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Why it was ratified
The ratification of the Sixteenth Amendment was the consequence of the Court’s 1895 decision in Pollock v. Farmers Loan & Trust Co.. The Court held that income taxes are direct taxes and must be divided among states according to the population . -
Pollock v. Farmers Loan and Trust Co.
The Constitution gave the states the power to impose direct taxation. The federal government could impose direct taxes too. If they were to, those taxes were divided among the states in proportion to their representation in Congress. The Court held that the act violated the Constitution since it imposed taxes on personal income. -
Proposal of the 16th Amendment
Senator Norris Brown of Nebraska proposed the 16th amendment to the US constitution. They proposed to congress that they should be able to collect taxes on peoples incomes. The proposed amendment was rejected at first. Now income taxes have become one of the largest sources of money for the federal government. -
Passed by Congress
In 1909 progressives in Congress again attached a provision for an income tax to a tariff bill. The 16th amendment is passed by congress. In 1872 congress repealed the income tax, but the concept did not go away forever. It was brought back up and was finally passed. -
Ratified
Wyoming becomes the last of the ¾ states needed to ratify the amendment. It was ratified in just 4 years. The 16th amendment then established congress's right to impose a federal tax income. During the House debates 40 members had debated on collecting income taxes. Representatives Sereno Payne from New York and Samuel McCall from Massachusetts argued that income taxes should only be taken to raise money during times of war. -
Argued the 16th Amendment covers more taxes than income
Stockholders file a brief in the U.S. The Supreme Court. It argued that the Sixteenth Amendment covers “many taxes other than on income." The Supreme Court declares the income tax is constitutional by the sixteenth amendment. It is then allowed to stay. -
Income Tax is Constitutional
The supreme court declares the income tax is constitutional by the sixteenth amendment. The Congress has power to lay and collect taxes on income. They can do this without apportionment among the several States. A year before it was argued that it wasn't constitutional but finally was considered constitutional. -
Stock dividends are not taxable
The Supreme Court says stock dividends are not taxable under the 1916 income tax law. Dividends are a payment to shareholders that is made in shares instead of cash. -
20th Century
The Sixteenth Amendment played a role in building up the American federal government of the twentieth century. It impacted the government a lot. It did that by making it possible to make it a modern, nationwide income tax. Before long the income tax would become the federal government's largest source of revenue. -
16th Amendment Now
The congress has power to lay and collect taxes on incomes. The congress made a federal income tax with the revenue act of 1913. Some people like the 16th amendment and others disagree and say it's unconstitutional. The Supreme Court held a case on income tax in 1916 case of Brushaber v. union pacific railroad co.