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.
The 16th amendment was proposed on July 12, 1909, and ratified on February 3, 1913, but why was it necessary, didn’t the Constitution already give the Congress the right to tax the people?
Article 1, section 8 begins with “The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay 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” wasn’t that enough?
The short answer was no, but let’s look at why.
To begin with, Article 1, section 8, clause 1 is not the only reference to taxation in the Constitution. Article 1, section 2, clause 2 limits the types of taxes and how they are apportioned when it says, “…direct taxes will be apportioned among the several states…” 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.” And clause 5 continues, “No Tax or Duty shall be laid on Articles exported from any State.” It was the section 9, clause 4 that became problematic as the government grew and the cost of government increased.
There had been time in the past when to fund the cost of war income taxes had been levied (i.e. war of 1812 and the Civil War), but they were both finite in their duration. In 1895, the Supreme Court of the United States (SCOTUS), heard the case of Charles Pollock versus Farmers’ Loan and Trust Company which seems to be the actual event leading to the decision to amend the constitution.
In this case, Mr. Pollock, of Massachusetts, “argued that while state-regulated income taxes were considered to be direct taxes, they were not subject to apportionment; as a result, Pollock argued that unapportioned, state-regulated direct taxes were in the direct violation of the Constitution.”[i] In its opinion - SCOTUS upheld Mr. Pollock’s claim.
The idea of an income tax and the amendment itself was supported by the southern and many of the northeastern states, but was opposed by the western half of the country. It was also opposed by many Republican politicians based on the concerns of their wealthy supporters.
With the passage of the 16th Amendment we opened up a new revenue source for the government, and enabled a growth in government bureaucracy to what we have today.