The 16th Amendment (US Constitution)

Factual Questions
1

I once saw a copy of the first income tax form, from the 1910’s. The top earners were taxed 4%, the next 2%, and that was it. IIRC, only about 5% of Americans that year had to file.

Now the rates are from 15% to 38%, and nearly everybody has to file.

My questions:
[list
[li]Why did the 16th amendment authorizing income tax and it’s subsequent legislation need to be created?[/li][li]What did the US Gov’t run on before?[/li][li]Did they (those who voted for it) not realize what a monster they were about to create?[/li][li]What would it take to go back to pre-16th amendment days?[/li][/list]

You must unlearn what you have learned. – Yoda

2

The historians on this list will soon arrive with the details, but as I recall, income tax was first instituted during the Civil War through Congressional legislation. The Supreme Court ruled the law unconstitutional. Thus, the only way to have income tax was to write it into the constitution. The only way to “go back to pre-16th-Amednment days” would be to repeal the 16th Amendment. (I suppose it would be possible to leave the amendment in place, giving Congress the right to levy income tax, and Congress decides to simply not exercise that right, but c’mon – when was the last time a politician passed up an income stream?)

As for the other two, can’t help you. Sorry.

“The dawn of a new era is felt and not measured.” Walter Lord

3

"Why did the 16th amendment authorizing income tax and it’s subsequent legislation need to be created? "

Because the first income tax- established during World War I- was declared unConstitutional by the Supreme Court. I forget exactly why.

“What did the US Gov’t run on before?”

Mostly tariffs, IIRC- charges places upon goods entering the country. And when you import a lot of stuff- as the U.S. did- that can be a lot of money.

Also realize that before 1930s, the U.S. government wasn’t spending a lot of money, either. Few social programs, few internal improvement programs, and a really small army.

“Did they (those who voted for it) not realize what a monster they were about to create?”

In a lot of cases, yes; but the need to be able to raise large sums of money for government funds- especially for emergency/war situations- outweighed the fear of over-taxation. After all, it’s easy enough to support the country having the option of taxation and save your fight for against high taxation.

“What would it take to go back to pre-16th amendment days?”

Strictly legally speaking, another amendment, repealing the 16th.

Realistically speaking, cutting the U.S. budget by about 70%. Which means dropping most social programs- especially Social Security and Medicare- and cutting the Defense Department down by at least half to two-thirds.

Of course, we could make up for lost revenues with heavy tariffs, but the last time the U.S. got really tough with tariffs, it sparked the Great Depression.

JMCJ

“Y’know, I would invite y’all to go feltch a dead goat, but that would be abuse of a perfectly good dead goat and an insult to all those who engage in that practice for fun.” -weirddave, set to maximum flame

4

Money to pay SS benefits does not come currently come out of the income tax per se. The money comes from the 7.5% payroll tax levied against both the employee and the employer, for a total of 15% payroll tax devoted to SS. This is in addition to the regular income tax you pay. Also, Medicare clients have to pay premiums to cover the cost of their coverage. I don’t know if they pay the full cost or if the program is subsidized by general tax receipts.

The reason the supreme court declared the original income tax unconstitutional was a clause in Article I, section 9 of the Constitution:

In practice this meant that residents of a poor but populous state had to pay high federal taxes, and residents of a rich but small state could pay low federal taxes, so that the per capita federal tax (in dollars, not in percent) would be the same for every state.

Work is the curse of the drinking classes. (Oscar Wilde)

5

The case invalidating the first federal income tax law was Pollock v. Farmers’ Loan & Trust 158 US 601.

6

Top rate then: 6% on income over $500,000 (roughly $5 million in today’s money).

Top rate now (tax year 1999): 39.6% on taxable income above a cutoff that depends on your filing status. Cutoff if you’re filing as “married filing separately” is 42,644.25. Cutoff if you’re filing as “single” is 90,200.50. (Some people may pay an even higher rate if they are subject to the Alternative Minimum Tax. I wouldn’t know about that).

7

Wrong war. The 16th Admendment was ratified on February 03, 1913 - prior to WWI. An earlier poster mentioned the Civil War - I think that was the one.

8

BIBLEO: You’re looking at the wrong line. To be in the top (39.6%) bracket, your TAXABLE income must be: $283,150 for single, 283,150 for joint, 141,575 for Sep.

When the tax was 1st out, there werew fewer deductions, too.

Booze & tobacco was heavily taxed also. Esp booze, the current tax would have to be upped 5 to 10 times to = what it used to. (tax is per BBL, not on price, & has not been asdjusted for inflation)

When we had no Income tax, we basicly had no military, no social security, no welfare, no education (federal), etc. State taxs were higher (in comparison).

All of the 40 industrialized nations have Income tax. In terms of overall tax burden the US of A ranks 39th, (Turkey is #40).

9

On Friday, 25-Feb-1913, the Sixteenth Ammendment was declared ratified. On Monday, March 1st, Congress passed the first income tax law. I’m surprised they waited so long.

10

What many people forget is that the income tax was a popular idea with many Progressives of the era. Getting the 16th amendment ratified was a very big deal. It’s not surprising that legislation was approved quickly.

I imagine that the Volstead Act got repealed very quickly after the 21st Amendment got passed also.

11

You’re right. I hate it when I’m wrong.

12

Thank you, BIBLEO you’re one of the first & only posters here to admit an error, any error. I owe ya one.