parados wrote: There is always a problem with pulling something out of context. This is one of the first references that Smith makes to taxes and how they are direct or indirect.
I've read everyone of those and more and have pulled NOTHING out of context. Read it again before you make such an outlandish claim. You couldn't possibly have arrived at that conclusion without a great effort to do so. Open your mind, man.
parados wrote: Quote:The transference of all sorts of property from the dead to the living, and that of immovable property, of lands and houses, from the living to the living, are transactions which are in their nature either public and notorious, or such as cannot be long concealed. Such transactions, therefore, may be taxed directly. The transference of stock, or movable property, from the living to the living, by the lending of money, is frequently a secret transaction, and may always be made so. It cannot easily, therefore, be taxed directly. It has been taxed indirectly in two different ways; first, by requiring that the deed containing the obligation to repay should be written upon paper or parchment which had paid a certain stamp-duty, otherwise not to be valid; secondly, by requiring, under the like penalty of invalidity, that it should be recorded either in a public or secret register, and by imposing certain duties upon such registration. Stamp-duties and duties of registration have frequently been imposed likewise upon the deeds transferring property of all kinds from the dead to the living, and upon those transferring immovable property from the living to the living, transactions which might easily have been taxed directly.
It makes his meaning quite different than the one pulled out of context in the wages section that follows this one.
An direct tax is one on the specific item. An indirect tax is one that taxes an item by taxing something related to it.
The meaning isn't different at all and in fact blends perfectly. While land has sometimes been taxed indirectly by requiring a deed or title, and taxing that... it could easily have been taxed directly since it isn't going anywhere. An automobile in today's world, would be difficult to tax directly... because to many sales would not be reported, so they are instead taxed indirectly by requiring a title. There's no contradiction here. Both the words direct and indirect are taking on their natural meaning.
parados wrote: Now lets look at the first time "direct tax" is used in the wages section of taxation, chapter 5 art 3.
Quote:While the demand for labour and the price of provisions, therefore, remain the same, a direct tax upon the wages of labour can have no other effect than to raise them somewhat higher than the tax.
Smith is referring to a tax directly on the wage as opposed to later when he talks about the indirect nature of taxing consumption. Both tax the wages. One directly and the other indirectly.
Nonsense. Read it again, and again if necessary until you understand what you just quoted. A direct tax on wages is just that. A tax on consumption is NOT tied to wages, but he articulates very clearly that it accomplishes the same thing (collecting tax) with some degree of accuracy if you tax things that everyone needs. The tiny excerpt you quoted is actually part of an explanation that they method sucks because when you tax a wage, a wage has to be increased not just by the amount of the tax; but also enough to tax the increase in wage the tax requires. He was very clear; you must be skimming.
parados wrote: The reality Bill is that when you take the totality of Smith's writing he explains that all items can be taxed directly or indirectly. In some cases it isn't possible to tax directly so indirect measures are used. Direct and indirect are nothing more than adjectives stating how the specific object is taxed. It is not some great revelation that the founders could not have missed. The founders would have read all of Smith. They would have been aware of how the words were used. This reading of "direct" and "indirect" leads us back to capitation and property as used in the Constitution since those are the items being talked about when it is used.
You are so off base you will be embarrassed when you realize it. Direct and Indirect ARE nothing more than adjectives in Smith's writing, taking on their natural meaning. Not until you actually write a law prescribing how to collect taxes do they become intrinsic in something bigger. Our founders did that... and we are now debating whether or not they understood the natural meaning of the words they chose to use. I'm guessing they did. You are adamantly insisting they did not.
parados wrote: But lets for a moment assume that only a tax on consumption is an indirect tax. How does that allow for the ruling in the Hylton case on a carriage tax? Certainly the tax is directly on the carriage and it isn't an income tax.
Bingo! It doesn't. And that's where two centuries of redefining the word "Direct" began. It was right then and there that a constitutional amendment was required. As written, Hylton was right. The appropriate remedy would have been to rule in favor of Hylton and ask legislation to get busy creating an amendment to allow for such a tax, or leave it repealed and therefore unconstitutional. Instead, they chose to legislate from the bench and perverted the word "Direct".
I pulled nothing out of context and that assessment is ridiculous. Read those sections again. Dude doesn't skimp on the details. Read your quotes, and the rest of Smith's writing on that page more closely and you'll see that he explains in great detail what he means by Direct Tax on wages. Pity our framers didn't do our constitution such justice. Nobody's perfect.
parados wrote: Bill,
You have fallen into recycling the arguments of the tax protestors. You are pulling the use of the word by Smith and claiming it means more than it does. All taxes are direct taxes on the object taxed. It is only a question of whether it is an attempt to indirectly tax something else.
That is patently false. I have avoided all tax protestor sites like the plague since writing that list of 13 conclusions. Every source I've quoted from is as sterile as could be hoped for. I did this because I wanted to go in fresh. Your conclusions are in error.
parados wrote: Consumption taxes indirectly tax wages
No, they indirectly Tax people if and when they choose to consume.
parados wrote:Income taxes indirectly tax labor performed.
No, Income taxes directly tax labor performed.
parados wrote:A labor tax indirectly taxes the manufacturer.
What pray tell is a labor tax? If you mean Income tax, you are wrong. A manufacturer doesn't necessarily raise wages when wage earner's taxes are raised. These days our feudal lords pay us peasants more than the needs of basic sustenance.
parados wrote:A manufacturer tax indirectly taxes the consumer.
What pray tell is a manufacturer tax? If you mean sales tax, then yes, that indirectly taxes consumers if and when they choose to consume.
parados wrote:It is a cycle that will always have circles to follow.
No, this is silly word play that even fails in that endeavor.
Joe, at the time the constitution was written; many people believed that all wealth came from the land. That's what the Wealth of Nations disputed in theory and what the United States proved in practice. In this sense, income and land are very much members of the same class.
I find it hard to believe you don't find it even curious that a brand new definition for "direct" mysteriously appeared in our constitution. Adam Smith's use of the word makes perfect sense today, just as it did two centuries ago. The Supreme Court's use of the word, has no natural definition, before or after, it's supposed use in the constitution. How can that seem so crystal clear to you? It doesn't make sense.
