Reply To: Was the Civil War income tax an excise tax?


For those who have not taken the time to read Blackstone, his ninth excise reads as follows:
“The ninth and last branch of the king’s extraordinary perpetual revenue is the duty upon offices and pensions; consisting in an annual payment of 1s. in the pound (over and above all other duties)(k) out of all salaries, fees, and perquisites, of offices and pensions payable by the crown, exceeding the value of 100l. per annum. This highly popular taxation was imposed by statute 31 Geo. II. c. 22, and is under the direction of the commissioners of the land tax.”
Footnote (k): “Previous to this, a deduction of 6d. in the pound was charged on all pensions and annuities, and all salaries, fees and wages of all offices of profit granted by or derived from the crown, in order to pay interest at the rate of three per cent. on one million, which was raised for discharging the debts on the civil list, by statutes 7 Geo. I. st. 1, c. 27; 11 Geo. I. c. 17; and 12 Geo.I. c. 2. …”

Of course this tax, or more accurately, this excise, did not go to the grave with Blackstone. Stephen Dowell in his 1888 ‘A History Of Taxation and Taxes in England’, Vol. III, pg. 90 discusses the further evolution of the Office Duty:
“That part of the old land tax which was collected from public offices and employment–’in respect of any public office, or employment, or any salaries, gratuities, bounty monies, rewards, fees, profits, perquisites or advantages therefrom’–had been extended, by Pitt, to ‘persons receiving annuities, pensions, stipends and other yearly payments charged upon the exchequer or any branch of the revenue, or secured to be paid by any person or persons otherwise than as a charge on lands,’ and, as thus extended, had been formed into a separate tax.”
He is discussing the office duty as expressed in Pitt’s Property and Income Tax, 1799-1802.

Dowell continues the story with Addington’s Property and Income Tax, 1803-06, beginning at pg. 99. The old office duty, now a part of a comprehensive property and income tax statute, was expressed in Schedules C and E. (It should be noted that Schedules A, B and D, were without question general direct taxes.) Dowell summarized them:

“Schedule C, the tax on fundholders, in respect of profits arising from annuities payable out of any public revenues…”

“Schedule E contained the charge on persons deriving income from any public office or employment of profit, and included also persons receiving any annuity, pension or stipend payable by the Crown or out of public revenue. The plan of this schedule was to make responsible for the payment of the tax those who paid the salary, annuity, pension or stipend, who in their turn, were to deduct the amount on paying the person entitled. This provision effectually prevented evasions, and therefore a wide sweep was given to the net, and by definition, the term ‘public office or employment’ was extended so as to include all offices in public institutions, and public foundations under any trustees or guardians of any county or municipal fund, tolls, or duties; those held under any corporation or any company or society, corporate or not corporate; and, generally, every other public office or employment of profit of a public nature.”

Is it just a coincidence that the American 1862 income excise tax on the exercise of federal government privilege was expressed in two statutes: Sec. 86 which mirrored Schedule E and Sec. 90 which mirrored Schedule C?
To see these statute sections of 1862 American tax law go here:

Dowell then proceeds to review the income tax recently in force in England for the periods 1879-80 and 1884-5. These mirror those of the Addington period.

“Schedule C: The third branch, termed schedule C, touches income from any public revenue, imperial, colonial, or foreign, and under this schedule the amount received is charged. The assessment, as regards dividends from the Funds and other imperial revenue, is made by commissioners for the purpose, from information derived from official documents in their possession; and the tax is deducted from the dividends or other payments and paid into the Bank to the account of the revenue. As regards income from investments in colonial or foreign government securities, the plan of the tax is to require all persons entrusted with the payment of the income in this country to deliver accounts to the SPECIAL COMMISSIONERS–in order that they may make out the assessments and raise a charge.”

“Schedule E. A fourth branch, termed schedule E, touches persons in the employment of the state, or in other public employments of profit. The assessment and collection is easily effected, ad unguem, as regards official incomes in the strict sense of the term, in the departments concerned; while as regards other employments of profit in public corporations or companies, the treasurer or other such officer is required to do all acts requisite for the assessment of the officers of the corporation or company. The increase in the number of public companies renders this a growing schedule.”

There should now be no misunderstanding as to what an excise on the exercise of government privilege consists of and how it operates. You can be sure that nineteenth and early twentieth century American legislators and lawyers understood it and would not confuse it with a direct tax or wish to abandon it for one. That’s why the Pollack decision received so much derision, because it ignored over 150 years of precedent. And why the purpose of the sixteenth amendment was to overturn that decision to return to Congress the power to tax privileged incomes, from whatever source derived, that it had utilized all through the 1862-1872 era.

For the most accurate and concise discussion of the 16th Amendment ever written go here: