Anaya Nolan
The Sixteenth Amendment to the United States Constitution, ratified in 1913, grants Congress the authority to levy an income tax without apportioning it among the states based on population. The text of the amendment 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 was passed in response to the 1895 Supreme Court case of Pollock v. Farmers' Loan & Trust Co., which ruled that income tax was a direct tax that needed to be apportioned among the states. The Sixteenth Amendment has been the subject of various court cases, with some challenging its constitutional legality and others defining what constitutes gross income under its scope.
| Characteristics | Values |
|---|---|
| Name of Amendment | Sixteenth Amendment (Amendment XVI) |
| Date Passed by Congress | July 2, 1909 |
| Date Ratified | February 3, 1913 |
| Purpose | To allow Congress to levy an income tax without apportioning it among the states on the basis of population |
| Text | "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." |
| Notable Court Cases | Brushaber v. Union Pacific Railroad (1916), Commissioner v. Glenshaw Glass Co. (1955), Bowers v. Kerbaugh-Empire Co. (1926) |
| Opposition | "Insurgent" Republicans, who opposed the amendment due to their connections to major businesses and concerns about centralizing power |
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What You'll Learn
The Sixteenth Amendment
The passage of the Sixteenth Amendment was a significant moment in the history of the United States' tax system. Before the amendment, the majority of federal revenue came from tariffs on domestic and international goods, rather than taxes. The first official federal income tax was the short-lived Revenue Act of 1861, which was repealed in 1872.
The push for a progressive income tax at the federal level gained momentum during the late nineteenth century, with groups like the Populist Party advocating for its establishment. In 1894, Congress passed the Wilson-Gorman Tariff Act, which included an income tax provision of 2% on incomes over $4,000 (equivalent to $135,951.63 in 2022). However, the Supreme Court ruled in 1895's Pollock v. Farmers' Loan & Trust Co. that the income tax in the Act was a "direct" tax and therefore had to be apportioned among the states.
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Federal income tax
> The Congress shall have the 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.
The Sixteenth Amendment came about in response to the 1895 Supreme Court case of Pollock v. Farmers' Loan & Trust Co., which ruled that income tax was a "direct" tax, and therefore legally required to be apportioned among the states. The amendment effectively overruled this decision and allowed for the introduction of the federal income tax statute.
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Constitutional legality
The 16th Amendment to the United States Constitution, also known as Amendment XVI, grants Congress the authority to levy an income tax without apportioning it among the states based on population. The amendment was passed by Congress on July 2, 1909, and ratified on February 3, 1913, by the requisite number of states, establishing Congress's right to impose a federal income tax.
The text of the 16th Amendment states: "The Congress shall have the 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 changed a portion of Article I, Section 9 of the Constitution, which previously required "direct" taxes to be collected based on the population of the states.
The 16th Amendment came about in response to the 1895 Supreme Court case of Pollock v. Farmers' Loan & Trust Co., where the Court ruled that an income tax was a "direct" tax and therefore had to be apportioned among the states. Despite opposition from conservative groups, the amendment was ratified by one state legislature after another, surprising those who believed it would never receive the necessary three-fourths majority.
The constitutional legality of income tax has been challenged over the years, with some arguing that taxation is slavery, violating the 13th Amendment, or that it is an unlawful seizure of property, violating the 5th Amendment. However, courts have consistently ruled against these arguments, upholding the legality of income tax. The Supreme Court has also clarified that the 16th Amendment does not grant Congress the power to tax incomes, but rather removes the requirement for income tax to be apportioned among the states according to population.
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Opposition to taxation
Tax resistance has continued to be a form of protest and civil disobedience in the United States, with individuals and groups refusing to pay taxes as a means of opposing government policies, wars, or taxation itself. For example, the Vietnam War led to strong opposition in the United States, with many people refusing to pay taxes specifically to fund the war effort. Similarly, some individuals and groups may refuse to pay taxes that fund certain government programs that conflict with their religious or moral beliefs.
In addition to war tax resistance, there have been other forms of tax resistance in the United States. For instance, conservatives have opposed payroll and self-employment taxes for the social security program, arguing against government overreach and socialism. Some individuals may also choose to reduce their income below the tax threshold by embracing a simpler lifestyle, especially if they believe their government is engaged in immoral or unethical activities.
Another form of opposition to taxation is through legal tax avoidance techniques, such as establishing a "corporation sole" to avoid federal income taxes. However, courts have repeatedly rejected these arguments and upheld criminal tax evasion convictions for those promoting such schemes. Overall, opposition to taxation in the United States has taken various forms, from philosophical and political objections to practical resistance and avoidance strategies.
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Supreme Court rulings
The Sixteenth Amendment to the United States Constitution, ratified on February 3, 1913, grants Congress the authority to levy an income tax without apportioning it among the states based on population. This amendment came about in response to the 1895 Supreme Court case of Pollock v. Farmers' Loan & Trust Co., which ruled that income tax was a "direct" tax, and therefore legally required to be apportioned among the states.
The Sixteenth Amendment effectively overruled the Supreme Court's ruling in Pollock v. Farmers' Loan & Trust Co. In 1916, the Supreme Court upheld this in Brushaber v. Union Pacific Railroad Co., ruling that the Sixteenth Amendment removes the Pollock requirement that certain income taxes be apportioned among the states according to population. The Court also ruled that the federal income tax statute does not violate the Fifth Amendment's prohibition on the government taking property without due process of law.
In Commissioner v. Glenshaw Glass Co. (1955), the Supreme Court defined "gross income" as "accessions to wealth, clearly realized, and over which the taxpayers have complete dominion". This decision established that income taxes could be levied on any increase in wealth, such as wages, benefits, bonuses, profits from the sale of stock or other property, and certain lawsuit awards.
In another case, the Court stated that Congress can label a thing as income and tax it as long as it acts within its constitutional authority, which includes not only the Sixteenth Amendment but also Article I, Sections 8 and 9. This highlights that while the Sixteenth Amendment is often cited as the source of congressional power to tax incomes, it did not grant this power but instead removed the requirement for income tax to be apportioned among the states based on population.
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Frequently asked questions
The 16th Amendment deals with income tax laws.
The 16th Amendment was passed by Congress on July 2, 1909.
The 16th Amendment was ratified on February 3, 1913.
The 16th Amendment states, "The Congress shall have the 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."
The 16th Amendment established Congress's right to impose a federal income tax, leading to the enactment of the Revenue Act of 1913. It removed the requirement for income taxes to be apportioned among states based on population.
