united-states tax-law us-constitution fifth-amendment statutory-construction
Is the United States federal income tax an indirect tax under the 5th amendment?
<p>I'm no American citizen, so I don't know that much about all the ins and outs of the Constitution. I've been watching a movie where one of the characters called the federal income tax &quot;unconstitutional&quot; due to the 5<sup>th</sup> Amendment. The 5<sup>th</sup> Amendment reads:</p>
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<p>No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offence to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; <strong>nor shall private property be taken for public use, without just compensation</strong>.</p>
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<p>Surfing the web, I found a claim that federal income tax is somehow reckoned to be indirect, which was used to have the 16<sup>th</sup> Amendment come to be. Indirect taxation is indeed no subject to the highlighted part of the 5<sup>th</sup>, yet I just can't see how federal tax is not direct.</p>
<p>Is federal income tax really indirect? If so, how? If not, how are 5<sup>th</sup> and 16<sup>th</sup> Amendments not contradicting one another?</p>

<p>The legal question is whether a tax (state or federal) constitutes a &quot;taking&quot; for purposes of the 5th Amendment eminent domain clause.</p>
<p>The Courts have always held that a generally applicable tax does not constitute a taking, so the income tax is not a taking. The Court came to this conclusion because the 5th Amendment takings clause was always understood to refer to government exercise of the power of eminent domain, rather than generally applicable taxes or regulations, even though they might have a negative economic effect on someone by causing their property to be taken for public use or by making their property less valuable.</p>
<p>The exclusion of taxes from 5th Amendment takings predates the 16th Amendment. There have always been taxes and taxes are always collected for public use.</p>
<p>The direct/indirect tax distinction arises not under the 5th Amendment, but under Article I, Section 2, Paragraph 3 of the United States Constitution and governs what kinds of taxes Congress is authorized to impose. This has nothing to do with the 5th Amendment.</p>

<p>The direct/indirect distinction is less important than the general/specific distinction.</p>
<p>Common law courts like those in the United States rely on the &quot;general–specific canon,&quot; a rule of statutory construction saying that when two laws could be read to impose conflicting rules, &quot;the specific provision is construed as an exception to the general one.&quot; <a href="https://supreme.justia.com/cases/federal/us/566/639/" rel="nofollow noreferrer"><em>RadLAX Gateway Hotel, LLC v. Amalgamated Bank</em>, 566 U.S. 639, 645 (2012)</a>.</p>
<p>Here, we have the Fifth Amendment's general prohibition on taking property without compensation, but we also have the Sixteenth Amendment's explicit grant of authority to impose an income tax. Because the Sixteenth Amendment is more specific, we treat it as an exception to the Fifth. Although it was not in the context of the income tax, the U.S. Supreme Court basically followed this analysis in another Fifth Amendment tax case:</p>
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<p>It is also settled beyond dispute that the Constitution is not self-destructive. In other words, that the powers which it confers on the one hand it does not immediately take away on the other; that is to say, that the authority to tax which is given in express terms is not limited or restricted by the subsequent provisions of the Constitution or the Amendments thereto, especially by the due process clause of the 5th Amendment.</p>
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<p><a href="https://supreme.justia.com/cases/federal/us/232/261/" rel="nofollow noreferrer"><em>Billings v. United States</em>, 232 U.S. 261, 282 (1914)</a></p>
<p>The court also stated the rule a bit more broadly in another case ten years earlier:</p>
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<p>Whilst undoubtedly both the 5th and 10th Amendments qualify ... all the provisions of the Constitution, nothing in those amendments operates to take away the grant of power to tax conferred by the Constitution upon Congress.</p>
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<p><a href="https://supreme.justia.com/cases/federal/us/195/27/" rel="nofollow noreferrer"><em>McCray v. United States</em>, 195 U.S. 27, 61 (1904)</a></p>
<p>One could also argue that the provisions are not in conflict at all. The Fifth Amendment does not prohibit taking private property; it only prohibits taking private property &quot;without just compensation.&quot; Income taxes are used to fund the federal programs, so there is a strong argument to be made that the existence of a functioning government, military, judiciary, etc. is just compensation for the income taxes taken. I don't know that any courts have relied on this analysis, but it would likely be a fallback if the general-specific canon did not resolve the question.</p>
