A well-informed reader notes:
The 16th Amendment authorizes Congress to tax “incomes, from whatever source derived.” It does not give Congress the power to tax balance sheets as well.
At the Constitutional Convention, Gouverneur Morris explained in plain English what every delegate understood “direct taxation” to be: it is when the federal government attempts to “stretch its hand directly into the pockets of the people,” rather than acting through the intermediary of a state. Direct taxes, the delegates decided, would be authorized only if each state paid the same per capita amount – i.e., only if the taxes were apportioned to population. Warren’s proposal to stretch her hand directly into the pockets of the people would not be apportioned and so it would violate both the 16th Amendment (failing as an income tax) and Article I, Section 9, Clause 4 (failing because it is an unapportioned direct tax).