100 Years Of U.S. Federal Income Tax

Tyler Durden's picture

On February 3rd, 1913, one of the two most historic events in US history took place: the ratification of the 16th amendment, which established Congress' right to impose a Federal income tax on Americans, and overturned Article I, Section 9 of the US Constitution which explicitly prohibited a general income tax. The amendment was brief and to the point, and read 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." And with that, the US Federal Income Tax was born and has been with us for precisely 100 years.

The amendment itself:

The result: the first ever iteration of what would henceforth become the most hated form in US history.

From OurDocuments.gov

Passed by Congress on July 2, 1909, and ratified February 3, 1913, the 16th amendment established Congress's right to impose a Federal income tax.


Far-reaching in its social as well as its economic impact, the income tax amendment became part of the Constitution by a curious series of events culminating in a bit of political maneuvering that went awry.


The financial requirements of the Civil War prompted the first American income tax in 1861. At first, Congress placed a flat 3-percent tax on all incomes over $800 and later modified this principle to include a graduated tax. Congress repealed the income tax in 1872, but the concept did not disappear.


After the Civil War, the growing industrial and financial markets of the eastern United States generally prospered. But the farmers of the south and west suffered from low prices for their farm products, while they were forced to pay high prices for manufactured goods. Throughout the 1860s, 1870s, and 1880s, farmers formed such political organizations as the Grange, the Greenback Party, the National Farmers’ Alliance, and the People’s (Populist) Party. All of these groups advocated many reforms (see the Interstate Commerce Act) considered radical for the times, including a graduated income tax.


In 1894, as part of a high tariff bill, Congress enacted a 2-percent tax on income over $4,000. The tax was almost immediately struck down by a five-to-four decision of the Supreme Court, even though the Court had upheld the constitutionality of the Civil War tax as recently as 1881. Although farm organizations denounced the Court’s decision as a prime example of the alliance of government and business against the farmer, a general return of prosperity around the turn of the century softened the demand for reform. Democratic Party Platforms under the leadership of three-time Presidential candidate William Jennings Bryan, however, consistently included an income tax plank, and the progressive wing of the Republican Party also espoused the concept.


In 1909 progressives in Congress again attached a provision for an income tax to a tariff bill. Conservatives, hoping to kill the idea for good, proposed a constitutional amendment enacting such a tax; they believed an amendment would never receive ratification by three-fourths of the states. Much to their surprise, the amendment was ratified by one state legislature after another, and on February 25, 1913, with the certification by Secretary of State Philander C. Knox, the 16th amendment took effect. Yet in 1913, due to generous exemptions and deductions, less than 1 percent of the population paid income taxes at the rate of only 1 percent of net income.


This document settled the constitutional question of how to tax income and, by so doing, effected dramatic changes in the American way of life.

As for the other historic event of US history, ironically it, too, took place in 1913, on December 23: this was the day when the Federal Reserve was founded.

The charts below summarize what has happened next:

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francis_sawyer's picture

Blow Me...


Time for some of your "Fred & Wilma" insights Kantbelieveit


krispkritter's picture

Fuck the Infernal Rotorooter Scumbags! An illegal paramilitary organization to rob you blind, every single year, after year...

trav777's picture

the USG was bankrupt and this was the only way to get interest money lent to them from thin air

francis_sawyer's picture

aka: the Mandrake mechanism


Shoulda stuck to 'making beer' to make money

kaiserhoff's picture

May the Blue Bird of Happiness shit on their birthday cake.

Zer0head's picture

that didn't take long


"400 special experts on their trail"

"A man is a fool who attempts to avoid the income tax, Commissioner Osborne said today. He is sure to be detected sooner or later. There is no chance that tax dodgers can escape."


Stackers's picture


Several states illegally ratified it under their own state constitutions and/or did not submit official ratification documentation properly.

krispkritter's picture

I really liked Aaron Russo's 'Freedom to Fascism' documentary. Took a lot of shots at this topic and embarrased the hell out of the IRS nitwits.

Manthong's picture

It’s no goddam accident that the 16th Amendment and the Federal Reserve Bank were established at the same time.

They are part and parcel of the same rape of the American republic.

Buckaroo Banzai's picture

There are practical considerations as well. In order for a fiat currency to work properly, you have to create a built-in demand for it. That's why an income tax is so important, for the tax can only be paid using Federal Reserve Notes. Otherwise, you could abandon the currency entirely and move to barter...or start using an alternative currency, like, say, 90% silver pre-1965 dimes. As an example.

chumbawamba's picture

That's part of it.  Another part is that the income tax is a way to drain excess currency from the economy to mitigate inflation.  But they can only take out what they put in.

Render unto Caesar that which is Caesar's.

Your labor cannot be taxed, unless you exchange it for Federal Reserve Notes (Caesar's money).  Even then, there are ways to discharge the obligation.

I am Chumbawamba.

LasVegasDave's picture

Andrew Joseph Stack, who flew his plane into an Austin TX IRS office

Hero or terrorist?


flacon's picture

I am busy trying to reduce my income to zero. And also to reduce my spending to as low as possible. 

francis_sawyer's picture

Andrew Stack was another one of MANY 'false flags'...


Go back to cleaning Sheldon Adelson's pool...

Buckaroo Banzai's picture

It wasn't a false flag. How can I know? Because no political advantage was taken from it. False flags are always perpetrated to pursue a political end.

Otherwise, why go through all the trouble?

LasVegasDave's picture

is that your word for today "false flag"?

Guys like you crack me up.  You are so lazy and insecure that you think you see the international jew behind every world event.

they dont come any dumber or more predictable than you, schmuck

phyuckyiu's picture

I see that the topic of stealing our money by force of law has brought out the trusty Hasbara Trolls.

P.S. Andrew Joseph Stack didn't work as a false flag because he was a musician with one of Alex Jones' staffmembers, Rob Dew. They had multiple videos of him playing keyboards in a local band with Rob Dew, and also knew his whole story personally, and his wife, so blew any holes the media was trying to advance. Yet another time that the local authorities were running a 'drill' about terrorism a few miles from where the actual event occurred, -on the same day-.

AllWorkedUp's picture

Keep going Francis. There IS an International Jew behind every fucked up world event.

Manthong's picture

Oh, and lest we forget, that same year there was a third atrocity thrust upon the republic that sealed our fate..

The 17th Amendment stole the Senate away from the control of and accountability to state governments and handed it over to moneyed special interests (banks/large corporations) who could fund and sway the shallow beauty contests that elections have become.

By getting the Senate they ultimately got de-facto control of the Judicial, too.


There are no "States" anymore in the federal government of United States of America as the founders established it.

Boris Alatovkrap's picture

Q: How many is take for Globalist Jew screw incandescent light?

A: None, all work is done by Goyim!

Dieselclam's picture

Mission Accomplished in reducing income and tax liability to zero. It's really not as bad as one might fear.

fourchan's picture

thats why taxes for government financing is is obsolite.

Bandit und Buster's picture

Some say there is a REMEDY written into the 'law'...


What they never told us is that the tax is interest for using the Fed's private 'money'/credit, like a bank card costs to use.

Stop using credit and use public money...


Skateboarder's picture

Erhm... you surely meant 'democracy'... and the freedoms it brings along, for which we are hated.

We're #1! (at illusory rape)

"Taxation without representation is tyranny" is a quaint phrase tossed at elementary school children in passing. Or wait... has that been deemed a terrorist threat... kind of like how pointing your finger like a gun is a terrorist threat.

Next time you see someone with an I <3 Obamacare bumper sticker, tell them they are scum.

wee-weed up's picture

And if you "love" the Fed Income Tax, just wait...

Next up... VAT! The "gift" (to the gubbermint) that keeps on giving. Things will be taxed at every transaction. Over and over again... a Liberal bureaucrat's wet-dream! Just like National health care, the Libs have been salivating for a VAT for a long time. They'll start it low, but then it will get jacked up over time. Just ask the euroweenies about VAT. They started out at about 5% and then before they knew it, they're over 20% now in some places!

tickhound's picture

People it's ConsumerBowl XLVII!!!!  Relax and get ure 64oz limited edition Dew.  Be ready to see some REAL Americana in the making... encapsulated in those 60 second segments, only today.  Feel good artifacts brought straight to your home...

The one day each year Americans all pray to the same god... Proves there is hope.

The only drawback is having to sit through four 15 minute quarters of cultural dance and celebration.


HardAssets's picture

TV spectator 'sport' is a waste of time IMO.

Bob Costas went after our gun rights, and you can bet he doesn't do anything without approval from his masters.

Now I hear theyre going to feature kids from the school that was attacked in the Stupid Bowl broadcast. More propaganda.

Youre more likely to be struck by lightning than be a victim of a mass shooting. Gun crimes have declined by about 50% in the

US over the last 20 years (FBI stats).

I'll continue to watch when our young family members and friends kids play in various sporting events. That means alot to the kids to have

people cheering them on and encouraging them.

Think I'll skip the Stupid Bowl, and skip supporting those who would attack our Freedoms. They can go f*ck themselves !


boogerbently's picture

I'm no huge fan of charts, but it looks like everytime we spend more, we increase the deficit!!!

Gee, how's that going to help??

hustler etiquette's picture

I agree. How does one get around this?  employers withold fed income tax

phyuckyiu's picture

Move to a different country and keep your first 80k without feeding the beast. More if they can pay you in other ways.


Edit: sorry the official number is $95,100, they index it for inflation each year (look up Foreign Earned Income Exclusion).

The Man in Room Five's picture

Laws don't matter when you have all the guns

Colonel Klink's picture

Yep 100 years of illegally confiscating our money.  Courts still refuse to see and acknowledge facts.

Cheesy Bastard's picture

May the Blue Bird of Happiness shit on their birthday cake

I think it will be the black swan of happiness. 

The Heart's picture

"I think it will be the black swan of happiness."

Is that a planned black swan, or a natural black swan?

This man has some VERY INTERESTING things to share here in his videos. What is noteworthy is the outbreak of this virus that no doubt came from any number of sorted nasty chem/bio labs that were flooded during Katrina. And of course what may be more prevalent is the deliberate poisoning of that entire region with corexit and the horrendous amounts of crude that have killed off most of the biology in the gulf and up the Atlantic, and over now to the western shores of Europe.

Oh, back to this. Will there be a superbowl, or is this a horse wash to be horsewashed?

V214 Super Bowl insurance cancelled.:


Corexit killing the Gulf:


chumbawamba's picture

This is an excerpt from the above archived article:

"This information is desired only from corporations which paid dividends between March 1 and Dec. 30, 1913, both inclusive.  If your organization did not pay dividends during that period, the blanks should be returned with the statements indorsed thereon that no dividends were paid during the period named."

The notice was address, "To all Corporations, Joint Stock Companies or Associations, and Insurance Companies."

The notice was to gather up information on those who had received gains on their common stock in the above-named entitites.  In other words, "income".

When you exchange hours of your day for some form of compensation, you did not receive income, you were compensated.  Compensation is not taxable, only income.  Income is a gain derived from some entity or opportunity contrived by the government, i.e. stock in a corporation, which is a government chartered entity, operating under privilege, a benefit.  You take benefits from the government, you pay for it.

That's how this works, then and now.

I am Chumbawamba.

Buckaroo Banzai's picture

BINGO. But that got flushed down the memory hole, didn't it?

logically possible's picture

That was the foot in the door then, that allowed them to get their hand deep in your wallet, as they are today.

Cathartes Aura's picture

language as delivery of concepts.

seek the definitions of words language'd, never take for granted that you know how the word is being used.

against you.

there is no real common language, though there/their is common awareness shared pre-verbal.

seek the(ir) definitions of the words used against you.

it's everywhere.

chumbawamba's picture

This is how they trick us: through their spell-ing.

It helps to know what they're saying.  Get a copy of Black's Law Dictionary, preferably 4th or 5th edition.  Anytime a politician says a word, assume they aren't an ignorant ass and assume you don't know what that word really means.  Look it up in a law dictionary so you know what they're really saying.  Then you'll know what spells they are trying to cast.

I am Chumbawamba.

Cathartes Aura's picture

in  deed.

I've long since held that I don't speak the same language as most, and clarity is intended so care is use-full when attempting to share perspectives. . .admittedly, I often just revert to sarc, but in cases where there is an attempt to meet halfway, dia-logos often produce more than the initial observations. . .

I'm often grateful for being self-taught, and thank you for your observations over the years I've shown up here, they have been, shall we say, provocative.


Pants McPants's picture

I always enjoy your comments, as well as Chumbawamba's contributions.  Makes me wish I had found this site about a year earlier than I did.

Also makes me feel foolish for sparring with trolls when there are deeper lessons to learn.


Things that go bump's picture

The son of a friend of mine went to IRS boot camp in DC last year, the little weasle.  He didn't make the cut.  

Just Observing's picture

Son of a friend of mine did make the cut and got a job.  I told him I'd much rather he become a male stripper than a whore for the govt.

He lasted about a year before he quit. The made him go out to people's homes to harass them, and he finally figured out one day somebody was gonna shoot him, and they already were in the process of hiring his replacement.

chumbawamba's picture

"United States citizens", not Americans.  And "income", not an exchange of one form of property for another (i.e. your labor for money).

I am Chumbawamba.

chumbawamba's picture

The IRS still exists because Americans cower in fear at their very mention.


An IRS Revenue Officer ignored the 2 separate NO TRESPASSING signs on my porch and still taped a summons to my door.  I returned it to her at her office the other day, pointing out its defects.  It had no account number and it wasn't addressed to my legal person.  The IRS is trying to set up a new account under a misnomer to contract with me.  No, thanks.

I am Chumbawamba.

JLee2027's picture

Depending on your state, and in most states a summons has no legal force unless handed to you personally. Just ignore it and don't answer the door to stangers. It is perfectly legal to avoid service.

Stoploss's picture

Looks like if we invert the second chart the true wealth effect can be seen since the inception of the grand experiment.