Amendment 16

Amendment 16

To start out let’s look at the section of the Constitution that was amended.

This is Article 1 section 9 of the Constitution, “No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or enumeration herein before directed to be taken.”

To fully understand the impact that the 16th amendment had we have to understand what taxation looked like in 1909. During this time period almost all incomes that governments derived were from excise taxes and tariffs. To be clear during the civil war 1862 the U.S. had levied an income tax citizens earning more than $600 per year 3% of their income, while those making over $10,000 paid 5%. These rates were raised in 1864 but the law was allowed to expire in 1872. In 1894 congress attempted to pass another national income tax but the tax was challenged in court and the law was struck down as unconstitutional because it was deemed to be a direct tax since the income was derived from (Interest, dividends, shares of companies etc) from land ownership and which according to Article 1 of the constitution direct taxes must be apportioned among the several states. For example if a direct tax was levied then a state with one–tenth the population of the United States they would only be required to pay one-tenth the total tax burden for the U.S.

An interesting note is that this amendment was championed by the democratic party which was the party of the South and West states due to the high cost of living in part by the tariffs and excise taxes at the time but which were not levied against companies. In the debate on the amendment you can see that the Democrat party is still today parroting the lines of its forbears in arguments. Rep William Sulzer is quoted as saying “I have been the constant advocate of an income tax along constitutional lines… I reiterate that through it only…will it ever be possible for the Government to be able to make idle wealth pay its just share of the ever-increasing burdens of taxation.”

The 16th amendment ratified in 1909 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 amendment removed the apportionment clause for direct taxation and effectively removed any barrier to the government sticking its hands in our pockets and taking money as they wish. This amendment has had many long ranging effects in addition to allowing the government virtually unlimited power to take money from its citizens. Firstly because the tax has to be collected from individuals it kept the IRS (which had been created during the civil war for income tax collection) around as a permanent part of the government. Secondly by moving so much of the power of taxation out of states hands it changed the power balance set out in the constitution thereby reducing states power and giving more power to the federal government.

--Crown and Ring