The 16th Amendment Explained
Written by: Max C.
One of the most prominent powers of the United States Government is its power to tax its citizens. It uses that money to fund all sorts of things. These departments thus provide services to those citizens. The national Park Service takes care of land to be preserved for the sake of nature. The Postal Service provides a system where mail can be sent anywhere in the country.
There are many ways that the government collects said taxes. One of the most notable sources is income tax. This type of tax is quite unique. After earning your paycheck, there will be a certain amount of cash taken out for the government, federal and state (not all states have state income tax).
But how did this come to be? The United States didn’t always have income tax. In the early 1900s, under president Woodrow Wilson, the 16th Amendment to the constitution was passed. Under Wilson, the government expanded controle considerably. The other impactful example of this is the Federal Reserve, also known as the Fed. This was a national banking system meant for monetary policy, such as printing money. The 16th amendment was in the same range, but it is more closely related to physical policy, as this was more about handling revenue, rather than it was about handling something such as inflation. The 16th amendment allowed for income tax. This meant more revenue for the government to use on those things mentioned before, departments that are meant to help the citizens.
Not everyone pays the same though; this is where tax brackets come into play. Rates range from 10% of income to 37% income. The amount one owes to the IRS depends on yearly income. The more made, the more taxed. Though that isn’t the only factor. Deductions and write offs can lessen the amount owed. Things such as marriage and things bought for the purpose of your employment can lessen the amount owed. Since this happens automatically, and not directed by congress every tax season, this is an example of an automatic stabilizer. The percentage stays the same and only changes when congress authorizes it. It is consistent regardless of the economy, whether it’s inflating or receding.
As you can see, this tax is not as simple as it seems. There are multiple brackets, with multiple ways to pay less. Though this is one of the most important taxes; not just in the topic of funding, but also in the topic of politics. How much is the right amount? What kind of tax breaks and write offs should be allowed? This is still a heated topic of political discussion today.
Work Cited
Cornell Law School, Cornell, https://www.law.cornell.edu/constitution/amendmentxvi. Accessed
March 2021.
2021 Tax Brackets, Tax Foundation, 2021,
https://taxfoundation.org/2021-tax-brackets/#brackets. Accessed March 2021.
I find it interesting how the taxes range for everyone in different situations such as being single or married. Also, with the fact about if you make more money you are taxed more money. Do you agree with that? Only asking because that can be a hot topic up for debate among some people.
ReplyDeleteThank you for explaining this topic! I've always been lost on the thought of taxes and the 16th amendment. I think it's very interesting that the government can like choose your tax rate depending on your situation. Something that seems a little fishy to the outside view.
ReplyDeleteI found it pretty interesting that the US didn’t have an income tax at one point. In addition, the table you added was pretty cool to look at. I had no idea that if someone was making a ton of money, they could get taxed up to 37% of their income which seems like a lot. Although people do like to complain about the taxes they pay, it is necessary for the government to collect taxes so that they can continue to run. However, people do have the right to complain if they feel like the government isn’t using the tax money wisely, because after all it is technically their money that the government is using.
ReplyDeleteMax, I really appreciated your post! As someone who is currently employed, I always felt confused and a little upset when I'd see how much taxes took from my paycheck! However,your post really explained things well, and now I feel slightly better about paying taxes since I know where they're going! I really liked the chart you included as well. Nice work!
ReplyDeleteAshley Anderson - I think it's so interesting how you got the idea to connect the things we are currently learning in personal finance to the real world of politics (more specifically, the 16th Amendment). I also really enjoy the chart you included in your post, because I was able to connect what I was reading to a more visual representation of the 16th Amendment. In your post, you mentioned that the United States didn't always income tax. In your opinion, what do you think what the main decided factor in which influenced the decision to enforce tax? Obviously the world is able to function much better with taxes enforced, but why did people actually WANT taxes to be enforced in the first place? Your posts brought up a lot of interesting questions that I have and I think it's so unique that you chose this topic as your post!
ReplyDeleteI think the vast range of the income taxes for people is interesting and while I don't necessarily agree with all these taxes and how much we have to pay from our paychecks, I don't really know how much we should pay and what the answer is to all these taxes
ReplyDeleteThis blog post was so interesting to me and while reading this I noticed the chart you had pictured.According to the chart I noticed that I would fall into the 10% bracket.The only thing I would add would be a link to the 16th Amendment.
ReplyDeleteI like your inclusion of not only the history of taxes, but the ways you can write them off. I think it would be interested to expand into how businesses can avoid taxes and how famous millionaires can get by without paying their fair share. I'm interested to learn more about the way taxes work, should work, and don't work sometimes. Thank you for the insight.
ReplyDeleteI think this is incredibly interesting and useful as it is almost the deadline for taxes (April 15). I knew a little but how tax brackets worked, such as income within that range would be taxed at that amount, so on and so forth. A common misconception is that all income (say you made 500,000) would be at the level it is sitting at, however, it gets separated into ranges. I find it incredibly interesting that this is in the constitution and appreciate the inclusion of this here. Do you think this should stay as a constitutional right (or compulsion)? How do you think it could be amended to fit today’s societies with billionaires better?
ReplyDeleteI think that your description of the history of taxes, along with a description of the current tax bracket and how to pay less was really well put together, and allowed for a great flow within your piece. I also found the content very interesting. I didn't know a lot about tax brackets and how they worked, but out of all the things I learned from this post, the most interesting was that this is in the constitution. Thank you for the insight.
ReplyDeleteThis was very interesting and had very good facts in here I am glad that I clicked on this blog. Good job going into detail with this!!
ReplyDeleteI find this very interesting. I think the bracket should go to higher percentages, but also have higher margins for progression. The right of taxation is required for a functioning federal government.
ReplyDeleteI thought this was very interesting, especially when you talked about the multiple tax brackets and how they formed. I thought you would also mention that the sixteenth amendment was originally proclaimed as temporary.
ReplyDeleteI like the image that you provided for the tax and its background, as it shows how the income tax has come to be in the US. I also appreciate the examples given for sources of taxes that we may not have thought previously. Something that I believe also happens with these tax brackets is that the brackets are stackable. A single individual making $100k would pay 10% up to 9950, 12% for 9950 to 40525, and upwards.
ReplyDeleteI found this post very inetresting. I think there should be more breaks and cutoffs involved in our tax system, but hey nobody likes paying taxes. What percentage rate of taxation do you think should be the maximum?
ReplyDeleteMax! Great article! I loved the connections you made to history and other background knowledge. Taxes are something that I have grown up hearing about and knowing about, but I have always just accepted them as part of life and not questioned where they came from or why we first wrote them into our legislation. My question is, should this law be amended in order to better suit today’s society?
ReplyDeleteThis is really interesting! Recently, the US has relied more on income taxes and less on other means, like excise taxes. This seems more fair, because it targets everyone in the same way rather than people who make/buy specific things. However, it may be a good idea to tax harmful activities like burning fossil fuels.
ReplyDeleteI always see videos on Tik Tok about people being able to buy brand new. expensive cars, but they are are able write them off as a business expense on their taxes. Taxes are always a big thing in politics, and I hear about it a lot. It was interesting to be able to know some more information about them
ReplyDeleteI've been learning about taxes myself and this article was incredibly relatable, the historic context you provided was super interesting and explained the foundation of the concept of taxes. It still makes me a bit nervous when I think about having to file my own taxes in a few years as someone with a job. Great work!
ReplyDeleteThe topic you chose was a great and extremely unique one, I never really understood the 16th amendment or what income tax really is and how it affects us, so this was extremely insightful. I also loved how you touched up on tax brackets and showed the chart to help me better understand how different people are taxed at different rates. This definitely brings a lot of future discussion up, as there can be many debated topics around this as you discussed such as whether or not there should be tax breaks and write offs for certain people. Overall, I learned a lot about the history of how this amendment was put into place and what it does, and was extremely beneficial for me to read!
ReplyDeleteThanks for posting this, despite being an American I feel like the 16th amendment isn't talked about all that often usually all the focus is on ones like the second. This post really highlights the importance of this piece of law.
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