THE FEDERAL ESTATE TAX
The Federal estate tax is patently unconstitutional when applied within the fifty states because that constitutes a direct tax that is not apportioned to the states for collection as required by the Constitution under Article I, Section 2, Clause 3 of that document, and this tax cannot be otherwise sustained as a legitimate exercise of the federally granted power to tax indirectly by impost, duty or excise under Article I, Section 8, Clause 1.
The federal government has absolutely no constitutional authority what-so-ever to tax the American People simply because we die, nor does it possess the legitimate power to tax the estates of the citizens of the fifty states at death under the pretense of excise taxation. And believe it or not, that is the admitted basis and supposed legal justification for the federal estate tax.
Unfortunately however, there is NO constitutional authority granted to the federal government to tax property on this basis, in this direct manner and without indirect subjectivity under Article I, Section 8, clause 1 to any legitimate excise tax.
This is patently unconstitutionally direct taxation. And I can prove it in ten minutes.
Article I, Section 2, Clause 3, of the U.S. Constitution requires all direct taxes to be apportioned to the States for collection. Additionally, Article I, Section 9, Clause 4, of the U.S. Constitution requires all direct taxes to be laid in proportion to the census. So this federal estate tax, which is not paid by the States, and is not laid in proportion to the census, cannot be perceived or claimed to be legitimate direct tax under the constraints and requirements of the Constitution.
The Constitution then divides the power to tax indirectly into three specific limited authorities: impost, duty, and excise.
The first constitutional category of indirect taxes, imposts, are by definition, only taxes that are imposed by Congress on the importation of foreign goods entering the United States, and on foreign activity occurring and being conducted in the United States.
federal estate tax that is imposed on estates made between American citizens in
The second constitutional category of indirect taxes, duties, are by definition, only taxes that are imposed on the flow of goods manufactured in the United States that are being exported out of the country for sale in other parts of the world.
federal estate tax that is imposed on estates made between American citizens in
So that takes us to the third and final constitutional category of authorized indirect taxation, excise taxes.
In the late 1890s (in 1898) the Supreme Court ruled that the federal estate tax was a constitutional exercise of the indirect federal power to tax by excise. The court held that the federal estate tax was not a direct tax, but an indirect tax in the form of an excise imposed on the privilege of transferring property at the death of the owner.
HOWEVER, the Supreme
Court orphaned this ruling, and widowed it from support in law and
constitutional fact when it ruled 13 years later, in 1911, in the Flint v. Stone Tracy
Co. case, precisely what an
excise constitutes under the U.S. Constitution,
I have already extensively addressed the authority to tax by excise, what an excise tax legally consists of, and how the reach of this granted authority is limited in application by the nature of the underlying activity conducted, but we review it all now again.
Black's Law Dictionary defines excise taxes today, specifically based on the Flint v. Stone Tracy Co. ruling in 1911:
Excise taxes are
taxes "laid upon the manufacture, sale or consumption of commodities
within the country, upon licenses to pursue certain occupations, and upon
corporate privileges." Flint v.
Stone Tracy Co., 220
The chief justice, delivering the opinion of the court in Thomas v. United States, 192 U.S. 363, 48 L. ed. 481, 24 Sup. Ct. Rep. 305, in speaking of the words 'duties,' 'imposts,' and 'excises,' said:
We think that they were used comprehensively, to cover customs and excise duties imposed on importation, consumption, manufacture, and sale of certain commodities, privileges, particular business transactions, vocations, occupations, and the like.
Duties and imposts are terms commonly applied to levies made by governments on the importation or exportation of commodities. Excises are 'taxes laid upon the manufacture, sale, or consumption of commodities within the country, upon licenses to pursue certain occupations, and upon corporate privileges.' Cooley, Const. Lim. 7th ed. 680.
The tax under consideration, as we have construed the
statute, may be described as an excise
upon the particular privilege of doing business in a corporate capacity, i.e.,
with the advantages which arise from corporate or quasi corporate organization;
or, when applied to insurance companies, for doing the business of such
companies. As was said in the Thomas Case, 192
If we are correct in holding that this is
an excise tax, there is nothing in the Constitution requiring such taxes to be
apportioned according to population. Pacific
Ins. Co. v. Soule, 7 Wall. 433, 19 L. ed. 95; Springer v. United States, 102 U.S. 586 , 26 L. ed. 253; Spreckels Sugar Ref. Co. v. McClain, 192
U.S. 397 , 48 L. ed. 496, 24 Sup. Ct. Rep. 376.
As was identified above, it was specifically held in the Flint v. Stone Tracy Co., 220 U.S. 107 (1911) ruling, that:
"Excises are "taxes laid upon the manufacture,
sale or consumption of commodities within the country, upon licenses to pursue
certain occupations, and upon corporate privileges ... the
requirement to pay such taxes involves the exercise of the privilege and if business is not done in the manner
described no tax is payable...it is the privilege which is the subject of
the tax and not the
mere buying, selling or handling of goods. " Cooley, Const. Lim.,
7th ed., 680."
Clearly, from these rulings we can easily see that the federal estate tax cannot be upheld as a legitimate and constitutional exercise of the indirect federal powers to tax by excise under Article 1, Section 8, Clause 1, as it does not come within this defined purview and reach of the federal constitutional authority to tax by excise.
should now be aware that no citizen is
directly subject to any federal estate tax, allegedly imposed as an indirect
excise, because under the Flint v.
Stone Tracy Co decision, the power to tax by excise NO LONGER INCLUDES the power to tax the transfer of property at death. Thus, citizens
are obviously not subject to any excise based estate tax unless they reside
in a territory or possession of the
estate tax clearly does not come within
the defined scope of the authority to tax commodity, license, or privilege,
by excise. Transferring property at death is NO LONGER a taxable privilege, because
the Supreme Court understood in 1911
that, for citizens, THAT IS A CONSTITUTIONAL RIGHT, not a taxable act, and
widowed that power from the legitimate authority. Taxing the simple transfer of property
without legitimate indirect basis and legal foundation for such is
Unconstitutionally direct taxation without apportionment when the tax is taken
from any entity other than the State, as required by the
This decision, under Flint v. Stone Tracy Co., is still the controlling decision and rule of law today concerning the power to tax by excise, and is in fact now recognized as Constitutional law, having been cited and followed over 600 times by virtually every court in the nation as the conclusive authoritative definition of the scope of excise taxing power.
Because the federal estate tax is a tax that is paid directly to the federal government by the estate of the person who died, as a direct consequence of their dying, the federal estate tax cannot be upheld as a constitutional direct tax that has been apportioned to the States; and because it also cannot be sustained as a tax with any legitimate INDIRECT constitutional basis, as neither impost, duty, or excise as shown, it is an unconstitutional tax in the fifty states of the United States of America;
Finally, the estate tax cannot be legitimately argued to be part of any income tax because, as we have pointed out, the Supreme Court has declared that income is taken to mean gain or profit on capital or labor, or the combination of both
In Stratton's Independence v.
"Income may be defined as the gain derived from capital, from labor, or from both combined."
" . . . and the gains derived from it are properly and strictly the income from that business; for "income" may be defined as the gains derived from capital, from labor, or from both combined,." Id at p. 415 (emphasis added)
In another case, Eisner v. Macomber,
". . . Income may be defined as the gain derived from capital, from labor, or from both combined," provided it be understood to include profit gained through a sale or conversion of capital assets, to which it was applied in the Doyle case (pp. 183, 185)."
"Brief as it is, it indicates the characteristic and distinguishing attribute of income essential for a correct solution of the present controversy. The Government, although basing its argument upon the definition as quoted, placed chief emphasis upon the word "gain," which was extended to include a variety of meanings; while the significance of the next three words was either overlooked or misconceived. "Derived from capital;" "the gain derived from capital," etc. Here we have the essential matter: not a gain accruing to capital, not a growth or increment of value in the investment; but a gain, a profit, something of exchangeable value proceeding from the property, severed from the capital however invested or employed, and coming in, being "derived," that is, received or drawn by the recipient (the taxpayer) for his separate use, benefit and disposal; that is income derived from property. Nothing else answers the description." Id at 207 (emphasis added)
I think that everyone will concede that when a person dies and an estate is created through that death, there is no investment or new activity that involves any capital, or labor, or conversion of assets that occurs, so the estate cannot be construed to have ant taxable income simply as a result of the death. Of course, there is no increase in capital or financial gain to the estate as a result of the death occurring, nor is there any profit that is realized by the estate in the creation of the estate through the death of the decedent, so the estate also cannot be made the subject of any income tax imposed on the estate as a result of the death either.
THE FEDERAL ESTATE TAX IS UNCONSTITUTIONAL !
Where imposed on the estates of American citizens in the fifty states, the federal estate tax IS OBVIOUSLY AN UNCONSTITUIONAL TAX, without legitimate constitutional basis as either a direct tax or an indirect tax.
This is exactly the sort of arbitrary and capricious exercise of un-granted direct powers that the Constitution was written to forever prevent. The federal government has absolutely no legal right what-so-ever to directly tax you, your property, or your estate because you die.
is no federal territorial jurisdiction
to tax estates of citizens in the fifty states, no federal subject matter jurisdiction to tax the estates of
citizens in the fifty states, no
personal jurisdiction to tax the estates of citizens, and no constitutional authority what-so-ever to tax estates act of any
American citizen, directly, or indirectly, anywhere in
There is no constitutional basis to tax the
estates of any persons, OTHER THAN
THOSE MADE BY FOREIGN persons
present in the
The two enemies of the People are criminals and government, so let us tie the second down
with the chains of the Constitution so the second will not become the legalized version of the first. - Thomas Jefferson
When it comes to the Federal Estate Tax,
 Again, Flint v. Stone Tracy Co. is controlling and Constitutional law, having been cited and followed over 600 times by virtually every court as the authoritative definition of the scope of excise taxing power.