When was the sixteenth amendment created

At first, Congress used the commerce clause, with its control of interstate commerce, to ban the shipment of goods made by child workers. But the Supreme Court struck this plan down in the case of Hammer v. Dagenhart for exceeding congressional authority. Then the opponents of child labor turned to the power of taxation. Congress enacted a steep tax on the profits of any manufacturer that hired children under certain ages.

The amount of the tax was not the issue. Instead, what the court found objectionable was that Congress was using a tax to serve as a form of regulation. Taxes cannot be substitutes for penalties or regulations, the Court decided. In later years, however, the Supreme Court has accepted high taxes on certain items that the community wishes to control, such as drugs, gambling, and some forms of weapons.

In the case of United States v. Congress creates the Commissioner of Internal Revenue and enacts the first national income tax to pay war expenses. The Confederacy also adopts an income tax. After the war, in , Congress repeals the income tax. The Supreme Court rules in Pollock v.

These taxes affect only a very small portion of the population. At the same time, the Treasury Department devises the first Form To raise additional taxes necessary to finance the First World War, Congress increases the top rate of the income tax to 77 percent, an all-time high.

Modern federal tax rates vary between 10 and 38 percent. Congress creates the U. If Pollock was wrong, the Amendment was legal surplusage. If Pollock was right, the Amendment changed the law. What direct taxes remain subject to apportionment? In any event, the Supreme Court has had no recent occasion to focus on the Amendment.

But that view would permit Congress to define the limits on its own power. The preeminent example is Eisner v. Macomber , where the Court struck down an unapportioned income tax as applied to certain stock dividends.

Although the income tax as a whole was valid—it was direct, but exempted from apportionment by the Amendment—the Court held that the tax on stock dividends effectively fell on property, not income.

Rejected though they are by most scholars today, those old cases might still have life. By citing Pollock , the Court accepted the proposition that a tax on any property including the income from that property , not just land, is direct. That was a slight, but reasonable, expansion of Hylton. Interest on bonds should be treated the same as rents from land.

But Chief Justice Roberts may not have been thinking about any of this; the citation to Macomber might just have been a throwaway. And, even if the distinctions between direct and indirect taxes and between taxes on income and other taxes retain constitutional significance, and I think they do, characterization issues have declined in importance because of the Sixteenth Amendment.

If Congress does look to new sources of revenue, however—because of burgeoning budget deficits, say—the old interpretive issues may return. The Constitution does not exist in a vacuum, sealed off from the Court and the People who interpret it and reason from it over time. To really understand what the Sixteenth Amendment is about, one needs to understand its context: the intense conflict in the late nineteenth and early twentieth century over the future of the American economic system—a conflict that still echoes today.

This was the period in American history in which powerful, nation-spanning corporations first took control of large swaths of the national economy. Think of the railroads, or monopolies like Standard Oil. These corporations were more powerful than state governments. The dynasties that owned them had great political clout and more concentrated wealth than Americans had ever seen. Inequality was rising to the point that many Americans began to fear that our constitutional democracy might be lost, replaced by an economic and political oligarchy.

In response, waves of reformers sought major changes. One was a change to the tax code. Instead of relying exclusively on consumption taxes that fell most heavily on ordinary people, the Populists and later the Progressives wanted a federal income tax that would fall most heavily on the enormous new fortunes of the era.

At the time, few thought there was any constitutional problem with an income tax. Precedents from as far back as and as recently as made that clear. As lawyers, they had handled the work of the new large corporations and monopolies. They feared the federal income tax as a form of socialism, and in Pollock they found a way to strike it down.

The decision in Pollock provoked enormous popular outrage. Rarely in American history has a single Supreme Court decision been so clearly and decisively rejected by the American people in this manner. What the Sixteenth Amendment rejected was a vision of a weak federal government that could subsist only on what were essentially consumption taxes—a government that could never be powerful enough to confront, regulate, and break up the enormous new fortunes and monopolies of the Gilded Age.

But the conflict over the main constitutional powers of the federal government—the power to tax, the power to spend, the power to regulate Commerce, and the Reconstruction power to promote liberty and equal citizenship—has never really ended. Conflict over the power to tax could rear its head again. For instance, suppose that in response to rising levels of economic inequality, Congress passes a tax on wealth.

Like the income tax a century ago, a wealth tax would undoubtedly provoke outrage from wealthy people. No tax has been apportioned since It makes absolutely no sense, in terms of fairness or politics, to apportion any tax other than a head tax.

So requiring apportionment would mean Congress cannot tax wealth. It should be up to the people, through their representatives, to decide whether to impose any other tax, such as an income tax, a wealth tax, a carbon tax, etc. The page tax code has expanded to more than 1, pages. And today, more people grumble about paying income taxes. Continue reading from Constitutional Rights Foundation. It looks like you're using Internet Explorer 11 or older. This website works best with modern browsers such as the latest versions of Chrome, Firefox, Safari, and Edge.

If you continue with this browser, you may see unexpected results. Sixteenth Amendment: About. Learn More. Why is the Sixteenth Amendment Important? Subjects: Government , History.