16th Amendment

By Chris Birks

  • First Income Tax

    The first income tax was more or less tolerated, as it was used to support the American Civil War. It was tolerated because the purpose of the tax was to help finance the war, paying for weapons, clothing, food, and the soldiers' pay.
    Source 2

  • Wilson- Gorman Tariff Act

    Wilson- Gorman Tariff Act
    This act let Congress pass a flat rate income tax, but was declared unconstitutional because it was a direct tax and not based on state population.
    Source 3

  • Pollock v. Farmers' Loan and Trust Company

    After the Civil War, Congress continued taxing income but were meet with angry citizens. In 1895 the Supreme Court declared portions of the Wilson-Gorman Tariff Act of 1894, or direct taxation on income unconstitutional.
    Source 2

  • The Deal

    Cordell Hull, a democrat from Tennessee, worked a deal out with President William Howard Taft. The deal they agreed upon was a constitutional amendment for an income tax in return they would not stall the approval of any tariff laws.
    Source 4

  • Passed by Congress

    After a 5 hour debate on the merits of the amendment, the bill was passed by Congress with a 318-14, with 56 not voting.
    Source 1

  • Ratification

    On this date, the states of Delaware, Wyoming, and New Mexico approved the 16th amendment, ratifying it into the Constitution.
    This Amendment allowed Congress the power to levy taxes based on the income of citizens.
    Source 1

  • First income law under the 16th Amendment

    This was the first collection day with the new Income Tax law. This law was a graduated tax that started with 1% for those whose income was between $4,000 and $20,000 up to 3$ for those over $50,000
    Source 4

  • Increasing Taxes

    In response to the US entrance to World War 1, Congress raised the 1% to 2% and for those who made over a million gave an ungodly 50%, up to 77% toward the end of the war, in taxes.
    Source 4

  • IRS

    IRS
    The IRS Restructuring and Reform Act of 1998 reorganized the IRS that modernized the Agency and established a Taxpayer Advocate Service.
    Source 3

  • Income Tax Rates Today

    Today, tax rates are separated into brackets. For single filers today the tax brackets are 10% for those who make $0-9,700, 12% for $9,701- $39,475, 22% for $39,476-$84,200, 24% for $84,201-$160,725, 32% for $160,726-$204,100, 35% for $204,101-$510,300, and 37% for $510,300+
    Source 5