The 16th Amendment to the United States Constitution, passed in 1913, authorizes Congress to levy a tax on income from any source. States in the South and West overwhelmingly backed the move. It was opposed by many Westerners who saw it as an infringement on state sovereignty.
The purpose of the 16th Amendment is twofold: first, to allow the federal government to collect its income taxes; second, to give Congress the power to impose a national income tax. The amendment's authors believed that both these goals were necessary parts of a plan to make America a world leader in finance.
In addition to the federal income tax, some states also have their own income taxes. These are usually limited to only a few hundred dollars or less per person per year. However, some states with no income tax at all may choose to implement a luxury tax instead. This tax would apply to items such as expensive cars, real estate, and jewelry. Its main goal is to raise money for public services rather than personal income taxation. For example, California has one of the most sophisticated luxury taxes in the country. It applies to certain vehicles over $50,000 and includes other expensive items like yachts and private planes. The rate varies depending on how much of your income is above $1 million per year.
On February 3, 1913, the sixteenth amendment was enacted, allowing Congress to collect an income tax. The sixteenth amendment is regarded as the first of the Progressive Era amendments, heralding a significant shift in the way the government controlled society. The amendment ended all reliance on state authority for the collection of federal taxes.
The seventeenth amendment abolished all state-based barriers to electoral participation, creating a uniform national electorate. It passed quickly through both houses of Congress and was ratified by the necessary number of states on December 18, 1916. The amendment's ratification marked the end of all official state involvement in presidential elections, freeing voters from having to travel across state lines to exercise their right to vote. States retained their power over local elections, but not until after many heated debates about whether states had any business regulating political parties at all.
By extending the right to vote to citizens who were previously denied this privilege, the seventeenth amendment ensured that every adult citizen would be able to participate in deciding which individuals will govern them. This amendment also removed any discrimination based on race or gender, two important steps toward true equality under the law.
These are just some of the many ways in which the sixteen amendment extends progressive ideals to all Americans. It is safe to say that no other single piece of legislation has done more to ensure equal rights for all people than the sixteen amendment.
The 16th amendment, passed by Congress on July 2, 1909 and approved on February 3, 1913, established Congress's ability to levy a federal income tax. The amendment eliminated all previous limitations on what taxes Congress could impose.
Federal income tax is any tax imposed on individuals or corporations for the purpose of generating revenue for the government. Although often referred to as a "income tax," that term is used to describe only one of several taxes collected under the amendment. The amendment also permits taxation of corporate profits earned in other countries and repatriated back to America. It also allows taxation of the income of churches from whatever source derived. And it permits taxes to be levied on the inheritance of citizens and residents of America.
Although the 16th amendment permits each state to decide what type of income tax it can impose, most states have opted not to create their own system but to rely on the federal government to provide them with funds for their education systems and police forces. Today, almost every state in America imposes some form of income tax.
In addition to the federal income tax permitted by the 16th amendment, many other types of taxes are collected at the federal level or by individual states. These include estate taxes, excise taxes, tariffs, and sales taxes.