Paying Taxes Can Tax The Better Of Us: Difference between revisions
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Revision as of 18:52, 5 March 2025
The courts have generally held that direct taxes are limited to taxes on people (variously called capitation, poll tax or head tax) and property. (Penn Mutual Indemnity Corp. v. C.I.R., 227 F.2d 16, 19-20 (3rd Cir. 1960).) Various other taxes are typically called "indirect taxes," as these tax an event, rather than particular or property as such. (Steward Machine Co. v. Davis, 301 U.S. 548, 581-582 (1937).) What turned out to be a straightforward limitation on the power of the legislature based on the main topic of the tax proved inexact and unclear when applied to an income tax, which is certainly arguably viewed either as a direct or an indirect tax.
If you add a C-Corporation to all of your business structure you can reduce your taxable income and therefore be qualified for those types of deductions for your current income is simply high. Remember, a C-Corporation is specific to it individual individual.
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An argument that tips, in some or all cases, aren't "compensation received for the performance of private services" still might work. Take in the amount it did not, I would expect the government to assert this fee. This is why I put a warning label which experts claim stands this column. I don't want some unsuspecting server to get drawn onto a fight the affected individual can't manage to lose.
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