Module 30: The Sixteenth Amendment

The Problem: Direct Taxes and the Census

The Constitution gave Congress a broad taxing power and then put two limits on it. Article I, section 8 lets Congress "lay and collect Taxes, Duties, Imposts and Excises," but requires that duties, imposts and excises be "uniform throughout the United States." Article I, section 2 says "direct Taxes shall be apportioned among the several States" according to population, and section 9 says "No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or enumeration."¹ Apportionment means Congress sets a total and divides it among the states by population, so a state with ten percent of the people pays ten percent of the total, however rich or poor those people are. A tax that has to be divided that way cannot be aimed at income. It would hit hardest in the states where incomes are lowest.

Everything then depends on what a "direct" tax is. The Constitution never defines the term. In the first Supreme Court test, Hylton v. United States (1796), the Court held that a federal tax on carriages was not a direct tax. Justice Chase wrote that he was "inclined to think, that the direct taxes contemplated by the constitution, are only two, to wit, a capitation or poll tax, and a tax on land."² On that reading, an income tax was an excise or duty, which needed only to be uniform.

The Civil War forced the question. The National Archives reports that the Revenue Act of 1861 put a flat 3 percent tax on incomes over $800 and later added graduated rates. Congress repealed the tax in 1872.³ In Springer v. United States (1881) the Supreme Court upheld the war income tax, with the syllabus recording that the tax on "gains, profits, and incomes was an excise or duty, and not a direct tax, within the meaning of the Constitution."⁴

That was the settled position until 1895. This lesson follows what happened next in this order: the Court's decision in Pollock; the 1909 politics that produced the amendment; the ratification record, including Idaho's vote; the Court's reading of the amendment in the century that followed; and the Idaho income tax and the claims that the amendment was never properly adopted.

The Text, Word by Word

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.

U.S. Const. amend. XVI⁵

The amendment has one sentence and no second section. Each phrase answers part of Pollock.

"The Congress shall have power to lay and collect taxes on incomes"

The subject is taxes "on incomes." The amendment does not say what an income is, and does not mention wages, profits, dividends or gains. The Court has had to decide what counts as income case by case, as the sections on Eisner v. Macomber and Moore show.

"from whatever source derived"

This phrase targets the central holding of Pollock, which treated a tax on income from land or investments as a tax on the land or the investments themselves. The amendment says the source does not matter. Whether the phrase does anything beyond that is disputed. Some briefs in Moore argued that it served only to overrule Pollock, and Justice Jackson's concurrence in that case discusses the argument, a point the next sections return to.⁶

"without apportionment among the several States, and without regard to any census or enumeration"

This removes the Article I, section 2 and section 9 rule for income taxes. It does not repeal the direct tax clauses. A federal property tax or a head tax still has to be apportioned. Justice Barrett noted in Moore that there have been very few federal property taxes in the nation's history and none in the modern era, and that the apportionment rule has left property taxation primarily to the States.⁷

What the amendment does not say

It does not say income tax rates must be graduated, or flat, or low. It does not say that income must be "realized." It does not say that income taxes must be uniform, although the uniformity clause of Article I, section 8 still applies to duties, imposts and excises, and the Court in Flint v. Stone Tracy (1911) treated the 1909 corporation tax as an excise subject to it.⁸ And it does not give Congress a general power over property. In Brushaber (1916) the Court said the amendment "does not purport to confer power to levy income taxes in a generic sense," an authority Congress "already possessed and never questioned."⁹

Pollock v. Farmers' Loan & Trust (1895)

In 1894 Congress passed an income tax as part of a tariff act. It set a rate of 2 percent on income over $4,000.³ A stockholder named Charles Pollock sued to stop the Farmers' Loan and Trust Company from paying it, and the case reached the Supreme Court in the spring of 1895.¹⁰

The first decision, April 8, 1895

The Court held that the law, "so far as it levies a tax on the rents or income of real estate, is in violation of the constitution," because such a tax is a direct tax that had to be apportioned. It also held that a tax on interest from municipal bonds was invalid, as a tax on the power of the states to borrow. On the remaining questions, including whether taxes on other income were direct taxes, the Justices who heard the argument were "equally divided, and, therefore, no opinion is expressed."¹⁰

The rehearing, May 20, 1895

The case was reheard, and on May 20, 1895 the Court went further. The report states that the tax on income from real estate and personal property was "a direct tax within the meaning of the Constitution, and, therefore, unconstitutional and void because not apportioned according to representation," and that because the sections formed "one entire scheme of taxation," all of them were "necessarily invalid." Justice Harlan dissented.¹¹ The National Archives records the vote as 5 to 4.³

Why it mattered

The decision departed from Hylton and Springer. Justice Barrett's description in Moore is that Pollock applied the apportionment rule "not only to taxes on real and personal property, but also to taxes on income 'derived' from that property," which "left Congress effectively unable to tax most nonlabor income," and that the Sixteenth Amendment overruled the decision's second holding.⁷ The Wikipedia summary adds that for several years after Pollock Congress did not attempt another income tax, largely because members feared the Court would strike it down, and few considered an apportioned income tax because it was widely regarded as unworkable.¹²

The National Archives account adds the political context: farmers in the South and West, organized in the Grange and the Populist movement, favored a graduated income tax as a way to shift burdens off the tariffs they paid on manufactured goods, and they treated Pollock as evidence of an alliance between government and business.³

1909: How the Amendment Got Proposed

The amendment came out of an argument over a tariff. According to the Wikipedia summary, President Taft told the Sixty-first Congress on June 16, 1909 that he favored a two percent tax on corporations, structured as an excise, and a constitutional amendment to permit an income tax; the proposal arrived during debate on the Payne-Aldrich Tariff Act.¹² The National Archives describes the maneuvering this way: progressives in Congress again attached an income tax to a tariff bill, and opponents of the tax, "hoping to kill the idea for good," proposed a constitutional amendment, believing three-fourths of the states would never ratify it. "Much to their surprise," the legislatures ratified one after another.³

The Senate vote

The Morning Oregonian reported that on July 5, 1909 the Senate, "by unanimous vote," adopted the resolution submitting the amendment to the state legislatures. The resolution was Senator Brown of Nebraska's, and the same dispatch says Senator Bristow offered an amendment requiring the election of senators by popular vote, and that Senator Aldrich replied that he would move to lay it on the table, on the ground that it breached the unanimous agreement and was not germane.¹³ (Popular election of senators came as the Seventeenth Amendment, which has its own course at the Seventeenth Amendment course.)

The House vote

On July 12 the House passed the Senate resolution by 317 to 14, "more than the necessary two-thirds." The Oregonian said the negative votes were all cast by Republicans. It also reported that Chairman Payne of the Ways and Means Committee told the House such a tax would make "a nation of liars" and was hard to enforce, and that Clark of Missouri, the minority leader, welcomed "the conversion of the Republican party to another Democratic principle."¹⁴ A secondary source gives the House vote as 318 to 14, and this lesson could not settle the one-vote difference from the Congressional Record.¹⁴

The dates

The National Archives puts congressional passage on July 2, 1909, while the State Department memorandum describes the resolution as "passed July twelfth, nineteen hundred and nine" and the newspaper accounts place the Senate vote on July 5 and the House vote on July 12.^3151314 This lesson cannot say what July 2 refers to. Anyone who needs the exact date should read the Congressional Record for July 1909. A fourth account, the House Manual published by the Government Publishing Office (HMAN-116), gives the date of proposal as July 16, 1909, and its ratification table lists West Virginia (January 31, 1913) and treats Delaware (February 3, 1913) as the State that completed ratification. Idaho is eleventh in that table, on January 20, 1911, matching this lesson. The Manual's dates for a few other States differ by a few days from the State Department memorandum, which is one more reason to check the primary record.

The corporation tax

Congress also passed the corporation tax that Taft had proposed, as an excise on doing business in corporate form. The Supreme Court upheld it in Flint v. Stone Tracy Co. (decided March 13, 1911), holding it "not a direct tax but an excise."⁸ The case shows the route Congress used while it waited for the amendment, which was to name the tax an excise and rely on Springer and Hylton.

Ratification: Thirty-six States and a Record of Errors

The amendment needed thirty-six of the forty-eight states. The State Department's Solicitor wrote a memorandum on February 15, 1913 to confirm that the state notices were in proper form before the Secretary of State announced the result. He reported that the Department had information from forty-two states, that four (Connecticut, New Hampshire, Rhode Island and Utah) had rejected the amendment, and that thirty-eight had acted to ratify.¹⁵ The list in the memorandum runs from Alabama on August 17, 1909, through Kentucky, South Carolina, Illinois, Mississippi and Oklahoma in the first months of 1910, to Delaware and Wyoming on February 3, 1913 and New Jersey and New Mexico on February 5, 1913.¹⁵

The step chart in the numbers section plots that list. It shows a pattern: nine ratifications in 1909 and 1910, then a burst of fifteen between January 19 and February 27, 1911, when many legislatures met in their regular sessions, and then a slower finish through 1912 and early 1913. Counting from the memorandum's order, Delaware's vote on February 3, 1913 was the thirty-fifth and Wyoming's the thirty-sixth. Wikipedia's list differs on some dates and treats Delaware as the thirty-sixth, so this lesson reports the memorandum's order as the primary source and flags the difference.¹⁵¹²

The Secretary of State, Philander C. Knox, certified the amendment on February 25, 1913.³ After that more states acted. Wikipedia lists forty-two ratifying states in all, including Vermont, Massachusetts and New Hampshire, which ratified in 1913, and lists Virginia among the states that rejected the amendment without later ratifying; Florida and Pennsylvania never considered it.¹²

Idaho is the eleventh

Idaho's legislature ratified the amendment in January 1911. The Solicitor's list puts Idaho eleventh, on January 20, 1911, after Ohio on January 19 and ahead of Oregon on January 23.¹⁵ The Idaho Session Laws print the resolution as Senate Joint Resolution No. 1 of the 1911 session. It recites that both houses of the Sixty-first Congress had proposed the amendment "by a constitutional majority of two-thirds thereof," quotes the text, resolves that the proposed amendment "be, and the same is hereby, ratified by the Legislature of the State of Idaho," and ends "Passed Senate Jan. 19, 1911. Passed House Jan. 20, 1911."¹⁶ The volume this lesson read does not print the roll-call tallies, so this lesson cannot give Idaho's vote counts.

Typographical errors in the state resolutions

The memorandum records that only four state resolutions (Arizona, North Dakota, Tennessee and New Mexico) quoted the amendment exactly. The other thirty-three that were filed contained errors of punctuation, capitalization or wording, and eleven had errors in wording. Idaho's entry reads: "Error of capitalization; 'of' instead of 'or' before 'enumeration.'" That is visible in the Idaho resolution: "any census of enumeration."¹⁷¹⁶ The Solicitor reasoned that the errors were immaterial. The Executive Branch had treated errors in the state ratifications of the Fourteenth Amendment the same way, and that amendment had been repeatedly enforced by the courts. The legislatures had no power to alter the text, so it was presumed that each intended to ratify the amendment Congress proposed and not to change it. The memorandum recommended that the Secretary announce the adoption.¹⁷

Arkansas and Kentucky

Two other oddities appear in the memorandum. Arkansas first failed to pass the resolution and then passed it on April 22, 1911, and the Governor vetoed it. The Solicitor concluded that the veto did not nullify the legislature's action and that a legislature that has rejected an amendment can later ratify it. Kentucky's legislature had ratified before the Governor transmitted the resolution of Congress, and the Solicitor found the ratification valid.¹⁸

The First Income Tax Test: Brushaber (1916)

Congress acted at once. The Tariff Act of October 3, 1913 included an income tax, and a stockholder of the Union Pacific Railroad sued to stop the company from complying with it. The Court's opinion by Chief Justice White, decided on January 24, 1916 in Brushaber v. Union Pacific Railroad Co., upheld the tax.⁹¹²

The stockholder had argued that the amendment created a new kind of direct tax, one exempt from apportionment while all other direct taxes stayed subject to it. The Court called that an "erroneous assumption" and said the confusion in the older cases was "not inherent, but rather arises from the conclusion that the Sixteenth Amendment provides for a hitherto unknown power of taxation."⁹ Its reading of the text is the one every later income tax case starts from: the amendment "does not purport to confer power to levy income taxes in a generic sense," because Congress already had that authority, and "the whole purpose of the Amendment was to relieve all income taxes when imposed from apportionment from a consideration of the source whence the income was derived." The amendment was "drawn for the purpose of doing away for the future with the principle upon which the Pollock Case was decided," meaning the rule that looked to the burden on the property that produced the income and not to the burden on the income itself.⁹

The same opinion disposed of a challenge to the 1913 act's first reporting period, which ran from March 1 to December 31, 1913. The Court held that the retroactivity did not reach back before the amendment was operative, so the power to tax without apportionment existed throughout the period.⁹ The Court also described the federal power over taxation as "plenary," a word Justice Jackson picks up in her Moore concurrence.⁹

What Counts as Income: Eisner, Glenshaw Glass and Moore

The amendment leaves "incomes" undefined, and the Court has defined it in stages.

Eisner v. Macomber (1920)

A company paid a stock dividend, meaning it issued additional shares to every shareholder in proportion to their holdings. The Court held that the new shares were not taxable income. It wrote that "Income may be defined as the gain derived from capital, from labor, or from both combined," and the syllabus adds that "Mere growth or increment of value in a capital investment is not income."¹⁹ The idea that income requires realization, a separation of the gain from the underlying capital, comes from this case.

Commissioner v. Glenshaw Glass (1955)

The Court held that punitive damages are taxable income, describing them as "undeniable accessions to wealth, clearly realized, and over which the taxpayers have complete dominion."²⁰ The phrase became the common working test for gross income in tax cases. The Court explained that in Eisner, "distinguishing gain from capital," the definition "served a useful purpose," but "was not meant to provide a touchstone to all future gross income questions."²⁰

Moore v. United States (2024)

Charles and Kathleen Moore had invested in an American-controlled foreign corporation that generated income and did not distribute it. The Mandatory Repatriation Tax of the 2017 Tax Cuts and Jobs Act attributed that corporation's accumulated income to its American shareholders and taxed them on their pro rata shares, at rates from 8 to 15.5 percent. The Moores paid a bill of $14,729 and sued, arguing that the MRT was an unapportioned direct tax on their shares because they had not realized any income.⁶

Justice Kavanaugh wrote for a five-Justice majority that the MRT "does not exceed Congress's constitutional authority." He framed the question as "precise and narrow": whether Congress may attribute an entity's realized and undistributed income to its shareholders and tax them. The Court said its precedents allow that, and said that it did "not address the Government's argument that a gain need not be realized to constitute income under the Constitution." The holding, the Court said, "is narrow," limited to taxing shareholders on the entity's undistributed realized income attributed to them when the entity has not itself been taxed on it.⁶²¹

The separate opinions are where the open questions sit. Justice Jackson, concurring, cited briefs arguing that "from whatever source derived" served only to overrule Pollock, and that before and after 1913 "income" was understood to include both realized and unrealized gains.⁶ Justice Barrett, joined by Justice Alito, concurred in the judgment on a different ground. She wrote that the question on which the Court granted review, whether the amendment lets Congress tax unrealized sums without apportionment, has a "straightforward" answer: "No." She added that the Moores' case involved a specific tax on the shareholders of a closely held foreign corporation and that "a different tax" would "present a different case."⁷ Justice Thomas, joined by Justice Gorsuch, dissented.⁶

The result is that three views of the same question are now in the Court's reports. No holding says Congress may tax unrealized gains as income, and no holding says it may not. A reporter or official who reads that Moore "upheld" or "struck down" a wealth tax has misread the case, because the case concerned a tax on realized, attributed corporate income and decided no wealth tax question.

The Tax in Practice: Rates and Thresholds

The first income tax after the amendment was small. In 1913 the top rate was 7 percent on income over $500,000, the lowest rate was 1 percent on income under $20,000, and the personal exemptions were $3,000 for a single person and $4,000 for a married couple, according to the IRS's historical table. The National Archives says that in 1913 "less than 1 percent of the population paid income taxes at the rate of only 1 percent of net income."²²³

The top rate then moved with the country's needs. It was 15 percent in 1916, 67 percent in 1917 and 77 percent in 1918, fell to 25 percent in 1925, rose to 63 percent in 1932 and 79 percent in 1936, and reached 94 percent in 1944 on income over $200,000. In 1952 it was 92 percent, in 1964 77 percent, in 1965 70 percent, in 1982 50 percent, in 1987 38.5 percent, and in 1988 28 percent. It was 39.6 percent in 1993, 35 percent in 2003, 39.6 percent again in 2013 and 37 percent in 2018.²² The chart in the numbers section shows those years. The years between are not charted, and the lesson did not read the rates for every year, so it does not describe the path between points.

For 2026 the IRS reports a top rate of 37 percent above $640,600 for single filers and $768,700 for married couples filing jointly, with a standard deduction of $16,100 for single filers and $32,200 for married couples filing jointly.²³ Nothing in the Sixteenth Amendment sets any of these numbers. They are statutory and change when Congress changes the law.

Claims That the Amendment Was Never Ratified

The Sixteenth Amendment has a long record of attacks on its validity, and most of them rest on the ratification record in the State Department memorandum.

The Ohio claim

The IRS describes the claim as an argument that all federal income tax laws are unconstitutional "because the Sixteenth Amendment was not officially ratified or because the State of Ohio was not properly a state at the time of ratification." Its reply is that the amendment was ratified by forty states including Ohio, that a 1953 joint resolution of Congress confirmed Ohio's statehood retroactive to 1803, and that even without Ohio enough states ratified. It adds that Brushaber upheld the income tax in 1916.²⁴

The State Department record agrees on the point that matters. Ohio is the tenth state on the Solicitor's list, on January 19, 1911, and the list counts thirty-eight states by February 15, 1913, two more than needed.¹⁵ The IRS counts forty at proclamation and forty-two in all, and the Solicitor counts thirty-eight as of his memorandum. These numbers differ because they were taken on different dates, and the lesson reports both.²⁴¹⁵

The wording-error claim

Another claim relies on the errors in the state resolutions, including Idaho's "of" for "or." The Solicitor's memorandum answers it directly. It found that only four states quoted the text exactly, treated the errors as immaterial as the Executive Branch had with the Fourteenth Amendment, and noted that a legislature has no power to alter the text and so is presumed to have intended to ratify what Congress proposed.¹⁷ The memorandum was written before the announcement, and so it is evidence of what the Department considered and decided at the time.

The "direct tax" claim

A third claim holds that the amendment does not authorize an unapportioned "direct" income tax. The IRS says courts have "invariably" upheld the amendment against challenges of that kind, and cites Lovell v. United States (7th Cir. 1984), In re Becraft (9th Cir. 1989), Young v. Commissioner (8th Cir. 2014) and Taliaferro v. Freeman (11th Cir. 2014), the last two with sanctions. This lesson read the IRS summary and not those opinions.²⁴

A fair reading of the Court's own cases points the same way. Brushaber upheld the 1913 tax, and Moore states that taxes on income do not need apportionment: the syllabus says "Taxes on income are indirect taxes, and the Sixteenth Amendment confirms that taxes on income need not be apportioned."⁹⁶

States, Property and the Federal Division of Taxes

The amendment concerns Congress's power. The states have their own power to tax income, and state constitutions limit it in their own ways. The Pollock majority itself noted that the states have power to lay income taxes.¹¹ The amendment also leaves in place the apportionment rule for federal direct taxes on property. The result is a division of labor that Justice Barrett described in Moore: by design and in fact, the apportionment rule left property taxation primarily to the states.⁷ The Idaho section below shows what the state's own income tax looks like and how its constitution handles taxes.

Questions People Ask

Did the Sixteenth Amendment create the income tax?

No. Congress had levied income taxes in 1861 and later, and the Court upheld the war tax in Springer. The amendment removed the obstacle Pollock had created.⁴¹¹³

Does the amendment authorize any rate?

It says nothing about rates. Congress sets them by statute, as the IRS history of top rates shows.²²

Can Congress tax unrealized gains?

The Court has not decided. The majority in Moore expressly did not address the question, and the concurring and dissenting opinions point in different directions.⁶⁷

Was the vote in Congress unanimous?

The Senate vote was unanimous according to a 1909 newspaper account. The House vote was reported as 317 to 14, with a secondary source giving 318 to 14.¹³¹⁴

Common Misreadings

Landmark Cases

Each case below was checked against the opinion text where a link appears in the footnotes. Supporting cases appear in the sections above.

The Idaho Connection

Idaho ratifies, January 1911

Idaho's legislature ratified the amendment by Senate Joint Resolution No. 1 of the 1911 session. The Senate passed it on January 19, 1911 and the House on January 20. The State Department's Solicitor lists Idaho eleventh of the thirty-eight ratifying states.¹⁶¹⁵ The resolution reproduces the amendment with the slip "census of enumeration," which the Solicitor logged as an immaterial error.¹⁶¹⁷ The Idaho Session Laws volume this lesson read does not print the roll-call tallies, so the vote counts in each house are not confirmed here. A reader who needs them can look for the 1911 Senate and House Journals, which this lesson did not locate.

Idaho's own constitution on taxes

The Idaho Constitution of 1890 was already in place when the amendment arrived, and it builds the state's tax system on property. Article VII, section 2 directs the legislature to provide revenue "by levying a tax by valuation, so that every person or corporation shall pay a tax in proportion to the value of his, her, or its property," and allows a license tax on persons and corporations doing business in the state. Section 5 says "All taxes shall be uniform upon the same class of subjects within the territorial limits, of the authority levying the tax." Section 6 says the legislature shall not impose taxes for the purposes of any county, city or town, but may give the local governing bodies the power to assess and collect taxes. Section 12 creates a four-member State Tax Commission.²⁵

The sections this lesson read do not mention an income tax. Idaho's income tax is statutory. This lesson did not find or read an Idaho Supreme Court decision on the validity of the income tax under Art. VII, and it does not state one. A reader who needs the answer should search the Idaho Supreme Court's decisions on Art. VII, secs. 2 and 5.

The state income tax

The Tax Commission's history says the Legislature enacted the Property Relief Act of 1931, which established the Office of Tax Commissioner "to administer the Income Tax Act," and that the income taxes were to be used to offset property taxes levied for state purposes. The same history says the first Tax Commission was created in 1913 from the Public Utilities Commission members to administer property tax laws and was repealed in 1915 after a constitutional challenge, that a 1944 constitutional amendment created a four-member part-time Tax Commission, and that in 1967 the commission became full-time.²⁶

Idaho Code section 63-3002, added in 1959, states the legislature's intent "insofar as possible to make the provisions of the Idaho act identical to the provisions of the Federal Internal Revenue Code relating to the measurement of taxable income," so that the taxable income reported to the Internal Revenue Service is "the identical sum reported to this state," subject to Idaho modifications.²⁷ That link means the federal definition of income, and the line of cases from Eisner to Moore that shapes it, reaches state returns by way of the Idaho Code and not by way of the Sixteenth Amendment.

For individuals, estates and trusts, Idaho Code section 63-3024 sets a tax of 5.3 percent of taxable income over $2,500, or over $5,000 on a joint return, with the thresholds adjusted by a factor the State Tax Commission prescribes so that inflation does not result in a tax increase. The statute's history note shows amendments through 2025. Confirm the rate on the Idaho Legislature's site before relying on it.²⁸

Not confirmed: the Idaho roll-call votes on the amendment, the Idaho Supreme Court's decisions on the state income tax, and the history of Idaho's first income tax act before the Property Relief Act of 1931.

Where This Shows Up for Officials, Reporters and Citizens

The speaker at the county commission meeting

A resident tells an invented county commission that he does not owe federal income tax because the Sixteenth Amendment was never ratified. The commission has no power over federal taxes and does not need to rule on the claim. A reporter covering the meeting can say what the record shows: the State Department's Solicitor reviewed the state notices in February 1913, counted thirty-eight ratifying states against thirty-six needed, and found the wording errors immaterial. The IRS lists the claim among those it has answered, and describes courts as consistently rejecting it.¹⁵¹⁷²⁴

The city council and the local tax

A council in an invented Idaho city is asked to impose a local tax on wages. Under Art. VII, sec. 6 the legislature does not impose taxes for a city's purposes but may give the city's governing body the power to assess and collect taxes, so the first question is which statute gives the council that power. The federal amendment does not answer it. Idaho Code and the constitution do.²⁵

The assessor and the valuation

An assessor in an invented county explains why two similar lots are taxed alike. Art. VII, sec. 2 taxes property "by valuation" and sec. 5 requires uniformity "upon the same class of subjects," and the Sixteenth Amendment does not apply to a county's property tax, because it concerns Congress's power to tax incomes.²⁵⁵

The reporter and the wealth-tax proposal

A reporter is asked whether Congress can tax the rise in value of stock a person still holds. Moore is the starting point, and it leaves the question open. The Court's opinion said it did not address whether a gain must be realized to count as income. Justice Barrett, with Justice Alito, wrote that the answer to whether the amendment reaches unrealized sums is "No," and Justice Jackson cited briefs reading "income" to include unrealized gains. A story should state which opinion says what and should not describe Moore as a ruling on wealth taxes.⁶⁷²¹

The taxpayer reading the Idaho return

A taxpayer notes that Idaho's return starts from the federal figure. That follows from Idaho Code section 63-3002, which states the legislature's intent to make Idaho's measurement of taxable income "identical" to the federal one except for Idaho modifications. If the federal definition changes, the Idaho starting point changes with it, unless the legislature has written an Idaho adjustment.²⁷

Related Modules

Related lessons: Article I: Congress (the taxing power and the origination clause, and the direct tax clauses in sections 2 and 9); Amending the Constitution (Article V and the ratification record); Voting and the Later Amendments (Module 11, the overview of Amendments 15 to 26); Federalism and the States (state taxing power); The Fourteenth Amendment (the Solicitor's 1913 memorandum used its ratification as precedent); The Eighteenth Amendment and The Nineteenth Amendment (other amendments of the same decade); and the Seventeenth Amendment course.

Sources & Further Reading

Primary Sources

• National Archives: Amendments 11-27 (text of the Sixteenth Amendment)
• National Archives: 16th Amendment, with transcript
• National Archives: Constitution transcription
• State Department Solicitor's memorandum on ratification, February 15, 1913
• Pollock v. Farmers' Loan & Trust, 157 U.S. 429 (1895), govinfo
• Pollock v. Farmers' Loan & Trust, 158 U.S. 601 (1895), govinfo
• Brushaber v. Union Pacific Railroad Co., 240 U.S. 1 (1916), govinfo
• Eisner v. Macomber, 252 U.S. 189 (1920), govinfo
• Commissioner v. Glenshaw Glass Co., 348 U.S. 426 (1955), govinfo
• Moore v. United States, 602 U.S. 572 (2024), supremecourt.gov
• Idaho Session Laws 1911 (Internet Archive full text)
• IRS Statistics of Income, Historical Table 23

Secondary Sources and Further Reading

• Wikipedia: Sixteenth Amendment (secondary)
• Morning Oregonian, July 6, 1909 (Senate vote)
• Morning Oregonian, July 13, 1909 (House vote)
• Starkman: The Sixteenth Amendment (secondary; House vote 318 to 14)
• IRS: The Truth About Frivolous Tax Arguments, Section I (D to E)
• IRS: 2026 tax inflation adjustments

Idaho Law and Records

• Idaho Constitution, art. VII (Secretary of State)
• Idaho Code sec. 63-3002 (declaration of intent)
• Idaho Code sec. 63-3024 (individual rate)
• Idaho State Tax Commission history

Related Training Modules

• Article I: Congress
• Amending the Constitution
• Voting and the Later Amendments
• Federalism and the States
• The Fourteenth Amendment
• Seventeenth Amendment course

Footnotes

1. U.S. National Archives, The Constitution of the United States: A Transcription. Article I, section 2, clause 3: "Representatives and direct Taxes shall be apportioned among the several States ... according to their respective Numbers." 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." Article I, section 8, clause 1: Congress may "lay and collect Taxes, Duties, Imposts and Excises ... but all Duties, Imposts and Excises shall be uniform throughout the United States."
2. Hylton v. United States, 3 U.S. (3 Dall.) 171 (1796), official text (govinfo). The reporter's headnote records that a tax on carriages "is not a direct tax, such as is required by the constitution to be laid according to the census," and quotes Justice Chase: "I am inclined to think, that the direct taxes contemplated by the constitution, are only two, to wit, a capitation or poll tax, and a tax on land."
3. U.S. National Archives, 16th Amendment to the U.S. Constitution: Federal Income Tax (1913). The page gives the congressional passage date as July 2, 1909, the ratification date as February 3, 1913, and the certification by Secretary of State Philander C. Knox as February 25, 1913. It also gives the 1861 tax (a flat 3 percent on incomes over $800), the 1894 tax (2 percent on income over $4,000), the 5 to 4 decision striking it down, and the statement that in 1913 "less than 1 percent of the population paid income taxes at the rate of only 1 percent of net income." The Solicitor's memorandum cited below describes the resolution as "passed July twelfth, nineteen hundred and nine"; the newspaper accounts below place the Senate vote on July 5 and the House vote on July 12. This lesson could not reconcile the National Archives date with those.
4. Springer v. United States, 102 U.S. 586 (1881), official text (govinfo). The syllabus records that the tax on gains, profits and incomes "was an excise or duty, and not a direct tax, within the meaning of the Constitution." The case arose from a notice to a taxpayer in Illinois to list his income for 1865.
5. U.S. National Archives, The Constitution: Amendments 11-27 (Amendment XVI: "Passed by Congress July 2, 1909. Ratified February 3, 1913.").
6. Moore v. United States, 602 U.S. 572 (decided June 20, 2024), opinion (supremecourt.gov). Kavanaugh, J., for the Court (joined by Roberts, C.J., and Sotomayor, Kagan and Jackson, JJ.); Jackson, J., concurring; Barrett, J., concurring in the judgment (joined by Alito, J.); Thomas, J., dissenting (joined by Gorsuch, J.). The Court held that the Mandatory Repatriation Tax "does not exceed Congress's constitutional authority," stated that "the precise and narrow question" was whether Congress may attribute an entity's realized and undistributed income to its shareholders and tax them on it, and wrote: "we do not address the Government's argument that a gain need not be realized to constitute income under the Constitution."
7. Moore, Barrett, J., concurring in the judgment, 602 U.S. at 604-605: the question on which the Court granted review was "[w]hether the Sixteenth Amendment authorizes Congress to tax unrealized sums without apportionment among the states," and "The answer is straightforward: No." She also writes that a different tax "would present a different case." supremecourt.gov.
8. Flint v. Stone Tracy Co., 220 U.S. 107 (decided March 13, 1911), official text (govinfo). The syllabus holds that the Corporation Tax of the Tariff Act of 1909 "is not a direct tax but an excise" on "the privilege of doing business in a corporate capacity."
9. Brushaber v. Union Pacific Railroad Co., 240 U.S. 1 (decided January 24, 1916), official text (govinfo) (White, C.J.). The suit was brought by a stockholder to enjoin the corporation from complying with the income tax provisions of the Tariff Act of October 3, 1913. The Court said at 11 that confusion in the cases arose from "the conclusion that the Sixteenth Amendment provides for a hitherto unknown power of taxation," and at 17-18 that the amendment "does not purport to confer power to levy income taxes in a generic sense" and that "the whole purpose of the Amendment was to relieve all income taxes when imposed from apportionment from a consideration of the source whence the income was derived"; it was "drawn for the purpose of doing away for the future with the principle upon which the Pollock Case was decided." Justice Jackson's concurrence in Moore quotes the case for the statement that the Constitution grants Congress "plenary power" over taxation, 240 U.S. at 13.
10. Pollock v. Farmers' Loan & Trust Co., 157 U.S. 429 (decided April 8, 1895), official text (govinfo). The syllabus records that "A tax on the rents or income of real estate is a direct tax, within the meaning of that term as used in the Constitution," that a tax on interest from municipal bonds is invalid, and that on other questions "the Justices who heard the argument are equally divided, and, therefore, no opinion is expressed."
11. Pollock v. Farmers' Loan & Trust Co., 158 U.S. 601 (decided May 20, 1895, on rehearing), official text (govinfo). The report states that the tax on income from real estate and personal property, "being a direct tax within the meaning of the Constitution, and, therefore, unconstitutional and void because not apportioned according to representation," made the whole group of sections "necessarily invalid." Justice Harlan dissented. The 5 to 4 count is from the National Archives page cited above.
12. Sixteenth Amendment to the United States Constitution (Wikipedia, secondary source, read October 2026): the Revenue Act of 1861 introduced the first federal income tax, repealed in 1872; on June 16, 1909, President Taft proposed a two percent tax on corporations, structured as an excise, and a constitutional amendment; the amendment was proposed during debate over the Payne-Aldrich Tariff Act; after ratification Congress passed the Revenue Act of 1913; the article's list says Connecticut, Rhode Island, Utah and Virginia rejected the amendment without later ratifying, Florida and Pennsylvania never considered it, and forty-two of the forty-eight states ratified in all.
13. The Morning Oregonian (Portland), July 6, 1909, p. 5 of the digitized issue, Historic Oregon Newspapers: "By unanimous vote the Senate today adopted the resolution submitting to the State Legislatures the income tax amendment" (dispatch dated July 5). The resolution was Senator Brown of Nebraska's. OCR text; confirm against the Congressional Record.
14. The Morning Oregonian, July 13, 1909, Historic Oregon Newspapers: "By the decisive vote of 317 to 14, more than the necessary two-thirds, the House today passed the Senate joint resolution" (dispatch dated July 12); "The negative votes were all cast by Republicans." Another secondary source (Starkman, The Sixteenth Amendment) gives the House vote as 318 to 14. This lesson could not resolve the one-vote difference against the Congressional Record.
15. U.S. Department of State, Office of the Solicitor, Memorandum, February 15, 1913, "Ratification of the 16th Amendment to the Constitution of the United States," reproduced at constitution.org. It reports that the Department had information from forty-two states, that four (Connecticut, New Hampshire, Rhode Island and Utah) had rejected the amendment, and that thirty-eight had acted to ratify, Arkansas among them. It lists the order and dates, from Alabama (August 17, 1909) to New Mexico (February 5, 1913), and says that Delaware and Wyoming both acted on February 3, 1913. Wikipedia's list differs in some dates and in which state completed the thirty-sixth ratification; this lesson follows the Solicitor's memorandum for the order and flags the difference.
16. Idaho Session Laws, 1911 (Eleventh Session), Senate Joint Resolution No. 1, "A Joint Resolution Ratifying the Sixteenth Amendment to the Constitution of the United States of America," pp. 784-785, Internet Archive full text. The resolution quotes the amendment with "census of enumeration" and ends: "Passed Senate Jan. 19, 1911. Passed House Jan. 20, 1911." The roll-call tallies were not printed in the session laws volume this lesson read.
17. Same State Department memorandum, section "Errors in Resolutions of State Legislatures in quoting the Proposed 16th Amendment": only four resolutions (Arizona, North Dakota, Tennessee and New Mexico) quoted the amendment exactly; thirty-three others contained errors of punctuation, capitalization or wording; twenty-two states had errors only of capitalization or punctuation and eleven had errors in wording; Idaho's entry reads "Error of capitalization; 'of' instead of 'or' before 'enumeration.'" The memorandum concludes that the Secretary of State "may disregard the errors," citing the precedent of the Fourteenth Amendment, and recommends announcing the adoption. constitution.org.
18. Same memorandum: the Arkansas legislature first failed to pass the resolution (the Governor so informed the Secretary of State on March 28, 1911), then passed it on April 22, 1911, and the Governor vetoed it; the Solicitor concluded the veto did not nullify the legislature's action, and that "the Legislature of a State may act adversely any number of times and it still has the right to act favorably." Kentucky's legislature ratified before it received the transmittal from its Governor; the Solicitor found that ratification valid.
19. Eisner v. Macomber, 252 U.S. 189, 207 (decided March 8, 1920), official text (govinfo): "Income may be defined as the gain derived from capital, from labor, or from both combined." The syllabus adds that "Mere growth or increment of value in a capital investment is not income."
20. Commissioner v. Glenshaw Glass Co., 348 U.S. 426, 431 (1955), official text (govinfo): "instances of undeniable accessions to wealth, clearly realized, and over which the taxpayers have complete dominion." The Court held punitive damages to be taxable income.
21. Moore, 602 U.S. at 572-573 (syllabus) and the Court's statement that "our holding today is narrow": it is limited to taxation of the shareholders of an entity, on the undistributed income realized by the entity, attributed to the shareholders, when the entity has not itself been taxed on that income. supremecourt.gov.
22. Internal Revenue Service, Statistics of Income, Historical Table 23: U.S. Individual Income Tax Rates and Tax Shares / Rates (spreadsheet histab23.xls). Top rate by tax year: 1913, 7% (over $500,000; lowest rate 1% under $20,000; personal exemptions $3,000 single and $4,000 married); 1916, 15%; 1917, 67%; 1918, 77%; 1925, 25%; 1932, 63%; 1936, 79%; 1944, 94%; 1952, 92%; 1964, 77%; 1965, 70%; 1981, 69.125%; 1982, 50%; 1987, 38.5%; 1988, 28%; 1993, 39.6%; 2003, 35%; 2013, 39.6%; 2018, 37%. The table carries footnotes on several years that this lesson did not reproduce.
23. Internal Revenue Service, IRS releases tax inflation adjustments for tax year 2026, including amendments from the One, Big, Beautiful Bill: the top rate of 37 percent applies above $640,600 for single filers and $768,700 for married couples filing jointly; the standard deduction is $16,100 for single filers and $32,200 for married couples filing jointly.
24. Internal Revenue Service, The Truth About Frivolous Tax Arguments, Section I (D to E). On the claim that the Sixteenth Amendment was not properly ratified, it says the claim rests on the premise that the amendment "was not officially ratified or because the State of Ohio was not properly a state at the time of ratification," and answers that the amendment was ratified by forty states including Ohio (with two more states ratifying shortly after), that Ohio's statehood was confirmed by a 1953 joint resolution (Bowman v. United States, 920 F. Supp. 623 n.1 (E.D. Pa. 1995)), that enough states ratified even without Ohio, and that Brushaber upheld the income tax in 1916. It cites Rev. Rul. 2005-19 and Notice 2010-33. For the claim that the amendment does not authorize a non-apportioned direct income tax it cites Lovell v. United States, 755 F.2d 517 (7th Cir. 1984), In re Becraft, 885 F.2d 547 (9th Cir. 1989), Young v. Commissioner, 551 F. App'x 229 (8th Cir. 2014) and Taliaferro v. Freeman, 595 F. App'x 961 (11th Cir. 2014). This lesson read the IRS page and did not read those decisions. The IRS page counts forty states at proclamation and forty-two in all; the State Department memorandum counts thirty-eight as of February 15, 1913.
25. Idaho Constitution, art. VII, secs. 2, 5 and 12, Idaho Secretary of State. Section 2: the legislature "shall provide such revenue as may be needful, by levying a tax by valuation, so that every person or corporation shall pay a tax in proportion to the value of his, her, or its property," and "may also impose a license tax." Section 5: "All taxes shall be uniform upon the same class of subjects within the territorial limits, of the authority levying the tax." Section 12 creates the four-member State Tax Commission.
26. Idaho State Tax Commission, Tax Commission history: the 1913 Legislature created the first Tax Commission from the Public Utilities Commission members to administer property tax laws; the 1915 Legislature repealed it after a constitutional challenge; the Property Relief Act of 1931 established the Office of Tax Commissioner "to administer the Income Tax Act," with income taxes "to be used to offset property taxes levied for State purposes"; a November 1944 constitutional amendment created a Tax Commission of four part-time members; in 1967 the commission became full-time.
27. Idaho Code sec. 63-3002, "Declaration of intent" (added 1959), Idaho Legislature: the legislature intends "insofar as possible to make the provisions of the Idaho act identical to the provisions of the Federal Internal Revenue Code relating to the measurement of taxable income."
28. Idaho Code sec. 63-3024, Idaho Legislature: tax "at the rate of five and three-tenths percent (5.3%) of taxable income over two thousand five hundred dollars ($2,500)," or over $5,000 for joint returns, with thresholds adjusted each year by a factor the State Tax Commission prescribes. Last amended by 2025, ch. 13, per the statute's history note; confirm the current rate before relying on it.