16th and 18th Amendment

Sixteenth Amendment

• Civil War: debts caused Congress to enact first federal income tax.

• Based on ability to pay – only people above a certain income level were expected to pay.

• The government relied on voluntary compliance with the income tax.

• Less than one percent paid, yet it generated $55 million.

• It was repealed in 1872

• 1890s – tariffs and excise taxes were used• 1900s – government starting to support more

people than ever (industrialization and modernization). Many people are poor

• 1909-1913 – Congress proposed an income tax that would not be based on the population of the states. Ratified in 1913. Allowed the government to tax people directly.

• First tax was limited: applied to 2% of workforce and highest rate was 7%

• Collected by IRS

Who pays and how much?

• More income = higher percentage to pay

Arguments for and against• For: We need it to support all of the

governmental programs: school, welfare, parks, roads, army, post offices, etc…

• Against: Originally Constitution said that Federal Government can not collect taxes from citizens. They can only take from the states according to their population. They are allowed to use tariffs, excise taxes, and consumption taxes. - States should pay for own welfare, health, education, transportation, and housing

Questions

• Is a direct tax on a worker’s income fair?• A progressive tax means that the rich are

taxed a higher percentage of their wealth than the poor. Is this fair?

Prohibition

• 18th Amendment, 1919• Prohibited manufacturing, sale, and

transportation of alcohol within the United States.

Why?• Many thought it would protect society from

poverty and violence associated with drinking• Most support came from women and country

folk• This caused brewery and liquor interests to

oppose women’s suffrage• States had already passed prohibition laws

before. • “Un-American” during WWI to be for alcohol

– need to save resources

What Happened

• Americans were very resourceful at finding alcohol

• Black market and various mobs and mafias became huge

• 18th Amendment repealed with 21st Amendment in 1933

Questions

•Should we have prohibition today?

•What about the war on drugs? Is it worth it?