Taxability and apportionment

There is some confusion about what "apportionment" means or originally meant. To be apportioned any tax would have to be adjusted so that the amount collected in any political jurisdiction would be proportional to the number of people who live in that jurisdiction, such as a "head" tax of an equal amount on every individual, collected and paid directly to the IRS, not to the states or other political subdivisions. It should be clear that such a tax on merely being alive is unfair to the poor, so a way was sought to collect more from those better able to pay to offset what would otherwise be a burden on the poor, but still keep the total collected proportionate to the populations of states and other subdivisions. That is not easy to do, because the calculation of the tax can't be done at the level of the individual taxpayer until it is done for all taxpayers in the subdivision. It would have to be done in two phases: first to generate an estimate of the now unequal assessment on each and every individual, and second to adjust all assessments so that the total for the subdivision comes out proportional to population for that subdivision.

The power to tax in Art. I Sec. 8 Cl. 1 does not define what are and what are not proper objects of taxation, and it is a mistake to interpret that to mean that any conceivable object is taxable. The Framers presumed an understanding of what objects are and are not taxable, but left the boundaries to be found by historical investigation.

Generally speaking, the exercise of fundamental rights were not deemed properly taxable, except in an incidental way that did not impose an undue burden. Constitutionally, it would not be permissible to tax people for merely breathing, which calls into question anything like a head tax unless it were extremely small. That would also exclude taxes on things like speaking, publishing, religious devotion, petition, assembly, etc. This principle was recognized in the Militia Act of 1792 when it exempted the tools of militia from being taxed or claimed for debts, not as a change in their taxability but as a recognition they were already untaxable under the common law understanding of taxability.

So what were taxable objects? Generally, they were only money-making activities such as sales or purchases for money or earnings on investments in land or capital. Taxes were payable in money so there had to be some money in the transaction from which taxes could be taken. Equal exchanges were generally excluded, which would include barter, with no monetary consideration.

The term "income" is not used in the Constitution, and not defined in the income tax amendment, so as Brushaber points out, by implication it could only mean "income" as of 1787. In 1787 "income" would not have included wages or other compensation for labor. Only earnings on land or capital, such as crop sales, rents, interest, dividends, or capital gains. Compensation for labor would have been considered an equal exchange, like barter. If an employer doesn't pay an employee right away, but lends himself the money for a time, then later pays with interest added, the interest would be "income" on the labor, but not the wages that are the principal on which the interest is calculated.

The usurpation involved here is the redefinition of "income" to include revenues generally, rather than just earnings on land or capital. That meaning is now so familiar to most people that they have trouble understanding it didn't always mean that.

The appropriate common law rule of construction for legal terms is expressed in the maxims:

Potestas stricte interpretatur. A power is strictly interpreted.
In dubiis, non præsumitur pro potentia. In cases of doubt, the presumption is not in favor of a power.

They mean that if there is any doubt whether a power has been delegated, it must be presumed not to have been delegated. If there is any doubt about whether something is "income", it must be presumed not to be "income".