Federal income tax

“ The tax relief is for everyone who pays income taxes — and it will help our economy immediately: 92 million Americans will keep, this year, an average of almost $1,000 more of their own money. A family of four with an income of $40,000 would see their federal income taxes fall from $1,178 to $45 per year. ”

“ THE INCOME TAX.—All taxes ultimately come out of income, but when we speak of an income tax we refer to a direct levy upon income as it arises, chiefly in the form of wages, salaries, and profits. A Federal income tax was levied during the Civil War, but in the nineties the Supreme Court held that such a tax violated the constitutional provision that Congress shall not lay direct taxes except in proportion to the population of the states. ”

“ If the business itself, by reason of its character, is not immune, although undertaken by the state, from a federal excise tax upon its operations, upon what ground can it be said that the compensation of those who conduct the enterprise for the state is exempt from a federal income tax? Their compensation, whether paid out of the returns from the business or otherwise, can have no quality, so far as the federal taxing power is concerned, superior to that of the enterprise in which the compensated service is rendered. ”

“ When this bill goes into effect, 80 percent of the American people will pay a top rate of only 15 percent or less in Federal income tax. No one will pay more than 28 percent of total income. A family of four living at the poverty level will have over $1,000 more in their pockets. In fact, millions of working poor will be dropped from the Federal income tax rolls altogether-they won't have to pay a cent in Federal income tax. ”

“ Thus, while the salary of an officer of the State cannot be taxed by the Federal Government, the compensation paid by a State or a municipality to a consulting engineer, who is neither an officer nor an employee of government, for work on public projects, may be subjected to a federal income tax. ”

“ For the wealthiest, those earning more than $180,000 per year, I ask you all who are listening tonight to support a raise in the top rate for Federal income taxes from 31 to 36 percent. We recommend a 10 percent surtax on incomes over $250,000 a year, and we recommend closing some loopholes that let some people get away without paying any tax at all. ”

“ Shall we be bettered by the alternative proposed by gentlemen—by levying taxes in specific articles? How will you dispose of them? Where is the merchant to buy them? Your business will be put into the hands of a commissioner, who, having no business of his own, will grasp at it eagerly; and he, no doubt, will manage it. But if the payment of the tax be left to the people,—if individuals are told that they must pay such a certain proportion of their income to support the general government,—then each will consider it as a debt; he will exert his ingenuity and industry to raise it ”

“ A Federal income-tax system necessarily involves multiple taxation on one and the same income, person, and property. For example, in the United States a citizen of any one State would be liable, in the first instance, to the Federal tax on his income ”

“ At the low end of the income scale, the bottom 40 percent of people who have income do not basically pay income taxes. Obviously, they pay withholding taxes, but as a practical matter that segment of our society pays virtually nothing in income taxes. They get money back, in fact, on the earned-income tax credit and other benefits the Federal Government puts in place. ”

“ There is no doubt that any state may levy income taxes. Nor is there any doubt that, under the federal Constitution as it now stands, Congress may levy an income tax provided it be apportioned according to population as required in regard to all direct federal taxes. There is also no doubt that Congress, by means of an excise tax, may reach income derived from any business or profession, and that any such tax, being essentially an excise tax on business, need not be apportioned but need merely be uniform throughout the United States. ”

“ Cost of service is therefore a major focus of inquiry. Normally included as a cost of service is a proper allowance for taxes, including federal income taxes. The determination of this allowance, as a general proposition, is obviously within the jurisdiction of the Commission. Ratemaking is, of course subject to the rule that the income and expense of unregulated and regulated activities should be segregated. But there is no suggestion in these cases that in arriving at the net taxable income of United the Commission violated this rule. Nor did it in our view in determining the tax allowance. ”

“ We start with the proposition that the federal income tax is a tax on net income, not a sanction against wrongdoing. That principle has been firmly imbedded in the tax statute from the beginning. One familiar facet of the principle is the truism that the statute does not concern itself with the lawfulness of the income that it taxes. Income from a criminal enterprise is taxed at a rate no higher and no lower than income from more conventional sources. ”

“ The tax law--even though we are generating a lot more revenue for the Federal Government, even though we are well over that mean number of 18.2 percent of gross national product, even though we have had jumps in revenue of 11 percent, 9 percent, 15 percent--we actually have a tax law today that is generating more revenue but is also more progressive. High-income individuals are paying more of the tax burden. Low-income people are getting more money back from the Federal Government. ”

“ It levies a tax on 'every person residing within the state,' and defines the word 'person' as including 'natural persons, fiduciaries and corporations,' and 'corporations' as including 'corporations, joint stock companies, associations or common law trusts.' It lays graduated taxes on the incomes of natural persons and corporations at different rates. It is comprehensive in its provisions regarding gross income and allowable deductions and exemptions, and is in most respects the analogue of the federal income tax acts in force since 1916. ”

“ If you are earning $22,000 a year in this country and you have a couple of kids, as a result of the way the earned income tax credit phases out, which is a program that helps low-income working people with children, principally, who receive extra help from the federal government -- it's predominantly a redistributed program -- you start to lose your earned income tax credit as you make more money, plus you're in the 15 percent tax bracket, which means you're paying taxes at a higher rate than the President believes you should. ”

“ Under our plan of government those new instructions are the direct product of public opinion.
That is one side of taxation. The other side is even more amazing. There is practically no basic American principle applying to taxes, which of necessity affects every citizen and every corporation. We find, for instance, that there is no line of demarcation between Federal taxes and state taxes. In many cases there is a definite duplication of taxes by the Federal Government and by the state, as, for example, in the case of the income tax. ”

“ He said that, so far as he had been able to form an opinion, there had been a general concurrence in a belief that the ultimate sources of public contributions were labor, and the subjects and effects of labor; that taxes, being permanent, had a tendency to equalize, and to diffuse themselves through a community. According to these opinions, a capitation tax, and taxes on land, and on property and income generally, were a direct charge, as well in the immediate as ultimate sources of contribution. He had considered those, and those only, as direct taxes in their operation and effects. ”

“ This combined program, by increasing the amount of our national income, will in time result in still higher Federal revenues. It is a fiscally responsible program--the surest and the soundest way of achieving in time a balanced budget in a balanced full employment economy.
This net reduction in tax liabilities of $10 billion will increase the purchasing power of American families and business enterprises in every tax bracket, with greatest increase going to our low-income consumers. ”

“ Section 219.↑ The amount of this tax was somewhat larger than that which would result, as a matter of calculation, from the figures set forth in the Company's report. It is stated in the opinion of the District Court that the 'tax as actually assessed contained a duplication of the accounts receivable.' And it is conceded that the Commission did not deduct the Federal income taxes from the net income. ”

“ A tax on the income of federal employees, or a tax on the possessory interest of federal employees in Government houses, if imposed only on them, could be escalated by a State so as to destroy the federal function performed by them either by making the Federal Government unable to hire anyone or by causing the Federal Government to pay prohibitively high salaries. ”

“ The language of (the Internal Revenue Act of 1918) subjects the income of 'every individual' to tax. Section 213 (a) includes income 'from any source whatever.' The intent of Congress was to levy the tax with respect to all residents of the United States and upon all sorts of income. ”

“ Higher taxes, actually, in many instances reduce revenues to the Federal Government because they reduce economic activity. They certainly reduce expansion of the economy, and they reduce the creation of jobs.
Three Presidents have proved beyond any reasonable doubt when you lower income tax rates, you generate economic expansion because people are just people. They just have common sense. If they know they are going to be able to keep more of their money, they are willing to go out and work harder to get more money. ”

“ The internal revenue is affected by the remarkable spread of the prohibition movement. A considerable and growing public sentiment in favour of the use of the taxing power for the regulation of wealth taken from society demands the introduction into the Federal system of income and inheritance taxes. The last—inasmuch as an income tax that is constitutional can perhaps not be framed—is the only promising source that can give the addition to the Federal revenues that must be needed in case the customs or the excise revenues are reduced. ”

“ Nevertheless, a graduated income tax of the proper type would be a desirable feature of Federal taxation, and it is to be hoped that one may be devised which the Supreme Court will declare constitutional. ”

“ Respondent argues that petitioner received both respondent’s Lien Notice and respondent’s notice of deficiency and that petitioner could have filed an appeal or a Tax Court petition with regard to either of those documents, and therefore that petitioner may not now, in the instant proceeding involving respondent’s levy notice, dispute the existence or amount of his 1995, 1996, and 1997 Federal income tax liabilities. ”

“ Schreiber acknowledges that the power of attorney does not cover the taxable year 1988, explaining that the 1988 year was added to the Erhard audit after the original power of attorney was executed. Schreiber indicated to Greene that he would prepare an additional power of attorney covering the 1988 taxable year and forward a copy to Greene upon its submission to Revenue Agent Keung. [FN4]
On February 3, 1992, Revenue Agent Keung mailed a 30-day letter to the Erhards in care of Michael Saltzman proposing deficiencies in the Erhards' Federal income taxes for the taxable years 1987 and 1988. ”

“ If you're a single mother with two children, working to make ends meet, your taxes would go up by more than a $1,000. If you're a small business owner working to meet a payroll, your taxes would increase by almost $4,000. And if Congress allows our tax relief to expire, more than 5 million low-income Americans who currently pay no income taxes would once again have to pay taxes. ”

“ Legal ingenuity, however, can get round anything. The Supreme Court decided as long ago as 1789 that an income tax was not a direct tax, and need not, therefore, be apportioned among the States. During the Civil War, though not, curiously enough, until every other source of taxable wealth had pretty well run dry, an income tax was actually imposed by three separate Acts of Congress, the Act of 1864 levying a tax of 5 per cent. on all incomes between $600 and $5,000, and of 10 per cent. ”

“ The overwhelming majority of Americans who pay taxes today are below that figure and they will pay substantially less than $5 a month. Married couples with two children, with incomes up to $5,000 per year, will be exempt from this tax--as will single people with an income of up to $1,900 a year. ”

“ I am surprised that such strong objections should have been made to, and such fears and alarms excited by, this power of direct taxation, since experience shows daily that it is neither inconvenient nor oppressive. A collector goes to a man's house; the man pays him with freedom, or makes an apology for his inability to do it then: at a future day, if payment be not made, distress is made, and acquiesced in by the party. What difference is there between this and a tax imposed by Congress? ”

“ About 10 days ago we all kept our rendezvous with the Internal Revenue Service and anted up our income tax. If it'll help ease the pain, let me remind you that in about 2 months, on July 1st, you'll start paying 10 percent less income tax on what you earn.
But that won't mean anything to a growing group of citizens who've already given themselves a tax cut. It's estimated that about $95 billion in income tax is not being paid. That's enough to balance the budget. ”

“ It is not material that such profit is taxed, along with other gains, under the general income tax law, for Congress has power to impose an increased or additional tax if satisfied there is need therefor. ”