The topic of discussion for this Constitution Monday comes from Article I.9.4: "No … direct Tax shall be laid [unless in Proportion to the Census or enumeration herein before directed to be taken.]" This provision in the Constitution guaranteed that no citizen, no matter where they lived, would have any direct taxes levied against their person or property except in proportion to the population of their state.
"A direct tax is one which is levied against a person (head tax), his property (property tax), or his income (personal income tax). Notice that in all of these the taxpayer must pay `directly.' In other words, he cannot pass the tax along to anyone else.
"On the other hand, an `indirect' tax is one which is placed on finished goods or those in process of being manufactured. Any tax paid by the manufacturer or distributor is passed on to the consumer. This means that the only person actually paying the tax is the consumer. He may not realize it, but he has paid the tax `indirectly.' For this reason, the many hidden taxes on a loaf of bread or other staples are paid for by the consumer `indirectly.' However, when he pays a poll tax, property tax, or income tax, he is paying taxes directly." (See W. Cleon Skousen in The Making of
- The Substance and Meaning of the Constitution, pp. 478-479.) America
When I first read the above information, I wondered why I have to pay income taxes. It appears that this clause in the Constitution was amended in 1913 with the passage of the Sixteenth Amendment: "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."
"Direct taxes, which were expected to be used only in emergencies, did not have the built-in protections characteristic of indirect taxes. Direct taxes were imposed directly on individuals, who, it was assumed, could not shift their liability to others. If a tax was not indirect, the Framers thought it should be apportioned. Capitation and land taxes were direct under this understanding, but so might other taxes be, whether known in 1787 or not. If nothing else, a broader understanding of `direct taxes' should require that the constitutional character of any proposed tax be studied before it is enacted in an unapportioned form." (See Erik M. Jensen in The Heritage Guide to the Constitution, p. 160.)