Getting Rid Of Tax Debts In Bankruptcy: Difference between revisions
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Revision as of 15:26, 9 October 2026
The courts have generally held that direct taxes are restricted 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).) All the other taxes are commonly referred to as "indirect taxes," as these tax an event, rather than an individual or property by itself. (Steward Machine Co. v. Davis, 301 U.S. 548, 581-582 (1937).) What was basically a straightforward limitation on the power of the legislature based on the main topics the tax proved inexact and unclear when applied a good income tax, which could be arguably viewed either as a direct or an indirect tax.
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Why? In most cases, the borrower can be a corporate entity, and tend to be just an individual guarantor.