jasontheoriginal on Nostr: To impose an income tax without apportioning it among the states, Congress proposed ...
To impose an income tax without apportioning it among the states, Congress proposed the 16th Amendment, which states:"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."This amendment was ratified by the required number of states on February 3, 1913, and effectively gave Congress the clear constitutional authority to impose a federal income tax.
The first federal income tax in the United States, after the ratification of the 16th Amendment in 1913, primarily affected wealthier individuals. Here are the details:
### Who Was Affected:
- The tax applied only to individuals with higher incomes. Specifically, it was aimed at those earning more than $3,000 per year (equivalent to about $90,000 today when adjusted for inflation).
- For married couples, the threshold was $4,000 (approximately $120,000 today).
- Because the average income at that time was much lower, this tax affected a relatively small percentage of the population, estimated at less than 1% of Americans.
### Tax Rates:
- The income tax rates were initially very low:
- The basic rate was 1% on income above the threshold ($3,000 for individuals and $4,000 for couples).
- Additionally, there was a "surtax" for higher incomes. This surtax started at 1% for incomes over $20,000 and rose to 6% for incomes over $500,000.
### Revenue and Impact:
- The goal of the tax was to generate revenue for the federal government from the wealthiest citizens.
- It was designed to be progressive, meaning that the tax rate increased as income increased, placing a larger burden on the wealthy.
This income tax structure marked a significant shift in the way the federal government raised revenue, moving away from tariffs and excise taxes and towards income taxation, which would become the primary source of federal revenue in the years to come.
The first federal income tax in the United States, after the ratification of the 16th Amendment in 1913, primarily affected wealthier individuals. Here are the details:
### Who Was Affected:
- The tax applied only to individuals with higher incomes. Specifically, it was aimed at those earning more than $3,000 per year (equivalent to about $90,000 today when adjusted for inflation).
- For married couples, the threshold was $4,000 (approximately $120,000 today).
- Because the average income at that time was much lower, this tax affected a relatively small percentage of the population, estimated at less than 1% of Americans.
### Tax Rates:
- The income tax rates were initially very low:
- The basic rate was 1% on income above the threshold ($3,000 for individuals and $4,000 for couples).
- Additionally, there was a "surtax" for higher incomes. This surtax started at 1% for incomes over $20,000 and rose to 6% for incomes over $500,000.
### Revenue and Impact:
- The goal of the tax was to generate revenue for the federal government from the wealthiest citizens.
- It was designed to be progressive, meaning that the tax rate increased as income increased, placing a larger burden on the wealthy.
This income tax structure marked a significant shift in the way the federal government raised revenue, moving away from tariffs and excise taxes and towards income taxation, which would become the primary source of federal revenue in the years to come.