• JP Prag

Why Income Tax?

How did income tax become the convoluted behemoth it is today?


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Key Points

  • Income taxes have never been un-Constitutional, but before the 16th Amendment the funds had to be distributed among the States based on the results of the Census.

  • While the 16th Amendment gave the government great leeway in determining how tax dollars could be used, at first it used that power to just tax a very small amount on large incomes.

  • But the poor timing of this Amendment being ratified came as World War I broke out. It was this and all wars afterwards that further expanded income tax as the default choice for the Federal Government.


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