Posted on 02/03/2015 7:24:16 PM PST by Tolerance Sucks Rocks
The amendment was required because the Supreme Court had already ruled that a direct tax that was in not in proportion to the census was unconstitutional.
No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or Enumeration herein before directed to be taken.
Hence the wording of the 16th Amendment.
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 Sixteenth Amendment (Amendment XVI) to the United States Constitution allows the Congress to levy an income tax without apportioning it among the states or basing it on the United States Census. This amendment exempted income taxes from the constitutional requirements regarding direct taxes, after income taxes on rents, dividends, and interest were ruled to be direct taxes in the court case of Pollock v. Farmers' Loan & Trust Co. (1895). The amendment was adopted on February 3, 1913.Even after a repeal of the 16th Amendment it would still be constitutional to tax income on wages and salaries. Only taxes on capital (rents, dividends and interest) would be considered a direct tax and thus required to be apportioned among the states.In Pollock v. Farmers' Loan & Trust Co., the U.S. Supreme Court declared certain taxes on incomes such as those on property under the 1894 Act to be unconstitutionally unapportioned direct taxes. The Court reasoned that a tax on income from property should be treated as a tax on "property by reason of its ownership" and so should be required to be apportioned. The reasoning was that taxes on the rents from land, the dividends from stocks, and so forth, burdened the property generating the income in the same way that a tax on "property by reason of its ownership" burdened that property.
After Pollock, while income taxes on wages (as indirect taxes) were still not required to be apportioned by population, taxes on interest, dividends, and rental income were required to be apportioned by population. The Pollock ruling made the source of the income (e.g., property versus labor, etc.) relevant in determining whether the tax imposed on that income was deemed to be "direct" (and thus required to be apportioned among the states according to population) or, alternatively, "indirect" (and thus required only to be imposed with geographical uniformity).
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