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.”
— 16th Amendment to the U.S. Constitution
“From whatever source derived” indeed. Exactly 100 years ago Sunday, on Feb. 3, 1913, Delaware became the 36th state to ratify the proposed 16th Amendment, making a nationwide income tax part of the Constitution. America had collectively decided that the federal government could, henceforth, take Americans’ money “from whatever source derived,” and decide, at a whim, how much to take from each citizen. Ah. Just as the Founders intended!
The battle to take money earned by Americans had been long, beginning at the outset of the Civil War. President Abraham Lincoln needed to raise cash to fight the South, so Congress introduced the income tax as part of the Revenue Act of 1861. Incomes above $800 annually ($20,370 in 2012 dollars) were taxed at 3 percent — yes, America’s first income tax was a flat tax.