One Hundred Years: The Sixteenth Amendment

Today is the one hundredth anniversary of the day the Sixteenth Amendment to the Constitution was passed by a vote of forty two state ratifications, four rejections, and two abstainers. (Alaska and Hawaii were not yet states.)

The text of the amendment runs The Congress Shall have the 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.

Basically,this allowed the income tax. Laws had been passed before this instating an income tax, however this time, it was in the constitution. The supreme court could not strike it down as it had the part of the 1894 tax act which allowed an income tax of 2% on incomes over $4,000. There were also two such acts at the time of the civil war which had an income tax of 3% in one case for revenues over $800, and in another of 3-5%.

The man who first called for the amendment was William H. Taft, (known for his trust busting), in 1909, although it took four years to ratify.

However, this idea is not of a free American basis. In the 1848 Communist Manifesto, plank 2. A heavy progressive or graduated income tax is what this particular part of the manifesto says needs to be instituted. And it was. Again communism was made law. However, this time, communism was not unconstitutional law, it was the constitution.

The communists wanted to create a of wealth through social programs, and, although the sixteenth amendment's income tax was not a social program, it did redistribute wealth. The income tax had a lower rate for those underneath a certain income, and for those of a very low income, no tax at all. Although we all want to see the poor rise from poverty, we do not want to see the rich fall to meet them.

The idea of the redistribution of wealth comes from the idea that the amount of actual wealth is stagnant, so that if one person gains another must lose. However, this evinces a faulty view of free market values. Two people can trade and gain on both ends of the bargain, such as when one person values his labor less than fifty dollars and another values a trench, which will take labor to dig, more than fifty dollars. He makes fifty dollars for his labor, and the other man now has a trench.

Another way for one person to acquire more wealth without others losing any would be through the introduction of more assets into society, such as a man bringing in two horses he has caught, or another bringing in lumber from a tree he has cut down. The man with five hundred gold pieces does not need to redistribute his wealth to make the other two rich, the others can either trade with each other or with him, he will gain wood and dogs, they will gain coin, perhaps to buy at that man's store a net to catch more horses, which will in turn make them richer, as the more horses they catch the more their wealth will increase. The man with the five hundred coin can breed the horses into a rare breed, and thus he is not the loser, neither is the man who traded with him, if he also has ingenuity.
It is the one hundredth anniversary of this amendment, and perhaps, after one hundred years of trying it their way, and seeing the results, perhaps we could go back to free-market capitalism.

Through His Strength We Will Conquer,

Andrew C. Abbott