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Murphy V. Internal Revenue Service, The Meaning Of 'Income,' And Sky-Is-Falling Tax Commentary, Erik M. Jensen
Murphy V. Internal Revenue Service, The Meaning Of 'Income,' And Sky-Is-Falling Tax Commentary, Erik M. Jensen
Faculty Publications
This article examines the widely noted D.C. Circuit case, Murphy v. Internal Revenue Service, where a panel twice got itself hopelessly entangled in the relationship between the meaning of “income” in the Internal Revenue Code and its meaning in the Sixteenth Amendment. At issue was whether a whistle-blower's recovery for emotional distress could be reached by the income tax. The first time around, the panel concluded that the recovery could not be taxed constitutionally because it was not income. The second time, apparently after having visited another planet, the very same panel concluded that the recovery could be taxed whether …
The Taxing Power, The Sixteenth Amendment, And The Meaning Of ‘Incomes,’, Erik M. Jensen
The Taxing Power, The Sixteenth Amendment, And The Meaning Of ‘Incomes,’, Erik M. Jensen
Faculty Publications
This article examines the debates leading to the enactment of the 1894 income tax, which the Supreme Court struck down in 1895, and the Sixteenth Amendment, ratified in 1913, and concludes that an income tax and a tax on consumption were understood to be fundamentally different types of taxes. The author argues that the term “taxes on incomes” in the Sixteenth Amendment should be interpreted with that distinction in mind. The Amendment was intended to make a “tax on incomes,” and only a tax on incomes, possible without the apportionment that would otherwise be required for a direct tax. For …