Understanding the Income Tax
and Indirect Taxation
Scroll down and watch each animation one at a time.
Notice who is responsible for making the Tax returns and who doesn't make returns . (customers)
Indirect Tax - General characteristics
- Can be passed on to customer
- Exercising a licensed privilege
- Can be avoided –
- avoid taxable activity
- avoid privileged goods
Example #1 indirect tax - Alcohol Tax
Example #2 indirect tax - Import Tax
Example #3 indirect tax - Corporate Excise Tax
Example #4 Direct tax - Tax on Everybody
Direct Tax
General Characteristics
- Cannot be avoided
- Applies to everybody
Now for the Mega Important United States Supreme Court decision about the meaning of income tax and the proper application of the 16th amendment.
STANTON
v. BALTIC MINING CO, 240 U.S. 103 (1916) "by the previous ruling it was
settled that the provisions of the 16th Amendment … simply prohibited …
income taxation
… from being taken out of the category of indirect taxation"
Example #5 Indirect tax - Tax does not apply to everybody
That was the intent of Indirect Taxation. That way, People are free to live with minimum government interference. You would NOT have to ...
- Keep Books and records
- File returns
- Worry about audits
- and all the jail time for not doing it correctly.
Everything you probably buy today is purchased from a faceless corporation. This would also boost the American unincorporated small business while putting the brakes on Mega Monopoly Big Business. There is no need to create another tax like the Fair Tax. A fair tax already exists if it was used properly.
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