The 16th amendment says:
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.There is a comma after incomes, which means that the phrase following it does not modify income in the nature of an adjective, but modifies the whole main clause, regarding the power to lay and collect. Otherwise it would have been incorporated into the main clause:
"...incomes from whatever source derived". But even then the word 'derived' modifies 'source', and not 'incomes' otherwise it would have been written as:
"...incomes derived from whatever source". The courts have held that Congress is presumed to know the rules of grammar, and will not change the language of the laws for them, as the courts have no function of legislation. See Montello Salt Co. v Utah (221 US 452) The onus is on Congress to rewrite the law in order to change its meaning. However, Congress cannot rewrite the 16th amendment by legislation.
The 16th amendment allows income tax to be imposed as an excise ( the power to lay . . . without apportionment . . . and without regard to any census or enumeration) as long as it is collected as an excise (the power to collect . . . from whatever source derived). The decision in Brushaber v Union Pacific R.R. Co. (240 US 1) underlined this interpretation, when it said that income tax in the U.S. had always been levied as an excise, interpreted by the courts as an excise, and is entitled to be enforced as an excise. The 16th amendment spells that out, so it is more of an interpretive regulation, rather than an extension of taxing power. The idea was to pre-empt any court from interpreting an excise tax on income as a direct tax, the way the Pollock court had done, as long as the tax was levied in the form of an excise. In other words, form is more important than substance. Pollock thought otherwise, saying that substance was more important than form. It is a historical fact that the intent of the 16th was to overturn this interpretation by Pollock, rather than give new powers to tax, such as a direct tax on income.
So the only ones subject to federal income tax are those who derive their source of income, whether it is a title to all or part of a business, or a licence, or grant from the government such as a copyright or patent. Therefore, laborers should not have to pay federal income tax on their wages, as long as they derived no ownership interest in the source (such as a profit sharing arrangement). The only instance that a federal income tax may be COLLECTED "directly" in the sense of Pollock, is from those who derived an ownership interest in their source of income, as long as Congress LAYS AND COLLECTS the tax in the form of an "excise". But no laborer ever "derived" his source of income, namely his labor, from anyone else: it is an inherent property right that he was born with, and so should be unalienable.
Also see Davis v. Boston & Maine R.R Co. (89 F2d 368, 376):
Working by an artisan at his trade, carrying on an ordinary business, or enga- ging in a common occupation cannot be subjected to a licence fee or excise.... The rights to labor and to do ordinary business are natural, essential and inalienable, partaking of the nature both of personal liberty and of private property.