In the case of the income tax, it is a different story. Section 9 states that “No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or Enumeration herein before directed to be taken.” The income tax is a direct tax, but the only direct tax that the Constitution allows would be one that is based on the population, for example, what is known as a “head tax”, i.e. so much money per person. That is why the 16th amendment was necessary.
Definition of excise taxes:
Excise taxes are categorized into two categories by their structures: (1) Ad Valorem - A fixed percentage charged on a particular good or service. These are normally referred to as sales taxes. This is what the FairTax is. (2) Specific - A fixed dollar amount dependent upon the quantity purchased. Today, these are still referred to as excise taxes, i.e. so many cents per gallon of gas.
[“An indirect consumption tax in which the base consists of the sales of businesses to non-businesses (a value-added tax or the retail sales tax)” Quote from Congressional Budget Office paper, “Comparing Income and Consumption Tax Bases,” July 1997, page 37.
Clause 1: The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States; [The FairTax is uniform throughout the US.]
Clause 4: No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or Enumeration herein before directed to be taken.
Clause 5: No Tax or Duty shall be laid on Articles exported from any State. [The FairTax does not tax exports. It only taxes goods/services consumed in the United States.]
The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration. [This is further evidence that an income tax is a direct tax; a consumption tax is an indirect tax, it is not levied directly on the individual himself or herself but only indirectly as the individual consumes.]--