The Taxing Power, the Sixteenth Amendment, and the Meaning of ‘Incomes,’

This article examines the debates leading to the enactment of the 1894 income tax, which the Supreme Court struck down in 1895, and the Sixteenth Amendment, ratified in 1913, and concludes that an income tax and a tax on consumption were understood to be fundamentally different types of taxes. The author argues that the term “taxes on incomes” in the Sixteenth Amendment should be interpreted with that distinction in mind. The Amendment was intended to make a “tax on incomes,” and only a tax on incomes, possible without the apportionment that would otherwise be required for a direct tax. For a tax that is direct but is not a tax on incomes, however, a category that includes direct-consumption taxes, the apportionment rule remains in effect.