B. The Tax On Ms. Murphy Is a "Capitation" or Other Direct Tax.
Alternatively, the tax on Ms. Murphy is a direct tax on the source and more direct than the tax declared to be invalid in Pollock.18 The Government makes many errors in its effort to counter Amici's argument, joined by Ms. Murphy, that the tax on Ms. Murphy's damages is a direct tax subject to apportionment under the Constitution.
1. The Federalist has a great deal to say about the nature of direct and indirect taxes, all of it unfavorable to the Government's case. The Government's response is to ignore the Federalist completely.
The Government draws from a secondary source its sole reference to a primary source: a passage from James Madison's notes of The Debates in the Federal Convention on August 20, 1787.19 Madison records that Rufus King asked the convention "what was the meaning of direct taxation" and that "[n]o one answd." Appellees' Br., pp. 59-60. The Government implies that the other delegates were baffled by the question and had no answer. This is both disingenuous and illustrates the folly of attempting Constitutional analysis without reference to The Federalist. It is obvious the delegates already had clear ideas about the meaning of direct and indirect taxation.20 Madison himself, as one of the three authors of The Federalist, wrote specifically in No. 54, about "direct taxes" and their relationship to apportionment of representatives. The Federalist Papers, No. 54 (Madison), pp. 336-7 (Mentor ed. 1961). It is overwhelmingly likely that the future President, knowledgeable and attentive, simply joined the others in ignoring King whose comment came close to the end of a hot August Monday in Philadelphia during a discussion of apportionment of taxes among the states pending an initial census. King was likely ignored because the delegates wanted to get on with the issue at hand, not because they didn't know what was meant by "direct taxation." "No one answd" was thus essentially equivalent to "No one bothered to answer."
2. The Government overlooks that the tax it seeks to impose upon Ms. Murphy is in fact a capitation tax or other direct tax.
Contemporaneous authoritative explanation of the term "capitation" shows that the term was meant to encompass, among others, income taxes. Albert Gallatin, Secretary of the Treasury under Presidents Jefferson and Madison, May 14, 1801 to February 9, 1814, thus wrote as to the meaning of the term:
The remarkable coincidence of the clause of the Constitution with this passage [in Adam Smith's "Wealth of Nations"] in using the word 'capitation' as a generic expression, including the different species of direct taxes, in acceptation of the word peculiar, it is believed, to Dr. Smith, leaves little doubt that the framers of the [Constitution] had [Adam Smith] in view at the time, and that they, as well as he, by direct taxes, meant those paid directly from and falling immediately on the revenue . . ." 3 Gallatin's Writings, (Adamis's ed.) 74, 75. [Quoted in Pollock v. Farmers Loan & Trust Co., 157 U.S. 429, 570 (1895), vacated on rehearing 158 U.S. 601 (1895).]
Of course, direct taxes in the Constitution are not limited to capitation taxes. See Article I, § 9, cl. 4 ("No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or Enumeration herein before directed to be taken."). Also see, Jensen, 97 Columbia Law Review at 2389-2397. A definition of direct taxes based on the historical record is: "Direct taxes are taxes that are not indirect taxes and that are imposed by the national government directly on individuals, generally without the states' serving as filters of the national power." Id., at 2402. On the basis of this definition, a tax on Ms. Murphy's damages is a direct tax. It was Ms. Murphy who paid the tax now at issue. The tax was both measured by the amount of Ms. Murphy's damages to make her whole for personal injury loss and clearly fell, directly, upon her. As a result, the tax the Government seeks to impose is thus clearly and inescapably direct.
3. The Government's heavy reliance on Hylton v. United States, 3 U.S. 171 (1796), is both over-stated and misplaced. First, in fact, only two of the justices -- William Patterson and James Wilson -- not four, were delegates to the Constitutional Convention.21 The lead opinion in Hylton was written by Samuel Chase, who was not a delegate. Second, there no reason to prefer the personal recollections of Messrs. Patterson and Wilson to the extent reflected in Hylton over the more immediate ones set forth in The Federalist -- rather the reverse. Third, Mr. Justice Chase's theory of direct and indirect taxation corresponds neatly to the principles set forth in The Federalist and Gallatin's Writings -- that direct taxes are measured by the taxpayer's revenue and indirect (consumption) taxes by the taxpayer's expenses:
I think an annual tax on carriages for the conveyance of persons, may be considered as within the power granted to Congress to lay duties. The term duty, is the most comprehensive next to the generical term tax; and practically in Great Britain, (whence we take our general ideas of taxes, duties, imposts, excises, customs, &c.) embraces taxes on stamps, tolls for passage, &c. &c. and is not confined to taxes on importation only.
It seems to me, that a tax on expence is an indirect tax; and I think, an annual tax on a carriage for the conveyance of persons, is of that kind; because a carriage is a consumeable commodity; and such annual tax on it, is on the expence of the owner. [3 U.S. at 175.]
Mr. Justice Patterson's views in Hylton are drawn even more directly from The Federalist and Gallatin, and cites to Adam Smith's Wealth of Nations, 3 Vol. pp. 331 and 341 (1776), which likewise supports that the tax on Ms. Murphy's damages are direct. Hylton., 3 U.S. at 180-81. Hylton thus supports Ms. Murphy's position in the instant case.
Every septic tank has a unicorn's horn in it. That's where the bylaws say we need to store them. And next time you get a rectal exam, ask the doctor to find the unicorn. He's obligated to tell you that it's not there, but trust me, LIES. ALL LIES. Anyone's who's managed to shove their head up there can tell you that they've seen it with their own two eyes! And that's why they don't just drop us in the ground as is when we die. They have to extract the unicorn first so they can transport it to the hospital - where it can make a new home in a newborn. That's why you see those "organ" couriers walking around with little biohazard coolers. He doesn't have a kidney in there, it's a small colony of unicorns!
Now that's "out there". 
