February 3, 1913
The 16th Amendment→
The Federal Income Tax
The 16th Amendment granted Congress the power to levy a federal income tax without apportioning it among the states by population. This overrode the Supreme Court's 1895 ruling in Pollock v. Farmers' Loan & Trust Co., which had struck down a previous income tax as unconstitutional.
Before 1913, the federal government funded itself primarily through tariffs and excise taxes, indirect taxes that flowed through commerce. The states served as intermediaries between citizens and the federal government. The 16th Amendment changed this fundamentally: it gave Washington direct taxing power over individual citizens, bypassing the states entirely.
The original income tax was modest: a 1% tax on incomes above $3,000 (roughly $93,000 today), with a top rate of 7% on incomes over $500,000. Proponents argued it would only affect the wealthy. Within a few years, rates climbed dramatically to fund World War I, reaching 77% by 1918.
Why it matters:
The income tax created a direct financial relationship between the federal government and every working American. It provided the revenue engine that would fund the massive expansion of federal power throughout the 20th century: from the New Deal to the Great Society to the modern regulatory state.