Don’t remember the U.S.’s Sweet Sixteen? That’s okay...here it is: “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.”
Translation: the federal government (specifically Congress) is allowed to tax people...and no, they don’t have to give it to the states. Basically, the 16th amendment means the U.S. federal government is free to tax its people.
The Sixteenth Amendment was a long time coming. First, Congress was taxing people via tariffs and excise taxes on certain goods. They decided that wasn’t working out very well, so they passed the Revenue Act of 1861, which gave the green light to federal income taxing, but that was repealed in 1872.
For the next two decades, the fight was on to make federal income tax a Thing. The demand for federal income tax to replace tariffs and excise taxes was a call for more progressive taxation. When goods are taxed, taxes are regressive, meaning they disproportionately tax poorer individuals at a higher rate than wealthier individuals. The result was the 1894 Wilson-Gorman Tariff Act, which had an income tax provision in it.
But...the Supreme Court struck it down, and said no-can-do...direct taxes must be doled out to the states. Finally, enough support was gathered among states to pass the Sixteenth Amendment...and amendments are no easy thing to pass in the U.S.
Later, in 1916, the Supreme Court upheld an income tax case, setting a new precedent for income taxes. And ol’ Uncle Sam has been collecting taxes from you ever since.
See: Progressive Income Tax. See: Tax Brackets.
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Finance: Why Do Taxes Exist?137 Views
Why do taxes exist and notice we're saying that with a kind of a whiny tone
alright well someone has to pay for this and this and this and this yep there are [Hand pointing to a road, a school, a plane and a park]
a bunch of different types of taxes in each of them carries a different purpose
yeah Road taxes get paid in large part out of
the gasoline you buy you got to pay for the building and maintaining of potholes [Car drives into a pothole]
right and that makes sense if you drive a car you use the roads more so you
should pay more for its use that's like a use tax get it cleverly named if for [Price for federal tax per gallon and state tax per gallon]
when you own a home you'll pay real estate tax and for the most part that
tax is designated to pay schools all right well but like everything [Hand holding money from real estate tax to pay for schools]
government related nothing is simple in America the federal government has kind
of a matching program for schools where they pay for a portion of the education
cost based on various factors and you don't want us to get into that in the [complicated equation on chalkboard]
video all right well the largest taxes most people pay are income taxes and
those generally pay for the government to you know govern us if a couple made a
hundred grand jointly in California last year they'd pay around thirty [A couple stood together in their home]
thirty-five grand in taxes that money covers things like shiny new airplanes
to force the mean countries to play nice in the schoolyard it covers repairs to
crumbling bridges and tunnels across the country it covers public protective [Bridges crumbling]
services like police and fire department people
it covers libraries and public parks, well don't feel like you're getting your
money's worth these days if you're ever not feeling that you can always move to [Woman chased from a park by a tiger]
the Ukraine discounts on citizenship they're everywhere
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