united-states tax-law
How has pre-emptive taxation been defended?
<p>How is the government taxing you on money you are yet to make nothing else than an interest free short-term loan you are forced to give them. You only get the chance at a return at the end of the year giving the government a full year to do with your money as the please.</p>
<p>I spoke to a person that is an estate agent and told me the Government takes 20% of all his commissions and only at the end of the year he has to prove what he made to get anything back from SARS.</p>

<p>First of all, I am not sure what is meant in the question by &quot;taxing you on money you are yet to make&quot;. Federal income tax withholding does not occur until the wages or other income is paid to the taxpayer. Federal estimated tax is paid quarterly bases o9n actual income for the previous part of the year. Federal income tax is not due until 4 months after the end of the tax year, so all income has long since been received.</p>
<p>But in any case, there is no bar in the US Federal Constitution to taxation on pretty much any basis the government chooses. If the Government chose to tax on next year's anticipated income, I don't see any constitutional provision to stop this.  As far as I know it has never been tried, so it hasn't been tested in court.</p>
<p>There is a requirement that &quot;direct&quot; taxes be apportioned among the states. This is sufficiently awkward and cumbersome that no direct tax has ever been intentionally passed by Congress. The classic examples of direct takes are &quot;head&quot; taxes, that is a fixed sum from each person, and property taxes measured by the value of the property. The US Federal government imposes neither, although stats and localities often have property taxes.</p>
<p>At one point the US Supreme Court held (in <a href="https://en.wikipedia.org/wiki/Pollock_v._Farmers%27_Loan_%26_Trust_Co." rel="nofollow noreferrer"><em>Pollock v. Farmers' Loan &amp; Trust Company</em>, 157 U.S. 429 (1895)</a>) that an income tax was a direct tax, and since the law imposing it did not apportion it, held it unenforcable. A constitutional amendment was soon passed specifically allowing an income tax (&quot;a tax on income, from whatever source derived&quot;) without any apportionment. That was the 16th amendment, passed by Congress in 1909, and ratified in 1913, 18 years after the court case.</p>
<p>In short, the US government may tax on anticipated income if it so enacts, but as far as I know it does not do so. The barrier to any such tax is political, not legal.</p>
<p>Taxing 20% on commissions would be taxing money already earned, by the way.</p>
