Question

What renders a state income tax unconstitutional? Must the state income tax violate these rules in actual practice, or just in theory, in order for the U.S. Supreme Court to render it unconstitutional? Discuss.

Answer 1

Answer

''A state income tax unconstitutional''

This argument is based on the premise that all federal income tax laws are unconstitutional because the Sixteenth Amendment was not officially ratified, or because the State of Ohio was not properly a state at the time of ratification. This argument has survived over time because proponents mistakenly believe that the courts have refused to address this issue.

One argument that has been raised is that because the federal income tax is progressive (i.e., because the marginal tax rates increase, or progress, as the level of taxable income increases), the discriminations and inequalities created by the tax should render the tax unconstitutional. This argument was rejected by the United States Supreme Court in two companion cases — with respect to the income tax on individuals in Thorne v. Anderson, and with respect to the income tax on corporations in Tyee Realty Co. v. Anderson.

Example:-

• United States v. Russell (taxpayer's argument—that the federal income is unconstitutional on the theory that the law cannot tax a "common law right to work"—was rejected by the United States Court of Appeals for the Eighth Circuit);