16th Amendment

A tax is money that is paid to the government and will be added when buying or owning something valuable. The 16th amendment is an important amendment that allows the federal (United States) government to levy (collect) an income tax from all Americans. Income tax allows for the federal government to keep an army, build roads and bridges, enforce laws and carry out other important duties. The federal government realized in 1913 that in order for it to collect taxes effectively, and not have to share that tax money with the states, federal income tax was necessary. Other taxes, such as taxes on houses or other property are considered “direct” taxes by the Constitution and would have to be divided back among the states.

Let us look at the 16th amendment

The Congress shall have power to lay and collect taxes on incomes…

(Congress is allowed to collect some of the money earned by people working in the United States)

from whatever source derived…

(it doesn’t matter where the money is earned, as long as it is “income”)

without apportionment among the several States…

(there is no need to share the revenue with the states)

and without regard to any census or enumeration.

(the census, a count of all the people that live in the United States that happens every ten years, can’t be used as a basis for distributing taxes on people)

How did income tax start?

There was an income tax before the 16th amendment, and it was in effect during the Civil War. Anyone making more than $800 would be charged a tax of 3% and then eventually 3-5% on income over $600. This was actually a lot of money during the Civil War. This income tax ended in 1866.The desire of Americans to pass an income tax on the rich was strong in 1909, when President William Taft proposed a 2% of big businesses know as corporations. Following this lead, Congress wrote the 16th amendment and after agreeing on the rules of the amendment about income tax, sent to the states to be voted on. Although many northern states did not like the idea of an income tax in the 16th amendment, western states strongly supported it.

For the amendment to become part of the constitution, 36 states needed to ratify (approve) it. The 36th state to approve the 16th amendment was Delaware in 1931, almost four years after the first state, Alabama, ratified the 16th amendment in 1909.


The 16th amendment became part of the constitution after it was ratified and since then the federal government has collected taxes from Americans every year on their income (money earned). Income tax is charged on wages (money) earned from working a job, earnings from a business, dividends (money from stocks and investing) and rental property (charging someone to live in a building you own). The 16th amendment is effective here in that it specifically allows all income to be taxed.