The distilled spirits tax law is presented before the income tax law because its structure is easier to discern than the income tax even though the structures are the same. The distilled spirits tax is also an excellent display of a tax imposed by clear and unequivocal language as the Supreme Court requires.
In the interpretation of statutes levying taxes it is the established rule not to extend their provisions, by implication, beyond the clear import of the language used, or to enlarge their operations so as to embrace matters not specifically pointed out. In case of doubt they are construed most strongly against the government, and in favor of the citizen." GOULD v. GOULD, 245 U.S. 151 (1917).
... [T]he well-settled rule ... the citizen is exempt from taxation unless the same is imposed by clear and unequivocal language, and that where the construction of a tax law is doubtful, the doubt is to be resolved in favor of those upon whom the tax is sought to be laid... SPRECKELS SUGAR REFINING CO. v. MCCLAIN, 192 U.S. 397 (1904)
Stating the obvious:
- Law must specify who and what it applies to.
As you examine the distilled spirits tax, you will see that its law specifies who and what it applies to.
The distilled spirits tax law specifies who and what it applies to in four parts.
- The tax is imposed upon a taxable item.
- The liability for the tax is imposed upon a class of persons.
- The taxable item is defined.
- The class of persons is defined.
The income tax has this same structure that the distilled spirits tax has even though this structure is diffused throughout portions of the Internal Revenue Code in what I regard as a deliberate attempt to hide the true subjects and objects of the income tax.
The following citations have been abridged for clarity. When you do your due diligence examination of these written words of law on government or academia websites you can confirm that the omitted words have no bearing and are correctly ignored.
The tax is imposed upon a taxable item.
TITLE 26 - INTERNAL REVENUE CODE
Subtitle E - Alcohol, Tobacco, and Certain Other Excise Taxes
CHAPTER 51 - DISTILLED SPIRITS, WINES, AND BEER
Subchapter A - Gallonage and Occupational Taxes
PART I - GALLONAGE TAXES
Subpart A - Distilled Spirits
Sec. 5001. Imposition, rate, and attachment of tax
-STATUTE-
(a) Rate of tax
(1) General
There is hereby imposed on all distilled spirits produced in or imported into the United States a tax at the rate of $13.50 on each proof gallon and a proportionate tax at the like rate on all fractional parts of a proof gallon.
The language is clear and unequivocal.
The
liability for the tax is
imposed upon a class of
persons.
TITLE 26 - INTERNAL REVENUE CODE
Subtitle E - Alcohol, Tobacco, and Certain Other Excise Taxes
CHAPTER 51 - DISTILLED SPIRITS, WINES, AND BEER
Subchapter A - Gallonage and Occupational Taxes
PART I - GALLONAGE TAXES
Subpart A - Distilled Spirits
Sec. 5005. Persons liable for tax
(a) General
The distiller or importer of distilled spirits shall be liable for the taxes imposed thereon by section 5001(a)(1).
The language is clear and unequivocal. The distiller or importer is made "LIABLE" for the tax imposed.
Please note that this "liability" statute links itself to the statute that imposes the tax. This type of linkage will be important in our examination of the income tax "liability" statutes.
The taxable item is defined.
TITLE 26 - INTERNAL REVENUE CODE
Subtitle E - Alcohol, Tobacco, and Certain Other Excise Taxes
CHAPTER 51 - DISTILLED SPIRITS, WINES, AND BEER
Subchapter A - Gallonage and Occupational Taxes
PART I - GALLONAGE TAXES
Subpart A - Distilled Spirits
Sec. 5002. Definitions
(a) In general
For purposes of this chapter -
(8) Distilled spirits
The terms "distilled spirits", "alcoholic spirits", and "spirits" mean that substance known as ethyl alcohol, ethanol, or spirits of wine in any form (including all dilutions and mixtures thereof from whatever source or by whatever process produced).
(10) Proof spirits
The term "proof spirits" means that liquid which contains one-half its volume of ethyl alcohol of a specific gravity of 0.7939 at 60 degrees Fahrenheit (referring to water at 60 degrees Fahrenheit as unity).
(11) Proof gallon
The term "proof gallon" means a United States gallon of proof spirits, or the alcoholic equivalent thereof.
The language is clear and unequivocal.
The tax is imposed upon a "proof gallon". A "proof gallon" is a gallon of "proof spirits". A gallon of "proof spirits" is a half gallon of ethyl alcohol mixed with a half gallon of some other liquid at the density and temperature described.
Therefore, a tax of $13.50 is proportionally imposed upon each half gallon of undiluted ethyl alcohol contained in any liquid mixture of beverage. In other words, 200 proof white lightning (100% ethyl alcohol) would be taxed at $27.00 a gallon.
The class of persons is defined.
TITLE 26 - INTERNAL REVENUE CODE
Subtitle E - Alcohol, Tobacco, and Certain Other Excise Taxes
CHAPTER 51 - DISTILLED SPIRITS, WINES, AND BEER
Subchapter A - Gallonage and Occupational Taxes
PART I - GALLONAGE TAXES
Subpart A - Distilled Spirits
Sec. 5002. Definitions
(a) In general
For purposes of this chapter -
(4) Distiller
The term "distiller" includes any person who -
(A) produces distilled spirits from any source or substance,
(B) brews or makes mash, wort, or wash fit for distillation or for the production of distilled spirits (other than the making or using of mash, wort, or wash in the authorized production of wine or beer, or the production of vinegar by fermentation),
(C) by any process separates alcoholic spirits from any fermented substance, or
(D) making or keeping mash, wort, or wash, has a still in his possession or use.
The language is clear and unequivocal.
Stating the obvious:
- If the law doesn't specify that it applies to you, then it doesn't apply to you.
- If the distilled spirits tax law does not make you "liable" for the tax, then the distilled spirits tax does not apply to you.