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On February 3, 1913, the states ratified the 16th Amendment to the U.S. Constitution. It states: "The Congress shall have power to lay and collect taxes on income from every source, without apportionment among the several States, and without regard to any census or enumeration." This amendment gives the federal government the power to tax an individual's income. Taxes are not based on a fixed rate, but can vary according to the amount of income received. The richer you are, the more taxes you pay. If you are poor, you are not taxed as much.
There was an income tax before the 16th Amendment, and it was in effect during the Civil War for those who earned more than $800. During the Civil War, that was a lot of money. The income tax expired in 1866. The desire of Americans to shift income tax to the rich was strong in 1909, when President William Taft proposed a 2% tax on large businesses known as corporations. Following this, Congress wrote the 16th Amendment and, after agreeing on the rules of the income tax amendment, sent it to the states for a vote. Proficient in: Economy
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While many northern states did not like the idea of an income tax in the 16th Amendment, western states strongly supported it.
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The 16th Amendment became part of the constitution after it was ratified, and the federal government has been collecting taxes from Americans on their income every year since. Income tax is levied on wages earned from employment, business income, dividends, and rental property. The 16th Amendment is effective because it allows all income to be taxed. The case of Pollock v. Farmers' Loan & Trust Co. challenged the constitutionality of the Wilson-Gorman Tariff Act of 1894, which taxed income over $4,000 at a rate of two percent. The case was decided by the United States Supreme Court in 1895.
The Supreme Court ruled that the Act's taxes on distributed profits on interest, dividends, and rents were in fact direct taxes. Thus, the Law was unconstitutional because it violated the Constitution's rule on the distribution of direct taxes. In 1913, eighteen years later, the Sixteenth Amendment to the United States Constitution was ratified. This amendment gave the United States Congress the legal authority to tax all income without regard to apportionment requirements. Although this amendment does not directly affect me now, it will affect me when I get a job.
This amendment is extremely important to all working Americans because it is how they get their money. In America, one of the largest income taxes is the federal income tax, although state and local taxes also take a large share. There are property taxes and sales taxes. Every time we fill up our gas tax, we pay a tax. We pay so many taxes that some consider "tax freedom day" as the day during the year when our nation has theoretically earned the revenue needed to pay the year's taxes. We pay taxes to pay for government services, including national defense, roads and bridges, fire and police protection, and more. American citizens are required to pay taxes every year.
The th Amendment: Giving Federal Government Taxing Power. (2023, Mar 23). Retrieved from https://studymoose.com/a-discussion-on-the-16th-amendment-an-amendment-that-gives-the-federal-government-the-power-to-tax-a-person-s-income-essay
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