Ludwig von Mises Institute

Income Tax in the United States

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An income tax is a fine imposed on individuals who work and corporations that are successful or profitable. Income taxes on corporations were first imposed in the United States federal government in 1909 by President Howard Taft. The constitutionality of the tax was challenged in Flint v. Stone Tracy 220 U.S. 107 (1911). The argument was that since corporations are a privilege granted by state governments, the federal government cannot tax based on that privilege. The Supreme Court ruled that the tax is constitutional.

The individual income tax in the United States was imposed by the 16th Amendment to the Constitution in 1913. In the 1912 election, all 3 major candidates supported the tax: Woodrow Wilson of the Democratic Party, Howard Taft of the Republican Party, and Theodore Roosevelt of the Bull Moose Party, a former Republican who had been President prior to Howard Taft.

The federal government requires citizens to assess their own taxes even though the Thirteenth Amendment states, "Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction." Actor Wesley Snipes was convicted of "failure to file tax returns."

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