Amendment 16 — Historical Background On Sixteenth Amendment

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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 Sixteenth Amendment was adopted to address the Court’s 1895 decision in Pollock v. Farmers’ Loan & Trust Co.[1](https://www.law.cornell.edu/constitution-conan/amendment-16/historical-background-on-sixteenth-amendment#fn1amd16 " 157 U.S. 429 (1895) (Pollock I); 158 U.S. 601 (1895) (Pollock II) [hereinafter collectively referred to as Pollock]. Pollock came to the Court twice. In Pollock I, the Court invalidated the tax at issue insofar as it was a tax upon income derived from real property, but the Court was equally divided on whether income derived from personal property was a direct tax. Pollock I, 157 U.S. at 583. In Pollock II, on petitions for rehearing, the Court held that a tax on income derived from personal property was also a direct tax. Pollock II, 158 U.S. at 637. ") holding unconstitutional Congress’s attempt of the previous year to tax incomes uniformly throughout the United States.[2](https://www.law.cornell.edu/constitution-conan/amendment-16/historical-background-on-sixteenth-amendment#fn2amd16 " Act of Aug. 27, 18949, § 27, 28 Stat. 509, 553. ") A tax on incomes derived from property,[3](https://www.law.cornell.edu/constitution-conan/amendment-16/historical-background-on-sixteenth-amendment#fn3amd16 " In Pollock II, the Court conceded that taxes on incomes from “professions, trades, employments, or vocations” levied by this act were excise taxes and therefore valid. The Court voided the entire statute, however, on the ground that Congress never intended to permit the entire “burden of the tax to be borne by professions, trades, employments, or vocations” after exempting real estate and personal property. Pollock II, 158 U.S. at 635. ") the Court declared, was a “direct tax,” which Congress, under the terms of Article I, Sections 2[4](https://www.law.cornell.edu/constitution-conan/amendment-16/historical-background-on-sixteenth-amendment#fn4amd16 " U.S. Const. art I, § 2, cl. 3 ( “Representatives and direct Taxes shall be apportioned among the several States which may be included within this Union, according to their respective Numbers . . . .” ). ") and 9,[5](https://www.law.cornell.edu/constitution-conan/amendment-16/historical-background-on-sixteenth-amendment#fn5amd16 " U.S. Const. art I, § 9, cl. 4 ( “No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or enumeration herein before directed to be taken.” ). ") could impose only by the rule of apportionment according to population. Scarcely fifteen years earlier, in Springer v. United States,[6](https://www.law.cornell.edu/constitution-conan/amendment-16/historical-background-on-sixteenth-amendment#fn6amd16 " 102 U.S. 586 (1881). ") the Justices had unanimously sustained a similar tax during the Civil War,[7](https://www.law.cornell.edu/constitution-conan/amendment-16/historical-background-on-sixteenth-amendment#fn7amd16 " Act of June 30, 1864, ch. 173, § 116, 13 Stat. 223, 281. ") the only other occasion preceding the Sixteenth Amendment in which Congress had used this method of raising revenue.[8](https://www.law.cornell.edu/constitution-conan/amendment-16/historical-background-on-sixteenth-amendment#fn8amd16 " For an account of the Pollock decision, see “From the Hylton to the Pollock Case,” under Art. I, § 9, cl. 4, supra note 5. ")

During the years between the Pollock decision in 1895 and the ratification of the Sixteenth Amendment in 1913, the Court appeared sensitive to Pollock’s ramifications for the Government, which it partially addressed by redefining “direct tax” and emphasizing the Court’s past favorable treatment of excise taxation. Thus, in a series of cases, notably Nicol v. Ames,[9](https://www.law.cornell.edu/constitution-conan/amendment-16/historical-background-on-sixteenth-amendment#fn9amd16 " 173 U.S. 509 (1899). ") Knowlton v. Moore,[10](https://www.law.cornell.edu/constitution-conan/amendment-16/historical-background-on-sixteenth-amendment#fn10amd16 " 178 U.S. 41 (1900). ") and Patton v. Brady,[11](https://www.law.cornell.edu/constitution-conan/amendment-16/historical-background-on-sixteenth-amendment#fn11amd16 " 184 U.S. 608 (1902). ") the Court held the following taxes to have been levied upon “incidents of ownership” and hence to be excises: a tax that involved affixing revenue stamps to memoranda evidencing the sale of merchandise on commodity exchanges; an inheritance tax; and a war revenue tax upon tobacco, on which the hitherto imposed excise tax had already been paid and that the manufacturer held for resale. The Court also sustained a corporate income tax as an excise “measured by income” on the privilege of doing business in corporate form.[12](https://www.law.cornell.edu/constitution-conan/amendment-16/historical-background-on-sixteenth-amendment#fn12amd16 " Flint v. Stone Tracy Co., 220 U.S. 107 (1911). ")

The adoption of the Sixteenth Amendment , however, put an end to speculation whether the Court would eventually reverse Pollock. Indeed, in its initial appraisal[13](https://www.law.cornell.edu/constitution-conan/amendment-16/historical-background-on-sixteenth-amendment#fn13amd16 " Brushaber v. Union Pac. R.R., 240 U.S. 1 (1916); Stanton v. Baltic Mining Co., 240 U.S. 103 (1916); Tyee Realty Co. v. Anderson, 240 U.S. 115 (1916). ") of the Amendment, the Court classified income taxes as being inherently “indirect,” stating:

[T]he command of the Amendment that all income taxes shall not be subject to apportionment by a consideration of the sources from which the taxed income may be derived, forbids the application to such taxes of the rule applied in the Pollock Case by which alone such taxes were removed from the great class of excises, duties and imports subject to the rule of uniformity and were placed under the other or direct class.[14](https://www.law.cornell.edu/constitution-conan/amendment-16/historical-background-on-sixteenth-amendment#fn14amd16 " Brushaber, 240 U.S. at 18–19. ")

The Court further observed: “[T]he Sixteenth Amendment conferred no new power of taxation but simply prohibited the previous complete and plenary power of income taxation possessed by Congress from the beginning from being taken out of the category of indirect taxation to which it inherently belonged . . . .” [15](https://www.law.cornell.edu/constitution-conan/amendment-16/historical-background-on-sixteenth-amendment#fn15amd16 " Stanton, 240 U.S. at 112. ")

Footnotes

1

157 U.S. 429 (1895) (Pollock I); 158 U.S. 601 (1895) (Pollock II) [hereinafter collectively referred to as Pollock]. Pollock came to the Court twice. In Pollock I, the Court invalidated the tax at issue insofar as it was a tax upon income derived from real property, but the Court was equally divided on whether income derived from personal property was a direct tax. Pollock I, 157 U.S. at 583. In Pollock II, on petitions for rehearing, the Court held that a tax on income derived from personal property was also a direct tax. Pollock II, 158 U.S. at 637.

2

Act of Aug. 27, 18949, § 27, 28 Stat. 509 , 553.

3

In Pollock II, the Court conceded that taxes on incomes from “professions, trades, employments, or vocations” levied by this act were excise taxes and therefore valid. The Court voided the entire statute, however, on the ground that Congress never intended to permit the entire “burden of the tax to be borne by professions, trades, employments, or vocations” after exempting real estate and personal property. Pollock II, 158 U.S. at 635.

4

U.S. Const. art I, § 2, cl. 3 ( “Representatives and direct Taxes shall be apportioned among the several States which may be included within this Union, according to their respective Numbers . . . .” ).

5

U.S. Const. art I, § 9, cl. 4 ( “No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or enumeration herein before directed to be taken.” ).

6

102 U.S. 586 (1881) .

7

Act of June 30, 1864, ch. 173, § 116, 13 Stat. 223 , 281.

8

For an account of the Pollock decision, see “From the Hylton to the Pollock Case,” under Art. I, § 9, cl. 4, supra note 5.

9

173 U.S. 509 (1899) .

10

178 U.S. 41 (1900) .

11

184 U.S. 608 (1902) .

12

Flint v. Stone Tracy Co., 220 U.S. 107 (1911) .

13

Brushaber v. Union Pac. R.R., 240 U.S. 1 (1916) ; Stanton v. Baltic Mining Co., 240 U.S. 103 (1916) ; Tyee Realty Co. v. Anderson, 240 U.S. 115 (1916) .

14

Brushaber, 240 U.S. at 18–19.

15

Stanton, 240 U.S. at 112.