February, 1913, saw the ratification of the 16th Amendment to the Constitution of the United States and, with it, the empowerment of the Congress “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.” With its passage, Congress’s powers expanded by an order of magnitude. Whereas, previously, federal revenues were largely realized through customs duties and taxes on such things as alcohol and tobacco, Congress now found itself with the power to lay claim to the fruits of the people’s labors, to reach into their pockets and take what it wanted, for whatever reason.
At the time of its passage, one proponent of the amendment, Rep. Cordell Hull, of Tennessee, was quoted in the Los Angeles Times as saying, “One of the important results of an income tax will be the curbing of unnecessary Federal expenditures. When a great part of the government’s income is derived by a direct tax upon the citizens of the nation, they will scrutinize more carefully the appropriations made by Congress.”
It should be clear to any reasoned intellect that such logic falls flat. This fact is evidenced by the astronomical heights to which marginal tax rates soared. Indeed, under that very careful scrutiny by the citizens, the top marginal rate reached 90 percent in the 1930s, and remained there until John F. Kennedy reduced it to 70 percent in the 1960s, which resulted in a 62 percent increase in revenue from 1961 to 1968 (33 percent when adjusted for inflation). The Reagan and Bush cuts saw similar revenue increases. Yet, history has shown that the federal hunger can never be sated and, inevitably, its maw opens ever wider as it seeks even more of our earnings to fund those unnecessary expenditures. And, according to the language of the 16th Amendment and the various court interpretations of it, virtually nothing is safe from the tax collector.
One of the primary factors leading to the American Revolution was that the colonists were taxed by a distant parliament in which they had no representation at all. In drafting the Constitution, the Framers understood that a too-powerful federal government would soon recreate the very circumstances that brought on revolution, and they intentionally limited the power of Congress to tax. The method chosen for direct taxation (apportionment) made it phenominally difficult to implement direct taxes, and at the same time gave the states and the people thereof much more control over what Congress included in its lofty ambitions. The 16th Amendment stripped all of those protections, and we see the results today: a Congress intent on dramatic spending hikes, coupled with higher taxes on everyone–and everything–without the slightest regard for the will of the states or the electorate (examples of which include current legislative fiascos such as bank and auto company bail-outs, cap and tax, and the health care debacle). If Congress, in “representing” the people, today resembles that distant parliament, it certainly appears that the 16th Amendment has failed.
It is clear that some taxation is necessary if we are to fund the various powers vested in the Congress. However, as Randy Barnett points out in an excellent Wall Street Journal article, federal spending should be limited to “that which is incident to an enumerated power.” As we’ve seen for most of the last century, Congress does not limit itself to enumerated powers, choosing instead to find some clandestine way of incorporating entitlements into the commerce clause, for example. As long as Congress retains such sweeping tax authority, there will be no end to the spending, and each of us will necessarily feel the intrusive federal hand reaching for our wallets more often.
The time has come to repeal the 16th Amendment. Whether or not that can be done remains to be seen, but as Barnett also points out, if enough states were to call for a constitutional convention–because Congress will not itself introduce such an amendment–that alone could well push Congress to introduce an amendment, as it did when states began petitioning for a convention on the direct election of senators. Regardless of how it is done, it must be done. The power to spend, when coupled with the power to take as much as Congress alone deems necessary, effectively removes any limits on the powers of the legislative branch. In the process, this also reduces the states, as Ronald Reagan put it, to “little more than administrative districts of the federal government,” a far cry from that intended by our forefathers.
Editor’s Note: The repeal of the 16th Amendment is one of the demands in the Common Ground 13 resolution. If you’ve not read it, please see and sign it here.