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 Congress repealed the income tax in 1872, but the concept did not disappear.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 - 16:45 | 3211573 machineh
machineh's picture

It squeaked through the same way Obamacare did ... by HOOK OR CROOK.

Sun, 02/03/2013 - 13:40 | 3211102 Bluntly Put
Bluntly Put's picture

Talk about a barbarous relic.

Sun, 02/03/2013 - 13:40 | 3211103 A Lunatic
A Lunatic's picture

Let's just throw out there, (you know, just to prove that it won't happen) a vote to repeal the second amendment. It won't go anywhere, and this will kill the idea once and for all............I'd like to go back in time with a shitload of rope......

Sun, 02/03/2013 - 14:12 | 3211188 homme
homme's picture

..and condoms.

Sun, 02/03/2013 - 13:40 | 3211106 Barry Mcokiner
Barry Mcokiner's picture

That is ok, the line in the sand has been drawn. People are waking up to the fact their "authority" is nothing but cowardice fear driven ego. In the next hundred years the only certainty in life will be the death of the taxman.

Sun, 02/03/2013 - 14:12 | 3211189 EscapeKey
EscapeKey's picture

Not in a million years.

"The only things certain in life are death and taxes."

--Ben Franklin.

Sun, 02/03/2013 - 13:43 | 3211118 Ima anal sphincter
Ima anal sphincter's picture

Everyone wants MY money (effort, sweat, toil). I work hard and I want to keep MY money. Either some useless bureaucrat, evil bankster, or useless lazy POS TAKES it from me.

I'm sick of it....... I'd like to take MY ball and leave the field.

Sun, 02/03/2013 - 14:11 | 3211183 CH1
CH1's picture

I'd like to take MY ball and leave the field.

Don't just talk. DO IT.

Sun, 02/03/2013 - 14:26 | 3211229 oddjob
oddjob's picture

non-participation...simply appearing stupid and lazy will speed up the chain of events.

Sun, 02/03/2013 - 15:04 | 3211324 DoChenRollingBearing
DoChenRollingBearing's picture

+ 1 trillion or maybe a quadrillion!  The light just went off right there in the middle where my brain should be.  We just act stupid and lazy, and since so many really are, we are camoflauged...  

Going Galt by appearing to be lazy and stupid...  Made my day, oddjob, thanks!

Sun, 02/03/2013 - 16:48 | 3211580 machineh
machineh's picture

'We just act stupid and lazy, and since so many really are, we are camoflauged...'

Definitely the approach to take with the TSA ... they just assume you're one of them.

Sun, 02/03/2013 - 23:04 | 3212189 FEDbuster
FEDbuster's picture

There is a school of thought in prepping that your bugout vehicle should look more like this:

http://static6.depositphotos.com/1003098/572/i/950/depositphotos_5722133...

then this:

http://www.enemyforces.net/apc/tpz_fuchs.jpg

The "grey man" strategy of blending in is a very viable option to survive many situations.

Going Galt is the only way to survive and thrive on the plantation.

Sun, 02/03/2013 - 17:41 | 3211692 A Humble Man
A Humble Man's picture

I remember a book called `How Children Fail` by John Holt.  He watched grade school kids and the strategies they used to avoid situations.

Sun, 02/03/2013 - 14:14 | 3211197 donsluck
donsluck's picture

Hmm, are you SURE you want to keep it? Not spend it on, say, silver? Of course there would be no ball or field if there were no money. Think long and hard about the true nature of money, assets, life, love and beauty.

Sun, 02/03/2013 - 14:16 | 3211208 Cheesy Bastard
Cheesy Bastard's picture

They only take half my money, so I must be a slave only half the time.  Of course, during the half I live as a free man I still need permission (a license) to drive a car, carry a weapon, get married, open a business, put a shed in my yard, fix the septic tank, sell lemonade, put a roof on the house, own a dog, fish, hunt, assemble in public, and drive a motorcyce and so on and so on. 

Sun, 02/03/2013 - 15:09 | 3211332 pods
pods's picture

Well Cheesy, if that is upsetting, don't look for state lands to prospect.  

You may look at birds, hike, etc. But do NOT look at taking any collateral off of their lands.
Their owners don't like that.

pods 

Sun, 02/03/2013 - 15:17 | 3211350 Cheesy Bastard
Cheesy Bastard's picture

Very true pods.  Also, it's not just government land either, they own it all.  I still gotta pay them rent (property taxes) on property I have a deed for, or they will make me homeless.  Sad.

Sun, 02/03/2013 - 15:23 | 3211365 Ima anal sphincter
Ima anal sphincter's picture

You are correct.... I do my very darnedest to avoid half of the above mentioned items.

Who needs a license to carry? Mine's expired... I don't care.

Sun, 02/03/2013 - 18:27 | 3211770 pursueliberty
pursueliberty's picture

I love your list.  We ask permission for everything, well some do, and it is pretty funny when you sit down and add up the fees associated with all the paid for "rights".

I'm licensed in a couple different things and every year I pay a few states around $1400 for the privalege of being licensed.

Sun, 02/03/2013 - 13:45 | 3211122 zerozulu
zerozulu's picture

Nothing to be proud of.

Sun, 02/03/2013 - 13:45 | 3211124 Motorhead
Motorhead's picture

Bitchez, taxes!

 

Sun, 02/03/2013 - 13:50 | 3211131 Cognitive Dissonance
Cognitive Dissonance's picture

The Federal Reserve and The Federal Income Tax are all part of the BIG LIE. An exerpt from Chapter Three of "Perhaps a Crumble Rather than a Collapse" coming late Monday afternoon. Chapter Two will be posted today, Sunday afternoon.

"Once we ignore the lie psychologically we become enablers of the lie. Every time we ignore the lie we are deepening our involvement and our own culpability. Soon enough we find ourselves defending the lie in order to defend ourselves. To out the lie and the liar at a later time means outing our prior complicity. This is why we find so many people believing the lie and actively supporting that which is contrary to their best interest or basic beliefs. Best to just leave sleeping dogs lie (sic). We do exactly the same thing with the government, military, judicial system, corporations and of course the financial system. Please don’t tell me because I just don’t want to know. And to make sure I don’t know what I don’t want to know I won’t ask."

Sun, 02/03/2013 - 14:02 | 3211161 trav777
trav777's picture

when you talk like that you sound like Hitler.

Sun, 02/03/2013 - 14:16 | 3211205 donsluck
donsluck's picture

Accuracy and evil are not mutually exclusive.

Sun, 02/03/2013 - 14:16 | 3211207 Tsunami Wave
Tsunami Wave's picture

I think people here think you're the one that always sounds like hitler.  What happened to your other 7 trav??

Sun, 02/03/2013 - 17:26 | 3211660 Cathartes Aura
Cathartes Aura's picture

p'haps robotrader made off with it. . .

Sun, 02/03/2013 - 14:18 | 3211211 EscapeKey
EscapeKey's picture

 

You're being downvoted, but you're right:

 

All this was inspired by the principle--which is quite true within itself--that in the big lie there is always a certain force of credibility; because the broad masses of a nation are always more easily corrupted in the deeper strata of their emotional nature than consciously or voluntarily; and thus in the primitive simplicity of their minds they more readily fall victims to thebig lie than the small lie, since they themselves often tell small lies in little matters but would be ashamed to resort to large-scale falsehoods. It would never come into their heads to fabricate colossal untruths, and they would not believe that others could have the impudence to distort the truth so infamously. Even though the facts which prove this to be so may be brought clearly to their minds, they will still doubt and waver and will continue to think that there may be some other explanation. For the grossly impudent lie always leaves traces behind it, even after it has been nailed down, a fact which is known to all expert liars in this world and to all who conspire together in the art of lying.

 

--Adolf Hitler, "Mein Kampf", chapter 10

Sun, 02/03/2013 - 14:51 | 3211283 Temporalist
Temporalist's picture

One is an explanation of why people ignore the truth and the other is how to use propaganda.  It is not the same at all as it is from diverging viewpoints, ie those being lied to and those doing the lying. 

Sun, 02/03/2013 - 15:25 | 3211288 Cognitive Dissonance
Cognitive Dissonance's picture

The difference is that Hitler was explaining the process in order to exploit the psychological flaw. I am explaining the process in order to help us see our psychological flaw so that we may reduce or eliminate the fact that it is leveraged against us.

Chapter Two has just been posted. An exerpt.....

"When only a few dozen individuals can successfully claim that they understand how an economic system works and how to fix it, and the remaining 99.99% are simply told that all is well, to just trust them, we have fully crossed over from examining and describing a complex economic entity and into a religious cult based solely upon faith and belief."

Sun, 02/03/2013 - 16:05 | 3211479 Skateboarder
Skateboarder's picture

Problem lies in the complete lack of respect for knowledge. When a paper degree is equated with knowledge, that's it - game over son, you can only wait for the grand reset of collective mentality.

"Oh you don't have an MBA? Your opinion doesn't count."

"But I can objectively see the intrinsic flaws of this here economic system and offer a dozen alternatives that would actualy work instead of saying they will work and fucking us further with the same old shit that put us here in the first place."

"No MBA, no opinion."

*gets MBA*

"What about now?"

"Sorry, you're not rich enough to have an opinion. Go away."

Even the paper credentials don't mean shit. It truly IS a money-worshipping cult most participate in. 'Atheists' in this system are treated with scorn and ridicule. Have a heathenous day. :)

Sun, 02/03/2013 - 16:30 | 3211532 Temporalist
Temporalist's picture

You don't know what you are talking about.  The wealthy guy on TV said they are "doing god's work" so it must be so.  And for all you athiests out there it should be obvious that god is good and that is the reason the banks run everything.

Sun, 02/03/2013 - 19:09 | 3211857 Bandit und Buster
Bandit und Buster's picture

"Doing gods work"  only problem there is that Zionists god is LUCIFER,  the father of lies

“Most Jews do not like to admit it, but our god is Lucifer   -so I wasn’t lying. -and we are his chosen people.  Lucifer is very much alive.”     

The above is an exact quote of Harold Wallace Rosenthal, former top administrative Aide to the then Senator Jacob Javits, who was since defeated in the 1980 election.

 

Sun, 02/03/2013 - 21:14 | 3212078 Clashfan
Clashfan's picture

And we have a winner. The Luciferian system is what is in control of the political and economic world.

Sun, 02/03/2013 - 17:41 | 3211693 Totentänzerlied
Totentänzerlied's picture

"Oh you have an MBA? Your opinion doesn't count."

My personal mantra.

Sun, 02/03/2013 - 16:24 | 3211472 vened
vened's picture

Here is the full quote as A. Hitler intended (highlighted parts is what you omitted):

"But it remained for the Jews, with their unqualified capacity for falsehood, and their fighting comrades, the Marxists, to impute responsibility for the downfall precisely to the man who alone had shown a superhuman will and energy in his effort to prevent the catastrophe which he had foreseen and to save the nation from that hour of complete overthrow and shame. By placing responsibility for the loss of the world war on the shoulders of Ludendorff they took away the weapon of moral right from the only adversary dangerous enough to be likely to succeed in bringing the betrayers of the Fatherland to Justice. All this was inspired by the principle - which is quite true in itself - that in the big lie there is always a certain force of credibility; because the broad masses of a nation are always more easily corrupted in the deeper strata of their emotional nature than consciously or voluntarily; and thus in the primitive simplicity of their minds they more readily fall victims to the big lie than the small lie, since they themselves often tell small lies in little matters but would be ashamed to resort to large-scale falsehoods. It would never come into their heads to fabricate colossal untruths, and they would not believe that others could have the impudence to distort the truth so infamously. Even though the facts which prove this to be so may be brought clearly to their minds, they will still doubt and waver and will continue to think that there may be some other explanation. For the grossly impudent lie always leaves traces behind it, even after it has been nailed down, a fact which is known to all expert liars in this world and to all who conspire together in the art of lying. These people know only too well how to use falsehood for the basest purposes.
From time immemorial. however, the Jews have known better than any others how falsehood and calumny can be exploited. Is not their very existence founded on one great lie, namely, that they are a religious community, whereas in reality they are a race? And what a race! One of the greatest thinkers that mankind has produced has branded the Jews for all time with a statement which is profoundly and exactly true. He (Schopenhauer) called the Jew "The Great Master of Lies". Those who do not realize the truth of that statement, or do not wish to believe it, will never be able to lend a hand in helping Truth to prevail."

A. Hitler, Mein Kampf

 

Sun, 02/03/2013 - 16:29 | 3211533 magpie
magpie's picture

Funny that, Hitler quoting Schopenhauer as an antisemite...while he is being lauded as a great cosmopolitan and philosemite these days. Kinda the opposite of what happened to Nietzsche.

Sun, 02/03/2013 - 18:58 | 3211834 TheGardener
TheGardener's picture

While you mention philosemites , another jewish joke :

What is a philosemite ? An antisemitic who loves the jews !

Sun, 02/03/2013 - 19:07 | 3211850 magpie
magpie's picture

Really, sounds like that one from Clemenceau

"I love Germany so much that i wish there were several of them."

Sun, 02/03/2013 - 17:44 | 3211702 Anusocracy
Anusocracy's picture

Lying is natural to the social mind and the world it creates.

Sun, 02/03/2013 - 18:37 | 3211788 TheGardener
TheGardener's picture

Thanks CD , for your precious insight, as ever.
I used to apologize the outrageous lies of contemporary
history writing with the need to justify the present while belittling the past.

Your physiological description for our need of lies is a lot more fitting, not to mention the psychological part...

Sun, 02/03/2013 - 13:48 | 3211132 Hannibal
Hannibal's picture

"The trade of the petty usurer is hated with most reason:
it makes a profit from currency itself, instead of making it
from the process which currency was meant to serve.
Their common characteristic is obviously their sordid avarice."

Politics I, ch. 10, 1258a35 (c.335-323 BC), ref: Aristotle Politics,

Sun, 02/03/2013 - 14:03 | 3211164 trav777
trav777's picture

careful there, you're going to start putting reason behind historical "antisemitism" and we can't have that

Sun, 02/03/2013 - 14:13 | 3211195 francis_sawyer
francis_sawyer's picture

The only thing between Aristotle & 'made up' terms like 'antisemitism' is the ADL & the MSM...

Sun, 02/03/2013 - 15:05 | 3211321 Temporalist
Temporalist's picture

This has nothing to do with the fractional reserve banking system or usury.  People putting capital at risk deserve no compensation?  The only way to avoid risk is to never lend money at all.  So it is either you cannot lend and therefore not "commit usury" or you can lend and expect that your risk be rewarded.  The point of a typical bank would be to accept money (which used to be cash, gold and silver) and pay a percentage for the right to lend it (paying the depositor for the risk they incur via the bank) and expect a percentage for the cost of borrowing it (the borrower pays for the access to the money borrowed).

 

If due diligence were more common and credit cards weren't falling from the sky and money weren't so carelessly thrown about and gambled illegally through Wall St and spent endlessly through DC these massive problems would have never gotten so out of hand and would have been small enough to manage during a time of crisis.

Sun, 02/03/2013 - 15:13 | 3211340 DoChenRollingBearing
DoChenRollingBearing's picture

I would never lend my money (put at risk) without compensation for such risk.  Good point also about "Other People's Money" being loaned with casual abandon.

Sun, 02/03/2013 - 15:30 | 3211381 dark pools of soros
dark pools of soros's picture

the money they lend doesn't even exist

Sun, 02/03/2013 - 15:34 | 3211397 Buckaroo Banzai
Buckaroo Banzai's picture

It is people who put UNEARNED capital at risk that deserve no compensation. To wit:

1) those who create money from nothing, and then lend it at a profit; or
2) those who warehouse other people's money, and then lend THAT money at a profit.

Any individual person, who has lawfully earned their money through their own efforts, is entitled to lend that money to another person at interest.

Sun, 02/03/2013 - 15:45 | 3211428 francis_sawyer
francis_sawyer's picture

Glad I'm not the only one who understands that...

Sun, 02/03/2013 - 16:19 | 3211510 Temporalist
Temporalist's picture

I understand and agree but a bank performing in the manner I described above would be providing the service of doing the due diligence for prospective borrowers, collecting the interest and repayment for the loan and insuring the return of the principal plus interest to the original depositor.  Unless people worked in the bank for free the bank must be compensated for these services too.  These services are something a person probably wouldn't have the time or resources to perform on their own so there has to be compensation to those doing it for them.

What you are describing Buckaroo is more Wall St banking than what was the classical function of a bank.  I abhor the Wall St/Fed/fractional reserve/credit creation model of money from nothing, or put another way, they make themselves winners by creating ever more losers and even now they call their clients muppets and steal directly from the people they are supposed to be fiduciaries for.

Sun, 02/03/2013 - 16:26 | 3211525 Buckaroo Banzai
Buckaroo Banzai's picture

As long as all bank managers were both depositors AND stock holders then ok. Otherwise the agency problem is insurmountable, IMO.

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