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).

Cross-references

Apportionment; Income Tax.

References in periodicals archive ?
Jensen, 19th Century 16th Century 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.
Thus, the Sixteenth Amendment allowed Congress to levy an income tax without apportioning it among the states or basing it on census results.
With the passage of the Sixteenth Amendment, the limitation on direct taxes and the required apportionment ended, and the federal government was entitled to tax all income from all sources, with only minor exceptions (e.g., state and municipal interest).
According to the majority in the Macomber court, the Sixteenth Amendment was not intended to extend to Congress the power to tax new subjects.
With the passage of the Sixteenth Amendment, the government was in a much better position to increase spending during the Great Depression than during the economic downturn of the 1890s.
income tax--there was constitutional content to the notion of an "income tax." Given the possibility that this content existed, most observers at the time of the ratification of the Sixteenth Amendment would probably have expected that the Supreme Court would play an important role in defining Congress's power under the Amendment.
A starting point for many tax defiers' constitutional claims has been the Sixteenth Amendment itself.
In the first Murphy decision (Murphy 1), (4) the DC Court of Appeals held that the taxation of nonphysical injury awards was unconstitutional because it taxed the receipt of money that is not "income" under the Sixteenth Amendment. The Court of Appeals, on its own motion a mere four months later (December 22, 2006), vacated its Murphy I decision and decided to rehear the case.
"In the present opinion, we affirm the [original] .judgment of the district court [dismissing all Murphy's claims and granting the IRS summary judgment] based upon the newly argued ground that Murphy's award, even if it is not income within the meaning of the Sixteenth Amendment, is within the reach of the congressional power to tax under Article I, Section 8 of the Constitution," wrote Chief Judge Douglas Ginsburg.
The Revenue Act of 1909 and ratification of the Sixteenth Amendment in 1913.
The main argument of taxation protesters like Schulz, involves the Sixteenth Amendment which states: "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."
The Sixteenth Amendment to the Constitution now allows a federal income tax without apportionment among the states.