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The Sixteenth Amendment
The most egregious usurpation of American freedoms in history started out as an experiment in reverse psychology. The Sixteenth Amendment, which allowed a non-apportioned tax on incomes, was the result of liberal Democrats – they called themselves “Progressives” in those days – calling the bluff of hard-line Republicans who were tired of repeated attempts to tax corporate income.
No income tax was envisioned by the framers of the Constitution. American revenue was to be raised by duties, tariffs, and excise taxes. The Revolution had been fired by colonial resentment over onerous taxation by the Crown. The colonists chafed at the idea that their possessions were on loan from the government, and subject to recall whenever they failed to meet some arbitrary tax obligation. Thus, their treasury was supported by direct taxation on goods, due and payable upon transfer. They eschewed the notion that intangibles should be taxed, reasoning that such fees amounted to stricture. As Edmund Burke put it, “The power to tax is the power to destroy.”
But in 1860, President Lincoln faced the daunting task of financing a civil war. The rag-tag, largely volunteer militias of the Revolution were replaced by huge conscripted armies, and the materiel of war had escalated as well. To provision the Union forces, Lincoln needed funds beyond what export duties and tariffs could provide. In July of 1860, he implemented the first tax on incomes.
It was a modest burden, 2 percent of gross income for people earning $2,000 a year or more(?). Most people were exempt. But Lincoln raised millions of dollars that year, which went to prop up a Union army badly shaken by repeated defeats. Clearly, the emergency income tax was serving its purpose.
But since an income tax was not a capitation or direct tax, the Constitution insisted it be apportioned equally among the states. In 1863, the Supreme Court was petitioned to rule on the legality of Lincoln’s income tax. The Court ruled unanimously that, in effect, the tax was actually a direct tax for purposes of the Constitution, and thus avoided the constraints of apportionment specified in Article I, Section 9. The tax was sustained.
Legal scholars have since reviewed the 1863 decision and found it unsound at best and specious at worst. The decision was almost certainly made out of fear that the federal government would be bankrupted by the war unless alternate sources of revenue were created. But the Supreme Court being the court of final appeal, there was no place to turn after their ruling was handed down.
The point became moot when the income tax was eliminated in 1874.
The question reared its head again in 1895, in the famous Pollock case. The previous year, stinging from a fin de siecle recession at home and economic instability abroad, the US export market had sagged alarmingly. Duties and tariffs again were proving inadequate to finance the expanding government. So another small income tax had been imposed, copying the successful model implemented by Lincoln a few decades prior.
This time, the resistance came almost immediately. In the 1895 case of Pollock vs. Farmer’s Loan & Trust Co., the Supreme Court revisited the question of apportionment. This time, the justices struck down the tax. Pollock was right. The tax did indeed violate Article I, Section 9, in that it was an indirect tax on something ethereal called “income,” and thus, subject to the apportionment rule of that Article. The government would have to make do with the constitutionally enumerated sources of revenue.
The primary backers of the tax had been representatives from farm states, whose produce was hurt by high export duties. This was the period of the Industrial Revolution, and agriculture was being replaced by industry at the same time the rural population was migrating to the city. Industrial produce was fast supplanting foodstuffs and farm commodities as the nation’s mercantile standard, and self-employed farmers were being replaced by legions of blue-collar workers who “worked all day for sugar in their tay.” Since the latter’s’ fruits were not their own, any tax on them was a tax on the corporations that employed them.
Republicans fought repeated attempts by Progressives to reinstate some form of income tax after Pollock. When conservative Texas senator Joseph Bailiey introduced another income tax bill designed to embarrass the Republicans in 1909, he was shocked to find his measure backed by a liberal coalition of Republicans, including Teddy Roosevelt. Finally, a group of conservatives led by Rhode Island senator Nelson Aldritch, Henry Cabot Lodge of Massachusetts, and President Taft decided to bluff the Progressives by acceding to the liberal demand for an income tax, but requiring that any proposed legislation pass constitutional muster first. This, of course, would require an amendment to nullify the apportionment clause of Article I.
The Republicans were convinced the opposition would back down on their proposals, since it was unlikely anyone would sponsor a national referendum to amend the Constitution. In fact, the Progressives rose to the challenge, and called the Republican bluff. They immediately drafted language for Amendment XVI, and submitted it to the House floor for debate. Now the Republicans had to back down. Even the author of the constitutional requirement, Sereno Payne of New York, was forced to betray his scheme and admit his true opposition to the amendment:
"I believe with Gladstone that it tends to make a nation of liars. I believe it is the most easily concealed of any tax that can be laid, the most difficult of enforcement, and the hardest to collect; that it is, in a word, a tax upon the income of honest men and an exemption, to a greater or lesser extent, of the income of rascals; and so I am opposed to any income tax in time of peace...I hope that if the Constitution is amended in this way the time will not come when the American people will ever want to enact an income tax except in time of war."
Over the strident objections of Lodge, Aldritch and others, the amendment was forwarded to the states. There were anomalies in the ratification process. For instance, Kentucky’s pro and con votes were actually reversed by Secretary of State Philander Knox
The final ratification came on Feb. 3, 1913. In October Bailey of Rhode Island introduced House Resolution 3321, which would become the foundation for the labyrinthine income tax code we “enjoy” today.
By 1939, only 5 percent of the population was liable under the income tax. At its outset, it supplied 2 to 3 percent of the Gross Domestic Product. Its brackets ranged from 1 to 7 percent. It has always been discriminatory – some call it “progressive” – with higher incomes taxed to a greater percentage than lower incomes.
By 1941, it had become the source for 8 percent of the federal revenue stream. Then Franklin Roosevelt passed a withholding regulation in 1943, which meant that the money was withheld from the wage earner’s paycheck before the worker even saw it. Coupled with FICA (Social Security) that same year, working-class America found 5 to 10 percent of its weekly paycheck had disappeared into the treasury. By the end of the decade, income tax fed up to half of the federal government’s vastly expanded waistline. The most onerous brackets ran up to 94 percent, reversing the Biblical admonition to give a tenth of one’s income to the priests. Roosevelt’s ravenous monster claimed 90 percent and left the earner a tithe.
Today, the 1998 tax code comprises more than 20 volumes of intricate accounting regulations virtually incomprehensible to even the most erudite experts. In 1996, an investigative team contacted 40 different IRS offices with the identical set of data, and asked for a resolution. The got 40 different answers. The IRS has admitted that it can’t audit more than 2 percent of any year’s returns. Many such audits are done at random, or because of highly secretive “triggers” that catch the electronic eyes. The government’s own auditors found in 1998 that the IRS itself has some of the sloppiest bookkeeping practices in the federal bureaucracy, a notable distinction in such a competitive field. If fact, the GAO report concluded, only partially tongue-in-cheek, the IRS would likely fail its own audit.
The average American cannot begin to comprehend the accounting complexities inherent in the income tax code. Yet failure to adhere completely to those regulations can expose the offender to fines and penalties that could cause great financial strain or even ruin. According to IRS precedents, the burden of proof in an audit lies with the defendant, not the plaintiff. The IRS needn’t prove its claim; the auditee must prove his innocence. Failure to pay the resulting judgment in full can result in a tax lien against the auditee’s property (including any held in joint tenancy), garnishment of wages, or seizure of personal property sufficient to offset the judgment.
Every year, 200 million Americans fill out form 1040 in one of its myriad incarnations. In doing so, they reveal the most intimate financial details of their lives: how much they earn, where they spend a good part of that income, how much they donate to charities (and which charities those are), how many children they have and what they do with those children, how much they spend on what types of health care. Even the make and model of the car they drive, the amount of their mortgage and the holder of that lien, and the clothes they buy for work. All this goes onto a form that may later be used by governmental agencies to incriminate the taxpayer. There is no option; failure to complete the form is itself a tax crime.
The income tax’s financial cost aside, it effectively surmounts the constitutional protections of the Fourth, Fifth, Sixth, and Fourteenth amendments. It requires citizens to provide self-incriminatory evidence; it usurps the judicial doctrine of burden of proof; it brushes aside the right of citizens to be secure in their personal effects; it applies its regulations in a discriminatory and arbitrary – even random – manner.
It is an abomination.
Former IRS Commissioner T. Coleman Andrews, who resigned in disgust from the agency in the 50’s, makes this accusation:
"The income tax is fulfilling the Marxist prophecy that the surest way to destroy a capitalist society is by - _steeply graduated_ taxes on income and heavy levies upon the estates of people when they die. As matters now stand, if our children make the most of their capabilities and training, they will have to give most of it to the tax collector and so become slaves of the government. People cannot pull themselves up by the bootstraps anymore because the tax collector gets the boots and the straps as well.”
The Sixteenth Amendment reversed the complexion of America’s political face. Before its passage (with a couple of notable exceptions) the citizenry fully enjoyed the blessings of prosperity, and were quick to realize the consequences of their own diligence or their own sloth. Government was a minor element in their lives, a distant, amorphous presence like the glint of sunlight off a distant breaker. Their intercourse was their own business; their commerce free and unfettered.
With ratification of the income tax, the government stood beside every working man and woman in the country, and beat them all to the paymaster’s window. In effect, every hour was paid not from the employer, but from the government. Since an arbitrary regulation determined how much each person was obligated to pay, that regulation could be increased at whim, and was limited only by mathematics. The government did not determine how much of your money it got; it determined how much of your money it let you keep. Add to that the forced withholding for Social Security, and the government had become an inescapable partner at every bench, counter, and desk. In one bitter move, the servant became the master, and nature was turned upside-down.
Now, the power that derived from the people was transferred, in the form of money, to the political aristocracy. It didn’t take long for an elite to emerge to fill those untitled ranks. The line between banker, businessman, and politician became blurred as each sought to purchase the favor of the others.
The New Deal ignited an explosion of government programs, all of which needed to be funded somehow. The socialistic agenda of Franklin Roosevelt would never have been possible without an income tax. The mood of the nation changed from tough self-reliance to a willingness to accept paternal dependency. And the Sixteenth Amendment provided the treasury that purchased the first generation of willing American slaves.
Today’s government comprises hundreds of agencies, commissions, departments, bureaus, and offices. They regulate and scrutinize everything in our lives, from the size of our toilets to the propellant in our deodorants. No product or service reaches the marketplace unless it has passed through a sieve of grasping, ignorant, obstructionist laws and restrictions that cost billions of dollars and improve the lives of no-one. At this point, it is impossible to determine whether the bloated bureaucracy exists because the money is there to feed it, or the money is leeched from the body politic to support the parasite. In either case, the solution is obvious.
To free our society from the ever-enlarging monster of government intrusion, we must reduce the scope of government. To strangle the hydra, we must cut off its heads. The food it eats, the air it breathes, is money. Our money. To cut off its head, we need to cut off its money.
We need to repeal the Sixteenth Amendment.
-30-
We do not need to repeal what was never properly ratified in the first place.
I nominate this for post of the Week. Ironjack we may have had conflicts on other issues But this article totally changed my mind about where you are coming from.
Super Bump Great post
"An Unconstitutional law imposes no obligation...and creates no office."
Wish I'd bookmarked that one, from a Supreme Court majority opinion. Anybody familiar with the quote?
Excellent research and a great narrative. Thanks for going to the trouble. It benefits us all.
BTT
"The income tax’s financial cost aside, it effectively surmounts the constitutional protections of the Fourth, Fifth, Sixth, and Fourteenth amendments. It requires citizens to provide self-incriminatory evidence; it usurps the judicial doctrine of burden of proof; it brushes aside the right of citizens to be secure in their personal effects; it applies its regulations in a discriminatory and arbitrary – even random – manner."
And this is why I say the 16th amendment is itself unconstitutional. Or at least the enforcement tactics used are. The 16th does not repeal the 4th, 5th, or any other amendment, or clause of the Constitution and does not give bureacrats the power to access our private financial information or the power to seize our assets without a trial. And it definitely does not empower them to treat citizens as convicted criminals. Being as how the Supreme Court refuses to throw it out, and the Congress refuses to repeal it, then it will be up to the people to force a repealing amendment. This tax is unjust and unconstitutional and is a direct threat to the continuence of our Republic and our Liberty!
In July of 1860, he implemented the first tax on incomes.
IronJack, how could Lincoln implement an income tax in July of 1860, when he wasn't even elected until November 1860, and didn't take office until 1861?
All such triffling erratum aside, there is no problem, and everything can be left as it is.
Like the leaning Tower of Pisa, often attempts to remedy create calamity.
It is left to the individual to become a constitutional American and decide to be brave enough not to be a communist toad & educate themselves out of liability!
Follow the Yellow Brick Road, Toto, Dorothy & all the rest of you darlings!
It was probably a typo. Should have been 1861.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.
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