Income Tax Jokes

Posted on January 22, 2012 by Admin
Income Tax Jokes

Income Tax Jokes

In August 1894, the Wilson-Gorman Act, a tax and tariff measure, was signed into law. It levied a 2% tax on incomes of $4,000 or more, which was only 2% of American taxpayers. The tax was applied to "gains, profits, and income derived from any kind of property, rents, interest, dividends, or salaries from any profession, trade, employment, or vocation," plus inheritances and gifts. The tax was also applied to net profits of corporations, companies, and associations.

Shareholders of corporations immediately sued to halt their corporations from paying the tax. The various cases were consolidated into Pollock v. Farmers' Loan and Trust Co. and accepted by the Supreme Court in January 1895. The plaintiffs, represented by William D. Guthrie, George F. Edmunds, and Joseph Choate, claimed that the income tax would induce class warfare that would lead to "communism, anarchy, and then, the ever following despotism."

Direct Tax and the Uniformity Clause

As for constitutional arguments, the plaintiffs insisted that the income tax was a direct tax- the law's tax on real property was the equivalent of a property tax, which was a direct tax. According to Article I, Section 9 of the Constitution, "No capitation or other direct, Tax shall be laid, unless in Proportion to the Census or Enumeration..." The plaintiffs claimed that the income tax wasn't in proportion to the census and therefore it was unconstitutional.