A tax on income from property in the form of rents, dividends or interest may or may not be "classified" as an excise depending on how you interpret Pollock and Brushaber and various other court cases. But regardless of whether rents, dividends and interest income are technically considered direct taxes or, alternatively, excises or, alternatively, "excises treated formerly as direct taxes but now treated as excises again," or however you want to say it -- taxes on rents, dividends and interest are indeed treated as excises today for purposes of the apportionment requirement. Reason? The Sixteenth Amendment. That means that such taxes are not required to be apportioned. (No federal income tax is required to be apportioned.)

The legal term "excise" has more than one legal meaning, so that might be hanging you up. Here, we are not talking about a statutory excise, we are talking about the term "excise" as used in the U.S. Constitution. Example: the federal income tax on compensation for personal services is not classified as an "excise" tax in the Internal Revenue Code. It IS, HOWEVER, classified as an excise as that term is used in the Constitution. Same legal term, but two different legal meanings.

The issue is not whether "taxable event" is or is not defined somewhere. I cited the cases that I cited to show you that "taxable event" is a legal term. The fact that you cannot find a definition for the term in the case is of no moment. (Again, for example, tax protesters have made the nonsensical argument that because "income" is not defined in the Internal Revenue Code, the income tax laws are invalid, ineffective, etc., etc.)

Contrary to what many non-lawyers may think, there is simply no blanket legal requirement that a particular legal term be "defined" somewhere. In fact, the Constitution itself is full of legal terms that are not defined in the Constitution. Federal statutes are full of legal terms that are not defined in the statutes. Yes, many important legal terms are formally defined. However, many others are not. Too bad.

Many words found in the Constitution or the statutes are defined not the Constitution or the statutes, but in court decisions. But the lack of a definition does not change anything from a legal standpoint. The point is that the material that was added by IP75.66.187.71 to the Wikipedia article was incorrect and was not properly sourced AND might have been prohibited original research (as that term is used in Wikipedia).

The statement that "Capitations ALSO encumber events" is incorrect. Capitations do not include poll taxes in the sense of voting taxes. Further, "port entry taxes" and "border crossing taxes" are NOT capitations.

The term "poll tax" when used in connection with "capitation" (in the Constitutional sense) means a "head tax" ("capitation") - a tax imposed on each person by virtue of the fact that he or she is a person, regardless of whether any "event" has occurred.

When you say "poll tax," you are thinking of a "voting tax" -- the kind of poll tax that used to be imposed when people "went to the polls" in the sense that they went to the voting booths to vote. When someone goes to the polls, that's an EVENT. You're not being taxed there because you're a PERSON, you're being taxed because you're VOTING. The places where people vote are sometimes called "the polls." That's two different legal meanings for the term "poll tax."

Further, the statement that an excise is an event tax -- a tax on an event (and "taxable event" is the term the courts use in their decisions) is basically correct. If you think you can find an example of an excise (an indirect tax) -- as that term is used in the United States Constitution -- that does not constitute a tax on an event, then we'll look at that.

Finally, on Adam Smith, you are quite incorrect. Here's what you said:

I don’t have time to research every case, but I’d be willing to bet that aside from the founding fathers themselves, few people are quoted by the high court as an authority on the meaning of constitutional terms as often as Adam Smith is. If Adam Smith is good enough for the Supremes, he ought to be good enough for this article.

This highlights a basic flaw in your analysis. For the Supreme Court to quote Adam Smith is one thing. For us to imply that Adam Smith supplies the correct legal definition of "excise" as used by the U.S. Supreme Court or any other federal court (if that's what you're trying to imply) is incorrect.

And I hate to be the one to break the news to you, but if you're a lawyer and you are down to the point of citing Adam Smith, an 18th century economist, for a point of law in a U.S. federal court, you had better have a darn good reason for doing so, or you are going to look silly. That does not mean that no one has ever done it without a good reason. What that does mean is that Adam Smith is not really a source you would want to be citing for authority in a U.S. court (or in Wikipedia) in the year 2008 if you can find something better. And if you can't find something better, you are in big trouble. And if you do not understand why I am saying this, you are definitely into this discussion way over your head.

Tellingly, you state that you don't have time to research every case. That simply is not acceptable if you are quoting from court cases and you haven't even read the full texts of the cases. When you cite a case in Wikipedia, you should be clear about whether the court in that case actually ruled the way you are implying the court ruled. If you haven't even briefed the case, you will almost certainly be leading yourself astray. On the cases you cited above, you may want to read the Wikipedia articles on Precedent and Stare decisis and Obiter dicta. I notice that you supply quotations from the cases, and then provide your own conclusion about what the quotations mean. Your interpretations are at a minimum problematic and in some cases blatantly wrong, and certainly do not support the material that was removed from the article. Further, many of these cases (such as Murdock) are already covered in Wikipedia articles -- those cases do not mean what you apparently think they mean. Famspear (talk) 22:31, 28 April 2008 (UTC)

Just as a follow-up, you state that I have not proven that "ANY event" can be taxed as an excise. Well, that's because I'm not trying to prove that ANY event can be taxed as an excise. And I did not say that ANY event could be taxed as an excise. What I said was:

"virtually ANY EVENT CAN INDEED BE TAXED UNDER THE U.S. CONSTITUTION AS AN EXCISE."

You missed the key word "virtually" -- and I'll assume that's partly my fault, as I did not put the word in all caps with the rest of the verbiage. "Virtually" means "almost entirely" or "for all intents and purposes". See Webster's New Collegiate Dictionary, p. 1307, G.&C. Merriam Co. (8th ed. 1976). The point of using the word "virtually" was to show that there are exceptions. For the intents and purposes of my discussion, I was pointing out that VIRTUALLY any kind of excise can be validly imposed.

I may also have confused you in the immediately following sentence. When I referred to "A notable example" being "exports from a state," I was referring to a notable example of an exception to the rule. By using the word "virtually," and by giving a specific example of where an excise was ruled unconstitutional, and by using the word "A" (as in "A notable example, and not THE ONLY notable example), I was pointing out that there are some examples of exceptions to the rule. I did not intend to list out every possible example of an exception. You may have missed that point.

By the way, another example of an exception (to the general rule that virtually any kind of excise can be validly imposed) would be found in Harper v. Virginia Board of Elections, 383 U.S. 663 (1966), which I believe you yourself cited. But in Harper, the tax in question, which conditioned a right to vote in a state election on the payment of a fee or tax, was ruled to have violated the Equal Protection Clause of the Fourteenth Amendment. That's why the Court ruled it to be unconstitutional.

See also the 24th Amendment. Under that Amendment, the right of U.S. citizens to vote for President, Vice President, U.S. Senator, or U.S. Representative cannot be denied for failure to pay "any poll tax or other tax." I guess you could argue about whether this provision invalidates the tax itself, or merely invalidates the ability of the government to deny the vote to a person who didn't pay the tax (I don't remember how the rule works), but this could be another possible example of an exception to the rule that virtually any excise can be validly imposed.

In other words, although the courts have more or less said that the power to tax is almost unlimited, there are SOME limits to the Congressional taxing power.

Regarding the rest of your material, I'll try to analyze at least some of it bit by bit over time. Yours, Famspear (talk) 03:00, 29 April 2008 (UTC)

Excises in the U.S.: Part III

Dear Famspear,

For the moment let’s put Direct taxes aside, which is a corollary to, but not essential part of, my position. The issue is to find the true meaning of “excise.” Your stance that excises may tax “virtually any event,” despite the consistent, explicit, and copious evidence that excises are taxes on privilege, is a complete mystery. After the clear and appositive statements of the Supreme Court, the lower courts, federal law, and the men who helped create the Constitution, I‘m at a loss to understand how anyone can claim an excise is strictly an “event tax.” I don’t see the evidence for such a belief. Perhaps this explains, in part, why your rebuttal is (to my mind) less than convincing and consists of:

1) The fact that the phrase “taxable event” is a legal term. I have to respectfully ask, so what? The term’s existence actually works against you. It indicates that a given “event” requires some special characteristic to make it “taxable.” Otherwise the adjective (“taxable”) is totally superfluous. (And I don’t think anyone buys into the notion that the word “taxable” is needed to distinguish between “virtually all events” and the one un-taxable excise mentioned in the Constitution.)

2) Logical fallacies like the “estate transfer and income tax” argument. Trying to characterize a major subdivision of taxes by reference to a limited number of examples thereof, is on the order of saying , “All trucks have wheels; therefore anything with wheels is a truck.”

Let me see if I can put this more succinctly. The Supreme Court may have ruled that excises on “income derived from work” and “transfers of estates” are constitutional; but we cannot say “Therefore, virtually any event can be taxed as an excise.“ That’s quite a leap. Any reasonable person should be able to see that immediately. I might be willing to stipulate that any event which can be LAWFULLY taxed as an excise is a “taxable event” (such as the receipt of income, or the transfer of an estate.) But the position that “virtually any event can be taxed as an excise,” simply because SOME events are taxable, goes way beyond the limits of reason. It simply does not compute, no matter how much you wish it so.

3) Ad hominem arguments to the effect that I’m “in over my head”, and suggesting (incorrectly) that I haven’t read the relevant cases. (What I said was, I don’t have time to research the total number of SC cases that cite at least one Framer--an exercise totally unnecessary to make the point that was being made.)

In sum, these arguments do little but highlight serious flaws in the reasoning behind them. None of them support the conclusion you wish to draw, namely, that virtually any event can be taxed as an excise.

It would be helpful to your case if you could produce the opinion of at least one court that explicitly says excises are taxes on events by the SOLE reason of “something happening.” Or if you could produce the opinion of at least one court that explicitly says “virtually any event is taxable as an excise, including any unalienable right.” But you haven’t done so. This admits, if only from silence, that the “event” definition is not correct.

Meanwhile, the actual historical record is that Hamilton, Smith, the state courts, tax court, federal excise laws, and the U.S. Supreme Court give one, consistent testimony that excises are DEFINED as taxes on PRIVILEGE and LUXURY. And that means they CANNOT tax any unalienable right.

Keeping in mind stare decisis, precedent, and obiter dicta (which, as you know, does not necessarily negate the validity of a statement by the court, and is a highly subjective rule, at best), here’s a refresher:

1. The Supreme Court EXPLICITLY says excises ARE taxes on privilege and luxury.

U.S. Supreme Court - Flint v. Stone Tracy Co. “Excises are taxes laid upon the manufacture, sale, or consumption of commodities within the country, upon licenses to pursue certain occupations, and upon corporate privileges... the requirement to pay such taxes involves the exercise of privileges.” [EXCISES are taxes on PRIVILEGE.]

U.S. Supreme Court - Michelin Tire Corp. v. Wages, 423 U.S. 276 (1976) “[I]mposts and duties…are essentially taxes on the commercial privilege of bringing goods into a country…” [Imposts and duties (excises) are ESSENTIALLY taxes on PRIVILEGE.]

U.S. Supreme Court - Sullivan v. United States, 395 U.S. 169 (1969) “It has frequently been said that a use tax, like a sales tax, is an excise or privilege tax different in kind from a tax on property...” [EXCISE = PRIVILEGE TAX]

U.S. Supreme Court - Springer v. U.S. (1880) “Perhaps the two most authoritative persons in the convention touching the Constitution were Hamilton and Madison. The latter, in a letter of May 11, 1794, speaking of the [excise] tax which was adjudicated upon in Hylton v. United States…said, 'The [excise] tax on carriages succeeded in spite of the Constitution by a majority of twenty, the advocates of the principle being reinforced by the adversaries of luxury.' 2 Mad. Writings ( pub. by Congress), p. 14.” [EXCISES are taxes on LUXURY.]

U.S. Supreme Court - Knowlton v. Moore (1900) “[A]lthough they [excises on the transfer of an estate] have different accidental names, such as probate duties, stamp duties, taxes on the transaction, or the act of passing of an estate or a succession, legacy taxes, estate taxes, or privilege taxes, nevertheless tax laws of this nature in all countries rest in their essence upon the principle that death is the generating source from which the particular taxing power takes its being, and that it is the power [privilege] to transmit, or the transmission from the dead to the living, on which such taxes are more immediately rested. [‘PRIVILEGE TAX’ is a SYNONYM for ‘ESTATE TAX.’]

2. The lower courts, whom I presume are staffed with and presided over by “legal scholars,” EXPLICITLY equate excises with taxes on privilege and luxury:

Black v. State, 113 Wis. 205, 89 NW 522 "An excise tax is...a duty levied upon licenses to pursue certain trades or deal in certain commodities and upon official privileges."

American Airways v. Wallace, 57 F.2d 877, 880 “The term ‘excise tax’ is synonymous with ‘privilege tax’, and the two have been used interchangeable.”

Foster & C. Co. v. Graham, 154 Tenn. 412, 285 S.W. 570, 47 ALR 971. “Whether a tax is characterized in a statute imposing it, as a privilege tax or an excise tax is merely a choice of synonymous words, for an excise tax is a privilege tax.”

Shannon v. Streckus Steamers, 279 Ky. 649, 131 S.W.2d 833, 838. “An ‘excise tax’ is often used synonymous with ‘privilege’ or ‘license tax’.”

3. The known body of federal excises is restricted to special items of privilege and luxury:

· Yachts · Jewelry · Alcohol · Tobacco · Gambling · Fuel & Coal · Special tires · Estate transfers · Special vaccines · Certain recreational items · Gifts in excess of $10,000 · Foreign insurance policies · Certain Sales and Use taxes · Luxury cruises and automobiles · Machine guns and certain shotguns · Certain licenses, occupations, and investments · Long-distance phone calls (considered a luxury in 1898; the tax has since been repealed)

4. The Supreme Court has said that an excise CANNOT be defined strictly as a tax on “any event” or “virtually any event,” by reason of “something happening”:

U.S. Supreme Court - Tyler v. United States, 281 U.S. 497, (1930) “The question here, then, is, not whether there has been, in the strict sense of that word, a 'transfer' ["event"]of the property by the death of the decedent, or a receipt ["event"] of it by right of succession, [IN OTHER WORDS, THE MERE FACT THAT AN EVENT HAS OCCURRED DOESN’T MAKE THAT EVENT TAXABLE] but whether the death has brought into being or ripened for the survivor, property rights of such character as to make appropriate the imposition of a tax upon that result…”

5. The Supreme Court has said that excises encumber particular events, not “virtually any” event.

U.S. Supreme Court - Knowlton v. Moore, 178 U.S. 41 (1900) “Here we are asked to decide that a tax is a direct tax on property which has at all times been considered as the antithesis of such a tax; that is, has ever been treated as a duty or excise, because of the particular occasion which gives rise to its levy.

U.S. Supreme Court - United States v. Manufacturers Nat’l Bank, 363 U.S. 194, 80 S. Ct. 1103, 60-2 U.S. Tax Cas. (CCH) paragr. 11,954 (1960). “From its inception, the estate tax has been a tax on a class of events which Congress has chosen to label…‘the transfer of the net estate of every decedent.’ … [S]uch a tax has always "been treated as a duty or excise, because of the particular occasion which gives rise to its levy." Under the statute, the occasion for the tax is the maturing of the beneficiaries' right to the proceeds upon the death of the insured… The taxable "transfer" [NOT SIMPLY ‘THE TRANSFER’], the maturing of the beneficiaries' right to the proceeds, is the crucial last step in what Congress can reasonably treat as a testamentary disposition by the insured in favor of the beneficiaries… The maturing of the right to proceeds is therefore…an appropriate occasion for taxing the transaction to the estate of the insured.” [The estate tax, a type of excise, is limited to encumbering certain CLASSES of events which are APPROPRIATE to be taxed, because they are characterized by a CRUCIAL element, not simply because “something happens.”]

U.S. Supreme Court - Knowlton v. Moore (1900) [Citing French law to get the correct sense of estate excises.] “[A]t the present day in France inheritance and legacy taxes are enforced, being collectible as stamp duties. They are included officially under the general denomination of indirect taxes, for the reason that all inheritance and legacy taxes [types of excise] are considered as levied on the 'occasion of a particular isolated act.'”

6. Numerous federal excises DO NOT tax “events,” but “states-of-being,” thus negating the strict “event” definition: Excises under 26 IRC, Subtitle E:

Sec. 5111 - Dealer Tax - “Every wholesale dealer in liquors (state of being) shall pay a special tax of $500 a year.”

Sec. 5131- Eligibility Tax - Any person using distilled spirits on which the tax has been determined…on payment of a special tax per annum, shall be eligible (state of being) for drawback…”

Sec. 5801 - Occupational Tax - “[E]very importer, manufacturer, and dealer in firearms (state of being) shall pay a special (occupational) tax for each place of business at the following rates…”

Sec. 5731 - Occupational Tax - “Every person engaged in business as…a manufacturer (state of being) of tobacco products …of cigarette papers and tubes, or…an export warehouse proprietor, shall pay a tax...”

Sec. 5081 - Occupational Tax - “Every proprietor of…a distilled spirits plant (state of being)…shall pay a tax of $1,000 per year in respect of each such premises.”

Sec. 4411 - Occupational Tax - “There shall be imposed a special tax of $500 per year to be paid by each person who is liable for (state of being) the tax imposed under section 4401...”

These taxes confer a privileged status (state-of-being) on the licensee, and are paid independent of any specific transaction or event, either before or after issuance.

7. The Supreme Court has ruled that Congress DOES NOT have the power to tax “virtually any event.” If it did have such power, the Constitution itself would be destroyed:

U.S. Supreme Court - Bailey v. Drexel Furniture Co., 259 U.S. 20 (1922) “[Were we to] Grant the validity of this law…all that Congress would need to do, hereafter, in seeking to take over to its control any one of the great number of subjects of public interest [all of which involve “events”], jurisdiction of which the states have never parted with, and which are reserved to them by the Tenth Amendment, would be to enact a detailed measure of complete regulation of the subject and enforce it by a so-called tax upon departures [“events”] from it. To give such magic to the word 'tax' would be to break down all constitutional limitation of the powers of Congress and completely wipe out the sovereignty of the states.”

From this, it should be obvious that the power to tax “virtually any event with an excise” would open the door to legalized slavery by the federal government over the People. I’m pretty sure that’s not what the Framers had in mind when they wrote the greatest charter of Freedom the world has ever known. The “event” definition may be acceptable to courts in Russia, China, Cuba, or North Korea--but not in America. If for no other reason, the position that “virtually any event can be taxed as an excise” is in error.

8. The Supreme Court acknowledges that the best place to find the meaning of a word used in the Constitution is from the men who influenced, wrote, and defended the document. Some people are willing to casually dismiss Smith and Hamilton, or to claim their opinions are anachronistic. But the Supreme Court actively seeks their counsel. Among the many other books and commentaries that influenced the Framers, the Court has cited The Federalist and The Wealth of Nations dozens and dozens of times in seeking the meaning of constitutional terms. (Even as late as this century.) Go to http://www.findlaw.com/casecode/supreme.html, plug in the key words, and see how many times the Supremes have cited these men. Also note the following statements:

POLLOCK The words of the constitution are to be taken in their obvious sense, and to have a reasonable construction… the enlightened patriots who framed our constitution, and the people who adopted it, must be understood to have employed words in their natural sense, and to have intended what they have said.' …And in Rhode Island v. Massachusetts…Mr. Justice Baldwin, speaking for the court, observed: 'The solution of this question must necessarily depend on the words of the constitution, the meaning and intention of the convention which framed and proposed it for adoption and ratification to the conventions of the people of and in the several states, together with a reference to such sources of judicial information as are resorted to by all courts in construing statutes, and to which this court has always resorted in construing the constitution.'”

MORISSETTE v. UNITED STATES, 342 U.S. 246 (1952) “And where Congress borrows terms of art in which are accumulated the legal tradition and meaning of centuries of practice, it presumably knows and adopts the cluster of ideas that were attached to each borrowed word in the body of learning from which it was taken and the meaning its use will convey to the judicial mind unless otherwise instructed. In such case, absence of contrary direction may be taken as satisfaction with widely accepted definitions, not as a departure from them.” [Talking about traditional words used in statutes, but no less applicable to the incorporation of terms used in the Constitution by the Philadelphia Convention .]

CRAWFORD v. WASHINGTON (2004) [The court makes numerous references to men whose ideas influenced the Framer’s understanding of the terms that appear in the 6th Amendment: Blackstone, William Hawkins, G. Gilbert, one “Federal Farmer,” and many others. They also look for guidance to the state constitutions in existence at that time. The justices even cite Noah Webster’s definition of “testimony,” being much closer (1828) to the Constitution’s creation than we are today.]

How did the Framer’s understand the word “excise”? They said excises were taxes on PRIVILEGE and LUXURY:

Adam Smith - The Wealth of Nations

1. Excises may only tax luxuries

The duties of excise are imposed briefly upon goods of home produce destined for home consumption. They are imposed only upon a few sorts of goods of the most general use. There can never be any doubt either concerning the goods which are subject to those duties, or concerning the particular duty which each species of goods is subject to. They fall almost altogether upon what I call luxuries, excepting always the four duties above mentioned, upon salt soap, leather, candles, and, perhaps, that upon green glass. [Book V, Ch. 2, Para. V.2.164]

2. Excises tax only a few items, not all items

In order that the greater part of the members of any society should contribute to the public revenue in proportion to their respective expence, it does not seem necessary that every single article of that expence should be taxed. The revenue which is levied by the duties of excise is supposed to fall as equally upon the contributors as that which is levied by the duties of customs, and the duties of excise are imposed upon a few articles only of the most general use and consumption. [Book V, Ch. 2, Para. V.2.176]

3. The masses should not pay excises on essential items

It must always be remembered, however, that it is the luxurious and not the necessary expence of the inferior ranks of people that ought ever to be taxed. [Book V, Ch. 2, Para. V.2.189]

4. Excises are generally repugnant, and should be limited in scope

Taxes upon luxuries generally are, and always may be, paid piecemeal, or in proportion as the contributors have occasion to purchase the goods upon which they are imposed… They offend in every respect against the fourth [maxim of fair taxation.] [Book V, Ch. 2, Para. V.2.205]

5. Any tax on a necessity is a direct tax, as opposed to an excise

It is thus that a tax upon the necessaries of life operates exactly in the same manner as a direct tax upon the wages of labour… [Such taxes are] absurd and destructive. [Bk. V, Ch. 2, V.2.150 and 135]

Alexander Hamilton - The Federalist Papers

No. 21 - Excises can only be placed on objects proper for such a tax

There is no method of steering clear of this inconvenience, but by authorizing the national government to raise its own revenues in its own way. Imposts, excises, and, in general, all duties upon articles of consumption, may be compared to a fluid, which will, in time, find its level with the means of paying them. The amount to be contributed by each citizen will in a degree be at his own option, and can be regulated by an attention to his resources. The rich may be extravagant, the poor can be frugal; and private oppression may always be avoided by a judicious selection of objects proper for such impositions. If inequalities should arise in some States from duties on particular objects, these will, in all probability, be counterbalanced by proportional inequalities in other States, from the duties on other objects.

No. 12 - Excises must be confined to a limited number of special items

In America, it is evident that we must a long time depend for the means of revenue chiefly on such duties. In most parts of it, excises must be confined within a narrow compass. The genius of the people will ill brook [not tolerate] the inquisitive and peremptory spirit of excise laws. The pockets of the farmers, on the other hand, will reluctantly yield but scanty supplies, in the unwelcome shape of impositions on their houses and lands; and personal property is too precarious and invisible a fund to be laid hold of in any other way than by the inperceptible agency of taxes on consumption…

In this country, if the principal part [of revenues] be not drawn from commerce, it must fall with oppressive weight upon land. It has been already intimated that excises, in their true signification, are too little in unison with the feelings of the people, to admit of great use being made of that mode of taxation; nor… are the objects proper for excise sufficiently numerous to permit very ample collections in that way.

No. 35 - Excises tax particular goods, not all goods

They would not, therefore, in this mode alone contribute to the public treasury in a ratio to their abilities. To make them do this it is necessary that recourse be had to excises, the proper objects of which are particular [privileged, luxurious] kinds of manufactures.

The following sources are also instructive:

Elementary Catechism on the Constitution of the United States

“Excises are sums of money which must be paid to the Government, by persons who make certain [NOT “virtually any”] articles within the United States, in proportion to the quantity or value of the articles manufactured. “

Noah Webster's 1828 American Dictionary

“Excise - An inland duty or impost, laid on commodities consumed, or on the retail, which is the last stage before consumption; as an excise on coffee, soap, candles…” [All of which were luxuries at that time the book was published.]

Black's Law Dictionary

"Excise - A tax imposed on the performance of AN act [NOT “virtually any act”], the engaging in an occupation, or the enjoyment of a privilege." [Please note that if “the performance of an act” really means that “virtually any event can be taxed as an excise,” then adding “occupations“ and “enjoyment of a privilege“ is just wasted ink and paper.]

Your statement that the constitutional meaning of “excise” is a “legal question” is not quite accurate. It is not a legal question, as such; it is a constitutional question. The fact that “excise” appears in the Constitution means that neither judges, nor court precedent, nor federal statutes -- in and of themselves -- can define the term. We must go back to the Constitution’s creators, which is exactly where the Nine would go if the question were ever put to them directly. The Supreme Court would have to determine the Framer’s sense of the word, in order to say what it means. They would have to know the Framer’s intent and rule accordingly. The Supremes have no authority to establish the meaning of “excise” on their own. They can’t pull it out of thin air. Neither can they re-interpret the meaning to accommodate the latest political fad. (The creature cannot create its Creator.)

Good scholarship in this matter therefore REQUIRES seeking the mind of those who actually wrote, or influenced the writing of, the Constitution. (See Springer v. United States, for example.) The Supreme Court has done so hundreds of times in similar situations. Outside the fact that the Framer’s understanding of “excise” supports the “privilege” definition, I can’t understand why you’re prepared to jettison this fundamental rule of analysis.

CONCLUSION

The practical upshot of this very substantial evidence is that excises CANNOT tax any unalienable right:

U.S. Supreme Court - Murdock v. Pennsylvania, 319 U.S. 105 (1943)

“The First Amendment…declares that 'Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press ....' It could hardly be denied that a tax laid specifically on the exercise [event] of those freedoms would be unconstitutional.”

U.S. Supreme Court - Lopez v. United States (1995)

“The exchanges during the ratification campaign reveal the relatively limited reach of the Commerce Clause and of federal power generally. The Founding Fathers confirmed that most areas of life (even many matters that would have substantial effects on commerce) would remain outside the reach of the Federal Government.”

Thus, the position that an excise can tax “events,” or “virtually any event,” by reason of nothing more than the fact “something has happened,” represents a tortured and erroneous interpretation. It is unsupported by any meaningful evidence or logical reasoning. It is unsupported by any testimony from the Framers. It is unsupported by any federal statute. It is unsupported by any Supreme Court precedent or statement. It is unsupported by anything. Indeed, at least one court specifically rules out such an interpretation. And the existence of numerous excises on states-of-being (occupational taxes, for example) does the same. You haven’t even provided sourcing for your statements in the disputed section of the article (except one, which is inconsequential, and which I’m willing to stipulate.)

Excises in the United States have been/are/always will be limited strictly to special commodities and activities involving privilege and luxury. The assessment and collection of lawful excises are sometimes triggered by a defined transaction, or “taxable event.” However, it is not true that "virtually all events" are taxable under an excise. And it IS certain that no excise may tax the exercise (“event”) of any unalienable right.

In the interest of intellectual honesty and fairness to both sides, I therefore propose the following change to the paragraphs in question:

PROPOSED PARAGRAPHS

In the constitutional sense, an excise is a tax on certain commodities and activities which are considered special, luxurious, or privileged. Although the assessment and collection of an excise is often triggered by a specific event or transaction, it is the element of privilege or luxury that makes the tax an indirect excise. Therefore, while many “events” qualify to be taxed by Congress under an excise, many others do not. Events that do not qualify include: 1) exporting goods from a State, taxation of which is specifically prohibited by Article I, Sec. 9 of the Constitution; 2) exercising the right to vote, taxation of which was outlawed under the 24th Amendment; and 3) the exercise of any unalienable right, taxation of which is generally prohibited under the Bill of Rights and American legal tradition.

Recognizing the above constitutional limits, Congress has always imposed excises on such things as alcohol, tobacco, estate transfers, luxury automobiles, jewelry, certain occupations, and gifts in excess of $10,000, all of which can reasonably be characterized as privileged or luxurious. At the same time, Congress has never attempted to tax the attendance of school, or the attendance of church, or the carrying of weapons for self-defense, or the making of a political speech, or the right to trial by jury, or any other activity involving the exercise of a common right.

Adam Smith, whose book, The Wealth of Nations, served as the economic bible of America’s founding fathers when the Constitution was written, said excises may encumber "a few articles only" of things called "luxuries," and never on the "necessary expence" of the People. (See Book V, Chap. 2, Para. V.2.135/150/164/176/189.)

Alexander Hamilton, our nation’s first treasury secretary, a brilliant constitutional lawyer, and co-author of the Federalist Papers, said excises must be "confined within a narrow compass" to objects "proper for such impositions." (See Federalist 12, 21, and 35.)

The U.S. Supreme Court and many lower courts also acknowledge the “special” or “privilege” definition of excise:

• "Excises are taxes laid upon the manufacture, sale, or consumption of commodities within the country, upon licenses to pursue certain occupations, and upon corporate privileges... the requirement to pay such taxes involves the exercise of ’privileges '." Flint v. Stone Tracy Co. 220 U.S. 107 (1911)
  

• “The term ‘excise tax’ is synonymous with ‘privilege tax’, and the two have been used interchangeably." (American Airways v. Wallace, 57 F.2d 877, 880)
  

• “Whether a tax is characterized in a statute imposing it, as a privilege tax or an excise tax is merely a choice of synonymous words, for an excise tax is a privilege tax.” Foster & C. Co. v. Graham, 154 Tenn. 412, 285 S.W. 570, 47 ALR 971.
  

• “An ‘excise tax’ is often used synonymous with ‘privilege’ or ‘license tax‘.” Shannon v. Streckus Steamers, 279 Ky. 649, 131 S.W.2d 833, 838.
  

Of late, some sources have redefined “excise” as a tax on events (or “virtually any event”) by sole reason of “something happening.” However, this is not correct. In Tyler v. United States, the Supreme Court pointed out that it takes more than the mere occurrence of an “event” to make a given transaction taxable:

“The question here, then, is, not whether there has been, in the strict sense of that word, a 'transfer' of the property by the death of the decedent, or a receipt of it by right of succession, but whether the death has brought into being or ripened for the survivor, property rights of such character as to make appropriate the imposition of a tax upon that result…” (Emphasis added.)

Were the “event” definition permitted, virtually any transaction or happening could be taxed as an excise -- even the exercise of one’s unalienable rights -- and the constitutional proscription against infringing those rights would collapse:

“The First Amendment…declares that 'Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press ....' It could hardly be denied that a tax laid specifically on the exercise [event] of those freedoms would be unconstitutional.” U.S. Supreme Court - Murdock v. Pennsylvania, 319 U.S. 105 (1943)

Excises are best understood, therefore, as taxes on commodities and activities involving privilege and luxury, abstaining from anything connected with the exercise of unalienable rights.

[Appropriate footnotes to be added to these paragraphs.]

Regards,

Dolphin52

Dolphin52 (talk) 17:14, 7 May 2008 (UTC)

Dear Dolphin52: I've pretty much seen most of this before. I don't have the time to go through all this material with you and explain all the material for you. You might want to just summarize in a few brief sentences exactly what your point is, and then pick just two or three court cases that you believe support your position. If you want, just refer to the material you have already cited. Then we can discuss it. Yours, Famspear (talk) 01:12, 8 May 2008 (UTC)

Excise in the U.S. - Part IV

Dear Famspear,

Thank you for your response. My point is that excises are defined as taxes on privilege, not on events, per se. The article should be modified accordingly.

You’ve asked me to discuss two or three cases that support my position. This is unnecessary. I have already provided ample quotes of SC and lower court cases wherein the justices specifically acknowledge that excises are synonymous with privilege taxes. I also provided at least one case wherein the court says, regarding estate taxes, that it is NOT just the occurrence of an event which makes the transaction taxable, but the element of a privilege created by the state. On the other hand, you have provided no cases whatsoever wherein a court specifically says that excises are essentially event taxes, or that virtually any event is taxable under an excise. If you can provide such cases, I would be happy to look at them. In the meantime, I think it is obvious to anyone reading this blog that you really have no authoritative support for your position, other than your own logic, which is plainly in error. (See further down.)

Nevertheless, the following definition from Black’s Law Dictionary (8th ed.) may offer additional insight:

Indirect Tax (p. 1497) - A tax on a right or privilege, such as an occupation tax. An indirect tax is often presumed to be partly or wholly passed on from the nominal taxpayer to another person.

[The word “right,” as used here, means a right created by law, not an unalienable right.] Notice that a “tax on events” is not part of the definition. This is because excises, which are a subset of indirect taxes, are not defined as a tax on “virtually any event.” They are defined by the fact they encumber commodities, activities, and licenses which are privileged, luxurious, or special (such as a right created by law). Nothing more.

Excise (p. 605) - A tax imposed on the manufacture, sale, or use of goods (such as a cigarette tax), or on an occupation or activity (such as a license tax or an attorney occupation fee.)

Notice that states-of-being, such as being a lawyer, can be taxed under an excise. Therefore, excises are not restricted to “events.” Also note that Black does not say excises apply to “any” good, occupation, or activity. Just “goods…an occupation or activity.” Thus, the most we can derive from this is that SOME goods and activities are taxable under an excise. We certainly cannot conclude that “virtually all” goods and activities are so taxable.

Significantly, Black contains no entry for:

• Event Tax

• State-of-being Tax

• Taxable Event

This is tacit acknowledgment that the terms you employed in your discussion of the constitutional meaning of excise are little more than convenient -- and somewhat artificial -- constructs, having no legal meaning or bearing.

On the other hand, Black does have entries for:

• Privilege Tax (p.1498)

• Franchise Tax (p. 1497)

• Occupation Tax (p. 1498)

By your own definition (to the effect that, anything which is not a direct tax must be an impost, duty, or excise), all of the above taxes are excises. And all of these entries explicitly say the tax is defined by the exercise, or state, of privilege.

Therefore, the “privilege” definition for excise has the explicit, consistent, and manifold support of:

• The Supreme Court
• The lower courts
• The men who wrote the Constitution
• The federal tax laws
• Black’s Law Dictionary

In opposition to this overwhelming authority and evidence, you maintain that because:

A. Some excises tax events (granted); and

B. The term “taxable event” has been used in a number of cases (also granted)…

Therefore:

C. Excises can be defined as “event” taxes, simply because “something happens”; and

D. Virtually any event is taxable under an excise.

I’m sorry, but I just can’t make the jump.

• Your conclusions (C and D above) are totally non sequitur.
• There exists a nearly limitless number of events which are not taxable under an excise, namely, the exercise of our unalienable rights.
• Some excises tax states of being. (See the federal tax code as well as Black‘s definitions above.)
• You have no support for your definition from the Framers.
• You have no support for your definition from the Supreme Court.
• You have no support for your definition from the lower courts.
• You have no support for your definition from Black’s Law Dictionary.
• The very phrase “taxable event” implies that many other events are not taxable.
• The power to tax “virtually any event” would give the government tyrannical power.

I therefore propose the paragraphs in question be changed to my most recent iteration. Otherwise, we should probably have a mediator look at this.

Regards,

Dolphin 52 Dolphin52 (talk) 01:40, 18 May 2008 (UTC)

Dear Dolphin52: I think I have an idea for a rewording in the article that may satisfy both your concerns and my own. Stay tuned.... By the way, I am at work, and we are having problems with our computers, so I may or may not be able to deal with this during the day (may have to work on this at night for the time being). Yours, Famspear (talk) 14:06, 19 May 2008 (UTC)

See, I can use proxies just like you “trustys” to hide myself. You cannot stop my truth, which is more important than your biased “facts”! The TRUTH about the Florida Supreme Court WILL COME OUT!

See, I can use proxies just like you “trustys” to hide myself. You cannot stop my truth, which is more important than your biased “facts”! The TRUTH about the Florida Supreme Court WILL COME OUT! —Preceding unsigned comment added by 208.89.208.70 (talk • contribs) on 21 May 2008.

Dear IP 208.89.208.70: Thank you for sharing that with me. What does it mean? Famspear (talk) 21:02, 21 May 2008 (UTC)

Excise in the U.S. (cont'd)

Dear Famspear,

I'm still tuned in. Looking forward to your kind response.

Dolphin52 (talk) 16:26, 4 June 2008 (UTC)

Yeah, I found some materials that I want to share with you. Stay tuned. This is really taking a lot longer than I expected (not because this takes so long, but because I'm working on other things, unrelated to Wikipedia), sorry. Famspear (talk) 16:52, 4 June 2008 (UTC)

OK, Dolphin52, please list the link or links to the web site or sites that is/are the source(s) of your material. Famspear (talk) 02:55, 9 June 2008 (UTC)

>>>> Dear Famspear,

Your request doesn't make sense. I could easily ask the same question. I thought you were going to provide a rewrite we could both agree on. I have provided numerous authoritative sources for the definition of excise as a tax on privilege -- Black's Law Dictionary, the Supreme Court, the Framers. It doesn't get much better. If you can provide COMPARABLE authority for your position, I'd be willing to look at it. Otherwise, I look forward to the promised rewrite.

Sincerely,

Dolphin52 (talk) 19:21, 12 June 2008 (UTC)

Dolphin52 He is a wikipedia "trusty". HE cares about his "Facts" because he is a tax liar, I mean lawyer. The Truth will come out, regardless of what he does. -Bob Hurt —Preceding unsigned comment added by 81.169.178.101 (talk) 00:58, 14 June 2008 (UTC)

No, Dolphin52, you have not provided any such "numerous authoritative sources" for the definition. I understand why you feel that my request for documentation "doesn't make sense" to you. The request needs to be understood in the context of (A) Wikipedia policies and guidelines, and (B) rules of legal analysis. What you have done is provide numerous quotations -- taken out of context -- from various court cases and from other sources. Many of the court cases did not even involve federal taxes.

Further, assuming you are still defending the verbiage that was removed from the article, you appear to be arguing that an "excise" -- in the U.S. constitutional law sense -- is limited to a tax on privileges, etc. That argument is completely invalid.

There are two problems with the argument. First, none of the sources you provided say that all excises (in the constitutional sense) must always involve a tax on a "privilege," and none of the sources you provided stand for that proposition. Second, by contrast, I have specific federal court cases where the courts ruled various events or activities to be taxable events -- yet those activities or events do not involve any "privilege."

Later, I'll repost, on this talk page, the actual text that was removed from the article, and I will again summarize -- applying Wikipedia policies and guidelines and rules of legal analysis -- why the removed material was objectionable. The analysis you provided violates various Wikipedia rules, and it also violates some of the basic tenets of legal analysis.

Now, for some more background.

The argument that an excise (in the constitutional sense), must always involve a "privilege" to be valid is called a "tax protester argument." It is not only legally invalid, but it is worse: it is also legally frivolous. A person can be penalized monetarily for even raising such an argument on a federal tax return or in a federal court. Later, I'll also post examples of actual court cases where people specifically argued, using the "privilege" argument, that their income could not be taxed under the federal income tax laws, and their arguments were ruled invalid.

On a separate note, it should be obvious that the argument --that a excise (again, in the constitutional sense, not the statutory sense) must always involve a "privilege" -- is legally nonsensical for an entirely separate reason: Engaging in criminal activity is not a "privilege" in any correct legal sense. Yet, the United States Supreme Court has repeatedly ruled that the federal income tax (which is an excise) may validly tax the receipt of funds in a criminal activity (specific examples: funds received by extortion or embezzlement), even though the wrongdoer is required to return the funds to their rightful owner. And the federal courts have repeatedly and overwhelmingly ruled that the federal income tax is fundamentally an excise, not a direct tax. (I know of only a couple of cases off the top of my head where a federal court actually ruled a particular federal income tax to be a "direct tax," and one of those cases was later overruled). On this basis alone, an "excise" cannot possibly be limited to ONLY a tax on a privilege, etc.

Stay tuned. Famspear (talk) 16:17, 19 June 2008 (UTC)

PS: In response to the above post allegedly made by "Bob Hurt" -- no, I am not a liar. Bob Hurt is a user who was blocked by Wikipedia administrators for repeated violations of Wikipedia rules. And there is no such thing as a "trusty" in Wikipedia (whatever "trusty" means to Bob Hurt). Wikipedia has "administrators" (and higher levels of operators as well) who have extra powers not held by regular editors. I am not a Wikipedia administrator or any other kind of systems operator (sysop) here, and I hold no sysop powers other than the simple "rollback" power granted to some non-sysops. For example, I cannot block any user's account. Regarding the reason for Bob Hurt's comment above: As far as I know, all of Bob Hurt's posts (as well as all my posts) here in Wikipedia are preserved for all to easily see and judge. Famspear (talk) 16:29, 19 June 2008 (UTC)

Hey don't forget that we're all part of some irs / wikipedia cabal. I could be our trusty. haha :-) Morphh ^(talk) 16:51, 19 June 2008 (UTC)

Hey, Morphh, how's it going? Famspear (talk) 17:11, 19 June 2008 (UTC)

Now, regarding Dolphin52, let's look at this portion of the removed verbiage:

According to Article I, Section 8, of the Constitution, excises belong to the Indirect category. Therefore, excises are strictly limited to taxing items of privilege and luxury. In other words, they may not tax any item or activity of common right.

Again, first sentence is correct. Excises do indeed belong to the "indirect" category.

The second sentence is complelely wrong, as already illustrated by the Supreme Court decisions where the receipt of funds in a criminal activity was ruled to be taxable (engaging in crime is not a "privilege").

And the "common right" language in the third sentence is directly contradicted by the United States Supreme Court in the case of Chas. C. Steward Machine Co. v. Davis, 301 U.S. 548 (1937). That case involved a challenge to the constitutionality of the Social Security tax.

In the case, the Supreme Court addressed the argument that the Social Security tax was unconstitutional because "employment for lawful gain is a 'natural' or 'inherent' or 'inalienable' right, and not a 'privilege' at all." The Court responded to that argument as follows:

But natural rights, so called, are as much subject to taxation as rights of less importance. An excise is not limited to vocations or activities that may be prohibited altogether. It is not limited to those that are the outcome of a franchise. It extends to vocations or activities pursued as of common right.

(Note: Italics were added by me, Famspear). The Supreme Court rejected the “privilege” argument, and ruled the Social Security tax to be constitutional.

You see, many if not most of the quotes you posted I have already seen, over and over, for years. The material is copied and pasted from one internet site to another. You are copying quotations that do not support your arguments.

Further, the "common right" verbiage that was removed from the article is an example of a phenomenon that I have seen over and over: Tax protesters taking material from the texts of court cases, and then changing the material to say the very opposite of what the court stated. In the the case of activities pursued as of "common right," the Court specifically stated in Steward Machine that an excise CAN be validly imposed on such activities. An activity pursued as of "common right," whether it's employment "for lawful gain" as a "natural right" or an "inherent right" or an "inalienable right", or generally any other activity, can validly, constitutionally be the subject of a federal excise -- even though such activity is admittedly not the exercise of a privilege.

When you cite material in Wikipedia, the source must actually stand for the proposition you are showing. This is part of the rule on Verifiability. And the Wikipedia rule against Original Research is, in part, that you cannot take Statement A from Source A and add Statement B from Source B and then use those things to draw your own Conclusion C -- a conclusion not drawn by Source A and Source B.

No, I'm sorry. None of the materials you cited support the propositions in the erroneous material that was removed from the article. And more to the point, there are numerous actual federal court rulings -- including but not limited to the United States Supreme Court case I just cited -- that say exactly the opposite. And I haven't even started to get into still other federal court cases where other people argued the "privilege" argument -- and lost. Yours, Famspear (talk) 17:24, 19 June 2008 (UTC)

PS: Dear Dolphin52: I should clarify that I am not saying that you yourself are a "tax protester," or that you yourself knowingly faked any verbiage, etc. Indeed, the reason I asked you for your sourcing was to clarify -- well, to clarify the sourcing!

I also recall that the material was inserted in Excise tax in the United States by an anonymous user (an anonymous IP address). After I removed the material, you came on the scene to my talk page here, and you began this discussion about it -- so I have tacitly assumed all these weeks that you are the individual who put the material into the article (an assumption that I will continue to hold as being correct, unless you say otherwise).

Regarding your commentary on this talk page: Assuming that you copied the numerous quotations and citations from places on the internet, I realize that you may not have known that these materials were based on tax protester arguments.

On the other hand, if you actually looked up all these court cases yourself (very unlikely, I guess) and extracted these quotations from reliable copies of the actual texts, what you then did with that material would be prohibited Original Research -- for the simple reason that in Wikipedia you cannot, as I stated above, take Statement A from Source A, and add Statement B from Source B, and then use those to draw your own Conclusion C -- a conclusion not drawn by Source A and Source B (and, in the case of Steward Machine, a conclusion contradicted by the ruling of the Court).

By contrast, the quotations I have provided you are good and authoritative, for two reasons: First, my sources are actual verbatim reprints of the actual texts as used by the legal community. Second, my materials represent the actual court rulings -- and not merely "quotations" from the texts taken out of context. When you analyze the texts of U.S. court cases (both federal and state), you must distinguish between what is variously called the ruling, the holding, or the precedent on the one hand, and, on the other hand, what is called Obiter dicta (non-binding verbiage). Now, it's OK to quote from obiter dicta as long as you understand that this is what you are doing, and as long as you don't use the dicta to contradict the rulings of the court. Yours, Famspear (talk) 17:52, 19 June 2008 (UTC)

Dear Dolphin52: Many of the "privilege" arguments come in connection with federal income taxes. Some of the tax protesters argue that a lack of federal government privilege negates the validity of tax. Others just say just the lack of a "government privilege," and I believe still others may simply say the lack of a "privilege." In any case, the federal courts have rejected the privilege arguments every single time, without a single exception. Example:

Plaintiffs argue first that they are exempt from federal taxation because they are "natural individuals" who have not "requested, obtained or exercised any, privilege from an agency of government." This is not a basis for an exemption from federal income tax. [ . . . ] All individuals, natural or unnatural, must pay federal income tax on their wages, regardless of whether they received any "privileges" from the government.

--Lovell v. United States, 755 F.2d 517, 85-1 U.S. Tax Cas. (CCH) paragr. 9208 (7th Cir. 1984). The Court affirmed a frivolous return penalty against the taxpayer under 26 U.S.C. § 6702(a).

The argument that an individual who received Form W-2 wages or other compensation is not subject to federal income tax because the individual has "neither requested, obtained, nor exercised any privilege from an agency of government" was ruled frivolous by the United States Court of Appeals for the First Circuit in Sullivan v. United States, 788 F.2d 813, 86-1 U.S. Tax Cas. (CCH) paragr. 9343 (1st Cir. 1986), and again in Kelly v. United States, 789 F.2d 94, 86-1 U.S. Tax Cas. (CCH) paragr. 9388 (1st Cir. 1986).

The argument that an individual who received Form W-2 wages is not subject to federal income tax unless the tax is imposed in connection with "government granted privileges" was ruled frivolous by the United States Court of Appeals for the Seventh Circuit in Coleman v. Commissioner, 791 F.2d 68, 86-1 U.S. Tax Cas. (CCH) paragr. 9401 (7th Cir. 1986).

The argument that an individual who received Form W-2 wages is not subject to federal income tax unless the taxpayer enjoys a "grant of privilege or franchise" was ruled frivolous by the United States Court of Appeals for the Eighth Circuit in May v. Commissioner, 752 F.2d 1301, 85-1 U.S. Tax Cas. (CCH) paragr. 9156 (8th Cir. 1985).

The argument that an individual who received Form W-2 wages is not subject to federal income tax unless the taxpayer has obtained a "privilege from a governmental agency" was ruled frivolous by the United States Court of Appeals for the Ninth Circuit in Olson v. United States, 760 F.2d 1003, 85-1 U.S. Tax Cas. (CCH) paragr. 9401 (9th Cir. 1985), and by the United States Court of Appeals for the Tenth Circuit in Prout v. United States, 31 Fed Appx. 624, 2002-1 U.S. Tax Cas. (CCH) paragr. 50,304 (10th Cir. 2002) (not for pub.)

Again, regarding the taxability of income in connection with events or activities not involving a privilege or franchise, the United States Supreme Court ruled in Rutkin v. United States that the receipt of money obtained by extortion is taxable as income to the wrongdoer. Rutkin v. United States, 343 U.S. 130 (1952).

The U.S. Supreme Court ruled in James v. United States that the receipt of money obtained through embezzlement is taxable as income to the wrongdoer, even though the wrongdoer is required to return the money to its owner. James v. United States, 366 U.S. 213 (1961).

Again, compare my materials to your own. My citations are not quotations taken out of context. My citations are references to the actual rulings of the courts. You have to look at the issues the parties in the case actually fought about, and then look at what the court actually decided. Famspear (talk) 18:15, 19 June 2008 (UTC)

Dear Dolphin52: Here's another example. You stated:

The Supreme Court rules that a tax on the exercise of any right guaranteed by the Constitution -- even though the exercise of these rights implies that “events” will take place -- is unconstitutional, and thus not taxable. NOT EVEN as an “excise on an event”: “The First Amendment…declares that 'Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press ....' It could hardly be denied that a tax laid specifically on the exercise of those freedoms would be unconstitutional.” Murdock v. Pennsylvania, 319 U.S. 105 (1943)

That is false. That is NOT what the Court ruled in Murdock. Not only that, but federal taxes (excises or otherwise) were not even at issue in the Murdock case. Here is the actual quotation from the text of the case:

The First Amendment, which the Fourteenth makes applicable to the states, declares that

"Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press . . ."

It could hardly be denied that a tax laid specifically on the exercise of those freedoms would be unconstitutional. Yet the license tax imposed by this ordinance is, in substance, just that.

The tax in question was not a federal excise. In fact, it was not a federal tax at all. Murdock (or Jones v. City of Opelika as it is also known) was a case involving the validity of a city ordinance in Jeannette, Pennsylvania worded as follows:

That all persons canvassing for or soliciting within said Borough, orders for goods, paintings, pictures, wares, or merchandise of any kind, or persons delivering such articles under orders so obtained or solicited, shall be required to procure from the Burgess a license to transact said business and shall pay to the Treasurer of said Borough therefore the following sums according to the time for which said license shall be granted.

'For one day $1.50, for one week seven dollars ($7.00), for two weeks twelve dollars ($12.00), for three weeks twenty dollars ($20.00), provided that the provisions of this ordinance shall not apply to persons selling by sample to manufacturers or licensed merchants or dealers doing business in said Borough of Jeannette.

As already noted elsewhere in Wikipedia, in this case a group of people who were Jehovah's Witnesses went from door to door distributing literature in the town. They failed to obtain the license under the ordinance. The case ended up in court, and went all the way to the U.S. Supreme Court, which stated:

There was evidence that it was their [the Jehovah’s Witnesses’] practice in making these solicitations to request a 'contribution' of twenty-five cents each for the books and five cents each for the pamphlets but to accept lesser sums or even to donate the volumes in case an interested person was without funds. [. . .] The First Amendment, which the Fourteenth makes applicable to the states, declares that 'Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press ....' [. . .] It could hardly be denied that a tax laid specifically on the exercise of those freedoms would be unconstitutional.

The usual protester argument is something along the lines that the federal government should not be able to tax income from labor or some other kind of income because the tax would be a tax on an exercise of the freedoms mentioned in the quotation. But that is not what the Court ruled.

The "tax" in this case was a local license fee imposed on door to door sales people under a city ordinance. The city was trying to exact the fee from Jehovah’s Witness members who were going door to door. Questions about the validity of federal income taxes were neither presented to, nor decided by, the Court.

The Murdock case has been falsely cited over and over by tax protesters for the preposterous argument that the federal income tax is unconstitutional, or that the federal income tax cannot tax ordinary compensation for personal services (such as wages, salaries, etc.). This is a classic example of taking verbiage from a text of a court decision and arguing that it "really means" something other than what the Court actually ruled. In the Murdock case, the mere fact that the Court did not stick the word "state" or "local" in front of the word "tax" does not allow us to take that verbiage and pretend that the Court was talking about ALL TAXES. The Court was not talking about federal excises or any other federal tax. The Court was talking about a tax or fee imposed under a state or local ordinance -- and by definition the only rulings made by the Court in that case related to state or local taxes, etc., NOT TO FEDERAL TAXES.

Similarly, using the Murdock case to try to argue that a federal excise cannot validly be imposed except where a "privilege" is involved (or however you want to phrase it) would not only violate the Wikipedia rule on Verifiability, it would also violate the Wikipedia rule on No Original Research AND it would violate a basic tenet of legal analysis. You simply cannot pull quotations out of court texts and then argue that they mean something other than what the federal courts have ruled when the federal courts have actually ruled just the opposite. When reading the text of a court opinion, you must separate the holding from the dicta, and you must not take words out of context. Famspear (talk) 20:03, 19 June 2008 (UTC)

Dear Dolphin52: Earlier, I made a reference to whether you had looked up all these court cases yourself and I referred to that as being "very unlikely". However, I have just noticed that you had already stated earlier on this page that I was incorrect to assume you had not read the relevant cases. I had missed that earlier comment, so I stand corrected on that point. My understanding is that you are saying you have read the texts of the cases you cited (please correct me if my understanding is not correct).

Regarding my comment several weeks ago about your possibly being in "over your head" and your reference to that comment as being an ad hominem argument -- that is not an ad hominem argument. However, I do apologize for the "over your head" comment -- for a different reason: because it might be construed as a personal attack, and I did not intend it that way. And personal attacks are prohibited by Wikipedia rules. Yours, Famspear (talk) 21:53, 19 June 2008 (UTC)

Dear Dolphin52: Now, let's look at some more of your arguments. You say:

You [Famspear] cite a number of cases that use the term “taxable event.” Yet none of them provide a definition of the term, much less state that an “excise” strictly pertains to a “taxable event.” In fact, one of the cases you cite (Tyler) says just the opposite. I‘m not sure why you would offer such weak evidence and analysis, unless you really have nothing to back up your position.

No, that is incorrect. The cases I cited don't "need" to "provide a definition" for "taxable event." The issue is not the definition of "taxable event". The term "taxable event" came up because you implied somewhere that you disagreed with the use of the term event tax" in the article because you believed that the article's statement, if accepted, would mean that virtually any event could be the subject of an excise (I'm paraphrasing from memory here). You were implying that you felt that the statement -- "virtually" any event can be taxed as an excise -- was incorrect. I pointed out to you that you were wrong. I made the point that virtually any event CAN be taxed as an excise. I also showed that "taxable event" is indeed a legal term used by the courts. I did not say that there were no exceptions to that rule. I said virtually. The mere fact that the courts did not define the term "taxable event has nothing to do with the reason I cited the cases: to show that "taxable event" is indeed the term used. By diverting yourself to a discussion about how the cases I cited did not define the term "taxable event", you took yourself down a rabbit trail and ended up nowhere you needed to be on that one. And the Tyler case does not say "just the opposite. Famspear (talk) 01:21, 20 June 2008 (UTC)

Now, let's look at another of the cases you cited: Springer v. United States.

As a side note, this case is often cited as 102 U.S. 586 (1880). The more proper citation is 102 U.S. 586 (1881), because the decision was actually rendered in January 1881. Back then, many U.S. Supreme Court cases were listed by the date of the session (in this case, the October 1880 session) rather than the date of the decision (in this case January 1881), so that's why you see the variances in how the case is cited.

At any rate, you cited Springer for your arguments. The problem is that in Springer the federal income tax in question was ruled to be an excise, an indirect tax. The taxpayer had specifically argued that it was a direct tax, and the Supreme Court rejected that argument.

Now, did the excise in Springer involve a tax on a "privilege"? On a "luxury"? The answer to both questions is no.

In fact, the sources of Mr. Springer's income are not event mentioned by the Court. As it so happens, Mr. Springer had two sources of income in the case: compensation for personal services, and interest income on bonds. Neither of these involve the exercise of a "privilege" in the sense in which you are using the term. And the Court upheld the constitutionality of the taxation of Mr. Springer's income.

By the way, some tax protesters have since argued that because Mr. Springer's income was from the practice of law, that more or less what was being taxed was the grant of the grant of his attorney's license or the activity of his practice of law. Those arguments are also incorrect. What was being taxed was the income he realized in the practice of law.

Yes, excises often do involve "privileges" -- but there is no constitutional requirement that they do so. The word "privilege" is not even found in the text of the Springer case. And as far as the word "luxury" in the text is concerned, you took it out of context. Mr. Springer, a lawyer, never argued that his income was realized in connection with either a "privilege" or a "luxury." In any case, the source of Mr. Springer's income was not even mentioned in the Court's opinion. Yours, Famspear (talk) 05:22, 20 June 2008 (UTC)

Response

Dear Famspear,

I am honored by your lengthy response. I've apparently touched a nerve for you to go to such lengths to defend your position. I appreciate your taking the time.

I think our discussion proves that either side of a case can be vigorously argued. That's why even the Nine, with all their erudition, training, and experience, can (almost?) never reach 9-0 on any case it considers.

So...I politely remain unconvinced that your A and B logically lead to your C. What's more, given the explicit statements of the Framers, the courts, federal law, and Black's Dictionary, I am scratching my head trying to figure out why the "event" definition is so precious to you. The greatness of America is her abiding love for, and jealous protection of, the unalienable rights that make us a free people. To suggest that the Founders, who had just fought a horrific war (in great part) against unconscionable, life-sapping taxes, then turned around and gave the new government the ability to destroy our lives with the power to tax "virtually any event" is ridiculous. On that truth alone, the idea that an excise, especially in the constitutional sense, is defined as an "event tax" must be thrown out. If the Constitution means anything, it is that government does NOT have the power to indiscriminately tax any event it pleases.

Here are some specifics counter-points...

1. You said: "There are two problems with the argument. First, none of the sources you provided say that all excises (in the constitutional sense) must always involve a tax on a "privilege," and none of the sources you provided stand for that proposition."

Rebuttal: The Supreme Court, and (probably) the lower courts, have never been asked to officially rule what an excise is. Therefore, BOTH of us have to make reasonable inferences from the body of statements that are available. Significantly, the Supreme Court has never said -- not even in obiter dicta -- that an excise is an "event tax." I will grant you that certain events are taxable under an excise. But they always involve a privilege, a luxury, or a legally created right. Never an unalienable right. (Specific analysis in the next post.) On the other hand the courts have explicitly said that "excise taxes" are synonymous with "privilege taxes." The Framers said it. So did Mr. Black in his dictionary. Even the taxes in Title 26 are all restricted to things involving luxury, government-granted privilege, or something special. (There is no tax in Title 26, for example, which taxes all political speeches, or all church services, or all private sector jobs, or all natural births, etc.)

2. You said: "Second, by contrast, I have specific federal court cases where the courts ruled various events or activities to be taxable events -- yet those activities or events do not involve any "privilege."

Rebuttal: Actually, they did involve privilege or something not of common right. But will have to comment case-by-case in the next post. You mentioned so many, it will take some time to respond.

Sincerely,

Dolphin52 (talk) 04:12, 27 June 2008 (UTC)

Dear Dolphin52: I've already completely rebutted your position that an excise must involve a privilege or the exercise of a privilege. The courts have specifically rejected that position.

Further, your statement that the cases I cited did "involve privilege or something not of common right" is incorrect.

Now, regarding this statement:

I am scratching my head trying to figure out why the "event" definition is so precious to you.

I am scratching my head trying to figure out why you think the reference in the article to "event tax" is a hard definition of an "excise." And I'm scratching my head trying to figure out why you think the "definition" as you put it is so "precious" to me. You're the one who keeps raising the issue. The article does not say that an excise tax must always involve an event. The article only says that an excise is "essentially" an event tax, which is a correct statement. Again, the discussion here is in response to your own comments.

Sorry, but the federal courts, including the Supreme Court, have officially ruled on what an excise is. We've already been through this. Under the case law, an excise (or, more broadly, a "duty, impost or excise") is simply any tax that is not a direct tax. In other words, an excise is an indirect tax. Since "direct tax" has already been defined by the courts (as being limited to capitations and property taxes), we know that under the law an excise is essentially anything that is not a capitation or property tax. Yes, the courts have defined "excise." You are quite wrong on that point.

Regarding your verbiage:

Significantly, the Supreme Court has never said -- not even in obiter dicta -- that an excise is an "event tax."

You are still trying to define an excise as an "event tax" or, more specifically - you are trying to argue that the article is defining it that way. You are wrong. The article says that an excise is essentially an event tax, which is a correct description. It's not a "definition" in the sense that it appears you are using the term "definition." The article does not say that there are no exceptions to the general statement that an excise is generally an event tax. You still need to address the language of the article itself. Again, there may be some excise somewhere that is not an event tax. If there is such an exception, that does not invalidate the language of the article. The article does not say that every excise must always be an "event tax." You are quite wrong on this point as well.

Regarding the rest of your comments, you are repeating erroneous conclusions already discussed above. I have explained why your conclusions are erroneous, and I have explained why the method of research does not comport with Wikipedia rules and guidelines.

To sum up: Your objections seem to fall in two categories. First, you object to the deletion, from the article, of the erroneous veribage that asserted that an excise (in the U.S. constitutional sense) must involve a "privilege." I have already pointed out that there is no such requirement in the text of the Constitution. I have already pointed out that the federal courts have specifically rejected that argument, in case after case. I actually cited the cases. I also pointed out cases where the U.S. Supreme Court has specifically ruled that the receipt of stolen money -- by extortion or by embezzlement, for example -- is taxable as income, even though the wrongdoer is required to return the funds to their owner. I have pointed out that under the Supreme Court decisions, the federal income tax is one kind of excise. Illegal activites, such as extortion and embezzlement, do not involve the exercise of a "privilege."

I appreciate your lengthy comments on this talk page, but this is a dead issue. The argument that an excise in the U.S. constitutional sense must involve a privilege is without legal merit, and is frivolous. The material that had been inserted into the article was erroneous, and was properly removed. We have little else to discuss on this point.

Second, you object to the use (in the article) of the term "taxable event" to describe what is taxed in connection with an excise (again, in the constitutional sense, not the statutory sense). You frame this objection by repeatedly and erroneously insisting, in the face of repeated explanations to the contrary, that the article defines excise as involving ALWAYS AND ONLY a tax on a "taxable event" in a way that the article allows no exceptions. You are wrong. The article does not say that. The article says only that an excise is essentially an event tax, which is a correct statement. You are arguing that the article says something that the article does not say.

I'm sorry, but we've beaten this to death. We have little else to discuss on this point as well.

I want to point out that I am not here primarily to persuade you that I am right and you are wrong about the legal esoterica we have been discussing; I am here primarily to discuss ways to improve Wikipedia. I have explained in great detail what the law is, why you are wrong on these points of law, and why your methods in this particular case do not comport with Wikipedia rules. Similarly, you should not feel the need to try to persuade me or others about the law. I thank you for your lengthy commentary here, which will eventually be archived. Yours, Famspear (talk) 11:01, 27 June 2008 (UTC)