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The longer I live and the more I study, the more convinced I become that the sixteenth amendment is the greatest assault on liberty in our Constitution.
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 amendment was passed as a benign revision to the Constitution, amending Article I Section 9 which had specifically prohibited Congress from laying any direct tax. Without this amendment the government could never have sufficient funds to substantially exceed their constitutional authority.
This amendment was passed in order to make it possible to levy income taxes – the most sinister aspect of income taxes being that government now holds first claim on the income of its citizens. If I don’t wish to support what the government is doing my only legal way to not support it is to have no income (or at least, less income than they are interested in taxing). While it will never happen in my lifetime (and probably will never happen period) the fact that the government has first claim on my income means that Congress could claim everything I produce and take it as income tax. So much for the right to property because my property (and yours) is now a gift or loan from the government.
4 replies on “Constitutional Amendment 16”
I was aware that the income tax had been used to fund wars (including the Civil War) and although I have not read the supreme court opinion that you cite, it sounds to me like they had the right idea – the government had been overstepping it’s bounds for a generation or more.
If the amendment had been passed with a cap it would have been much better – then the government would only have first claim on 8% or 10% of our income (to use the figures discussed at the time) rather than the open-ended 100% they could claim according to the amendment as written. Now we have Sen. Hatch proposing to limit federal spending to “only” 20% of GDP. Some argue against that (myself included) because it would be like a speed limit – the government would never even attempt to spend as little as 19.9% of GDP. The same could be said of capping income tax at 10% (or any other number), but if the people in the early 1900’s had looked at what the government needed (let’s say an income tax of 5%) and written a generous cap of 7% into the amendment then when government felt the need to exceed 7% they would have had to look at a new amendment or other sources of revenue – that’s much better than the current system of having de facto ownership of everything we produce (with the generosity of allowing us to keep the majority of it) in exchange for pretending that they can secure us against our own poor choices (or the poor choices of others).
This amendment came about in response to a Supreme Court case that stripped the federal government of the ability to tax income. The government had used this authority to fund wars, but it became a permanent feature after the Civil War, as it became clear that other traditional revenue generating measures were insufficient.
When the court ruled 30 years after the Civil War that direct taxation of income violated the constitutional language requiring apportionment among states according to population, one of the three dissenting justices wrote that the court had in essence redefined what the Constitution actually meant; an action that should have required a constitutional amendment. In very short order, the case became a symbol of judicial overreach, as the solvency of the nation was threatened.
Many states supported the 16th Amendment because the situation following the court ruling threatened to turn states into revenue collectors for the federal government. At the same time, a great wave of populist sentiment was sweeping the nation. Class warfare was even more popular then than it is now. It was widely felt that the rich had aggregated too much power. All of this worked together to enable the passage of the amendment.
But it should be realized that the amendment only restored what had been in practice for a generation prior to an arguably faulty Supreme Court ruling.
A couple of other things should be noted. During the debates on this amendment, some argued that the amendment should include some kind of cap on the amount or percentage of income that could be taxed. This failed because many progressives favored a progressive income tax that would levy higher taxes on the wealthy. Some of the cap figures that were advocated were eight and ten percent. Opponents of such caps argued that the caps were unnecessary because the public would rise up in rebellion if taxes ever got that high. Either they were disingenuous or they didn’t realize what sheep we are.
It is also interesting to note that Utah was one of only three states that rejected the amendment. Utah once again seemed the pariah, as all of the other Western states supported the amendment; some enthusiastically so. The other two states, plus three states that never even took up the amendment were all in the East. The Western and Midwest states argued that this was because that is where the (presumably wicked) concentration of the wealth was held.
I have full confidence in the craftiness of our politicians, that had the 16th Amendment included a cap they would by now have found many insidious and supposedly legal ways around it.
Although the effect of the Supreme Court ruling may have been in the right spirit, the logic used was arguably faulty — not unlike finding some invisible right to privacy in the Constitution. The form used to achieve an end is often more important than the end itself, especially in Supreme Court cases, which can have far reaching effects for centuries as they are cited as precedent.
It makes me wonder if we would have ever gotten into the whole progressive taxation mire had the court case have gone differently. It is quite possible that had the case been decided based on a more prudent reading of the Constitution, the amendment would never have happened. It’s hard to know for sure, but we may still have a flat tax under that scenario. But since that didn’t happen, that can’t be said with any degree of accuracy.
When the amendment was passed an argument against placing a cap was that the people would revolt at tax rates of 8% or 10% and yet we sit by and accept tax rates of 35% (I’m sure largely because the vast majority of us are paying much lower tax rates). I too trust the craftiness of politicians but I’m confident that even sheep would revolt at a 35% tax rate if they had specified a 10% cap in the Constitution – although the politicians might sneak in a 12% tax rate.