Direct Tax Clause

“England may be the mother of Parliament, but from the Boston Tea Party to this administration, it’s the United States that has been the mother of tax revolt.  You know, that’s a pretty good line.  I can hardly wait to try it out on Margaret Thatcher.”

Ronald Reagan, Remarks at a briefing for members of the American Business Conference, The White House, March 23, 1988

“No capitation or other direct tax shall be laid, unless in proportion to the census or enumeration herein before directed to be taken.”  Article 1, Section 9, Clause 4, US Constitution

This clause is known as the Direct Tax Clause.  It underlines the statement in Article 1, Section 2, Clause 3 (the three-Fifths Clause), which states, “Representatives and direct taxes shall be apportioned among the several states”.

Apportioned means an allotment based on state population.

Enumeration means number of or count of.

One of the intentions of the Writers of the Constitution was to give the federal government the ability to raise money.  This was not a strong point in the Articles of Confederation.

In order to understand direct taxation, it is important to understand indirect taxation.  Indirect taxes are generally taxes on articles of consumption.  (Duties, Imposts, and Excises).  These taxes are considered “safe” for Congress to pass (people wouldn’t get mad and vote them out of office).  The burden was shifted to the consumers.

As Alexander Hamilton, writing as Publius, states in Federalist 21: “

“If duties are too high, they lessen the consumption; the collection is eluded; and the product to the treasury is not so great as when they are confined within proper and moderate bounds. This forms a complete barrier against any material oppression of the citizens by taxes of this class, and is itself a natural limitation of the power of imposing them.”

Scholars are divided on the meaning of direct tax.  Basically, direct tax would be a tax among the states based on population.

In debates during the time of the Founding, there were two forms of taxation for which apportionment was intended: capitation and land (included slaves).  Capitation tax is generally known as a “head tax”.  Each person in the country would pay a certain amount.

Through the years, there has been argument in the Courts as to whether direct taxation goes beyond capitation and land taxes.  The general conclusion is that it does not.  If Congress tries to collect direct taxes beyond that point, Congress would be considered to be overreaching.  Direct taxes were to be used in an emergency.  Congress has seldom levied direct taxes.

The issue of direct taxation became less of an issue with the “passage” of the 16^th Amendment.  It states:

“The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several states, and without regard to any census or enumeration.”

Sources say this was ratified on February 3, 1913.

With the direct tax clause, we the people allow Congress to pass taxes indirectly –capitation and land.

We the people limit the authority of Congress to pass direct taxes, which could be unfair and/or burdensome.

References:

Findlay, Bruce Allyn and Findlay, Esther Blair.  Your Rugged Constitution.  Stanford: Stanford University Press, 1950

Hannaford, Peter.  The Quotable Ronald Reagan.  Washington, DC: Regnery Press, 1998

http://www.heritage.org/constitution/#!/articles/1/essays/64/direct-taxes

US Constitution

Online dictionaries

Could You Pass the Citizenship Test?

“To establish an uniform Rule of Naturalization, and uniform Laws on the subject of bankruptcies throughout the United States;” Article 1, Section 8, Clause 4 US Constitution

Naturalization means granting citizenship to aliens (people who have come to the US from a foreign country).

One of the grievances stated in the Declaration of Independence was that the King was, “obstructing the Laws for the Naturalization of Foreigners”.

Under the Articles of Confederation, each State had the power to naturalize aliens. This led to chaos. Alexander Hamilton stated in Federalist 32, “an uniform rule of naturalization…must necessarily be exclusive; because if each State had power to prescribe a distinct rule, there could not be a uniform rule.”

So the federal government gradually acquired the power to grant citizenship to people from foreign countries. There were other ways that citizenship could be acquired. The incorporation of the Louisiana Territory and Florida raised the question of collective naturalization, in which the people of these areas were granted citizenship as a group. This was upheld in the Courts. Another example of collective naturalization was with the Treaty of Guadalupe Hidalgo in 1848 at the end of the Mexican-American War. The people who lived in the ceded territories were given the option of maintaining Mexican citizenship or becoming American citizens. If they did not make the request to remain Mexican citizens, they were granted American citizenship.

The Naturalization law has become more detailed over time, but it maintains the basic elements of the law as written in 1795. The details of the current law are well explained in this article: http://ezinearticles.com/?6-Steps-to-Becoming-a-Naturalized-US-Citizen&id=5807974.

The immigrant must take a Citizenship Test. This generally consists of 10 questions; you must answer 8 correctly. Here is an example of questions asked on the test: http://immigration.findlaw.com/citizenship/typical-citizenship-examination-questions.html. How many answers do you know?

Political discussion frequently turns to immigration reform. As you can see, the current immigration and naturalization laws are infrequently enforced. There are an estimated 11-18 million illegal aliens (immigrants) on US soil at any one time today.

We the people have given Congress the power to pass laws to describe how foreign-born persons may become citizens of the US.

If the laws were enforced, we the people would benefit because persons who have met the criteria would be granted citizenship and become part of the wonderful melting pot, which is the United States of America. There would be rejection of the privilege of citizenship for those who fail to meet the criteria.

** Bankruptcy Clause

amrosario.com

According to Investorwords.com, bankruptcy is defined as, “A proceeding in a federal court in which an insolvent debtor’s assets are liquidated and the debtor is relieved of further liability. Chapter 7 of the Bankruptcy Reform Act deals with liquidation, while Chapter 11 deals with reorganization.”

The power of dealing with bankruptcy was delegated to the individual states under the Articles of Confederation. It was understood and really not debated at the Constitutional Convention that this power needed to be given to the federal government to provide for uniform treatment of this circumstance as well as uniform protection of the people involved.

James Madison wrote in Federalist 42, “The power of establishing uniform laws of bankruptcy is so intimately connected with the regulation of commerce, and will prevent so many frauds where the parties or their property may lie or be removed into different States that the expediency of it [i.e., Congress’s power to regulate bankruptcy] seems not likely to be drawn into question.”

There were changes to the law over the years. Comprehensive new law was put in place in 1978. That essential law remains in place today.

According to Todd Zywicki, Foundation Professor of Law, George Mason University, on www. Heritage.org:

“The Bankruptcy Code thus represents a tenuous accommodation between federal and state law. Most of the non-bankruptcy law that governs debtor-creditor relations remains state law, and federal bankruptcy law honors these state-law substantive entitlements, unless federal law and policy expressly preempts them. Moreover, the Bankruptcy Code expressly incorporates some elements of state law into the Code itself, such as in the treatment of a debtor’s property exemptions. This interaction between state and federal law guarantees that creditors and debtors will be treated differently depending on the state that determines their rights.”
“At the same time, any bankruptcy legislation enacted by Congress must also be “uniform…throughout the United States.” In Hanover National Bank v. Moyses (1902), the Supreme Court held that this “personal” non-uniformity in treatment among individuals was permissible, so long as “geographical” uniformity was preserved. Thus, debtors and creditors in different states may receive different treatment, so long as the debtors and creditors within the same state are treated the same. The “uniformity” requirement does, however, forbid “private” bankruptcy laws that affect only particular debtors.”

We the people give Congress the power to pass laws to protect an individual if he is in debt beyond has ability to pay.

The benefit to we the people is that an individual has protection from utter poverty if he or she is in serious debt. It also provides you with a fair share of a person in debt’s assets if that person owes you money.

References:

Federalist Papers

Findlay, Bruce Allyn and Findlay, Esther Blair. Your Rugged Constitution. Stanford: Stanford University Press, 1950

Investorwords.com

US Constitution

Todd Zywicki, Foundation Professor of Law, George Mason University, on www. Heritage.org