Was the Civil War income tax an excise tax?

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    This question was proffered to the panel (Tom, Brion and Kevin) during the live broadcast on April 15, which I feel was appropriate for the occasion and critical to understanding the American income tax. All of the panel punted claiming ignorance of American taxation history and alluded to holding the pragmatic position of going along to get along until the 16th Amendment is repealed. In other words: “why bother to study the history of the tax when it won’t make a hill of beans in the long run.” But of course like all subject matter, especially law, the historical context can make or break a correct understanding of it. The income tax is no exception. To gain this contextual understanding current beliefs, education and experiences regarding the tax must somehow be put aside and a concerted effort be put forth to honestly attempt to think how Americans did during this time.
    Was there a general knowledge among Americans that an “income tax” in the nature of an excise was a privilege tax and how were they so informed? One of the most influential resources upon early Americans was Blackstone’s Commentaries. In the chapter: Of the King’s Revenue Blackstone discusses how, since at least the Glorious Revolution, the indirect system of taxation was adopted in Britain as more reflective of a free people. It was this system that was adopted by the Founder’s as the main fiscal engine of the new federal government, when Congress was given the power to levy duties, imposts and excises. Blackstone lists various excises or duties as representative of the system in 1760’s Britain. The ninth and last duty was the office duty upon the privilege of receiving gain, profit or income whose ultimate source was from government. It was as Blackstone put it: “highly popular taxation.” This particular duty was unmistakably a tax upon the privileged political class and reflective of the classical liberal thinking that government service was for altruist ends not personal gain. In fact the whole question of graduation was born out of this thinking. The more one gains from a political privilege the more he is obligated (duty) to return.
    The historical record is replete with evidence that the Civil War income tax was indeed an excise and enforced as such. 1) The 1861 income “tax”, which was not enforced, was repealed by the 1862 income “duty”. The name change was not mere coincidence but a clear indication that it was not to be recognized as a direct tax, which the name of the 1861 tax could erroneously express. 2)The tax form to be used to file a return of income expressly declared that the duty was authorized under the excise laws of the United States. 3) The SCOTUS declared matter-of-factly in 1880 in Springer that the duty was an excise. Springer was a federally licensed attorney who failed to properly declare his income. 4) The official reports from the CIR during this period show that less than 1% of the population filed returns. Strongly supporting the conclusion that it was a limited and specific privilege tax effecting few.
    Thus, to extend the claim that the Lincoln administration utilized the income duty as another unconstitutional encroachment to further advance centralized national power is probably going to far. It was obviously just the use of Congress’s longstanding constitutional excise power to tax the exercise of government privilege and measure it by the income that the privilege produces. In fact it was so successful that it was responsible for a quarter of the revenue collected via taxation. Which I might add was miniscule compared to borrowing and paper-money printing.
    So what does it all matter since we are saddled with the 16th Amendment? Could it be that because such basic taxation knowledge is lacking conclusions drawn concerning the meaning and purpose of the amendment are nothing but propaganda and myths perpetrated by the political class and camp followers to achieve what the income tax as an excise could never achieve and was originally levied to help prevent: empire?
    Note: Charles Adams entertaining romp through taxation history, For Good and Evil, gives an illuminating discussion of the indirect system of taxation. Check out chapters 27 and 28.


    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:



    What did the Framers mean by apportioned direct taxes?
    Was this meant to be a cryptic reference to financing the federal government (without using the word “requisitions”) by continuing the failed method of requisitions on the states by population apportionment that was the fundamental method of financing the confederational government under the Articles of Confederation?
    Was the requisition on the states method ever used after the ratification and implementation of the Constitution?
    Daniel Clyde Cummings

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