It’s that time of year we all dread, so thought it would be good to explore the source of our misery and how it came to be.
The Sixteenth Amendment
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.
The birth of the income tax! W. Cleon Skousen wrote a very informative and entertaining “History of the 16th Amendment” article which I’m going to paraphrase here. He starts his article this way:
“Strange as it may seem, the Sixteenth Amendment (which gave the American people the affliction of confiscatory income taxes) was never supposed to have passed. It was introduced by the Republicans as part of a political scheme to trick the Democrats, but it backfired. “
Well, after reading that intro, I was hooked! I thought this would be a pretty boring story interpreting the Amendment that burdened us forevermore, but this was suddenly looking pretty interesting! I love history and the story BEHIND the story is usually even more intriguing!
Our Founding Fathers, having just rebelled against England because of imposed taxes, were not supporters by any means of a federal tax unless it was apportioned by population so the small states wouldn’t have the same burdens as the bigger states (one of the biggest bones of contention in the formation of our government).
This Amendment, and the debates regarding it, is what spawned the “soak the rich” sentiment still present today. Mr. Skousen writes: “In April 1909, Sen. Joseph Bailey, a conservative Democrat from Texas who was opposed to income taxes, decided to embarrass the Republicans by forcing them to openly oppose an income tax bill similar to those which had been introduced in the past – and always shot down by the conservative Republicans (which is how they got labeled “the party of the rich”). He introduced his bill, expecting it to get the usual opposition. However, to his amazement, Teddy Roosevelt and a growing element of liberals in the Republican party came out in favor of the bill and it looked as though it was going to pass.”
The Democrats were astounded and quickly circled the wagons trying to figure out how to kill their own bill. Their ultimate strategy was to try a political end run: they announced they favored an income tax but only if it were an amendment to the Constitution. They hoped to make the Republicans look uncooperative and they were SURE there would be no way it would pass, so a win-win for the Dems. (Some things never change, huh?)
The Dems were stunned when President Taft (who worked with them to demolish the original Bailey Bill) unexpectedly came out recommending passage of a Constitutional amendment to legalize the federal income tax legislation! The Republicans, it turned out, already had an amendment written. Democratic Congressman Cordell Hull took the floor to excoriate the Republican leaders for this “political trick”, but the snowball was already rolling down the hill.
“When Republican Congressman Sereno Payne of New York – who had introduced the amendment to the House – saw that this end run was turning into a winning touchdown for the opposition, he was horrified, openly denouncing the bill he had sponsored!
“It turned out that the slogan “soak the rich” had aroused Pavlovian salivation among politicians both Federal and State. The Senate approved the Sixteenth Amendment with an astonishing unanimity of 77-0! The House approved it by a vote of 318-14. The end run of the Republican leadership did indeed backfire. State after state ratified this “soak the rich” amendment until it went into full force and effect on February 12, 1913.” (W. Cleon Skousen)
But there’s another part of this story: The wealthy, especially the super-wealthy, had seen the handwriting on the wall and had created a clever device to protect their riches. It was called a “charitable foundation.” And tucked away in the language of the 1913 HR Bill 3321, establishing the 16th amendment is that precious key which safely preserved the riches of the super wealthy under Section 2, para. G:
“Provided, however, that nothing in this section shall apply . . . to any corporation or association organized and operated exclusively for religious, charitable, scientific or educational purposes.”
So, that’s how middle-class Americans came to be stuck with an ever increasing income tax burden – all because of political shenanigans that no one thought would pass. Within five years, the federal income tax became the principal source of income for the federal government. www.latterdayconservative.com/articles/history-of-the-16th-amendment/