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51-736: Sixteenth Amendment can refer to: Sixteenth Amendment to the United States Constitution Sixteenth Amendment of the Constitution of India , also known as the Anti-Secession Amendment, 1963 amendment enabling the government to restrict certain freedoms, followed the Sino-Indian War of 1962 Sixteenth Amendment of the Constitution of Ireland Sixteenth Amendment to

102-486: A Supreme Court Justice, spoke out against the income tax amendment. Hughes supported the idea of a federal income tax, but believed the words "from whatever source derived" in the proposed amendment implied that the federal government would have the power to tax state and municipal bonds. He believed this would excessively centralize governmental power and "would make it impossible for the state to keep any property". Between 1909 and 1913, several conditions favored passage of

153-629: A federal tax of two percent on incomes over $ 4,000 (equal to $ 141,000 in 2023). The federal income tax was strongly favored in the South, and it was moderately supported in the eastern North Central states, but it was strongly opposed in the Far West and the Northeastern States (with the exception of New Jersey ). The tax was derided as "un-Democratic, inquisitorial, and wrong in principle". In Pollock v. Farmers' Loan & Trust Co. ,

204-409: A graduated income tax in 1887. The Populist Party "demand[ed] a graduated income tax" in its 1892 platform. The Democratic Party, led by William Jennings Bryan , advocated the income tax law passed in 1894, and proposed an income tax in its 1908 platform. Proponents of the income tax generally believed that high tariff rates exacerbated income inequality , and wanted to use the income tax to shift

255-481: A member of the Socialist Party winning a seat in the U.S. House in 1910 and the party's presidential candidate polling six percent of the popular vote in 1912 . Three advocates of a federal income tax ran in the presidential election of 1912 . On February 25, 1913, Secretary of State Philander Knox proclaimed that the amendment had been ratified by three-fourths of the states and so had become part of

306-548: A positive role in national economies. A bigger government and a bigger military, they argued, required a correspondingly larger and steadier source of revenue to support it. Opposition to the Sixteenth Amendment was led by establishment Republicans because of their close ties to wealthy industrialists, although not even they were uniformly opposed to the general idea of a permanent income tax. In 1910, New York Governor Charles Evans Hughes , shortly before becoming

357-586: A tax based on the value of land, as well as a capitation. Article I, Section 9, Clause 5: No Tax or Duty shall be laid on Articles exported from any State. Until 1913, customs duties (tariffs) and excise taxes were the primary sources of federal revenue. During the War of 1812, Secretary of the Treasury Alexander J. Dallas made the first public proposal for an income tax, but it was never implemented. The Congress did introduce an income tax to fund

408-602: Is different from Wikidata All article disambiguation pages All disambiguation pages Sixteenth Amendment to the United States Constitution The Sixteenth Amendment ( Amendment XVI ) to the United States Constitution allows Congress to levy an income tax without apportioning it among the states on the basis of population. It was passed by Congress in 1909 in response to

459-551: The Civil War through the Revenue Act of 1861 . It levied a flat tax of three percent on annual income above $ 800. This act was replaced the following year with the Revenue Act of 1862 , which levied a graduated tax of three to five percent on income above $ 600 and specified a termination of income taxation in 1866. The Civil War income taxes, which expired in 1872, proved to be both highly lucrative and drawing mostly from

510-624: The Sixty-first Congress , proposed a two percent federal income tax on corporations by way of an excise tax and a constitutional amendment to allow the previously enacted income tax. Upon the privilege of doing business as an artificial entity and of freedom from a general partnership liability enjoyed by those who own the stock. An income tax amendment to the Constitution was first proposed by Senator Norris Brown of Nebraska . He submitted two proposals, Senate Resolutions Nos. 25 and 39. The amendment proposal finally accepted

561-434: The U.S. Supreme Court declared certain taxes on incomes, such as those on property under the 1894 Act, to be unconstitutionally unapportioned direct taxes . The Court reasoned that a tax on income from property should be treated as a tax on "property by reason of its ownership" and so should be required to be apportioned. The reasoning was that taxes on the rents from land, the dividends from stocks, and so forth, burdened

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612-531: The "Insurgent" Republicans (who would go on to form the Progressive Party). These Republicans were driven mainly by a fear of the increasingly large and sophisticated military forces of Japan, Britain and the European powers, their own imperial ambitions, and the perceived need to defend American merchant ships. Moreover, these progressive Republicans were convinced that central governments could play

663-558: The 1895 Supreme Court case of Pollock v. Farmers' Loan & Trust Co. The Sixteenth Amendment was ratified by the requisite number of states on February 3, 1913, and effectively overruled the Supreme Court's ruling in Pollock . Prior to the early 20th century, most federal revenue came from tariffs rather than taxes, although Congress had often imposed excise taxes on various goods. The Revenue Act of 1861 had introduced

714-550: The Constitution of Pakistan Sixteenth Amendment of the Constitution of South Africa Topics referred to by the same term [REDACTED] This disambiguation page lists articles associated with the title Sixteenth Amendment . If an internal link led you here, you may wish to change the link to point directly to the intended article. Retrieved from " https://en.wikipedia.org/w/index.php?title=Sixteenth_Amendment&oldid=1151172147 " Category : Disambiguation pages Hidden categories: Short description

765-519: The Constitution. The Revenue Act of 1913 , which greatly lowered tariffs and implemented a federal income tax, was enacted shortly after the Sixteenth Amendment was ratified. According to the United States Government Publishing Office , the following states ratified the amendment: Ratification (by the requisite 36 states) was completed on February 3, 1913, with the ratification by Delaware . The amendment

816-571: The Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States. Article I, Section 9, Clause 4: No Capitation , or other direct, Tax shall be laid, unless in proportion to the Census or Enumeration herein before directed to be taken. This clause basically refers to a tax on property, such as

867-527: The Sixteenth Amendment is not viewed as narrowing the definition of direct taxes, it at least introduces an additional consideration to analysis under the Apportionment Clause. For the Court to strike an unapportioned tax, plaintiffs must establish not only that a tax is a direct tax, but also that it is not in the subset of direct taxes known as an income tax. From Alan O. Dixler: In Brushaber,

918-658: The Sixteenth Amendment. Inflation was high and many blamed federal tariffs for the rising prices. The Republican Party was divided and weakened by the loss of Roosevelt and the Insurgents who joined the Progressive Party, a problem that blunted opposition even in the Northeast. In 1912, the Democrats won the presidency and control of both houses of Congress. The country was generally in a left-leaning mood, with

969-500: The Supreme Court in the Brushaber case, the power of Congress to tax income derives from Article I, Section 8, Clause 1, of the original Constitution rather than from the Sixteenth Amendment; the latter simply eliminated the requirement that an income tax, to the extent that it is a direct tax , must be apportioned among the states. A corollary of this conclusion is that any direct tax that is not imposed on "income" remains subject to

1020-587: The Supreme Court validated the first post - 16th Amendment income tax. Chief Justice White, who as an associate justice had dissented articulately in Pollock, wrote for a unanimous Court. Upholding the income tax provisions of the tariff act of October 3, 1913, Chief Justice White observed that the 16th Amendment did not give Congress any new power to lay and collect an income tax; rather, the 16th Amendment permitted Congress to do so without apportionment   ... Payne%E2%80%93Aldrich Tariff Act Protectionism

1071-484: The Supreme Court would strike down any attempt to levy an income tax. In 1909, during the debate over the Payne–Aldrich Tariff Act , Congress proposed the Sixteenth Amendment to the states. Though conservative Republican leaders had initially expected that the amendment would not be ratified, a coalition of Democrats, progressive Republicans, and other groups ensured that the necessary number of states ratified

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1122-521: The University of Delaware wrote: On February 25, 1913, in the closing days of the Taft administration, Secretary of State Philander C. Knox, a former Republican senator from Pennsylvania and attorney general under McKinley and Roosevelt, certified that the amendment had been properly ratified by the requisite number of state legislatures. Three more states ratified the amendment soon after, and eventually

1173-463: The West tended to support income taxes because their residents were generally less prosperous, more agricultural and more sensitive to fluctuations in commodity prices. A sharp rise in the cost of living between 1897 and 1913 greatly increased support for the idea of income taxes, including in the urban Northeast. A growing number of Republicans also began supporting the idea, notably Theodore Roosevelt and

1224-476: The actual ratification of the amendment, but they believed that it had little chance of being ratified, as ratification required approval by three quarters of the state legislatures. On July 12, 1909, the resolution proposing the Sixteenth Amendment was passed by the Congress and was submitted to the state legislatures. Support for the income tax was strongest in the western and southern states, while opposition

1275-436: The amendment. Shortly after the amendment was ratified, Congress imposed a federal income tax with the Revenue Act of 1913 . The Supreme Court upheld that income tax in the 1916 case of Brushaber v. Union Pacific Railroad Co. , and the federal government has continued to levy an income tax since 1913. The Congress shall have power to lay and collect taxes on incomes , from whatever source derived, without apportionment among

1326-466: The bill greatly angered Progressives, who began to withdraw support from President Taft. Because it increased the duty on print paper used by publishers, the publishing industry viciously criticized the President, further tarnishing his image. Although Taft met and consulted with Congress during its deliberations on the bill, critics charged that he ought to have imposed more of his own recommendations on

1377-483: The bill such as that of a slower schedule. However, unlike his predecessor ( Theodore Roosevelt ), Taft felt that the president should not dictate lawmaking and should leave Congress free to act as it saw fit. Taft signed the bill with enthusiasm on 5 August 1909, expecting it would stimulate the economy and enhance his political standing. He especially praised the provision empowering the president to raise rates on countries which discriminated against American products, and

1428-510: The burden of funding the government away from working class consumers and to high-earning businessmen. Before Pollock v. Farmers' Loan & Trust Co. , all income taxes had been considered to be indirect taxes imposed without respect to geography, unlike direct taxes, that have to be apportioned among the states according to population. In 1894, an amendment was attached to the Wilson–Gorman Tariff Act that attempted to impose

1479-514: The first federal income tax, but that tax was repealed in 1872. During the late nineteenth century, various groups, including the Populist Party , favored the establishment of a progressive income tax at the federal level. These groups believed that tariffs unfairly taxed the poor, and they favored using the income tax to shift the tax burden onto wealthier individuals. The 1894 Wilson–Gorman Tariff Act contained an income tax provision, but

1530-461: The hobbling apportionment requirement.   ... Pollock was itself overturned by the Sixteenth Amendment as to apportionment of income   ... From Gale Ann Norton: Courts have essentially abandoned the permissive interpretation created in Pollock. Subsequent cases have viewed the Sixteenth Amendment as a rejection of Pollock's definition of "direct tax". The apportionment requirement again applies only to real estate and capitation taxes. Even if

1581-726: The more industrialized states, with New York , Pennsylvania , and Massachusetts generating about 60 percent of the total revenue that was collected. During the two decades following the expiration of the Civil War income tax, the Greenback movement, the Labor Reform Party, the Populist Party, the Democratic Party and many others called for a graduated income tax. The Socialist Labor Party advocated

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1632-461: The only question in debate should be whether duties were "unreasonably" high, was natural enough. Most people get used to existing conditions, and cannot easily conceive of anything different." The defection of insurgent Republicans from the Midwest began Taft's slippage of support. It heralded conflicts over conservation, patronage, and progressive legislation. The debate over the tariff thus split

1683-466: The property generating the income in the same way that a tax on "property by reason of its ownership" burdened that property. After Pollock , while income taxes on wages (as indirect taxes) were still not required to be apportioned by population, taxes on interest, dividends, and rental income were required to be apportioned by population. The Pollock ruling made the source of the income (e.g., property versus labor, etc.) relevant in determining whether

1734-551: The provision for free trade with the Philippines. In an article for the Quarterly Journal of Economics , F. W. Taussig wrote that the congressional debates about the tariffs were "depressing for the economist. There is hardly a gleam of general reasoning of the sort which is applied in our books to questions of international trade... That there should be general acceptance of the protectionist principle, and that

1785-457: The rule of apportionment. Because the Sixteenth Amendment does not purport to define the term "direct tax," the scope of that constitutional phrase remains as debatable as it was before 1913; but the practical significance of the issue was greatly reduced once income taxes, even if direct , were relieved from the requirement of apportionment. Professor Erik Jensen at Case Western Reserve University Law School has written: [The Sixteenth Amendment]

1836-406: The several States, and without regard to any census or enumeration". From William D. Andrews, Professor of Law, Harvard Law School: In 1913 the Sixteenth Amendment to the Constitution was adopted, overruling Pollock , and the Congress then levied an income tax on both corporate and individual incomes. From Professor Boris Bittker, who was a tax law professor at Yale Law School: As construed by

1887-404: The several States, and without regard to any census or enumeration. Article I , Section 2, Clause 3: Representatives and direct taxes shall be apportioned among the several States which may be included within this Union, according to their respective Numbers   ... Article I, Section 8, Clause 1: The Congress shall have Power to lay and collect Taxes, Duties, Imposts and Excises, to pay

1938-527: The sum to be so raised among the States according to population, it practically decides that, without an amendment of the Constitution—two-thirds of both Houses of Congress and three-fourths of the States concurring—such property and incomes can never be made to contribute to the support of the national government. Members of Congress responded to Pollock by expressing widespread concern that many of

1989-620: The tax imposed on that income was deemed to be "direct" (and thus required to be apportioned among the states according to population) or, alternatively, "indirect" (and thus required only to be imposed with geographical uniformity). Dissenting in Pollock , Justice John Marshall Harlan stated: When, therefore, this court adjudges, as it does now adjudge, that Congress cannot impose a duty or tax upon personal property, or upon income arising either from rents of real estate or from personal property, including invested personal property, bonds, stocks, and investments of all kinds, except by apportioning

2040-489: The tax was struck down by the Supreme Court in the case of Pollock v. Farmers' Loan & Trust Co. In its ruling, the Supreme Court did not hold that all federal income taxes were unconstitutional, but rather held that income taxes on rents, dividends, and interest were direct taxes and thus had to be apportioned among the states on the basis of population. For several years after Pollock , Congress did not attempt to implement another income tax, largely due to concerns that

2091-492: The total reached 42. The remaining six states either rejected the amendment or took no action at all. Notwithstanding the many frivolous claims repeatedly advanced by so-called tax protestors, the Sixteenth Amendment to the Constitution was duly ratified as of February 3, 1913. With that, the Pollock decision was overturned, restoring the status quo ante . Congress once again had the "power to lay and collect taxes on incomes, from whatever source derived, without apportionment among

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2142-526: The use of Congress and the President in future tariff considerations. Another provision allowed for free trade with the Philippines , then under American control. Congress passed the bill officially on April 9, 1909. The bill states it would "take effect the day following its passage." President Taft officially signed the bill at 5:05 pm on August 5, 1909. The Payne Act had the immediate effect of frustrating proponents of reducing tariffs. In particular,

2193-516: The votes but Democrats William Jennings Bryan , Henry Watterson , and Josephus Daniels denounced them. In response the Democratic caucus imposed more discipline before the Democrats took control of the House in 1911 . An additional provision of the bill provided for the creation of a tariff board to study the problem of tariff modification in full and to collect information on the subject for

2244-447: The wealthiest Americans had consolidated too much economic power. Nonetheless, in the years after Pollock , Congress did not implement another federal income tax, partly because many Congressmen feared that any tax would be struck down by the Supreme Court. Few considered attempting to impose an apportioned income tax, since such a tax was widely regarded as unworkable. On June 16, 1909, President William Howard Taft , in an address to

2295-516: Was Senate Joint Resolution No. 40, introduced by Senator Nelson W. Aldrich of Rhode Island , the Senate majority leader and Finance Committee Chairman. The amendment was proposed as part of the congressional debate over the 1909 Payne–Aldrich Tariff Act ; by proposing the amendment, Aldrich hoped to temporarily defuse progressive calls for the imposition of new taxes in the tariff act. Aldrich and other conservative leaders in Congress largely opposed

2346-537: Was a response to the Income Tax Cases (Pollock v. Farmers' Loan & Trust Co.), and it exempts only "taxes on incomes" from the apportionment rule that otherwise applies to direct taxes. Professor Calvin H. Johnson , a tax professor at the University of Texas School of Law , has written: The Sixteenth Amendment to the Constitution, ratified in 1913, was written to allow Congress to tax income without

2397-466: Was strongest in the northeastern states. Supporters of the income tax believed that it would be a much better method of gathering revenue than tariffs, which were the primary source of revenue at the time. From well before 1894, Democrats, Progressives, Populists and other left-oriented parties argued that tariffs disproportionately affected the poor, interfered with prices, were unpredictable, and were an intrinsically limited source of revenue. The South and

2448-449: Was subsequently ratified by the following states, bringing the total number of ratifying states to forty-two of the forty-eight then existing: The legislatures of the following states rejected the amendment without ever subsequently ratifying it: The legislatures of the following states never considered the proposed amendment: The Sixteenth Amendment removed the precedent set by the Pollock decision. Professor Sheldon D. Pollack at

2499-508: Was the battle ground. President Taft was disliked by Theodore Roosevelt because he didn't reduce tariffs which led to Roosevelt running for re-election. Since there were two Republicans in the vote, it led to the party's votes being split. That soon led to Woodrow Wilson being elected. However, the United States Senate speedily substituted a bill written by Aldrich, calling for fewer reductions and more increases in tariffs. It

2550-544: Was the first change in tariff laws since the Dingley Act of 1897 . Progressive Republicans wanted to lower tariffs but Conservative leader Senator Aldrich prevailed by winning over some Democrats (despite the Democratic national platform calling for lower tariffs). These Democrats represented states with industry facing imports of iron ore, lumber, hides, coal, and other items. Senator Joseph Bailey of Texas defended

2601-599: Was the ideological cement holding the Republican coalition together. High tariffs were used by Republicans to promise higher sales to business, higher wages to industrial workers, and higher demand for farm products. Progressive insurgents said it promoted monopoly . Democrats said it was a tax on the little man. It had greatest support in the Northeast , and greatest opposition in the South and West . The Midwest

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