Medical Tuesday Blog

Progressive Income tax

Jun 30

Written by: Del Meyer
06/30/2018 1:35 AM 



Constitution of United States of America 1789 (rev. 1992):  AMENDMENT XVI:

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. 

The Sixteenth Amendment (Amendment XVI) to the United States Constitution allows the Congress to levy an income tax without apportioning it among the states or basing it on the United States Census. This amendment exempted income taxes from the constitutional requirements regarding direct taxes, after income taxes on rents, dividends, and interest were ruled to be direct taxes in the court case of Pollock v. Farmers’ Loan & Trust Co.(1895). The amendment was adopted on February 3, 1913.

Other Constitutional provisions regarding taxes

Article I, Section 2, Clause 3:

Representatives and direct taxes shall be apportioned among the several States which may be included within this Union, according to their respective Numbers…[1]

Article I, Section 8, Clause 1:

The Congress shall have Power to lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States.

Article I, Section 9, Clause 4:

No Capitation, or other direct, Tax shall be laid, unless in proportion to the Census or Enumeration herein before directed to be taken.

This clause basically refers to a tax on property, such as a tax based on the value of land,[2] as well as a capitation.

Article I, Section 9, Clause 5:

No Tax or Duty shall be laid on Articles exported from any State.

Income taxes before the Pollock case

Until 1913, customs duties (tariffs) and excise taxes were the primary sources of federal revenue.[3] During the War of 1812, Secretary of the Treasury Alexander J. Dallas made the first public proposal for an income tax, but it was never implemented.[4] The Congress did introduce an income tax to fund the Civil War through the Revenue Act of 1861.[5] It levied a flat tax of three percent on annual income above $800. This act was replaced the following year with the Revenue Act of 1862, which levied a graduated tax of three to five percent on income above $600 and specified a termination of income taxation in 1866. The Civil War income taxes, which expired in 1872, proved to be both highly lucrative and drawing mostly from the more industrialized states, with New YorkPennsylvania, and Massachusetts generating about 60 percent of the total revenue that was collected.[6]                   

The Pollock case

In 1894, an amendment was attached to the Wilson–Gorman Tariff Act that attempted to impose a federal tax of two percent on incomes over $4,000 (equal to $113,000 in 2017).[13] . . .  The tax was derided as “un-Democratic, inquisitorial, and wrong in principle”.[15]

In Pollock v. Farmers’ Loan & Trust Co., the U.S. Supreme Court declared certain taxes on incomes – such as those on property under the 1894 Act – to be unconstitutionally unapportioned direct taxes. The Court reasoned that a tax on income from property should be treated as a tax on “property by reason of its ownership” and so should be required to be apportioned. The reasoning was that taxes on the rents from land, the dividends from stocks, and so forth, burdened the property generating the income in the same way that a tax on “property by reason of its ownership” burdened that property. . .

On June 16, 1909, President William Howard Taft, in an address to the Sixty-first Congress, proposed a two percent federal income tax on corporations by way of an excise tax and a constitutional amendment to allow the previously enacted income tax. . .

On July 12, 1909, the resolution proposing the Sixteenth Amendment was passed by the Congress[22] and was submitted to the state legislatures. Support for the income tax was strongest in the western and southern states, while opposition was strongest in the northeastern states.[23] Supporters of the income tax believed that it would be a much better method of gathering revenue than tariffs, which were the primary source of revenue at the time. . .

In 1912, the Democrats won the presidency and control of both houses of Congress. The country was generally in a left-leaning mood, with the Socialist Party winning a seat in the House in 1910 and polling six percent of the popular presidential vote in 1912.

Three advocates for a federal income tax ran in the presidential election of 1912.[30] On February 25, 1913, Secretary of State Philander Knox proclaimed that the amendment had been ratified by three-fourths of the states and so had become part of the Constitution.[31] The Revenue Act of 1913 was enacted shortly thereafter. . .

In 1913 the Sixteenth Amendment to the Constitution was adopted, overruling Pollock, and the Congress then levied an income tax on both corporate and individual incomes.[38]. . .


The XVI Amendment thus allowed Congress to spend without limitation and then raise the progressive income tax rate from 2 percent to 94 percent to cover their GLUTONY. President Reagan spearheaded the first reduction in these excessive rate increases by about 39 percent as recalled, and it has become a political football ever since. It is high time for a tax limitation amendment.

Some decades ago, Reader’s Digest reported the results of a national poll concerning what should be a maximum tax on income. The results which included all political persuasions indicated that the majority of Americans felt that no one should have to give more than 25 percent of his work endeavors to the political class. Hence, an amendment to limit the total of all income taxes to 25 percent should now be implemented.

Taxes affect health care adversely and unpredictably. Current proposals to place all of healthcare in the tax structure vary widely and disruptively.  Therefore, a tax limitation amendment is sorely needed to prevent the deterioration of our healthcare which is the best in the world. Also, all levels of government should be limited to two types of taxation.

MedicalTuesday proposes that

  1. Federal Income taxes be limited to 15 percent and state income taxes be limited to 10 percent of disposable income.
  2. We propose that the federal government may have an excise tax limited to 10 percent on interstate and foreign commerce and states have a sales tax limited to 5 percent on goods sold within the state.
  3. Local jurisdictions, whether city (municipalities), or county (boroughs, parishes), should be limited to a one percent property tax and a one percent sales tax on goods sold within or by those in their jurisdiction.

Also see for a world view on taxation.

The Constitution of the United States of America, is the fundamental law of the U. S. federal system of government and a landmark document of the Western world. The oldest written national constitution in use, the Constitution defines the principal organs of government and their jurisdictions and the basic rights of citizens.

In 1913 the 16th Amendment was ratified, and shortly thereafter a new individual income tax with rates ranging from 1 to 7 percent on income in excess of $3,000 for a single individual was voted by Congress. At the end of World War II, the lowest marginal rate was 23 percent and the maximum rate was 94 percent; the exemption for a single individual was only $500. . .

Whether 23 percent or 94 percent, depends upon who our political representatives are at the time.
This makes the taxation limitation amendment of critical importance.

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