The Sixteenth Amendment turned one hundred years old on February 3, 2013. The Sixteenth Amendment authorizes Congress to levy a federal income tax.
On February 3, 1913, the state of Delaware ratified the 16th Amendment, becoming the 36th state to ratify the constitutional amendment, and meeting the requirement that amendments be ratified by three-fourths of the states. There were 48 states at the time.
The 16th Amendment reads as follows:
"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 16th Amendment was put forth in response to a Supreme Court decision that declared the income tax unconstitutional. According to the Senate Web site's commentary on the Constitution, "In 1895 the Supreme Court had declared a federal income tax law unconstitutional. This amendment reversed that decision and authorized a tax on income."
- For a more detailed history of the 16th Amendment, see Kelly Phillips Erb's article in Forbes, "Guess What Turned 100 This Weekend?"
Following ratification of the 16th Amendment, the first income tax code was enacted on October 3, 1913. The first federal income tax featured graduated tax rates starting at 1%, with seven tax brackets, and a top marginal tax rate of 7%.
1913 Nominal Rate |
1913 Adjusted for Inflation to Today |
||
Tax Rate |
Tax Brackets |
Tax Rate |
Tax Brackets* |
1.0% |
$0 to $20,000 |
1.0% |
$0 to $463,826 |
2.0% |
$20,000 to $50,000 |
2.0% |
$463,826 to $1,159,566 |
3.0% |
$50,000 to $75,000 |
3.0% |
$1,159,566 to $1,739,348 |
4.0% |
$75,000 to $100,000 |
4.0% |
$1,739,348 to $2,319,131 |
5.0% |
$100,000 to $250,000 |
5.0% |
$2,319,131to $5,797,828 |
6.0% |
$250,000 to $500,000 |
6.0% |
$5,797,828 to $11,682,677 |
7.0% |
$500,000 and more |
7.0% |
$11,595,657 and more |
Source: CCH.
The very first Form 1040 for the year 1913 can be downloaded from the IRS Web site. It is three pages long with one page page of instructions.
Further resources:
- Ellen Terrell, History of the US Income Tax, Library of Congress
- Richard Morrison, 100 Years of the Federal Income Tax, Tax Foundation
- Len Burman, Happy Birthday, Income Tax, Forbes
- Kay Bell, Happy 100th Birthday Federal Income Tax, Don't Mess With Taxes
- Al Neuharth, Editorial: How Income Tax Has Changed in 100 Years, USA Today
- Sixteenth Amendment to the United States Constitution, Wikipedia
- Revenue Act of 1913, Wikipedia
- Tax History Museum: 1901-1932, Tax History Project