Sixteenth Amendment

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Sixteenth Amendment

The Sixteenth Amendment to the U.S. Constitution reads:

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.

Congress passed the Sixteenth Amendment to the U.S. Constitution in 1909, and the states ratified it in 1913. The ratification of the amendment overturned an 1895 U.S. Supreme Court decision that had ruled a 2 percent federal flat tax on incomes over $4,000 unconstitutional (pollock v. farmer's loan & trust co., 157 U.S. 429, 15 S. Ct. 673, 39 L. Ed. 759). Article I of the Constitution states that "direct taxes shall be apportioned among the several states … according to their respective numbers." By a 5–4 vote, the Court in Pollock held that the new Income Tax was a direct tax insofar as it was based on incomes derived from land and, as such, had to be apportioned among the states. Because the law did not provide for Apportionment, it was unconstitutional.

The decision was unpopular and took the public by surprise because a federal income tax levied during the U.S. Civil War had not been struck down. Critics contended that the conservative majority on the Pollock Court was seeking to protect the economic elite. Industrialization had led to the creation of enormous corporate profits and personal fortunes, which could not be taxed to help pay for escalating federal government services. The Democratic Party made the enactment of a constitutional amendment a plank in its platform beginning in 1896.

The language of the Sixteenth Amendment addressed the issue in Pollock concerning apportionment, repealing the limitation imposed by article I. Soon after the amendment was ratified, Congress established a new personal income tax with rates ranging from 1 to 7 percent on income in excess of $3,000 for a single individual.

Further readings

Jensen, Erik M. 2001. "The Taxing Power, the Sixteenth Amendment, and the Meaning of 'Incomes'." Arizona State Law Journal 33 (winter).

Oring, Mark, and Steve Hampton. 1994. "Cheek v. United States and the Tax Protest Movement: An Historical Reassessment of the Sixteenth Amendment." University of West Los Angeles Law Review 25 (annual).


Apportionment; Income Tax.

References in periodicals archive ?
The income tax all of us know today dates to 1913, when the 16th Amendment to the Constitution was ratified, giving Congress the power to levy such taxes.
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Richard Cohen, attorney for the 34 buyers who filed complaints with Cuomo's office, told The Real Deal that he contacted assistant AG Lisa Wallace on May 19, 2009, about a week after the 16th Amendment was mailed out to buyers, and told her that the sponsor failed to disclose the previous complaints.
Jensen, 19th Century 16th Amendment Jurisprudence, 3 GREEN BAG 2D 241 (2000) (noting, after exhaustive research, the absence of case law on the meaning of the Sixteenth Amendment before the Amendment had been contemplated); see also Erik M.
Kenney, "Murphy a Boon for Protesters, Critics Say," 112 Tax Notes 832 (September 4, 2006); Prusiecki, "Murphy: The 16th Amendment May Be Irrelevant," 113 Tax Notes 926 (December 4, 2006); Sheppard, "Murphy's Law: Tax Provision Declared Unconstitutional," 112 Tax Notes 825 (September 4, 2006); Stratton, "Experts Ponder Murphy Decision's Many Flaws," 112 Tax Notes 822 (September 4, 2006).