How Federal Income Tax Laws are Unfair

by Nastya Petrovitch

The Federal Income Tax Laws are unfair. They are too complicated and vague, making it hard to enforce. Because of their poor wording, nobody can agree on what the laws mean. Over the years, there has been a lengthy debate over whether it is a direct or indirect tax. People who believe that it is a direct tax say that income is property, while people who believe that it is an indirect tax say that income is not property. Because of this confusion as to the nature of the law, numerous Supreme Court rulings have conflicted with one another. If the Supreme Court justices, who are very well-versed in reading the law, cannot understand Federal Tax Laws, then the average American most definitely will not be able to. People do not know which ruling to abide by, because abiding by one ruling could get them in trouble for tax evasion in another ruling. This vagueness impinges on due process.

It causes people to be unfairly convicted of tax evasion. An example of this can be found in United States v. Critzer where a Native American was convicted of tax evasion, a ruling which was overturned later due to being unconstitutional (498 F.2d 1160, 4th cir., 1974). Mrs. Critzer asked the Bureau of Indian Affairs if profit gained from her property was taxable and the agency told her that it was not taxable. Mrs. Critzer relied on this advice and did not report that income. Unfortunately, the IRS held a different opinion, convicting her of tax evasion. It was later overturned, with the reasoning that conflicting stances of federal institutions prevented Mrs. Critzer from having the willful intent necessary for a conviction. The conflict over its interpretation not only caused Mrs. Critzer to be unfairly prosecuted, but also impaired the court’s ability to correctly interpret the law.

In order to make the Federal Income Tax Laws more fair, they need to be simplified. A complete overhaul of the law needs to be in order, and a new law needs to be written in its stead. It needs to either be definitively identified as a direct or indirect tax, or another category needs to be created. In order for laws to be fair, they need to be equally enforced. The first thing which needs to happen to ensure they are equally enforced is to make them clear enough that it is not constantly subject to misinterpretation. In 1913, Senator Elihu Root commented on the vagueness of the 16th Amendment during a debate by saying,

I guess you will have to go to jail. If that is the result of not understanding the Income Tax Law I shall meet you there. We shall have a merry, merry time, for all of our friends will be there. It will be an intellectual center, for no one understands the Income Tax Law[s] except persons who have not sufficient intelligence to understand the questions that arise under it (Dubroff 12).

Links for more information:

Income Tax. United States Individual Tax Site. http://www.usa-federal-state-individual-tax.com/income_tax.asp

Articles about Income. TaxAlmanac. http://www.taxalmanac.org/index.php/Income

FAQs: Taxes. United States Department of the Treasury. http://www.treas.gov/education/faq/taxes/liability.shtml

Works Cited:

Dubroff, Harold. The United States Tax Court: An Historical Analysis. New York: CCH, 1979.

“Uncertainty of the Federal Income Tax Laws.” We the People Foundation. 8 August 2005.

United States of America v. Haggar Apparel Corporation. No. 97-2044. Supreme Ct. of the US. December 1998.

United States v. Critzer. 498 F.2d 1160. 4th cir. 1974.

Originally posted in Nastya Petrovitch’s blog at http://www.progressiveu.org/blog/candy7468  

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