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 Congress repealed the income tax in 1872, but the concept did not disappear.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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Sun, 02/03/2013 - 14:08 | 3211178 Cistercian
Cistercian's picture

"Federal Reserve" and The IRS.What could possibly go wrong?

  Whats a dollar worth now...about 3 cents?


 It is long past time to get these shackles off.

 Long past time.

Sun, 02/03/2013 - 14:10 | 3211182 mightycluck
mightycluck's picture


Or get Nancy Pelosi and the other Sodomites to disclose THEIR taxes.

Sun, 02/03/2013 - 14:33 | 3211242 Cheesy Bastard
Cheesy Bastard's picture

Whats a dollar worth now...about 3 cents?

Yes, but only in pennies made after 1982.

Sun, 02/03/2013 - 17:41 | 3211694 Umh
Umh's picture

Yes, but only in pennies made before 1982. The newer pennies are mostly zinc.

Sun, 02/03/2013 - 18:44 | 3211808 yogibear
yogibear's picture

When the SHTF the masses know which buildings to topple. The 2 evil houses of the republic.

Like Regan's, MrGorbachev tear down this wall."

Tear the IRS and the Federal Reserve Buildings Down!!!!


Sun, 02/03/2013 - 19:05 | 3211845 HardAssets
HardAssets's picture

Oh, but you forgot the 'benefit' of having a world wide EMPIRE.

'We' now have 900 military bases around the world and some footprint on just about every country on the globe.

I costs a lot of money (and a lot of lives) . . . for some politician to get off on an ego power trip, you know.

Sun, 02/03/2013 - 17:21 | 3211650 jballz
jballz's picture

That's an odd point of view. They send me way more money than I pay every year.

Haven't you heard about earned incoming credits? They are just like money! You just tell the IRS how much you made and they have the treasury send you a bonus check. It's awesome.

I love those guys. You must be doing it wrong.

Sun, 02/03/2013 - 19:15 | 3211867 bobthehorse
bobthehorse's picture

I've got your taxes.

I've got them hanging between my legs.



Sun, 02/03/2013 - 13:32 | 3211085 Lets_Eat_Ben
Lets_Eat_Ben's picture

Many will refuse to pay this year and a big shit fest will be made of it and some series of bad economic data will be blamed on it. Happy Birthday!

Sun, 02/03/2013 - 13:43 | 3211113 FEDbuster
FEDbuster's picture

We are all Greeks now.

Sun, 02/03/2013 - 13:44 | 3211116 Renewable Life
Renewable Life's picture

And in some strange twist of karmic fate, on the 100th birthday to the day, of this ominous anniversary, we watch the Super Bowl!

The single biggest fiat currency, commercial orgy inducing, credit creating event, ever invented by man!! (And yes I will be watching too) More taxes will be paid this weekend, (sales, local, and federal income) then any other, besides that "Black Friday" circus, every year!

Ironic, don't you think!

Sun, 02/03/2013 - 14:08 | 3211177 smlbizman
smlbizman's picture

no betting...that would not be right......these cocksucking rule makers....ravens all day long...

Sun, 02/03/2013 - 16:18 | 3211506 mercenaryomics
mercenaryomics's picture


Many will refuse to pay this year

And many more will happily accept their "free" redistribution monies. 

Sun, 02/03/2013 - 13:32 | 3211087 lunaticfringe
lunaticfringe's picture

Yes. The same year they established the Federal Reserve Bank. What a coincidence.

Sun, 02/03/2013 - 13:42 | 3211110 Tsunami Wave
Tsunami Wave's picture

And around the establishment of the FBI.. and shortly thereafter, our entrance into World War I.

Sun, 02/03/2013 - 14:00 | 3211151 Cheesy Bastard
Cheesy Bastard's picture

Relax.  As soon as we win WW1 the tax will go away.

Sun, 02/03/2013 - 14:06 | 3211171 EscapeKey
EscapeKey's picture

As will the debt ceiling suspension.


Sun, 02/03/2013 - 15:19 | 3211356 Buckaroo Banzai
Buckaroo Banzai's picture

As will the State of Emergency declared on March 9, 1933 under the Trading With The Enemy Act of 1917.

Sun, 02/03/2013 - 18:06 | 3211731 Panika
Panika's picture

Well and united States of America will be restored. And corporation know as UNITED STATES(and ACT of 1865 and 1867 will be repald) will be disolved and its proprety reposes for constitutional GVMT.

And original 13th amedment will be enforced. With reapeling of 16th and 17th

Sun, 02/03/2013 - 13:50 | 3211137 Lets_Eat_Ben
Lets_Eat_Ben's picture

Yes they need one another - The Fed and Fed Income Tax - they are like low pressure and humidity feeding the debt vortex.

Sun, 02/03/2013 - 18:52 | 3211822 Bandit und Buster
Bandit und Buster's picture

The IRS IS the COLLECTION BUREAU FOR THE FED...collecting interest on Bankster created phony/fiat dollars.  The Jews have been thrown out of every nation in Europe at least once for their usury and greed.

Sun, 02/03/2013 - 20:46 | 3212040 AllWorkedUp
AllWorkedUp's picture

100 up arrows for you! The grand prize!

Every nation but the U.S.

Hopefully there's still time. I have my doubts

Sun, 02/03/2013 - 14:01 | 3211138 francis_sawyer
francis_sawyer's picture

Dig deeper... This was 'passed' in Congress in 1909 [followed shortly thereafter by the meeting at 'Jeckyll Island']... No dumbfuck 'Mericans ever stood a chance against these weasels... Remember that when they come after your gus...


Planning of the Federal Reserve System

See also: History of the Federal Reserve System

At the end of November 1910, Senator Nelson W. Aldrich and Assistant Secretary of the U.S. Treasury Department A. Piatt Andrew, and five of the country's leading financiers (Frank Vanderlip, Henry P. Davison, Charles D. Norton, Benjamin Strong, and Paul Warburg) arrived at the Jekyll Island Club to discuss monetary policy and the banking system, an event that led to the creation of the current Federal Reserve. According to the Federal Reserve Bank of Atlanta, the 1910 Jekyll Island meeting resulted in draft legislation for the creation of a U.S. central bank. Parts of this draft (the Aldrich plan) were incorporated into the 1913 Federal Reserve Act.


Connect the dots further...

One year later, In 1914, Archduke Franz Ferdinand of Austria (& of the 'Hapsburg' dynasty] was killed & WWI began... In 1915, the Lusitania was sunk (drawing the US into the conflict)... DEBT CITY Here we come... By the end of WWI, they're talking about the 'Treaty of Versaille' [which later became the United Nations ~ whose first move was to ratify the State of Israel in honor of the Balfour Agreement]...

Of course ~ this is all a WILD coincidence...

Sun, 02/03/2013 - 14:23 | 3211224 samsara
samsara's picture

I think Benny signs on just to give down arrows to posts like these.

Who the pluck else would give a down arrow?

Sun, 02/03/2013 - 14:29 | 3211233 francis_sawyer
francis_sawyer's picture

The ADL is on call 24/7...


THEY ARE LEGION! [even moreso than Bitcoiners]

Sun, 02/03/2013 - 16:27 | 3211527 WhiteNight123129
WhiteNight123129's picture

Off topic.

Joe Biden is preparing the French public opinion to the " fact" that the window for diplomacy is closing for Iran.



Sun, 02/03/2013 - 14:33 | 3211241 Winston Churchill
Winston Churchill's picture

It wasn't passed.

Go back and check individual states voting upon it.Then add them up.

One vote short of 3/4 of the states.Nobody has even tested that in court.On other issues;

SCOTUS has already held that the 16th amendment gives no power to the Feds to

levy a personal income tax either.Four times so held since 1916.

A livinglie.

Sun, 02/03/2013 - 20:58 | 3212056 Clashfan
Clashfan's picture

WC, I have long heard that claim, but I have never seen direct reference to the SC cases. Can you provide it? TY in advance.

Sun, 02/03/2013 - 16:23 | 3211438 vened
vened's picture

Lusitania sinking was a setup by Schiff and Rothschild zioinists to get Amerikwa in WW1 in exchange for Balfour Declaration (Israel Creation.)

Germans took front page of New York Times, warning dummy Amerikwans of Lusitania provocation to no avail.  Recently,  divers confirmed that Lusitania in fact carried arms supplies. The reasoh that it sunk so quickly was because some of the ammo exploded.

Sun, 02/03/2013 - 16:43 | 3211568 Redhotfill
Redhotfill's picture

Yes they supposedly were hauling "BUTTER" in those forward cargo holds, that after they found the wreck, found millions of .303 British Ammo inside the ship and near the wreck along with artillery shells.  So German intel was pretty good even then.  You also forgot to mention that the US and British militaries have both tried to go to th wreck and further destroy it, and keep people away from it.  Lest they bring up more proof to help show those govt's have a long track record of lying to get its citizens to go die in wars about lies.

Sun, 02/03/2013 - 16:00 | 3211468 resurger
resurger's picture

Was the Son of bitch Paul Warburg a German Kyke?

Sun, 02/03/2013 - 13:35 | 3211089 PUD
PUD's picture

The "income" tax was imposed so that there would be a revenue stream to pay the interest on money now "borrowed" from the privately held "Federal" Reserve Bank!

Prior to this our country created its own interest free money. The government in its limited role funded itself through taxes on commerce at one time exclusively with a tax on beer.

It does not take a conspiracy minded individual to connect these dots.

Sun, 02/03/2013 - 13:46 | 3211127 francis_sawyer
francis_sawyer's picture

Usually, they conveniently stop making connections when it becomes clear WHO the beneficiaries are...

Sun, 02/03/2013 - 14:21 | 3211220 samsara
samsara's picture

Thanks, I was reading the comments to see if someone brought out that point.

If not I was going to post it.

It all connected kids

Sun, 02/03/2013 - 13:34 | 3211090 A Lunatic
A Lunatic's picture

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.


They hoped nothing of the sort, and the same shit still happens today. Politicians were unrepentant scum then and they are unrepentant scum now..........

Sun, 02/03/2013 - 17:33 | 3211673 Being Free
Being Free's picture

Jesus, that Bonner guy's been in con-gress a long time.

Sun, 02/03/2013 - 13:35 | 3211095 Zola
Zola's picture

100 years of Slavery , and counting

Sun, 02/03/2013 - 14:10 | 3211180 donsluck
donsluck's picture

It is becoming increasingly clear, although painful to admit, "tune-in, turn-on and drop out".

Sun, 02/03/2013 - 16:42 | 3211565 machineh
machineh's picture

The social mood is so bleak today, one can't even find any LSD anymore.

We're all on an acid-free BAD TRIP.

Sun, 02/03/2013 - 15:26 | 3211370 Buckaroo Banzai
Buckaroo Banzai's picture

Actually, one could argue the 14th Amendment made us de jure slaves in 1868, when Inalienable Rights were replaced by "privileges and immunities."

What happened in 1913 made it not just a matter of law, but also of economics.

Sun, 02/03/2013 - 18:08 | 3211733 Panika
Panika's picture

Well taht hapend for citizens of Federal GVMT "under jurisdiction there of" But states deiapeared....

Sun, 02/03/2013 - 15:53 | 3211445 resurger
resurger's picture

Next year am sure it will be different....

Embrace Hope!

Sun, 02/03/2013 - 16:48 | 3211577 Redhotfill
Redhotfill's picture

And Change? 

Sun, 02/03/2013 - 13:35 | 3211096 Stuffs And Stuff
Stuffs And Stuff's picture

I was chatting with Muppet and he mentioned that his pastor was talking about 1963 and how it was the year society really started to decay. While I don't disagree with this, especially given some of the statistics, I find 1913 was a much more significant date. 1913 was the year that America was officially on the path to self-destruction, in my opinion.

Sun, 02/03/2013 - 13:43 | 3211117 Stuffs And Stuff
Stuffs And Stuff's picture

I'd like to add the 1912 sinking of the Titanic to this. Little did America know that the nation as a whole would eventually sink with that ship.

Sun, 02/03/2013 - 13:56 | 3211148 Cheesy Bastard
Cheesy Bastard's picture

Not if we rearrange the deck chairs.

Sun, 02/03/2013 - 15:58 | 3211459 Buckaroo Banzai
Buckaroo Banzai's picture

Over 600 industrialists who opposed the Federal Reserve died on that ship. J.P. Morgan, who suggested that they all meet on board to discuss their concerns, missed the boat "at the last minute".

Sun, 02/03/2013 - 16:15 | 3211491 tip e. canoe
tip e. canoe's picture

did you know that the Titanic had a sister ship, the Olympic?

interesting & entertaining slice of titanic tinfoil:

Sun, 02/03/2013 - 16:19 | 3211513 Buckaroo Banzai
Buckaroo Banzai's picture

Yes. Reminds me of Larry Silverstein, somehow.

Sun, 02/03/2013 - 13:36 | 3211100 jtlien
jtlien's picture

And the conservatives that thought that it could not be approved...



Look up the book "The Law That Never Was"

Author Bill Benson went to each state capitol and researched how the law was passed

in each state and found that several of the states that were put down as approving this amendment never did.

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