The Income Tax Turns 100 Years Old


The federal income tax is now a centenarian. On February 3, 1913, the 16th amendment to the Constitution was ratified.

The revenue the income tax raises allowed Congress to greatly expand the size of the federal government. We will likely never return to a federal government the size we had before the 16th amendment became law.

Even though the income tax raises gargantuan amounts of revenue that allows for big government, it can only raise so much.

The individual income tax’s top rate has been as high as 91 percent as recently as 1960 and has been as low as 28 percent in the late 1980s. And yet the income tax raised on average 8 percent of gross domestic product (GDP) and had never exceeded 10.2 percent (reached only once in 2000 at the height of the tech bubble).



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