What does the 16th amendment cover?

Some of Perry's views are in opposition to Constitutional amendments already adopted. In his 2010 book "Fed Up!", he takes issue with the Federal government's right to collect income tax, saying "if you want to know when Washington really got off the track, the 16th Amendment, giving them the opportunity to take your money with a personal income tax." He also criticizes the 17th Amendment, which allows for the direct election of U.S. Senators. According to Perry, the 16th and 17th Amendments caused states to "[hand] over significant chunks of their sovereignty and wealth to the federal government. Congress was free to tax and spend to its heart's content."

Political positions of Rick Perry

Rick Perry is an American politician who served as the 47th Governor of Texas from 2000 to 2015. He was a candidate for the nomination of the Republican Party for President of the United States in 2012 and 2016, and currently serves as the United States Secretary of Energy.

Perry has expressed support for amending the Constitution to set a nationwide policy on social issues, by prohibiting abortion and same-sex marriage. He also supports abolishing life tenure for judges, empowering Congress to overrule Supreme Court decisions by a two-thirds vote, requirement of a balanced budget, and placing a limit on federal expenditures.

On August 16, 2011, Perry sharply criticized the Federal Reserve, stating that it would be "almost treacherous – or treasonous in my opinion" to be "printing money to play politics". Many prominent Republicans criticized Perry for his statements. For instance, Tony Fratto, a Republican who had worked in the Treasury and White House under the Bush administration, described Perry's remarks as "inappropriate and unpresidential". Perry also suggested that if Chairman Ben Bernanke visited Texas, "we would treat him pretty ugly", a remark criticized by the White House as threatening.

Another of the top-three-polling Republican presidential candidates, Ron Paul, who routinely criticizes Bernanke and has made "End the Fed" a major platform issue, also criticized Perry's comment, saying that "he makes me look like a moderate" and that, unlike Perry, "I have never once said Bernanke has committed treason."

In 2001, Perry supported HB 1403, a statute extending in-state tuition to undocumented and documented immigrants who meet Texas' residency requirements and pledged to apply for permanent residency if this ever became a possibility for them. Perry is opposed to the DREAM Act.

Perry opposed the building of a Mexico – United States barrier. Perry says that the federal government should fulfill its responsibility to its citizens by securing the borders with "boots on the ground" and technology to improve safety while not harming trade with the state's biggest trading partner, Mexico. Perry said the Arizona immigration law, SB 1070, "would not be the right direction for Texas" and would distract law enforcement from fighting other crimes. He also opposes requirements that businesses use E-Verify to check the immigration status of prospective employees. He says that employment verification is needed but that the current E-verify system has flaws such as bad data which could be a hindrance to US citizens getting jobs as well as allowing as many as 50% of illegal immigrants through. Perry also wants to grant work visas to undocumented immigrants.

In response to the 2014 crisis of undocumented, unaccompanied children crossing the border, which generated widespread attention, Perry declared the issue of illegal immigration of minors a "side-issue" compared with the number of illegal immigrants arriving who have committed crimes, which he estimated was about 80%.

Rick Perry opposes the legal recognition of same-sex marriage and civil unions, and supported the 2005 ballot proposition which amended the Texas constitution by defining marriage as "only a union between a man and a woman" and prohibiting the state from creating or recognizing "any legal status identical or similar to marriage". In 2011, after New York legalized same-sex marriage, Perry stated that it was their right to do so under the principle of states' rights delineated in the 10th Amendment. A spokesman later reiterated Perry's support for a federal constitutional amendment banning same-sex marriage, saying that position was not inconsistent since an amendment would require approval by three-fourths of the states.

In his first book, "On My Honor", published in 2008, Perry drew a parallel between homosexuality and alcoholism, writing that he is "no expert on the 'nature versus nurture' debate," but that gays should simply choose abstinence. In 2002, Perry described the Texas same-sex anti-sodomy law as "appropriate". The United States Supreme Court's landmark civil rights decision in "Lawrence v. Texas" struck down the statute Perry referred to the following year for violating the 14th Amendment to the US Constitution.

Perry has been a skeptic on human contributions to climate change. In Perry's book, "Fed Up!", he called climate science a "contrived phony mess." On August 17, 2011 at a breakfast with business leaders in New Hampshire Perry said that he does not believe the science behind global warming, saying that he thinks "there are a substantial number of scientists who have manipulated data so that they will have dollars rolling in to their projects". Perry has said that "Virtually every day another scientist leaves the global warming bandwagon... But you won't read about that in the press because they have already invested in one side of the story." Perry's views have been criticized, with fact-checkers stating that surveys showed that more that 97% of climate scientists believed that global warming is anthropogenic and arguing that the ranks of dissenters don't appear to be swelling. On June 19, 2014 at lunch organized by the Christian Science Monitor Perry criticized the Obama administration's policies on climate change, including proposed regulation of greenhouse gases, saying "Calling CO2 a pollutant is doing a disservice the country... I'm not a scientist... I don't believe that we have the settled science by any sense of the imagination...". He said he was offended by being called a "denier." He said he supports the Keystone XL pipeline. In 2014, a spokesman for Perry cited "unsettled science" regarding climate change in partial explanation of Perry's opposition to the regulation of greenhouse gases.

Texas-based TXU had been planning a $10 billion investment in 11 new coal-fired power plants over the next several years, but drastically reduced those plans in 2007 under the terms of a buyout by a consortium of private equity firms. The Governor's Clean Coal Technology Council continues to explore ways to generate clean energy with coal. After the 2009 legislative session, Perry signed House Bill 469 which includes incentives for clean coal technology breakthroughs.

Perry opposes regulation of greenhouse gas emissions because he says it would have "devastating implications" for the Texas economy and energy industry. He has stated that he supports an "all of the above" energy strategy including oil, coal, nuclear, biofuels, hydroelectric, solar, and wind energy. Perry has collaborated with T. Boone Pickens, who has advocated reduced use of oil, primarily through replacing it with natural gas. Under Governor Perry, Texas sued the Obama administration to overturn Environmental Protection Agency regulations.

In 2011, temperatures in Texas set an all-time record for the hottest summer in the contiguous United States, with 91% of the state "experiencing extreme or exceptional drought". Perry said that comments by President Obama that linked the resulting wildfires to climate change were "outrageous".

Perry says the fossil fuel reserves in the United States are sufficient to meet current demand levels for the next 300 years. He supports current policies that may add a quarter million jobs by fracking the Marcellus Shale. However the report he based his comments on seems to have vastly overstated the case for America's gas reserves. As governor of Texas, Perry signed the first law in the nation to require drilling companies to disclose the chemicals used in the fracking process, in order to confront fears that the chemicals are leaking into water supplies.

In 2008, Perry pushed for federal loan guarantees for the expansion of the South Texas Nuclear Generating Station, but in 2011 he said that he had changed his position and no longer favored federal engagement in energy projects.

In Perry's book, "Fed Up!", published in the fall of 2010, he said that Social Security was "a crumbling monument to the failure of the New Deal." He likened the program to "an illegal Ponzi scheme" and also suggested that it was unconstitutional, having been enacted "at the expense of respect for the Constitution and limited government." During the promotion of the book he said that the Federal government should leave health care to the states and focus on putting Social Security on "better and more solid footing".

In 2011, after he announced his candidacy for the presidency, a spokesman for Perry said that the book was written "as a review and critique of 50 years of federal excesses, not in any way as a 2012 campaign blueprint or manifesto". Later, Perry stated in a campaign appearance that he still believed the views in his book, and that he "[hadn't] backed off anything in [his] book." Perry has continued to sharply criticize Social Security, describing it as a "monstrous lie" and a "Ponzi Scheme". Perry's comments on Social Security have been criticized by many prominent Republicans, including former Vice President Dick Cheney, Republican strategist Karl Rove, and Republican presidential primary candidate Mitt Romney. Romney has released a detailed list of questions as to what would happen if Perry moved Social Security from the federal level over to the states.

During the campaign, Perry has suggested that changes in Social Security could include restricting eligibility on the basis of age and income, and a switch to private accounts.

Perry has said that under President Bush's defense secretary, Robert Gates, the Pentagon vastly underestimated China's defense modernization.

While visiting Israel in August 2009, Perry gave an interview to the "Jerusalem Post" in which he affirmed his support for Israel from his religious background, "I'm a big believer that this country was given to the people of Israel a long time ago, by God, and that's ordained."

In 2011, he accused President Obama of a "policy of appeasement" for giving "equal standing to the grievances of Israelis and Palestinians" in peace talks.

Perry said, during the Republican debate in Orlando on Sept. 22, 2011, that the U.S. had chosen not to sell F-16 jet fighters to India; India made the decision to go with another military airplane. The Obama administration had lobbied for the sale. In that same debate, Perry also decried the Obama Administration's refusal to sell F-16C/Ds to Taiwan.
Perry criticized Obama's policies in Iraq and Afghanistan, saying that the announcement of the scheduled withdrawal from Iraq by the end of 2011 has endangered American troops in the area.

Perry has also expressed support for an Israeli military strike on Iran's nuclear facilities.

In 2012, Perry argued against prosecuting American troops for violations of the Geneva Conventions.

In late 2011, Perry argued for the use of waterboarding as a method of obtaining information from suspects attempting to harm U.S. service personnel.

In August 2014, the Pentagon denied Perry's claims that Islamic terrorists were crossing the Texas border. The National Guard members Perry activated to face this "threat" were then directed to seek help from food banks while they waited to be paid for their service.

In October 2011, Perry put forwards a flat tax proposal that would allow taxpayers to choose either their tax rate under existing law or a flat 20% rate. The plan would also eliminate taxes on Social Security benefits and inheritances. Asked if his tax plan would help wealthy taxpayers, Perry said he was not concerned about that because a lower tax rate would encourage greater investment and job creation by the wealthy.

As Governor of Texas, Perry received grades of B in 2004, B in 2006, B in 2008, B in 2010, C in 2012, and B in 2014 from the Cato Institute, a libertarian think tank, in their biennial Fiscal Policy Report Card on America's Governors.

In October 2007, despite their political differences on many social issues, Perry endorsed Rudy Giuliani for President. "Rudy Giuliani is the most prepared individual of either party to be the next President... I'm not talking about any mayor, I'm talking about America's Mayor," Perry said. Some conjectured that, if Giuliani were elected, Perry might have been considered for a position in the new president's cabinet, or perhaps the vice presidency. Giuliani withdrew from the race on January 30, 2008, after failing to gain support in early primaries.

Both Giuliani and Perry immediately endorsed Arizona Senator John McCain for President. Shortly after Mitt Romney's withdrawal from the race in early February, Perry reportedly called McCain rival Mike Huckabee and suggested that he withdraw as well to clear the way for McCain to secure the nomination. Huckabee declined this request and made it clear publicly that he would abandon his presidential bid only if McCain secured enough delegates. Huckabee withdrew his presidential bid on March 5, 2008, after John McCain won the Texas and Ohio primaries.

The Progressives fixed some of their reforms into law by adding amendments 16, 17, 18, and 19 to the US Constitution. The 16th amendment made an income tax legal (this required an amendment due to Article One, Section 9 of the Constitution, which required that direct taxes be laid on the States in proportion to their population as determined by the decennial census). The Progressives also made strides in attempts to reduce political corruption through the 17th amendment (direct election of U.S. Senators). The most radical and controversial amendment came during the anti-German craze of World War I that helped the Progressives and others push through their plan for prohibition through the 18th amendment (once the Progressives fell out of power the 21st amendment repealed the 18th in 1933). The ratification of the 19th amendment in 1920, which recognized women's suffrage was the last amendment during the progressive era. Another significant constitutional change that began during the progressive era was the incorporation of the Bill of Rights so that those rights would apply to the states. In 1920, Benjamin Gitlow was convicted under the Espionage Act of 1917 and the case went all the way to the Supreme Court, where the justices decided that the First Amendment applied to the states as well as the federal government. Prior to that time, the Bill of Rights was considered to apply only to the federal government, not the states.

Progressive Era

The Progressive Era is a period of widespread social activism and political reform across the United States that spanned from the 1890s to the 1920s. The main objectives of the Progressive movement were eliminating problems caused by industrialization, urbanization, immigration, and political corruption. The movement primarily targeted political machines and their bosses. By taking down these corrupt representatives in office, a further means of direct democracy would be established. They also sought regulation of monopolies (trust busting) and corporations through antitrust laws, which were seen as a way to promote equal competition for the advantage of legitimate competitors.

Many progressives supported prohibition of alcoholic beverages, ostensibly to destroy the political power of local bosses based in saloons, but others out of a religious motivation. At the same time, women's suffrage was promoted to bring a "purer" female vote into the arena. A third theme was building an Efficiency Movement in every sector that could identify old ways that needed modernizing, and bring to bear scientific, medical and engineering solutions; a key part of the efficiency movement was scientific management, or "Taylorism".

Many activists joined efforts to reform local government, public education, medicine, finance, insurance, industry, railroads, churches, and many other areas. Progressives transformed, professionalized and made "scientific" the social sciences, especially history, economics, and political science. In academic fields the day of the amateur author gave way to the research professor who published in the new scholarly journals and presses. The national political leaders included Republicans Theodore Roosevelt, Robert M. La Follette, Sr., and Charles Evans Hughes and Democrats William Jennings Bryan, Woodrow Wilson and Al Smith. Leaders of the movement also existed far from presidential politics: Jane Addams, Grace Abbott, Edith Abbott and Sophonisba Breckinridge were among the most influential non-governmental Progressive Era reformers.

Initially the movement operated chiefly at local levels; later, it expanded to state and national levels. Progressives drew support from the middle class, and supporters included many lawyers, teachers, physicians, ministers, and business people. Some Progressives strongly supported scientific methods as applied to economics, government, industry, finance, medicine, schooling, theology, education, and even the family. They closely followed advances underway at the time in Western Europe and adopted numerous policies, such as a major transformation of the banking system by creating the Federal Reserve System in 1913 and the arrival of cooperative banking in the US with the founding of the first credit union in 1908. Reformers felt that old-fashioned ways meant waste and inefficiency, and eagerly sought out the "one best system".

Disturbed by the waste, inefficiency, stubbornness, corruption, and injustices of the Gilded Age, the Progressives were committed to changing and reforming every aspect of the state, society and economy. Significant changes enacted at the national levels included the imposition of an income tax with the Sixteenth Amendment, direct election of Senators with the Seventeenth Amendment, Prohibition with the Eighteenth Amendment, election reforms to stop corruption and fraud, and women's suffrage through the Nineteenth Amendment to the U.S. Constitution.

A hallmark group of the Progressive Era, the middle class became the driving force behind much of the thought and reform that took place in this time. With an increasing disdain for the upper class and aristocracy of the time, the middle class is characterized by their rejection of the individualistic philosophy of the upper ten. They had a rapidly growing interest in the communication and role between classes, those of which are generally referred to as the upper class, working class, farmers, and themselves, and sought to define these terms. Along these lines, the founder off Hull-House, Jane Addams, coined the term "association" as a counter to Individualism, with association referring to the search for a relationship between the classes. Additionally, the middle class (most notably women) began to move away from prior Victorian era domestic values. Divorce rates increased as women preferred to seek education and freedom from the home. Victorianism was pushed aside in favor of the rise of the Progressives.

Magazines experienced a boost in popularity in 1900, with some attaining circulations in the hundreds of thousands of subscribers. In the beginning of the age of Mass media the rapid expansion of national advertising led to the cover price of popular magazines falling sharply to about 10 cents, lessening the financial barrier to consuming them. Another factor contributing to the dramatic upswing in magazine circulation was the prominent coverage of corruption in politics, local government and big business, especially by journalists and writers who were labeled "muckrakers." They wrote for popular magazines to expose social and political sins and shortcomings. Relying on their own investigative journalism; muckrakers often worked to expose social ills and corporate and political corruption. Muckraking magazines, notably "McClure's," took on corporate monopolies and crooked political machines while raising public awareness of chronic urban poverty, unsafe working conditions, and social issues like child labor. Most of the muckrakers wrote nonfiction, but fictional exposés often had a major impact as well, such as those by Upton Sinclair. In his 1906 novel "The Jungle" Sinclair exposed the unsanitary and inhumane practices of the meat packing industry. He quipped, "I aimed at the public's heart and by accident I hit it in the stomach," as readers demanded and got the Pure Food and Drug Act.

The journalists who specialized in exposing waste, corruption, and scandal operated at the state and local level, like Ray Stannard Baker, George Creel, and Brand Whitlock. Others such as Lincoln Steffens exposed political corruption in many large cities; Ida Tarbell is famed for her criticisms of John D. Rockefeller's Standard Oil Company. In 1906, David Graham Phillips unleashed a blistering indictment of corruption in the U.S. Senate. Roosevelt gave these journalists their nickname when he complained they were not being helpful by raking up all the muck.

The Progressives were avid modernizers, with a belief in science and technology as the grand solution to society's flaws. They looked to education as the key to bridging the gap between their present wasteful society and technologically enlightened future society. Characteristics of Progressivism included a favorable attitude toward urban-industrial society, belief in mankind's ability to improve the environment and conditions of life, belief in an obligation to intervene in economic and social affairs, a belief in the ability of experts and in the efficiency of government intervention. Scientific management, as promulgated by Frederick Winslow Taylor, became a watchword for industrial efficiency and elimination of waste, with the stopwatch as its symbol.

Across the nation, middle-class women organized on behalf of social reforms during the Progressive Era. Using the language of municipal housekeeping women were able to push such reforms as prohibition, women's suffrage, child-saving, and public health.

Middle class women formed local clubs, which after 1890 were coordinated by the General Federation of Women's Clubs (GFWC). Historian Paige Meltzer puts the GFWC in the context of the Progressive Movement, arguing that its policies:

built on Progressive-era strategies of municipal housekeeping. During the Progressive era, female activists used traditional constructions of womanhood, which imagined all women as mothers and homemakers, to justify their entrance into community affairs: as "municipal housekeepers," they would clean up politics, cities, and see after the health and well being of their neighbors. Donning the mantle of motherhood, female activists methodically investigated their community's needs and used their "maternal" expertise to lobby, create, and secure a place for themselves in an emerging state welfare bureaucracy, best illustrated perhaps by clubwoman Julia Lathrop's leadership in the Children's Bureau. As part of this tradition of maternal activism, the Progressive-era General Federation supported a range of causes from the pure food and drug administration to public health care for mothers and children, to a ban on child labor, each of which looked to the state to help implement their vision of social justice.

The National American Woman Suffrage Association (NAWSA) was an American women's rights organization formed in May 1890 as a unification of the National Woman Suffrage Association (NWSA) and the American Woman Suffrage Association (AWSA). The NAWSA set up hundreds of smaller local and state groups, with the goal of passing woman suffrage legislation at the state and local level. The NAWSA was the largest and most important suffrage organization in the United States, and was the primary promoter of women's right to vote. Carrie Chapman Catt was the key leader in the early 20th century. Like AWSA and NWSA before it, the NAWSA pushed for a constitutional amendment guaranteeing women's voting rights, and was instrumental in winning the ratification of the Nineteenth Amendment to the United States Constitution in 1920. A breakaway group, the National Woman's Party, tightly controlled by Alice Paul, used civil disobedience to gain publicity and force passage of suffrage. Paul's members chained themselves to the White House fence in order to get arrested, then went on hunger strikes to gain publicity. While the British suffragettes stopped their protests in 1914 and supported the British war effort, Paul began her campaign in 1917 and was widely criticized for ignoring the war and attracting radical anti-war elements.

The number of rich families climbed exponentially, from 100 or so millionaires in the 1870s, to 4000 in 1892 and 16,000 in 1916. Many subscribed to Andrew Carnegie's credo outlined in "The Gospel of Wealth" that said they owed a duty to society that called for philanthropic giving to colleges, hospitals, medical research, libraries, museums, religion and social betterment.

In the early 20th century, American philanthropy matured, with the development of very large, highly visible private foundations created by Rockefeller, and Carnegie. The largest foundations fostered modern, efficient, business-oriented operations (as opposed to "charity") designed to better society rather than merely enhance the status of the giver. Close ties were built with the local business community, as in the "community chest" movement. The American Red Cross was reorganized and professionalized. Several major foundations aided the blacks in the South, and were typically advised by Booker T. Washington. By contrast, Europe and Asia had few foundations. This allowed both Carnegie and Rockefeller to operate internationally with powerful effect.

Many Progressives sought to enable the citizenry to rule more directly and circumvent machines, bosses and professional politicians. The institution of the initiative and referendums made it possible to pass laws without the involvement of the legislature, while the recall allowed for the removal of corrupt or under-performing officials, and the direct primary let people democratically nominate candidates, avoiding the professionally dominated conventions. Thanks to the efforts of Oregon State Representative William S. U'Ren and his Direct Legislation League, voters in Oregon overwhelmingly approved a ballot measure in 1902 that created the initiative and referendum processes for citizens to directly introduce or approve proposed laws or amendments to the state constitution, making Oregon the first state to adopt such a system. U'Ren also helped in the passage of an amendment in 1908 that gave voters power to recall elected officials, and would go on to establish, at the state level, popular election of U.S. Senators and the first presidential primary in the United States. In 1911, California governor Hiram Johnson established the Oregon System of "Initiative, Referendum, and Recall" in his state, viewing them as good influences for citizen participation against the historic influence of large corporations on state lawmakers. These Progressive reforms were soon replicated in other states, including Idaho, Washington, and Wisconsin, and today roughly half of U.S. states have initiative, referendum and recall provisions in their state constitutions.

About 16 states began using primary elections to reduce the power of bosses and machines. The Seventeenth Amendment was ratified in 1913, requiring that all senators be elected by the people (they were formerly appointed by state legislatures). The main motivation was to reduce the power of political bosses, who controlled the Senate seats by virtue of their control of state legislatures. The result, according to political scientist Henry Jones Ford, was that the United States Senate had become a "Diet of party lords, wielding their power without scruple or restraint, on behalf of those particular interests" that put them in office.

A coalition of middle-class reform-oriented voters, academic experts, and reformers hostile to the political machines started forming in the 1890s and introduced a series of reforms in urban America, designed to reduce waste, inefficiency and corruption, by introducing scientific methods, compulsory education and administrative innovations.

The pace was set in Detroit Michigan, where Republican mayor Hazen S. Pingree first put together the reform coalition. Many cities set up municipal reference bureaus to study the budgets and administrative structures of local governments.

Progressive mayors took the lead in many key cities, such as Cleveland, Ohio (especially Mayor Tom Johnson); Toledo, Ohio; Jersey City, New Jersey; Los Angeles; Memphis, Tennessee; Louisville, Kentucky; and many other cities, especially in the western states. In Illinois, Governor Frank Lowden undertook a major reorganization of state government. In Wisconsin, the stronghold of Robert La Follette Sr., the Wisconsin Idea used the state university as a major source of ideas and expertise.

As late as 1920, half the population lived in rural areas. They experienced their own progressive reforms, typically with the explicit goal of upgrading country life. By 1910 most farmers subscribed to a farm newspaper, where editors promoted efficiency as applied to farming. Special efforts were made to reach the rural South and remote areas, such as the mountains of Appalachia and the Ozarks.

The most urgent need was better transportation. The railroad system was virtually complete; the need was for much better roads. The traditional method of putting the burden on maintaining roads on local landowners was increasingly inadequate. New York State took the lead in 1898, and by 1916 the old system had been discarded in every area. Demands grew for local and state government to take charge. With the coming of the automobile after 1910, urgent efforts were made to upgrade and modernize dirt roads designed for horse-drawn wagon traffic. The American Association for Highway Improvement was organized in 1910. Funding came from automobile registration, and taxes on motor fuels, as well as state aid. In 1916, federal-aid was first made available to improve post-roads, and promote general commerce. Congress appropriated $75 million over a five-year period, with the Secretary of Agriculture in charge through the Bureau of Public Roads, in cooperation with the state highway departments. There were 2.4 million miles of rural dirt rural roads in 1914; 100,000 miles had been improved with grading and gravel, and 3000 miles were given high quality surfacing. The rapidly increasing speed of automobiles, and especially trucks, made maintenance and repair a high priority. Concrete was first used in 1933, and expanded until it became the dominant surfacing material in the 1930s. The South had fewer cars and trucks and much less money, but it worked through highly visible demonstration projects like the "Dixie Highway."

Rural schools were often poorly funded, one room operations. Typically, classes were taught by young local women before they married, with only occasional supervision by county superintendents. The progressive solution was modernization through consolidation, with the result of children attending modern schools. There they would be taught by full-time professional teachers who had graduated from the states' teachers colleges, were certified, and were monitored by the county superintendents. Farmers complained at the expense, and also at the loss of control over local affairs, but in state after state the consolidation process went forward.

Numerous other programs were aimed at rural youth, including 4-H clubs, Boy Scouts and Girl Scouts. County fairs not only gave prizes for the most productive agricultural practices, they also demonstrated those practices to an attentive rural audience. Programs for new mothers included maternity care and training in baby care.

The movement's attempts at introducing urban reforms to rural America often met resistance from traditionalists who saw the country-lifers as aggressive modernizers who were condescending and out of touch with rural life. The traditionalists said many of their reforms were unnecessary and not worth the trouble of implementing. Rural residents also disagreed with the notion that farms needed to improve their efficiency, as they saw this goal as serving urban interests more than rural ones. The social conservatism of many rural residents also led them to resist attempts for change led by outsiders. Most important, the traditionalists did not want to become modern, and did not want their children inculcated with alien modern values through comprehensive schools that were remote from local control. The most successful reforms came from the farmers who pursued agricultural extension, as their proposed changes were consistent with existing modernizing trends toward more efficiency and more profit in agriculture.

The Philippines were acquired by the United States in 1899, after victory over Spanish forces at the Battle of Manila Bay and a long series of controversial political debates between the senate and President McKinley and was considered the largest colonial acquisition by the United States at this time.

While anti-imperialist sentiments had been prevalent in the United States during this time, the acquisition of the Philippines sparked the relatively minor population into action. Voicing their opinions in public, they sought to deter American leaders from keeping the Asian-Pacific nation and to avoid the temptations of expansionist tendencies that were widely viewed as "un-American" at that time.

Philippines was a major target for the progressive reformers. A 1907 report to Secretary of War Taft provided a summary of what the American civil administration had achieved. It included, in addition to the rapid building of a public school system based on English teaching, and boasted about such modernizing achievements as:

steel and concrete wharves at the newly renovated Port of Manila; dredging the River Pasig; streamlining of the Insular Government; accurate, intelligible accounting; the construction of a telegraph and cable communications network; the establishment of a postal savings bank; large-scale road-and bridge-building; impartial and incorrupt policing; well-financed civil engineering; the conservation of old Spanish architecture; large public parks; a bidding process for the right to build railways; Corporation law; and a coastal and geological survey.

In 1903 the American reformers in the Philippines passed two major land acts designed to turn landless peasants into owners of their farms. By 1905 the law was clearly a failure. Reformers such as Taft believed landownership would turn unruly agrarians into loyal subjects. The social structure in rural Philippines was highly traditional and highly unequal. Drastic changes in land ownership posed a major challenge to local elites, who would not accept it, nor would their peasant clients. The American reformers blamed peasant resistance to landownership for the law's failure and argued that large plantations and sharecropping was the Philippines' best path to development.

Elite Filipina women played a major role in the reform movement, especially on health issues. They specialized on such urgent needs as infant care and maternal and child health, the distribution of pure milk and teaching new mothers about children's health. The most prominent organizations were the La Protección de la Infancia, and the National Federation of Women's Clubs.

Across the South black communities developed their own Progressive reform projects. Typical projects involved upgrading schools, modernizing church operations, expanding business opportunities, fighting for a larger share of state budgets, and engaging in legal action to secure equal rights. Reform projects were especially notable in rural areas, where the great majority of Southern blacks lived.

George Washington Carver (1860-1943) was well known for his research projects, especially involving agriculture. He was also a leader in promoting environmentalism.

Rural blacks were specially involved in environmental issues, in which they developed their own traditions and priorities.

Although there were some achievements that improved conditions for African Americans and other non-"white" minorities, the Progressive Era was the nadir of American race relations. While white Progressives in principle believed in improving conditions for minority groups, there were wide differences in how this was to be achieved. Some, such as Lillian Wald, fought to alleviate the plight of poor African Americans. Many, though, were concerned with enforcing, not eradicating, racial segregation. In particular, the mixing of black and white pleasure-seekers in "black-and-tan" clubs troubled Progressive reformers. The Progressive ideology espoused by many of the era attempted to correct societal problems created by racial integration following the Civil War by segregating the races and allowing each group to achieve its own potential. That is to say that most Progressives saw racial integration as a problem to be solved, rather than a goal to be achieved. As white progressives sought to help the white working-class, clean-up politics, and improve the cities, the country instated the system of racial segregation known as Jim Crow.

Legal historian Herbert Hovenkamp argues that while many early progressives inherited the racism of Jim Crow, as they begin to innovate their own ideas, they would embrace behaviorism, cultural relativism and marginalism which stress environmental influences on humans rather than biological inheritance. He states that ultimately progressives "were responsible for bringing scientific racism to an end".

Progressives believed that the family was the foundation stone of American society, and the government, especially municipal government, must work to enhance the family. Local public assistance programs were reformed to try to keep families together. Inspired by crusading Judge Ben Lindsey of Denver, cities established juvenile courts to deal with disruptive teenagers without sending them to adult prisons.

During the progressive era more women took work outside the home. For the working class this work was often as a domestic servant.  Yet working or not women were expected to perform all the cooking and cleaning. This "affected female domestics' experiences of their homes, workplaces, and possessions, While the male household members, comforted by the smells of home cooking, fresh laundry, and soaped floors, would have seen home as a refuge from work, women would have associated these same smells with the labor that they expended to maintain order." With increased in technology some of this work became easier. The "introduction of gas, indoor plumbing, electricity and garbage pickup had a significant impact on the homes and the women who were responsible form maintaining them." With the introduction of new methods of heating and lighting the home allowed for use of space once used for storage to become living spaces.  Women were targeted by advertisements for many different products once produced at home. These products were anything from mayonnaise, soda, or canned vegetables.

The purity of food, milk and drinking water became a high priority in the cities. At the state and national levels new food and drug laws strengthened urban efforts to guarantee the safety of the food system. The 1906 federal Pure Food and Drug Act, which was pushed by drug companies and providers of medical services, removed from the market patent medicines that had never been scientifically tested.

With the decrease in standard working hours, urban families had more leisure time. Many spent this leisure time at movie theaters. Progressives advocated for censorship of motion pictures as it was believed that patrons (especially children) viewing movies in dark, unclean, potentially unsafe theaters, might be negatively influenced in witnessing actors portraying crimes, violence, and sexually suggestive situations. Progressives across the country influenced municipal governments of large urban cities, to build numerous parks where it was believed that leisure time for children and families could be spent in a healthy, wholesome environment, thereby fostering good morals and citizenship.

Some Progressives sponsored eugenics as a solution to excessively large or underperforming families, hoping that birth control would enable parents to focus their resources on fewer, better children. Progressive leaders like Herbert Croly and Walter Lippmann indicated their classically liberal concern over the danger posed to the individual by the practice of eugenics. The Catholics strongly opposed birth control proposals such as eugenics.

Prohibition was the outlawing of the manufacture, sale and transport of alcohol. Drinking itself was never prohibited. Throughout the Progressive Era, it remained one of the prominent causes associated with Progressivism at the local, state and national level, though support across the full breadth of Progressives was mixed. It pitted the minority urban Catholic population against the larger rural Protestant element, and Progressivism's rise in the rural communities was aided in part by the general increase in public consciousness of social issues of the temperance movement, which achieved national success with the passage of the 18th Amendment by Congress in late 1917, and the ratification by three-fourths of the states in 1919. Prohibition was essentially a religious movement backed by the Methodists, Baptists, Congregationalists, Scandinavian Lutherans and other evangelical churches. Activists were mobilized by the highly effective Anti-Saloon League. Timberlake (1963) argues the dries sought to break the liquor trust, weaken the saloon base of big-city machines, enhance industrial efficiency, and reduce the level of wife beating, child abuse, and poverty caused by alcoholism.

Agitation for prohibition began during the Second Great Awakening in the 1840s when crusades against drinking originated from evangelical Protestants. Evangelicals precipitated the second wave of prohibition legislation during the 1880s, which had as its aim local and state prohibition. During the 1880s, referendums were held at the state level to enact prohibition amendments. Two important groups were formed during this period. The Woman's Christian Temperance Union (WCTU) was formed in 1874. The Anti-Saloon League which began in Ohio was formed in 1893, uniting activists from different religious groups. The league, rooted in Protestant churches, envisioned nationwide prohibition. Rather than condemn all drinking, the group focused attention on the saloon which was considered the ultimate symbol of public vice. The league also concentrated on campaigns for the right of individual communities to choose whether to close their saloons. In 1907, Georgia and Alabama were the first states to go dry followed by Oklahoma, Mississippi, North Carolina, and Tennessee in the following years. In 1913, Congress passed the Webb-Kenyon Act, which forbade the transport of liquor into dry states.

By 1917, two thirds of the states had some form of prohibition laws and roughly three quarters of the population lived in dry areas. In 1913, the Anti-Saloon League first publicly appealed for a prohibition amendment. They preferred a constitutional amendment over a federal statute because although harder to achieve, they felt it would be harder to change. As the United States entered World War I, the Conscription Act banned the sale of liquor near military bases. In August 1917, the Lever Food and Fuel Control Act banned production of distilled spirits for the duration of the war. The War Prohibition Act, November, 1918, forbade the manufacture and sale of intoxicating beverages (more than 2.75% alcohol content) until the end of demobilization.

The drys worked energetically to secure two-third majority of both houses of Congress and the support of three quarters of the states needed for an amendment to the federal constitution. Thirty-six states were needed, and organizations were set up at all 48 states to seek ratification. In late 1917, Congress passed the Eighteenth Amendment; it was ratified in 1919 and took effect in January 1920. It prohibited the manufacturing, sale or transport of intoxicating beverages within the United States, as well as import and export. The Volstead Act, 1919, defined intoxicating as having alcohol content greater than 0.5% and established the procedures for federal enforcement of the Act. The states were at liberty to enforce prohibition or not, and most did not try.

Consumer demand, however, led to a variety of illegal sources for alcohol, especially illegal distilleries and smuggling from Canada and other countries. It is difficult to determine the level of compliance, and although the media at the time portrayed the law as highly ineffective, even if it did not eradicate the use of alcohol, it certainly decreased alcohol consumption during the period. The Eighteenth Amendment was repealed in 1933, with the passage of the Twenty-First Amendment, thanks to a well-organized repeal campaign led by Catholics (who stressed personal liberty) and businessmen (who stressed the lost tax revenue).

The Progressives sought to reform and modernize schools at the local level. The era was notable for a dramatic expansion in the number of schools and students attending them, especially in the fast-growing metropolitan cities. By 1940, 50% of young adults had earned a high school diploma. The result was the rapid growth of the educated middle class, who typically were the grass roots supporters of Progressive measures. During the Progressive Era, many states began passing compulsory schooling laws. An emphasis on hygiene and health was made in education, with physical and health education becoming more important and widespread.

A new field of study, the art and science of homemaking, emerged in the Progressive Era in an effort to feminize women's education in the United States. Alternatively called home arts, or home economics, the major curriculum reform in women's education was influenced by the publication of "Treatise on Domestic Economy", written by Catherine Beecher in 1843. Advocates of home economics argued that homemaking, as a profession, required education and training for the development of an efficient and systematic domestic practice. The curriculum aimed to cover a variety of topics, including teaching standardized way of gardening, child-rearing, cooking, cleaning, performing household maintenance, and doctoring. Such scientific management applied to the domestic sphere was presented as a solution to the dilemma middle class women faced in terms of searching for meaning and fulfillment in their role of housekeeping. The feminist perspective, by pushing for this type of education, intended to explain that women had separate but equally important responsibilities in life with men that required proper training.

There was a concern towards working-class children being taken out of school to be put straight to work. Progressives around the country put up campaigns to push for an improvement in public education and to make education mandatory. It was further pushed in the South, where education was very much behind compared to the rest of the country. The Southern Education Board came together to publicize the importance of reform. However, many rejected the reform. Farmers and workers relied heavily on their eldest children, their first born, to work and help the family's income. Immigrants were not for reform either, fearing that such a thing would Americanize their children.
Despite those fighting against reform, there was a positive outcome to the fight for reform. Enrollment for children (age 5 to 19) in school rose from 50.5 percent to 59.2 between 1900 and 1909. Enrollment in public secondary school went from 519,000 to 841,000. School funds and the term of public schools also grew.

The "Flexner Report" of 1910, sponsored by the Carnegie Foundation, professionalized American medicine by discarding the scores of local small medical schools and focusing national funds, resources, and prestige on larger, professionalized medical schools associated with universities. Prominent leaders included the Mayo Brothers whose Mayo Clinic in Rochester, Minnesota, became world-famous for innovative surgery.

In the legal profession, the American Bar Association set up in 1900 the Association of American Law Schools (AALS). It established national standards for law schools, which led to the replacement of the old system of young men studying law privately with established lawyers by the new system of accredited law schools associated with universities.

Progressive scholars, based at the emerging research universities such as Harvard, Columbia, Johns Hopkins, Chicago, Michigan, Wisconsin and California, worked to modernize their disciplines. The heyday of the amateur expert gave way to the research professor who published in the new scholarly journals and presses. Their explicit goal was to professionalize and make "scientific" the social sciences, especially history, economics, and political science. Professionalization meant creating new career tracks in the universities, with hiring and promotion dependent on meeting international models of scholarship.

The Progressive Era was one of general prosperity after the Panic of 1893—a severe depression—ended in 1897. The Panic of 1907 was short and mostly affected financiers. However, Campbell (2005) stresses the weak points of the economy in 1907–1914, linking them to public demands for more Progressive interventions. The Panic of 1907 was followed by a small decline in real wages and increased unemployment, with both trends continuing until World War I. Campbell emphasizes the resulting stress on public finance and the impact on the Wilson administration's policies. The weakened economy and persistent federal deficits led to changes in fiscal policy, including the imposition of federal income taxes on businesses and individuals and the creation of the Federal Reserve System. Government agencies were also transformed in an effort to improve administrative efficiency.

In the Gilded Age (late 19th century) the parties were reluctant to involve the federal government too heavily in the private sector, except in the area of railroads and tariffs. In general, they accepted the concept of laissez-faire, a doctrine opposing government interference in the economy except to maintain law and order. This attitude started to change during the depression of the 1890s when small business, farm, and labor movements began asking the government to intercede on their behalf.

By the start of the 20th century, a middle class had developed that was leery of both the business elite and the radical political movements of farmers and laborers in the Midwest and West. The Progressives argued the need for government regulation of business practices to ensure competition and free enterprise. Congress enacted a law regulating railroads in 1887 (the Interstate Commerce Act), and one preventing large firms from controlling a single industry in 1890 (the Sherman Antitrust Act). These laws were not rigorously enforced, however, until the years between 1900 and 1920, when Republican President Theodore Roosevelt (1901–1909), Democratic President Woodrow Wilson (1913–1921), and others sympathetic to the views of the Progressives came to power. Many of today's U.S. regulatory agencies were created during these years, including the Interstate Commerce Commission and the Federal Trade Commission. Muckrakers were journalists who encouraged readers to demand more regulation of business. Upton Sinclair's "The Jungle" (1906) was influential and persuaded America about the supposed horrors of the Chicago Union Stock Yards, a giant complex of meat processing plants that developed in the 1870s. The federal government responded to Sinclair's book and The Neill-Reynolds Report with the new regulatory Food and Drug Administration. Ida M. Tarbell wrote a series of articles against Standard Oil, which was perceived to be a monopoly. This affected both the government and the public reformers. Attacks by Tarbell and others helped pave the way for public acceptance of the breakup of the company by the Supreme Court in 1911.

When Democrat Woodrow Wilson was elected President with a Democratic Congress in 1912 he implemented a series of Progressive policies in economics. In 1913, the Sixteenth Amendment was ratified, and a small income tax was imposed on higher incomes. The Democrats lowered tariffs with the Underwood Tariff in 1913, though its effects were overwhelmed by the changes in trade caused by the World War that broke out in 1914. Wilson proved especially effective in mobilizing public opinion behind tariff changes by denouncing corporate lobbyists, addressing Congress in person in highly dramatic fashion, and staging an elaborate ceremony when he signed the bill into law. Wilson helped end the long battles over the trusts with the Clayton Antitrust Act of 1914. He managed to convince lawmakers on the issues of money and banking by the creation in 1913 of the Federal Reserve System, a complex business-government partnership that to this day dominates the financial world.

In 1913, Henry Ford dramatically increased the efficiency of his factories by large-scale use of the moving assembly line, with each worker doing one simple task in the production of automobiles. Emphasizing efficiency, Ford more than doubled wages (and cut hours from 9 a day to 8), attracting the best workers and sharply reducing labor turnover and absenteeism. His employees could and did buy his cars, and by cutting prices over and over he made the Model T cheap enough for millions of people to buy in the U.S. and in every major country. Ford's profits soared and his company dominated the world's automobile industry. Henry Ford became the world-famous prophet of high wages and high profits.

Labor unions, especially the American Federation of Labor (AFL), grew rapidly in the early 20th century, and had a Progressive agenda as well. After experimenting in the early 20th century with cooperation with business in the National Civic Federation, the AFL turned after 1906 to a working political alliance with the Democratic party. The alliance was especially important in the larger industrial cities. The unions wanted restrictions on judges who intervened in labor disputes, usually on the side of the employer. They finally achieved that goal with the Norris–La Guardia Act of 1932.

By the turn of the century, more and more small businesses were getting fed up with the way that they were treated compared to the bigger businesses. It seemed that the "Upper Ten" were turning a blind-eye to the smaller businesses, cutting corners where ever they could to make more profit. The big businesses would soon find out that the smaller businesses were starting to gain ground over them, so they became unsettled as described; "Constant pressure from the public, labor organizations, small business interests, and federal and state governments forced the corporate giants to engage in a balancing act." Now that all of these new regulations and standards were being enacted, the big business would now have to stoop to everyones level, including the small businesses. The big businesses would soon find out that in order to succeed they would have to band together with the smaller businesses to be successful, kind of a "Yin and Yang" effect.

The influx of immigration grew steadily after 1896, with most new arrivals being unskilled workers from southern and eastern Europe. These immigrants were able to find work in the steel mills, slaughterhouses, fishing industry, and construction crews of the emergent mill towns and industrial cities mostly in the Northeast, Midwest, and West Coast. The outbreak of World War I in 1914 halted most transcontinental immigration, only after 1919 did the flow of immigrants resume. Starting in the 1880s, the labor unions aggressively promoted restrictions on immigration, especially restrictions on Chinese, Japanese and Korean immigrants. In combination with the racist attitudes of the time, there was a fear that large numbers of unskilled, low-paid workers would defeat the union's efforts to raise wages through collective bargaining. In addition, rural Protestants distrusted the urban Catholics and Jews who comprised most of the Southern and Eastern European immigrants, and on those grounds opposed immigration. On the other hand, the rapid growth of the industry called for a greater and expanding labor pool that could not be met by natural birth rates. As a result, many large corporations were opposed to immigration restrictions. By the early 1920s, a consensus had been reached that the total influx of immigration had to be restricted, and a series of laws in the 1920s accomplished that purpose. A handful of eugenics advocates were also involved in immigration restriction for their own pseudo-scientific reasons. Immigration restriction continued to be a national policy until after World War II.

During World War I, the Progressives strongly promoted Americanization programs, designed to modernize the recent immigrants and turn them into model American citizens, while diminishing loyalties to the old country. These programs often operated through the public school system, which expanded dramatically.

Foreign policy in the progressive era was often marked by a hint of moral supremacy, with assessments of Woodrow Wilson and William Jennings Bryan believing themselves to be 'Missionaries of Democracy' being accurate, with them believing that they were "Inspired by the confidence that they knew better how to promote the peace and well-being of other countries than did the leaders of those countries themselves." Similar ideas and language had already been used previously in the Monroe Doctrine, wherein Roosevelt claimed that the United States could serve as the police of the world, using its power to end unrest and wrongdoing on the western hemisphere. Using this moralistic approach, Roosevelt argued for intervention with Cuba to help it to become a "just and stable civilization", by way of the Platt amendment. Wilson used a similar moralistic tone when dealing with Mexico. In 1913, while revolutionaries took control of the government, Wilson judged them to be immoral, and refused to acknowledge the in-place government on that reason alone.

Although the Progressive Era was characterized by public support for World War I under Woodrow Wilson, there was also a substantial opposition to World War I.

In the 1940s typically historians saw the Progressive Era as a prelude to the New Deal and dated it from 1901 (when Roosevelt became president) to the start of World War I in 1914 or 1917. Historians have moved back in time emphasizing the Progressive reformers at the municipal and state levels in the 1890s.

Much less settled is the question of when the era ended. Some historians who emphasize civil liberties decry their suppression during World War I and do not consider the war as rooted in Progressive policy. A strong anti-war movement headed by noted Progressives including Jane Addams, was suppressed after Wilson's 1916 re-election, a victory largely enabled by his campaign slogan, "He kept us out of the war." The slogan was no longer accurate by April 6 of the following year, when Wilson surprised much of the Progressive base that twice elected him and asked a joint session of Congress to declare war on Germany. The Senate voted 82–6 in favor; the House agreed, 373–50. Some historians see the so-called "war to end all wars" as a globalized expression of the American Progressive movement, with Wilson's support for a League of Nations as its climax.

The politics of the 1920s was unfriendly toward the labor unions and liberal crusaders against business, so many if not most historians who emphasize those themes write off the decade. Urban cosmopolitan scholars recoiled at the moralism of prohibition, the intolerance of the nativists and the KKK, and on those grounds denounced the era. Richard Hofstadter, for example, in 1955 wrote that prohibition, "was a pseudo-reform, a pinched, parochial substitute for reform" that "was carried about America by the rural-evangelical virus". However, as Arthur S. Link emphasized, the Progressives did not simply roll over and play dead. Link's argument for continuity through the twenties stimulated a historiography that found Progressivism to be a potent force. Palmer, pointing to leaders like George Norris, says, "It is worth noting that progressivism, whilst temporarily losing the political initiative, remained popular in many western states and made its presence felt in Washington during both the Harding and Coolidge presidencies." Gerster and Cords argue that, "Since progressivism was a'spirit' or an 'enthusiasm' rather than an easily definable force with common goals, it seems more accurate to argue that it produced a climate for reform which lasted well into the 1920s, if not beyond." Some social historians have posited that the KKK may in fact fit into the Progressive agenda, if Klansmen are portrayed as "ordinary white Protestants" primarily interested in purification of the system, which had long been a core Progressive goal. This however ignores the violence and racism central to Klan ideology and activities, that had nothing to do with improving society, so much as enforcing racial hierarchies.

While some Progressive leaders became reactionaries, that usually happened in the 1930s, not in the 1920s, as exemplified by William Randolph Hearst, Herbert Hoover, Al Smith and Henry Ford.

Following the period rapid social change saw a worker's uprising turn to a full scale revolution in Russia in 1917 taken over by Bolsheviks along anarchist bombings of 1919 by foreigners encroached a large fear over many citizens of a possible Bolshevism revolt to overthrow values which the United States holds up to mainly capitalism. It saw persecutions of many ideals of the progressive era seeing raids, arrests, and persecutions taken place. Such as the period saw supporters such as worker unions, socialist, and others faced similar prosecutions. Along these convicted were foreigners, African Americans, Jews, Catholics, etc. The US government was also affected both legally and internally as of January 1920 saw 6,000 arrests of persecutions along changes in government policies where the government in acted censorship in the media and suppressing opinion on the matter going as far to use physical assaults or legal arrests having certain civil liberties stripped.

What historians have identified as "business progressivism", with its emphasis on efficiency and typified by Henry Ford and Herbert Hoover reached an apogee in the 1920s. Wik, for example, argues that Ford's "views on technology and the mechanization of rural America were generally enlightened, progressive, and often far ahead of his times."

Tindall stresses the continuing importance of the Progressive movement in the South in the 1920s involving increased democracy, efficient government, corporate regulation, social justice, and governmental public service. William Link finds political Progressivism dominant in most of the South in the 1920s. Likewise it was influential in the Midwest.

Historians of women and of youth emphasize the strength of the Progressive impulse in the 1920s. Women consolidated their gains after the success of the suffrage movement, and moved into causes such as world peace, good government, maternal care (the Sheppard–Towner Act of 1921), and local support for education and public health. The work was not nearly as dramatic as the suffrage crusade, but women voted and operated quietly and effectively. Paul Fass, speaking of youth, says "Progressivism as an angle of vision, as an optimistic approach to social problems, was very much alive." International influences that sparked many reform ideas likewise continued into the 1920s, as American ideas of modernity began to influence Europe.

By 1930 a block of progressive Republicans in the Senate who were urging Hoover to take more vigorous action to fight the depression. There were about a dozen members of this group, including William Borah of Idaho, George W. Norris of Nebraska, Robert M. La Follette Jr., of Wisconsin, Gerald Nye of North Dakota, Hiram Johnson of California and Bronson M. Cutting of New Mexico. While these western Republicans could stir up issues, they could rarely forge a majority, since they were too individualistic and did not form a unified caucus. Hoover himself had sharply moved to the right, and paid little attention to their liberal ideas. By 1932 this group was moving toward support for Roosevelt's New Deal. They remain staunch isolationists deeply opposed to any involvement in Europe. Outside the Senate, however, a strong majority of the surviving Progressives from the 1910s had become conservative opponents of New Deal economic planning.

The United States Constitution provides that Congress "shall have the power to lay and collect Taxes, Duties, Imposts, and Excises... but all Duties, Imposts, and Excises shall be uniform throughout the United States." Prior to amendment, it provided that "No Capitation, or other direct, Tax shall be Laid unless in proportion to the Census..." The 16th Amendment provided that "Congress shall have the 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." The 10th Amendment provided that "powers not delegated to the United States by this Constitution, nor prohibited to the States, are reserved to the States respectively, or to the people."

Taxation in the United States

The United States of America has separate federal, state, and local governments with taxes imposed at each of these levels. Taxes are levied on income, payroll, property, sales, capital gains, dividends, imports, estates and gifts, as well as various fees. In 2010, taxes collected by federal, state, and municipal governments amounted to 24.8% of GDP. In the OECD, only Chile and Mexico are taxed less as a share of their GDP.

However, taxes fall much more heavily on labor income than on capital income. Divergent taxes and subsidies for different forms of income and spending can also constitute a form of indirect taxation of some activities over others. For example, individual spending on higher education can be said to be "taxed" at a high rate, compared to other forms of personal expenditure which are formally recognized as investments.

Taxes are imposed on net income of individuals and corporations by the federal, most state, and some local governments. Citizens and residents are taxed on worldwide income and allowed a credit for foreign taxes. Income subject to tax is determined under tax accounting rules, not financial accounting principles, and includes almost all income from whatever source. Most business expenses reduce taxable income, though limits apply to a few expenses. Individuals are permitted to reduce taxable income by personal allowances and certain non-business expenses, including home mortgage interest, state and local taxes, charitable contributions, and medical and certain other expenses incurred above certain percentages of income. State rules for determining taxable income often differ from federal rules. Federal marginal tax rates vary from 10% to 39.6% of taxable income. State and local tax rates vary widely by jurisdiction, from 0% to 13.30% of income, and many are graduated. State taxes are generally treated as a deductible expense for federal tax computation, although the 2017 tax law imposed a $10,000 limit on the state and local tax ("SALT") deduction, which raised the effective tax rate on medium and high earners in high tax states. Prior to the SALT deduction limit, the average deduction exceeded $10,000 in most of the Midwest, and exceeded $11,000 in most of the Northeastern United States, as well as California and Oregon. The states impacted the most by the limit were the tri-state area (NY, NJ, and CT) and California; the average SALT deduction in those states was greater than $17,000 in 2014.

The United States is one of two countries in the world that taxes its non-resident citizens on worldwide income, in the same manner and rates as residents; the other is Eritrea. The U.S. Supreme Court upheld the constitutionality of imposition of such a tax in the case of "Cook v. Tait".

Payroll taxes are imposed by the federal and all state governments. These include Social Security and Medicare taxes imposed on both employers and employees, at a combined rate of 15.3% (13.3% for 2011 and 2012). Social Security tax applies only to the first $106,800 of wages in 2009 through 2011. However, benefits are only accrued on the first $106,800 of wages. Employers must withhold income taxes on wages. An unemployment tax and certain other levies apply to employers. Payroll taxes have dramatically increased as a share of federal revenue since the 1950s, while corporate income taxes have fallen as a share of revenue. (Corporate profits have not fallen as a share of GDP).

Property taxes are imposed by most local governments and many special purpose authorities based on the fair market value of property. School and other authorities are often separately governed, and impose separate taxes. Property tax is generally imposed only on realty, though some jurisdictions tax some forms of business property. Property tax rules and rates vary widely with annual median rates ranging from 0.2% to 1.9% of a property's value depending on the state.

Sales taxes are imposed by most states and some localities on the price at retail sale of many goods and some services. Sales tax rates vary widely among jurisdictions, from 0% to 16%, and may vary within a jurisdiction based on the particular goods or services taxed. Sales tax is collected by the seller at the time of sale, or remitted as use tax by buyers of taxable items who did not pay sales tax.

The United States imposes tariffs or customs duties on the import of many types of goods from many jurisdictions. These tariffs or duties must be paid before the goods can be legally imported. Rates of duty vary from 0% to more than 20%, based on the particular goods and country of origin.

Estate and gift taxes are imposed by the federal and some state governments on the transfer of property inheritance, by will, or by lifetime donation. Similar to federal income taxes, federal estate and gift taxes are imposed on worldwide property of citizens and residents and allow a credit for foreign taxes.

The U.S. has an assortment of federal, state, local, and special-purpose governmental jurisdictions. Each imposes taxes to fully or partly fund its operations. These taxes may be imposed on the same income, property or activity, often without offset of one tax against another. The types of tax imposed at each level of government vary, in part due to constitutional restrictions. Income taxes are imposed at the federal and most state levels. Taxes on property are typically imposed only at the local level, although there may be multiple local jurisdictions that tax the same property. Other excise taxes are imposed by the federal and some state governments. Sales taxes are imposed by most states and many local governments. Customs duties or tariffs are only imposed by the federal government. A wide variety of user fees or license fees are also imposed.

A federal wealth tax would be required by the U.S. Constitution to be distributed to the States according to their populations, as this type of tax is considered a direct tax. State and local government property taxes are wealth taxes on real estate.

Taxes may be imposed on individuals (natural persons), business entities, estates, trusts, or other forms of organization. Taxes may be based on property, income, transactions, transfers, importations of goods, business activities, or a variety of factors, and are generally imposed on the type of taxpayer for whom such tax base is relevant. Thus, property taxes tend to be imposed on property owners. In addition, certain taxes, particularly income taxes, may be imposed on the members of organizations for the organization's activities. Therefore, partners are taxed on the income of their partnership.

With fewer exceptions, one level of government does not impose tax on another level of government or its instrumentalities.

Taxes based on income are imposed at the federal, most state, and some local levels within the United States. The tax systems within each jurisdiction may define taxable income separately. Many states refer to some extent to federal concepts for determining taxable income.

The first Income tax in the United States was implemented with the Revenue Act of 1861 by Abraham Lincoln during the Civil War. In 1895 the Supreme Court ruled that the U.S. federal income tax on interest income, dividend income and rental income was unconstitutional in Pollock v. Farmers' Loan & Trust Co., because it was a direct tax. The "Pollock" decision was overruled by the ratification of the Sixteenth Amendment to the United States Constitution in 1913, and by subsequent U.S. Supreme Court decisions including "Graves v. New York ex rel. O'Keefe," "South Carolina v. Baker," and "Brushaber v. Union Pacific Railroad Co."

The U.S. income tax system imposes a tax based on income on individuals, corporations, estates, and trusts. The tax is taxable income, as defined, times a specified tax rate. This tax may be reduced by credits, some of which may be refunded if they exceed the tax calculated. Taxable income may differ from income for other purposes (such as for financial reporting). The definition of taxable income for federal purposes is used by many, but far from all states. Income and deductions are recognized under tax rules, and there are variations within the rules among the states. Book and tax income may differ. Income is divided into "capital gains", which are taxed at a lower rate and only when the taxpayer chooses to "realize" them, and "ordinary income", which is taxed at higher rates and on an annual basis. Because of this distinction, capital is taxed much more lightly than labor.

Under the U.S. system, individuals, corporations, estates, and trusts are subject to income tax. Partnerships are not taxed; rather, their partners are subject to income tax on their shares of income and deductions, and take their shares of credits. Some types of business entities may elect to be treated as corporations or as partnerships.
Taxpayers are required to file tax returns and self assess tax. Tax may be withheld from payments of income ("e.g.", withholding of tax from wages). To the extent taxes are not covered by withholdings, taxpayers must make estimated tax payments, generally quarterly. Tax returns are subject to review and adjustment by taxing authorities, though far fewer than all returns are reviewed.

Taxable income is gross income less exemptions, deductions, and personal exemptions. Gross income includes "all income from whatever source". Certain income, however, is subject to tax exemption at the federal or state levels. This income is reduced by tax deductions including most business and some nonbusiness expenses. Individuals are also allowed a deduction for personal exemptions, a fixed dollar allowance. The allowance of some nonbusiness deductions is phased out at higher income levels.

The U.S. federal and most state income tax systems tax the worldwide income of citizens and residents. A federal foreign tax credit is granted for foreign income taxes. Individuals residing abroad may also claim the foreign earned income exclusion. Individuals may be a citizen or resident of the United States but not a resident of a state. Many states grant a similar credit for taxes paid to other states. These credits are generally limited to the amount of tax on income from foreign (or other state) sources.

Federal and state income tax is calculated, and returns filed, for each taxpayer. Two married individuals may calculate tax and file returns jointly or separately. In addition, unmarried individuals supporting children or certain other relatives may file a return as a head of household. Parent-subsidiary groups of companies may elect to file a consolidated return.

Income tax rates differ at the federal and state levels for corporations and individuals. Federal and many state income tax rates are higher (graduated) at higher levels of income. The income level at which various tax rates apply for individuals varies by filing status. The income level at which each rate starts generally is higher ("i.e.", tax is lower) for married couples filing a joint return or single individuals filing as head of household.

Individuals are subject to federal graduated tax rates from 10% to 39.6%. Corporations are subject to federal graduated rates of tax from 15% to 35%; a rate of 34% applies to income from $335,000 to $15,000,000. State income tax rates vary from 1% to 16%, including local income tax where applicable. State and local taxes are generally deductible in computing federal taxable income. Federal and many state individual income tax rate schedules differ based on the individual's filing status.

Taxable income is gross income less adjustments and allowable tax deductions. Gross income for federal and most states is receipts and gains from all sources less cost of goods sold. Gross income includes "all income from whatever source", and is not limited to cash received. Income from illegal activities is taxable and must be reported to the IRS.

The amount of income recognized is generally the value received or which the taxpayer has a right to receive. Certain types of income are specifically excluded from gross income. The time at which gross income becomes taxable is determined under federal tax rules. This may differ in some cases from accounting rules.

Certain types of income are excluded from gross income (and therefore subject to tax exemption). The exclusions differ at federal and state levels. For federal income tax, interest income on state and local bonds is exempt, while few states exempt any interest income except from municipalities within that state. In addition, certain types of receipts, such as gifts and inheritances, and certain types of benefits, such as employer-provided health insurance, are excluded from income.

Foreign non-resident persons are taxed only on income from U.S. sources or from a U.S. business. Tax on foreign non-resident persons on non-business income is at 30% of the gross income, but reduced under many tax treaties.
These brackets are the taxable income plus the standard deduction for a joint return. That deduction is the first bracket. For example, a couple earning $88,600 by September owes $10,453; $1,865 for 10% of the income from $12,700 to $31,500, plus $8,588 for 15% of the income from $31,500 to $88,600. Now, for every $100 they earn, $25 is taxed until they reach the next bracket.

After making $400 more; going down to the 89,000 row the tax is $100 more. The next column is the tax divided by 89,000. The new law is the next column. This tax equals 10% of their income from $24,000 to $43,050 plus 12% from $43,050 to $89,000. The singles' sets of markers can be set up quickly. The brackets with its tax are cut in half.

Itemizers can figure the tax without moving the scale by taking the difference off the top. The couple above, having receipts for $22,700 in deductions, means that the last $10,000 of their income is tax free. After seven years the papers can be destroyed; if unchallenged.

Source and Method

The U.S. system allows reduction of taxable income for both business and some nonbusiness expenditures, called deductions. Businesses selling goods reduce gross income directly by the cost of goods sold. In addition, businesses may deduct most types of expenses incurred in the business. Some of these deductions are subject to limitations. For example, only 50% of the amount incurred for any meals or entertainment may be deducted. The amount and timing of deductions for business expenses is determined under the taxpayer's tax accounting method, which may differ from methods used in accounting records.

Some types of business expenses are deductible over a period of years rather than when incurred. These include the cost of long lived assets such as buildings and equipment. The cost of such assets is recovered through deductions for depreciation or amortization.

In addition to business expenses, individuals may reduce income by an allowance for personal exemptions and either a fixed standard deduction or itemized deductions. One personal exemption is allowed per taxpayer, and additional such deductions are allowed for each child or certain other individuals supported by the taxpayer. The standard deduction amount varies by taxpayer filing status. Itemized deductions by individuals include home mortgage interest, property taxes, certain other taxes, contributions to recognized charities, medical expenses in excess of 7.5% of adjusted gross income, and certain other amounts.

Personal exemptions, the standard deduction, and itemized deductions are limited (phased out) above certain income levels.

Corporations must pay tax on their taxable income independently of their shareholders. Shareholders are also subject to tax on dividends received from corporations. By contrast, partnerships are not subject to income tax, but their partners calculate their taxes by including their shares of partnership items. Corporations owned entirely by U.S. citizens or residents (S corporations) may elect to be treated similarly to partnerships. A limited liability company and certain other business entities may elect to be treated as corporations or as partnerships. States generally follow such characterization. Many states also allow corporations to elect S corporation status. Charitable organizations are subject to tax on business income.

Certain transactions of business entities are not subject to tax. These include many types of formation or reorganization.

A wide variety of tax credits may reduce income tax at the federal and state levels. Some credits are available only to individuals, such as the child tax credit for each dependent child, American Opportunity Tax Credit for education expenses, or the Earned Income Tax Credit for low income wage earners. Some credits, such as the Work Opportunity Tax Credit, are available to businesses, including various special industry incentives. A few credits, such as the foreign tax credit, are available to all types of taxpayers.

The United States federal and state income tax systems are self-assessment systems. Taxpayers must declare and pay tax without assessment by the taxing authority. Quarterly payments of tax estimated to be due are required to the extent taxes are not paid through withholdings. Employers must withhold income tax, as well as Social Security and Medicare taxes, from wages. Amounts to be withheld are computed by employers based on representations of tax status by employees on Form W-4, with limited government review.

Forty-three states and many localities in the U.S. impose an income tax on individuals. Forty-seven states and many localities impose a tax on the income of corporations. Tax rates vary by state and locality, and may be fixed or graduated. Most rates are the same for all types of income. State and local income taxes are imposed in addition to federal income tax. State income tax is allowed as a deduction in computing federal income, but is capped at $10,000 per household since the passage of the 2017 tax law. Prior to the change, the average deduction exceeded $10,000 in most of the Midwest, most of the Northeast, as well as California and Oregon.

State and local taxable income is determined under state law, and often is based on federal taxable income. Most states conform to many federal concepts and definitions, including defining income and business deductions and timing thereof. State rules vary widely regarding to individual itemized deductions. Most states do not allow a deduction for state income taxes for individuals or corporations, and impose tax on certain types of income exempt at the federal level.

Some states have alternative measures of taxable income, or alternative taxes, especially for corporations.

States imposing an income tax generally tax all income of corporations organized in the state and individuals residing in the state. Taxpayers from another state are subject to tax only on income earned in the state or apportioned to the state. Businesses are subject to income tax in a state only if they have sufficient nexus in (connection to) the state.

Foreign individuals and corporations not resident in the United States are subject to federal income tax only on income from a U.S. business and certain types of income from U.S. sources. States tax individuals resident outside the state and corporations organized outside the state only on wages or business income within the state. Payers of some types of income to non-residents must withhold federal or state income tax on the payment. Federal withholding of 30% on such income may be reduced under a tax treaty. Such treaties do not apply to state taxes.

An alternative minimum tax (AMT) is imposed at the federal level on a somewhat modified version of taxable income. The tax applies to individuals and corporations. The tax base is adjusted gross income reduced by a fixed deduction that varies by taxpayer filing status. Itemized deductions of individuals are limited to home mortgage interest, charitable contributions, and a portion of medical expenses. AMT is imposed at a rate of 26% or 28% for individuals and 20% for corporations, less the amount of regular tax. A credit against future regular income tax is allowed for such excess, with certain restrictions.

Many states impose minimum income taxes on corporations or a tax computed on an alternative tax base. These include taxes based on capital of corporations and alternative measures of income for individuals. Details vary widely by state.

In the United States, taxable income is computed under rules that differ materially from U.S. generally accepted accounting principles. Since only publicly traded companies are required to prepare financial statements, many non-public companies opt to keep their financial records under tax rules. Corporations that present financial statements using other than tax rules must include a detailed reconciliation of their financial statement income to their taxable income as part of their tax returns. Key areas of difference include depreciation and amortization, timing of recognition of income or deductions, assumptions for cost of goods sold, and certain items (such as meals and entertainment) the tax deduction for which is limited.

Income taxes in the United States are self-assessed by taxpayers by filing required tax returns. Taxpayers, as well as certain non-tax-paying entities, like partnerships, must file annual tax returns at the federal and applicable state levels. These returns disclose a complete computation of taxable income under tax principles. Taxpayers compute all income, deductions, and credits themselves, and determine the amount of tax due after applying required prepayments and taxes withheld. Federal and state tax authorities provide preprinted forms that must be used to file tax returns. IRS Form 1040 series is required for individuals, Form 1120 series for corporations, Form 1065 for partnerships, and Form 990 series for tax exempt organizations.

The state forms vary widely, and rarely correspond to federal forms. Tax returns vary from the two-page (Form 1040EZ) used by nearly 70% of individual filers to thousands of pages of forms and attachments for large entities. Groups of corporations may elect to file consolidated returns at the federal level and with a few states. Electronic filing of federal and many state returns is widely encouraged and in some cases required, and many vendors offer computer software for use by taxpayers and paid return preparers to prepare and electronically file returns.

Individuals and corporations pay U.S. federal income tax on the net total of all their capital gains. The tax rate depends on both the investor's tax bracket and the amount of time the investment was held. Short-term capital gains are taxed at the investor's ordinary income tax rate and are defined as investments held for a year or less before being sold. Long-term capital gains, on dispositions of assets held for more than one year, are taxed at a lower rate.

In the United States, payroll taxes are assessed by the federal government, many states, the District of Columbia, and numerous cities. These taxes are imposed on employers and employees and on various compensation bases. They are collected and paid to the taxing jurisdiction by the employers. Most jurisdictions imposing payroll taxes require reporting quarterly and annually in most cases, and electronic reporting is generally required for all but small employers. Because payroll taxes are imposed only on wages and not on income from investments, taxes on labor income are much heavier than taxes on income from capital.

Federal, state, and local withholding taxes are required in those jurisdictions imposing an income tax. Employers having contact with the jurisdiction must withhold the tax from wages paid to their employees in those jurisdictions. Computation of the amount of tax to withhold is performed by the employer based on representations by the employee regarding his/her tax status on IRS Form W-4. Amounts of income tax so withheld must be paid to the taxing jurisdiction, and are available as refundable tax credits to the employees. Income taxes withheld from payroll are not final taxes, merely prepayments. Employees must still file income tax returns and self assess tax, claiming amounts withheld as payments.

Federal social insurance taxes are imposed equally on employers and employees, consisting of a tax of 6.2% of wages up to an annual wage maximum ($118,500 in 2015) for Social Security plus a tax of 1.45% of total wages for Medicare. For 2011, the employee's contribution was reduced to 4.2%, while the employer's portion remained at 6.2%. To the extent an employee's portion of the 6.2% tax exceeds the maximum by reason of multiple employers (each of whom will collect up to the annual wage maximum), the employee is entitled to a refundable tax credit upon filing an income tax return for the year.
Employers are subject to unemployment taxes by the federal and all state governments. The tax is a percentage of taxable wages with a cap. The tax rate and cap vary by jurisdiction and by employer's industry and experience rating. For 2009, the typical maximum tax per employee was under $1,000. Some states also impose unemployment, disability insurance, or similar taxes on employees.

Employers must report payroll taxes to the appropriate taxing jurisdiction in the manner each jurisdiction provides. Quarterly reporting of aggregate income tax withholding and Social Security taxes is required in most jurisdictions. Employers must file reports of aggregate unemployment tax quarterly and annually with each applicable state, and annually at the federal level.

Each employer is required to provide each employee an annual report on IRS Form W-2 of wages paid and federal, state and local taxes withheld, with a copy sent to the IRS and the taxation authority of the state. These are due by January 31 and February 28 (March 31 if filed electronically), respectively, following the calendar year in which wages are paid. The Form W-2 constitutes proof of payment of tax for the employee.

Employers are required to pay payroll taxes to the taxing jurisdiction under varying rules, in many cases within 1 banking day. Payment of federal and many state payroll taxes is required to be made by electronic funds transfer if certain dollar thresholds are met, or by deposit with a bank for the benefit of the taxing jurisdiction.

Failure to timely and properly pay federal payroll taxes results in an automatic penalty of 2% to 10%. Similar state and local penalties apply. Failure to properly file monthly or quarterly returns may result in additional penalties. Failure to file Forms W-2 results in an automatic penalty of up to $50 per form not timely filed. State and local penalties vary by jurisdiction.

A particularly severe penalty applies where federal income tax withholding and Social Security taxes are not paid to the IRS. The penalty of up to 100% of the amount not paid can be assessed against the employer entity as well as any person (such as a corporate officer) having control or custody of the funds from which payment should have been made.

There is no federal sales or use tax in the United States. All but five states impose sales and use taxes on retail sale, lease and rental of many goods, as well as some services. Many cities, counties, transit authorities and special purpose districts impose an additional local sales or use tax. Sales and use tax is calculated as the purchase price times the appropriate tax rate. Tax rates vary widely by jurisdiction from less than 1% to over 10%. Sales tax is collected by the seller at the time of sale. Use tax is self assessed by a buyer who has not paid sales tax on a taxable purchase.

Unlike value added tax, sales tax is imposed only once, at the retail level, on any particular goods. Nearly all jurisdictions provide numerous categories of goods and services that are exempt from sales tax, or taxed at a reduced rate. Purchase of goods for further manufacture or for resale is uniformly exempt from sales tax. Most jurisdictions exempt food sold in grocery stores, prescription medications, and many agricultural supplies. Generally cash discounts, including coupons, are not included in the price used in computing tax.

Sales taxes, including those imposed by local governments, are generally administered at the state level. States imposing sales tax require retail sellers to register with the state, collect tax from customers, file returns, and remit the tax to the state. Procedural rules vary widely. Sellers generally must collect tax from in-state purchasers unless the purchaser provides an exemption certificate. Most states allow or require electronic remittance of tax to the state. States are prohibited from requiring out of state sellers to collect tax unless the seller has some minimal connection with the state.

Excise taxes may be imposed on the sales price of goods or on a per unit or other basis, in theory to discourage consumption of the taxed goods or services. Excise tax may be required to be paid by the manufacturer at wholesale sale, or may be collected from the customer at retail sale. Excise taxes are imposed at the federal and state levels on a variety of goods, including alcohol, tobacco, tires, gasoline, diesel fuel, coal, firearms, telephone service, air transportation, unregistered bonds, and many other goods and services. Some jurisdictions require that tax stamps be affixed to goods to demonstrate payment of the tax.

Most jurisdictions below the state level in the United States impose a tax on interests in real property (land, buildings, and permanent improvements). Some jurisdictions also tax some types of business personal property. Rules vary widely by jurisdiction. Many overlapping jurisdictions (counties, cities, school districts) may have authority to tax the same property. Few states impose a tax on the value of property.

Property tax is based on fair market value of the subject property. The amount of tax is determined annually based on the market value of each property on a particular date, and most jurisdictions require redeterminations of value periodically. The tax is computed as the determined market value times an assessment ratio times the tax rate. Assessment ratios and tax rates vary widely among jurisdictions, and may vary by type of property within a jurisdiction. Where a property has recently been sold between unrelated sellers, such sale establishes fair market value. In other ("i.e.", most) cases, the value must be estimated. Common estimation techniques include comparable sales, depreciated cost, and an income approach. Property owners may also declare a value, which is subject to change by the tax assessor.

Property taxes are most commonly applied to real estate and business property. Real property generally includes all interests considered under that state's law to be ownership interests in land, buildings, and improvements. Ownership interests include ownership of title as well as certain other rights to property. Automobile and boat registration fees are a subset of this tax. Usually, other nonbusiness goods are not subject to property tax.

The assessment process varies by state, and sometimes within a state. Each taxing jurisdiction determines values of property within the jurisdiction and then determines the amount of tax to assess based on the value of the property. Tax assessors for taxing jurisdictions are generally responsible for determining property values. The determination of values and calculation of tax is generally performed by an official referred to as a tax assessor. Property owners have rights in each jurisdiction to declare or contest the value so determined. Property values generally must be coordinated among jurisdictions, and such coordination is often performed by a board of equalization.

Once value is determined, the assessor typically notifies the last known property owner of the value determination. After values are settled, property tax bills or notices are sent to property owners. Payment times and terms vary widely. If a property owner fails to pay the tax, the taxing jurisdiction has various remedies for collection, in many cases including seizure and sale of the property. Property taxes constitute a lien on the property to which transfers are also subject. Mortgage companies often collect taxes from property owners and remit them on behalf of the owner.

The United States imposes tariffs or customs duties on imports of goods. The duty is levied at the time of import and is paid by the importer of record. Customs duties vary by country of origin and product. Goods from many countries are exempt from duty under various trade agreements. Certain types of goods are exempt from duty regardless of source. Customs rules differ from other import restrictions. Failure to properly comply with customs rules can result in seizure of goods and criminal penalties against involved parties. United States Customs and Border Protection ("CBP") enforces customs rules.

Goods may be imported to the United States subject to import restrictions. Importers of goods may be subject to tax ("customs duty" or "tariff") on the imported value of the goods. "Imported goods are not legally entered until after the shipment has arrived within the port of entry, delivery of the merchandise has been authorized by CBP, and estimated duties have been paid." Importation and declaration and payment of customs duties is done by the importer of record, which may be the owner of the goods, the purchaser, or a licensed customs broker. Goods may be stored in a bonded warehouse or a Foreign-Trade Zone in the United States for up to five years without payment of duties. Goods must be declared for entry into the U.S. within 15 days of arrival or prior to leaving a bonded warehouse or foreign trade zone. Many importers participate in a voluntary self-assessment program with CBP. Special rules apply to goods imported by mail. All goods imported into the United States are subject to inspection by CBP. Some goods may be temporarily imported to the United States under a system similar to the ATA Carnet system. Examples include laptop computers used by persons traveling in the U.S. and samples used by salesmen.

Rates of tax on transaction values vary by country of origin. Goods must be individually labeled to indicate country of origin, with exceptions for specific types of goods. Goods are considered to originate in the country with the highest rate of duties for the particular goods unless the goods meet certain minimum content requirements. Extensive modifications to normal duties and classifications apply to goods originating in Canada or Mexico under the North American Free Trade Agreement.

All goods that are not exempt are subject to duty computed according to the Harmonized Tariff Schedule published by CBP and the U.S. International Trade Commission. This lengthy schedule provides rates of duty for each class of goods. Most goods are classified based on the nature of the goods, though some classifications are based on use.

Customs duty rates may be expressed as a percentage of value or dollars and cents per unit. Rates based on value vary from zero to 20% in the 2011 schedule. Rates may be based on relevant units for the particular type of goods (per ton, per kilogram, per square meter, etc.). Some duties are based in part on value and in part on quantity.

Where goods subject to different rates of duty are commingled, the entire shipment may be taxed at the highest applicable duty rate.

Imported goods are generally accompanied by a bill of lading or air waybill describing the goods. For purposes of customs duty assessment, they must also be accompanied by an invoice documenting the transaction value. The goods on the bill of lading and invoice are classified and duty is computed by the importer or CBP. The amount of this duty is payable immediately, and must be paid before the goods can be imported. Most assessments of goods are now done by the importer and documentation filed with CBP electronically.

After duties have been paid, CBP approves the goods for import. They can then be removed from the port of entry, bonded warehouse, or Free-Trade Zone.

After duty has been paid on particular goods, the importer can seek a refund of duties if the goods are exported without substantial modification. The process of claiming a refund is known as duty drawback.

Certain civil penalties apply for failures to follow CBP rules and pay duty. Goods of persons subject to such penalties may be seized and sold by CBP. In addition, criminal penalties may apply for certain offenses. Criminal penalties may be as high as twice the value of the goods plus twenty years in jail.

Foreign-Trade Zones are secure areas physically in the United States but legally outside the customs territory of the United States. Such zones are generally near ports of entry. They may be within the warehouse of an importer. Such zones are limited in scope and operation based on approval of the Foreign-Trade Zones Board. Goods in a Foreign-Trade Zone are not considered imported to the United States until they leave the Zone. Foreign goods may be used to manufacture other goods within the zone for export without payment of customs duties.

Estate and gift taxes in the United States are imposed by the federal and some state governments. The estate tax is an excise tax levied on the right to pass property at death. It is imposed on the estate, not the beneficiary. Some states impose an inheritance tax on recipients of bequests. Gift taxes are levied on the giver (donor) of property where the property is transferred for less than adequate consideration. An additional generation-skipping transfer (GST) tax is imposed by the federal and some state governments on transfers to grandchildren (or their descendants).

The federal gift tax is applicable to the donor, not the recipient, and is computed based on cumulative taxable gifts, and is reduced by prior gift taxes paid. The federal estate tax is computed on the sum of taxable estate and taxable gifts, and is reduced by prior gift taxes paid. These taxes are computed as the taxable amount times a graduated tax rate (up to 35% in 2011). The estate and gift taxes are also reduced by a "unified credit" equivalent to an exclusion ($5 million in 2011). Rates and exclusions have varied, and the benefits of lower rates and the credit have been phased out during some years.

Taxable gifts are certain gifts of U.S. property by nonresident aliens, most gifts of any property by citizens or residents, in excess of an annual exclusion ($13,000 for gifts made in 2011) per donor per donee. Taxable estates are certain U.S. property of non-resident alien decedents, and most property of citizens or residents. For aliens, residence for estate tax purposes is primarily based on domicile, but U.S. citizens are taxed regardless of their country of residence. U.S. real estate and most tangible property in the U.S. are subject to estate and gift tax whether the decedent or donor is resident or nonresident, citizen or alien.

The taxable amount of a gift is the fair market value of the property in excess of consideration received at the date of gift. The taxable amount of an estate is the gross fair market value of all rights considered property at the date of death (or an alternative valuation date) ("gross estate"), less liabilities of the decedent, costs of administration (including funeral expenses) and certain other deductions. State estate taxes are deductible, with limitations, in computing the federal taxable estate. Bequests to charities reduce the taxable estate.

Gift tax applies to all irrevocable transfers of interests in tangible or intangible property. Estate tax applies to all property owned in whole or in part by a citizen or resident at the time of his or her death, to the extent of the interest in the property. Generally, all types of property are subject to estate tax. Whether a decedent has sufficient interest in property for the property to be subject to gift or estate tax is determined under applicable state property laws. Certain interests in property that lapse at death (such as life insurance) are included in the taxable estate.

Taxable values of estates and gifts are the fair market value. For some assets, such as widely traded stocks and bonds, the value may be determined by market listings. The value of other property may be determined by appraisals, which are subject to potential contest by the taxing authority. Special use valuation applies to farms and closely held businesses, subject to limited dollar amount and other conditions. Monetary assets, such as cash, mortgages, and notes, are valued at the face amount, unless another value is clearly established.

Life insurance proceeds are included in the gross estate. The value of a right of a beneficiary of an estate to receive an annuity is included in the gross estate. Certain transfers during lifetime may be included in the gross estate. Certain powers of a decedent to control the disposition of property by another are included in the gross estate.

The taxable estate of a married decedent is reduced by a deduction for all property passing to the decedent's spouse. Certain terminable interests are included. Other conditions may apply.

Donors of gifts in excess of the annual exclusion must file gift tax returns on IRS Form 709 and pay the tax. Executors of estates with a gross value in excess of the unified credit must file an estate tax return on IRS Form 706 and pay the tax from the estate. Returns are required if the gifts or gross estate exceed the exclusions. Each state has its own forms and filing requirements. Tax authorities may examine and adjust gift and estate tax returns.

Many jurisdictions within the United States impose taxes or fees on the privilege of carrying on a particular business or maintaining a particular professional certification. These licensing or occupational taxes may be a fixed dollar amount per year for the licensee, an amount based on the number of practitioners in the firm, a percentage of revenue, or any of several other bases. Persons providing professional or personal services are often subject to such fees. Common examples include accountants, attorneys, barbers, casinos, dentists, doctors, auto mechanics, plumbers, and stock brokers. In addition to the tax, other requirements may be imposed for licensure.

All 50 states impose vehicle license fee. Generally, the fees are based on type and size of vehicle and are imposed annually or biannually. All states and the District of Columbia also impose a fee for a driver's license, which generally must be renewed with payment of fee every few years.

Fees are often imposed by governments for use of certain facilities or services. Such fees are generally imposed at the time of use. Multi-use permits may be available. For example, fees are imposed for use of national or state parks, for requesting and obtaining certain rulings from the U.S. Internal Revenue Service (IRS), for the use of certain highways (called "tolls" or toll roads), for parking on public streets, and for the use of public transit.

Taxes in the United States are administered by hundreds of tax authorities. At the federal level there are three tax administrations. Most domestic federal taxes are administered by the Internal Revenue Service, which is part of the Department of the Treasury. Alcohol, tobacco, and firearms taxes are administered by the Alcohol and Tobacco Tax and Trade Bureau (TTB). Taxes on imports (customs duties) are administered by U.S. Customs and Border Protection (CBP). TTB is also part of the Department of the Treasury and CBP belongs to the Department of Homeland Security.

Organization of state and local tax administrations varies widely. Every state maintains a tax administration. A few states administer some local taxes in whole or part. Most localities also maintain a tax administration or share one with neighboring localities.

The Internal Revenue Service administers all U.S. federal tax laws on domestic activities, except those taxes administered by TTB. IRS functions include:

The IRS maintains several Service Centers at which tax returns are processed. Taxpayers generally file most types of tax returns by mail with these Service Centers, or file electronically. The IRS also maintains a National Office in Washington, DC, and numerous local offices providing taxpayer services and administering tax examinations.

Tax returns filed with the IRS are subject to examination and adjustment, commonly called an IRS audit. Only a small percentage of returns (about 1% of individual returns in IRS FY 2008) are examined each year. The selection of returns uses a variety of methods based on IRS experiences. On examination, the IRS may request additional information from the taxpayer by mail, in person at IRS local offices, or at the business location of the taxpayer. The taxpayer is entitled to representation by an attorney, Certified Public Accountant (CPA), or enrolled agent, at the expense of the taxpayer, who may make representations to the IRS on behalf of the taxpayer.

Taxpayers have certain rights in an audit. Upon conclusion of the audit, the IRS may accept the tax return as filed or propose adjustments to the return. The IRS may also assess penalties and interest. Generally, adjustments must be proposed within three years of the due date of the tax return. Certain circumstances extend this time limit, including substantial understatement of income and fraud. The taxpayer and the IRS may agree to allow the IRS additional time to conclude an audit. If the IRS proposes adjustments, the taxpayer may agree to the adjustment, appeal within the IRS, or seek judicial determination of the tax.

In addition to enforcing tax laws, the IRS provides formal and informal guidance to taxpayers. While often referred to as IRS Regulations, the regulations under the Internal Revenue Code are issued by the Department of Treasury. IRS guidance consists of:The Alcohol and Tobacco Tax Trade Bureau (TTB), a division of the Department of the Treasury, enforces federal excise tax laws related to alcohol, tobacco, and firearms. TTB has six divisions, each with discrete functions:Criminal enforcement related to TTB is done by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, a division of the Justice Department.

U.S. Customs and Border Protection (CBP), an agency of the United States Department of Homeland Security, collects customs duties and regulates international trade. It has a workforce of over 58,000 employees covering over 300 official ports of entry to the United States. CBP has authority to seize and dispose of cargo in the case of certain violations of customs rules.

Every state in the United States has its own tax administration, subject to the rules of that state's law and regulations. These are referred to in most states as the Department of Revenue or Department of Taxation. The powers of the state taxing authorities vary widely. Most enforce all state level taxes but not most local taxes. However, many states have unified state-level sales tax administration, including for local sales taxes.

State tax returns are filed separately with those tax administrations, not with the federal tax administrations. Each state has its own procedural rules, which vary widely.

Most localities within the United States administer most of their own taxes. In many cases, there are multiple local taxing jurisdictions with respect to a particular taxpayer or property. For property taxes, the taxing jurisdiction is typically represented by a tax assessor/collector whose offices are located at the taxing jurisdiction's facilities.

Congress has enacted numerous laws dealing with taxes since adoption of the Constitution. Those laws are now codified as Title 19, Customs Duties, Title 26, Internal Revenue Code, and various other provisions. These laws specifically authorize the United States Secretary of the Treasury to delegate various powers related to levy, assessment and collection of taxes.

State constitutions uniformly grant the state government the right to levy and collect taxes. Limitations under state constitutions vary widely.

Various individuals and groups have questioned the legitimacy of United States federal income tax. These arguments are varied, but have been uniformly rejected by the Internal Revenue Service and by the courts and ruled to be frivolous.

Commentators Benjamin Page, Larry Bartels and Jason Seawright contend that Federal tax policy in relation to regulation and reform in the United States tends to favor wealthy Americans. They assert that political influence is a legal right the wealthy can exercise by contributing funds to lobby for their policy preference.
Each major type of tax in the United States has been used by some jurisdiction at some time as a tool of social policy. Both liberals and conservatives have called for more progressive taxes in the U.S. Page, Bartels and Seawright assert that although members of the government favor a move toward progressive taxes, due to budget deficits upper class citizens are not yet willing to make a push for the change. Tax cuts were provided during the Bush administration, and were extended in 2010, making federal income taxes less progressive.

The Internal Revenue Service estimated that in 2001, the tax gap was $345 billion. The tax gap is the difference between the amount of tax legally owed and the amount actually collected by the government. The tax gap in 2006 was estimated to be $450 billion. The tax gap two years later in 2008 was estimated to be in the range of $450–$500 billion and unreported income was estimated to be approximately $2 trillion. Therefore, 18–19 percent of total reportable income was not properly reported to the IRS.

Before 1776, the American Colonies were subject to taxation by the United Kingdom, and also imposed local taxes. Property taxes were imposed in the Colonies as early as 1634. In 1673, the English Parliament imposed a tax on exports from the American Colonies, and with it created the first tax administration in what would become the United States. Other tariffs and taxes were imposed by Parliament. Most of the colonies and many localities adopted property taxes.

Under Article VIII of the Articles of Confederation, the United States government did not have the power to tax. All such power lay with the states. The United States Constitution, adopted in 1787, authorized the federal government to lay and collect taxes, but required that some types of tax revenues be given to the states in proportion to population. Tariffs were the principal federal tax through the 1800s.

By 1796, state and local governments in fourteen of the 15 states taxed land. Delaware taxed the income from property. The War of 1812 required a federal sales tax on specific luxury items due to its costs. However, internal taxes were dropped in 1817 in favor of import tariffs that went to the federal government. By the American Civil War, the principle of taxation of property at a uniform rate had developed, and many of the states relied on property taxes as a major source of revenue. However, the increasing importance of intangible property, such as corporate stock, caused the states to shift to other forms of taxation in the 1900s.

Income taxes in the form of "faculty" taxes were imposed by the colonies. These combined income and property tax characteristics, and the income element persisted after 1776 in a few states. Several states adopted income taxes in 1837. Wisconsin adopted a corporate and individual income tax in 1911, and was the first to administer the tax with a state tax administration.

The first federal income tax was adopted as part of the Revenue Act of 1861. The tax lapsed after the American Civil War. Subsequently enacted income taxes were held to be unconstitutional by the Supreme Court in "Pollock v. Farmers' Loan & Trust Co." because they did not apportion taxes on property by state population. In 1913, the Sixteenth Amendment to the United States Constitution was ratified, permitting the federal government to levy an income tax on both property and labor.
The federal income tax enacted in 1913 included corporate and individual income taxes. It defined income using language from prior laws, incorporated in the Sixteenth Amendment, as "all income from whatever source derived". The tax allowed deductions for business expenses, but few non-business deductions. In 1918 the income tax law was expanded to include a foreign tax credit and more comprehensive definitions of income and deduction items. Various aspects of the present system of definitions were expanded through 1926, when U.S. law was organized as the United States Code. Income, estate, gift, and excise tax provisions, plus provisions relating to tax returns and enforcement, were codified as Title 26, also known as the Internal Revenue Code. This was reorganized and somewhat expanded in 1954, and remains in the same general form.

Federal taxes were expanded greatly during World War I. In 1921, Treasury Secretary Andrew Mellon engineered a series of significant income tax cuts under three presidents. Mellon argued that tax cuts would spur growth. Taxes were raised again in the latter part of the Great Depression, and during World War II. Income tax rates were reduced significantly during the Johnson, Nixon, and Reagan presidencies. Significant tax cuts for corporations and all individuals were enacted during the second Bush presidency.

In 1986, Congress adopted, with little modification, a major expansion of the income tax portion of the IRS Code proposed in 1985 by the U.S. Treasury Department under President Reagan. The thousand-page Tax Reform Act of 1986 significantly lowered tax rates, adopted sweeping expansions of international rules, eliminated the lower individual tax rate for capital gains, added significant inventory accounting rules, and made substantial other expansions of the law.

Federal income tax rates have been modified frequently. Tax rates were changed in 34 of the 97 years between 1913 and 2010. The rate structure has been graduated since the 1913 act.

The first individual income tax return Form 1040 under the 1913 law was four pages long. In 1915, some Congressmen complained about the complexity of the form. In 1921, Congress considered but did not enact replacement of the income tax with a national sales tax.

By the 1920s, many states had adopted income taxes on individuals and corporations. Many of the state taxes were simply based on the federal definitions. The states generally taxed residents on all of their income, including income earned in other states, as well as income of nonresidents earned in the state. This led to a long line of Supreme Court cases limiting the ability of states to tax income of nonresidents.

The states had also come to rely heavily on retail sales taxes. However, as of the beginning of World War II, only two cities (New York and New Orleans) had local sales taxes.

The Federal Estate Tax was introduced in 1916, and Gift Tax in 1924. Unlike many inheritance taxes, the Gift and Estate taxes were imposed on the transferor rather than the recipient. Many states adopted either inheritance taxes or estate and gift taxes, often computed as the amount allowed as a deduction for federal purposes. These taxes remained under 1% of government revenues through the 1990s.

All governments within the United States provide tax exemption for some income, property, or persons. These exemptions have their roots both in tax theory, federal and state legislative history, and the United States Constitution.Government sources:

Law & regulations:

Standard texts (most updated annually):

Reference works:

Popular publications (annual):

The Sixteenth Amendment (Amendment XVI) to the United States Constitution allows Congress to levy an income tax without apportioning it among the states on the basis of population. It was passed by Congress in 1909 in response to the 1895 Supreme Court case of "Pollock v. Farmers' Loan & Trust Co." The Sixteenth Amendment was ratified by the requisite number of states on February 3, 1913, and effectively overruled the Supreme Court's ruling in "Pollock".

Sixteenth Amendment to the United States Constitution

Prior to the early 20th century, most federal revenue came from tariffs rather than taxes, although Congress had often imposed excise taxes on various goods. The Revenue Act of 1861 had introduced the first federal income tax, but that tax was repealed in 1872. During the late nineteenth century, various groups, including the Populist Party, favored the establishment of a progressive income tax at the federal level. These groups believed that tariffs unfairly taxed the poor, and they favored using the income tax to shift the tax burden onto wealthier individuals. The 1894 Wilson–Gorman Tariff Act contained an income tax provision, but the tax was struck down by the Supreme Court in the case of "Pollock v. Farmers' Loan & Trust Co." In its ruling, the Supreme Court did not hold that all federal income taxes were unconstitutional, but rather held that income taxes on rents, dividends, and interest were direct taxes and thus had to be apportioned among the states on the basis of population.

For several years after "Pollock", Congress did not attempt to implement another income tax, largely due to concerns that the Supreme Court would strike down any attempt to levy an income tax. In 1909, during the debate over the Payne–Aldrich Tariff Act, Congress proposed the Sixteenth Amendment to the states. Though conservative Republican leaders had initially expected that the amendment would not be ratified, a coalition of Democrats, progressive Republicans, and other groups ensured that the necessary number of states ratified the amendment. Shortly after the amendment was ratified, Congress imposed a federal income tax with the Revenue Act of 1913. The Supreme Court upheld that income tax in the 1916 case of "Brushaber v. Union Pacific Railroad Co.", and the federal government has continued to levy an income tax since 1913.

Article I, Section 2, Clause 3:

Article I, Section 8, Clause 1:

Article I, Section 9, Clause 4:

This clause basically refers to a tax on property, such as a tax based on the value of land, as well as a capitation.

Article I, Section 9, Clause 5:

Until 1913, customs duties (tariffs) and excise taxes were the primary sources of federal revenue. During the War of 1812, Secretary of the Treasury Alexander J. Dallas made the first public proposal for an income tax, but it was never implemented. The Congress did introduce an income tax to fund the Civil War through the Revenue Act of 1861. It levied a flat tax of three percent on annual income above $800. This act was replaced the following year with the Revenue Act of 1862, which levied a graduated tax of three to five percent on income above $600 and specified a termination of income taxation in 1866. The Civil War income taxes, which expired in 1872, proved to be both highly lucrative and drawing mostly from the more industrialized states, with New York, Pennsylvania, and Massachusetts generating about 60 percent of the total revenue that was collected. During the two decades following the expiration of the Civil War income tax, the Greenback movement, the Labor Reform Party, the Populist Party, the Democratic Party and many others called for a graduated income tax.

The Socialist Labor Party advocated a graduated income tax in 1887. The Populist Party "demand[ed] a graduated income tax" in its 1892 platform. The Democratic Party, led by William Jennings Bryan, advocated the income tax law passed in 1894, and proposed an income tax in its 1908 platform. Proponents of the income tax generally believed that high tariff rates exacerbated income inequality, and wanted to use the income tax to shift the burden of funding the government away from working class consumers and to high-earning businessmen.

Before "Pollock v. Farmers' Loan & Trust Co.", all income taxes had been considered to be indirect taxes imposed without respect to geography, unlike direct taxes, that have to be apportioned among the states according to population.

In 1894, an amendment was attached to the Wilson–Gorman Tariff Act that attempted to impose a federal tax of two percent on incomes over $4,000 (equal to $,000 in ). The federal income tax was strongly favored in the South, and it was moderately supported in the eastern North Central states, but it was strongly opposed in the Far West and the Northeastern States (with the exception of New Jersey). The tax was derided as "un-Democratic, inquisitorial, and wrong in principle".

In "Pollock v. Farmers' Loan & Trust Co.", the U.S. Supreme Court declared certain taxes on incomes – such as those on property under the 1894 Act – to be unconstitutionally unapportioned direct taxes. The Court reasoned that a tax on "income from property" should be treated as a tax on "property by reason of its ownership" and so should be required to be apportioned. The reasoning was that taxes on the rents from land, the dividends from stocks, and so forth, burdened the property generating the income in the same way that a tax on "property by reason of its ownership" burdened that property.

After "Pollock", while income taxes on wages (as indirect taxes) were still not required to be apportioned by population, taxes on interest, dividends, and rental income were required to be apportioned by population. The "Pollock" ruling made the "source of the income" (e.g., property versus labor, etc.) relevant in determining whether the tax imposed on that income was deemed to be "direct" (and thus required to be apportioned among the states according to population) or, alternatively, "indirect" (and thus required only to be imposed with geographical uniformity).

Dissenting in "Pollock", Justice John Marshall Harlan stated:

Members of Congress responded to "Pollock" by expressing widespread concern that many of the wealthiest Americans had consolidated too much economic power. Nonetheless, in the years after "Pollock", Congress did not implement another federal income tax, partly because many Congressmen feared that any tax would be struck down by the Supreme Court. Few considered attempting to impose an apportioned income tax, since such a tax was widely regarded as unworkable.

On June 16, 1909, President William Howard Taft, in an address to the Sixty-first Congress, proposed a two percent federal income tax on corporations by way of an excise tax and a constitutional amendment to allow the previously enacted income tax.

An income tax amendment to the Constitution was first proposed by Senator Norris Brown of Nebraska. He submitted two proposals, Senate Resolutions Nos. 25 and 39. The amendment proposal finally accepted was Senate Joint Resolution No. 40, introduced by Senator Nelson W. Aldrich of Rhode Island, the Senate majority leader and Finance Committee Chairman. The amendment was proposed as part of the congressional debate over the 1909 Payne–Aldrich Tariff Act; by proposing the amendment, Aldrich hoped to temporarily defuse progressive calls for the imposition of new taxes in the tariff act. Aldrich and other conservative leaders in Congress largely opposed the actual ratification of the amendment, but they believed that it had little chance of being ratified, as ratification required approval by three quarters of the state legislatures.

On July 12, 1909, the resolution proposing the Sixteenth Amendment was passed by the Congress and was submitted to the state legislatures. Support for the income tax was strongest in the western and southern states, while opposition was strongest in the northeastern states. Supporters of the income tax believed that it would be a much better method of gathering revenue than tariffs, which were the primary source of revenue at the time. From well before 1894, Democrats, Progressives, Populists and other left-oriented parties argued that tariffs disproportionately affected the poor, interfered with prices, were unpredictable, and were an intrinsically limited source of revenue. The South and the West tended to support income taxes because their residents were generally less prosperous, more agricultural and more sensitive to fluctuations in commodity prices. A sharp rise in the cost of living between 1897 and 1913 greatly increased support for the idea of income taxes, including in the urban Northeast. A growing number of Republicans also began supporting the idea, notably Theodore Roosevelt and the "Insurgent" Republicans (who would go on to form the Progressive Party). These Republicans were driven mainly by a fear of the increasingly large and sophisticated military forces of Japan, Britain and the European powers, their own imperial ambitions and the perceived need to defend American merchant ships. Moreover, these progressive Republicans were, as the name suggests, convinced that central governments could play a positive role in national economies. A bigger government and a bigger military, of course, required a correspondingly larger and steadier source of revenue to support it.

Opposition to the Sixteenth Amendment was led by establishment Republicans because of their close ties to wealthy industrialists, although not even they were uniformly opposed to the general idea of a permanent income tax. In 1910, New York Governor Charles Evans Hughes, shortly before becoming a Supreme Court Justice, spoke out against the income tax amendment. Hughes supported the idea of a federal income tax, but believed the words "from whatever source derived" in the proposed amendment implied that the federal government would have the power to tax state and municipal bonds. He believed this would excessively centralize governmental power and "would make it impossible for the state to keep any property".

Between 1909 and 1913, several conditions favored passage of the Sixteenth Amendment. Inflation was high and many blamed federal tariffs for the rising prices. The Republican Party was divided and weakened by the loss of Roosevelt and the Insurgents who joined the Progressive Party, a problem that blunted opposition even in the Northeast. In 1912, the Democrats won the presidency and control of both houses of Congress. The country was generally in a left-leaning mood, with the Socialist Party winning a seat in the House in 1910 and polling six percent of the popular presidential vote in 1912.

Three advocates for a federal income tax ran in the presidential election of 1912. On February 25, 1913, Secretary of State Philander Knox proclaimed that the amendment had been ratified by three-fourths of the states and so had become part of the Constitution. The Revenue Act of 1913, which greatly lowered tariffs and implemented a federal income tax, was enacted shortly after the Sixteenth Amendment was ratified.

According to the United States Government Publishing Office, the following states ratified the amendment:Ratification (by the requisite 36 states) was completed on February 3, 1913 with the ratification by Delaware. The amendment was subsequently ratified by the following states, bringing the total number of ratifying states to forty-two of the forty-eight then existing:

The legislatures of the following states rejected the amendment without ever subsequently ratifying it:

The legislatures of the following states never considered the proposed amendment:

The Sixteenth Amendment removed the precedent set by the "Pollock" decision.

Professor Sheldon D. Pollack at the University of Delaware wrote:

From William D. Andrews, Professor of Law, Harvard Law School:

From Professor Boris Bittker, who was a tax law professor at Yale Law School:

Professor Erik Jensen at Case Western Reserve University Law School has written:

Professor Calvin H. Johnson, a tax professor at the University of Texas School of Law, has written:

From Gale Ann Norton:

From Alan O. Dixler:

Congress may impose taxes on income from any source without having to apportion the total dollar amount of tax collected from each state according to each state's population in relation to the total national population.

In "Wikoff v. Commissioner", the United States Tax Court said:

In "Abrams v. Commissioner", the Tax Court said:

In the late 19th century and early 20th century, many legal observers believed that the Supreme Court had erred in designating some income taxes as direct taxes. The Supreme Court had previously rejected the argument that income taxes constituted direct taxes in "Springer v. United States" (1881). Some legal scholars continue to question whether the Supreme Court ruled correctly in "Pollock", but others contend that the original meaning of direct taxes did indeed include income taxes.

The federal courts' interpretations of the Sixteenth Amendment have changed considerably over time and there have been many disputes about the applicability of the amendment.

In "Brushaber v. Union Pacific Railroad",, the Supreme Court ruled that (1) the Sixteenth Amendment removes the "Pollock" requirement that certain income taxes (such as taxes on income "derived from real property" that were the subject of the "Pollock" decision), be apportioned among the states according to population; (2) the federal income tax statute does not violate the Fifth Amendment's prohibition against the government taking property without due process of law; (3) the federal income tax statute does not violate the Article I, Section 8, Clause 1 requirement that excises, also known as indirect taxes, be imposed with geographical uniformity.

In "Bowers v. Kerbaugh-Empire Co.",, the Supreme Court, through Justice Pierce Butler, stated:

In "Commissioner v. Glenshaw Glass Co.",, the Supreme Court laid out what has become the modern understanding of what constitutes "gross income" to which the Sixteenth Amendment applies, declaring that income taxes could be levied on "accessions to wealth, clearly realized, and over which the taxpayers have complete dominion". Under this definition, "any" increase in wealth – whether through wages, benefits, bonuses, sale of stock or other property at a profit, bets won, lucky finds, awards of punitive damages in a lawsuit, qui tam actions – are all within the definition of income, unless the Congress makes a specific exemption, as it has for items such as life insurance proceeds received by reason of the death of the insured party, gifts, bequests, devises and inheritances, and certain scholarships.

Federal courts have ruled that the Sixteenth Amendment allows a direct tax on "wages, salaries, commissions, etc. without apportionment".

Although the Sixteenth Amendment is often cited as the "source" of the congressional power to tax incomes, at least one court has reiterated the point made in "Brushaber" and other cases that the Sixteenth Amendment itself did not grant the Congress the power to tax incomes, a power the Congress had since 1789, but only removed the possible requirement that any income tax be apportioned among the states according to their respective populations. In "Penn Mutual Indemnity", the United States Tax Court stated:

The United States Court of Appeals for the Third Circuit agreed with the Tax Court, stating:

On December 22, 2006, a three-judge panel of the United States Court of Appeals for the District of Columbia Circuit vacated its unanimous decision (of August 2006) in "Murphy v. Internal Revenue Service and United States". In an unrelated matter, the court had also granted the government's motion to dismiss Murphy's suit against the Internal Revenue Service. Under federal sovereign immunity, a taxpayer may sue the federal government, but not a government agency, officer, or employee (with some exceptions). The Court ruled:

An exception to federal sovereign immunity is in the United States Tax Court, in which a taxpayer may sue the Commissioner of Internal Revenue. The original three-judge panel then agreed to rehear the case itself. In its original decision, the Court had ruled that was unconstitutional under the Sixteenth Amendment to the extent that the statute purported to tax, as income, a recovery for a nonphysical personal injury for mental distress and loss of reputation not received in lieu of taxable income such as lost wages or earnings.

Because the August 2006 opinion was vacated, the Court of Appeals did not hear the case "en banc".

On July 3, 2007, the Court (through the original three-judge panel) ruled (1) that the taxpayer's compensation was received on account of a nonphysical injury or sickness; (2) that gross income under section 61 of the Internal Revenue Code does include compensatory damages for nonphysical injuries, even if the award is not an "accession to wealth", (3) that the income tax imposed on an award for nonphysical injuries is an indirect tax, regardless of whether the recovery is restoration of "human capital", and therefore the tax does not violate the constitutional requirement of Article I, Section 9, Clause 4, that capitations or other direct taxes must be laid among the states only in proportion to the population; (4) that the income tax imposed on an award for nonphysical injuries does not violate the constitutional requirement of Article I, Section 8, Clause 1, that all duties, imposts and excises be uniform throughout the United States; (5) that under the doctrine of sovereign immunity, the Internal Revenue Service may not be sued in its own name.

The Court stated that "[a]lthough the 'Congress cannot make a thing income which is not so in fact',... it can "label" a thing income and tax it, so long as it acts within its constitutional authority, which includes not only the Sixteenth Amendment but also Article I, Sections 8 and 9." The court ruled that Ms. Murphy was not entitled to the tax refund she claimed, and that the personal injury award she received was "within the reach of the Congressional power to tax under Article I, Section 8 of the Constitution" – even if the award was "not income within the meaning of the Sixteenth Amendment". See also the "Penn Mutual" case cited above.

On April 21, 2008, the U.S. Supreme Court declined to review the decision by the Court of Appeals.

The Sixteenth Amendment (Amendment XVI) to the United States Constitution allows Congress to levy an income tax without apportioning it among the states on the basis of population. It was passed by Congress in 1909 in response to the 1895 Supreme Court case of "Pollock v. Farmers' Loan & Trust Co." The Sixteenth Amendment was ratified by the requisite number of states on February 3, 1913, and effectively overruled the Supreme Court's ruling in "Pollock".

Article I, Section 2, Clause 3:

Article I, Section 8, Clause 1:

Article I, Section 9, Clause 4:

This clause basically refers to a tax on property, such as a tax based on the value of land, as well as a capitation.

Article I, Section 9, Clause 5:

The Socialist Labor Party advocated a graduated income tax in 1887. The Populist Party "demand[ed] a graduated income tax" in its 1892 platform. The Democratic Party, led by William Jennings Bryan, advocated the income tax law passed in 1894, and proposed an income tax in its 1908 platform. Proponents of the income tax generally believed that high tariff rates exacerbated income inequality, and wanted to use the income tax to shift the burden of funding the government away from working class consumers and to high-earning businessmen.

Before "Pollock v. Farmers' Loan & Trust Co.", all income taxes had been considered to be indirect taxes imposed without respect to geography, unlike direct taxes, that have to be apportioned among the states according to population.

In 1894, an amendment was attached to the Wilson–Gorman Tariff Act that attempted to impose a federal tax of two percent on incomes over $4,000 (equal to $,000 in ). The federal income tax was strongly favored in the South, and it was moderately supported in the eastern North Central states, but it was strongly opposed in the Far West and the Northeastern States (with the exception of New Jersey). The tax was derided as "un-Democratic, inquisitorial, and wrong in principle".

In "Pollock v. Farmers' Loan & Trust Co.", the U.S. Supreme Court declared certain taxes on incomes – such as those on property under the 1894 Act – to be unconstitutionally unapportioned direct taxes. The Court reasoned that a tax on "income from property" should be treated as a tax on "property by reason of its ownership" and so should be required to be apportioned. The reasoning was that taxes on the rents from land, the dividends from stocks, and so forth, burdened the property generating the income in the same way that a tax on "property by reason of its ownership" burdened that property.

After "Pollock", while income taxes on wages (as indirect taxes) were still not required to be apportioned by population, taxes on interest, dividends, and rental income were required to be apportioned by population. The "Pollock" ruling made the "source of the income" (e.g., property versus labor, etc.) relevant in determining whether the tax imposed on that income was deemed to be "direct" (and thus required to be apportioned among the states according to population) or, alternatively, "indirect" (and thus required only to be imposed with geographical uniformity).

Dissenting in "Pollock", Justice John Marshall Harlan stated:

Members of Congress responded to "Pollock" by expressing widespread concern that many of the wealthiest Americans had consolidated too much economic power. Nonetheless, in the years after "Pollock", Congress did not implement another federal income tax, partly because many Congressmen feared that any tax would be struck down by the Supreme Court. Few considered attempting to impose an apportioned income tax, since such a tax was widely regarded as unworkable.

On June 16, 1909, President William Howard Taft, in an address to the Sixty-first Congress, proposed a two percent federal income tax on corporations by way of an excise tax and a constitutional amendment to allow the previously enacted income tax.

Opposition to the Sixteenth Amendment was led by establishment Republicans because of their close ties to wealthy industrialists, although not even they were uniformly opposed to the general idea of a permanent income tax. In 1910, New York Governor Charles Evans Hughes, shortly before becoming a Supreme Court Justice, spoke out against the income tax amendment. Hughes supported the idea of a federal income tax, but believed the words "from whatever source derived" in the proposed amendment implied that the federal government would have the power to tax state and municipal bonds. He believed this would excessively centralize governmental power and "would make it impossible for the state to keep any property".

Between 1909 and 1913, several conditions favored passage of the Sixteenth Amendment. Inflation was high and many blamed federal tariffs for the rising prices. The Republican Party was divided and weakened by the loss of Roosevelt and the Insurgents who joined the Progressive Party, a problem that blunted opposition even in the Northeast. In 1912, the Democrats won the presidency and control of both houses of Congress. The country was generally in a left-leaning mood, with the Socialist Party winning a seat in the House in 1910 and polling six percent of the popular presidential vote in 1912.

Three advocates for a federal income tax ran in the presidential election of 1912. On February 25, 1913, Secretary of State Philander Knox proclaimed that the amendment had been ratified by three-fourths of the states and so had become part of the Constitution. The Revenue Act of 1913, which greatly lowered tariffs and implemented a federal income tax, was enacted shortly after the Sixteenth Amendment was ratified.

According to the United States Government Publishing Office, the following states ratified the amendment:Ratification (by the requisite 36 states) was completed on February 3, 1913 with the ratification by Delaware. The amendment was subsequently ratified by the following states, bringing the total number of ratifying states to forty-two of the forty-eight then existing:

The legislatures of the following states rejected the amendment without ever subsequently ratifying it:

The legislatures of the following states never considered the proposed amendment:

The Sixteenth Amendment removed the precedent set by the "Pollock" decision.

Professor Sheldon D. Pollack at the University of Delaware wrote:

From William D. Andrews, Professor of Law, Harvard Law School:

From Professor Boris Bittker, who was a tax law professor at Yale Law School:

Professor Erik Jensen at Case Western Reserve University Law School has written:

Professor Calvin H. Johnson, a tax professor at the University of Texas School of Law, has written:

From Gale Ann Norton:

From Alan O. Dixler:

Congress may impose taxes on income from any source without having to apportion the total dollar amount of tax collected from each state according to each state's population in relation to the total national population.

In "Wikoff v. Commissioner", the United States Tax Court said:

In "Abrams v. Commissioner", the Tax Court said:

In the late 19th century and early 20th century, many legal observers believed that the Supreme Court had erred in designating some income taxes as direct taxes. The Supreme Court had previously rejected the argument that income taxes constituted direct taxes in "Springer v. United States" (1881). Some legal scholars continue to question whether the Supreme Court ruled correctly in "Pollock", but others contend that the original meaning of direct taxes did indeed include income taxes.

The federal courts' interpretations of the Sixteenth Amendment have changed considerably over time and there have been many disputes about the applicability of the amendment.

In "Brushaber v. Union Pacific Railroad",, the Supreme Court ruled that (1) the Sixteenth Amendment removes the "Pollock" requirement that certain income taxes (such as taxes on income "derived from real property" that were the subject of the "Pollock" decision), be apportioned among the states according to population; (2) the federal income tax statute does not violate the Fifth Amendment's prohibition against the government taking property without due process of law; (3) the federal income tax statute does not violate the Article I, Section 8, Clause 1 requirement that excises, also known as indirect taxes, be imposed with geographical uniformity.

In "Bowers v. Kerbaugh-Empire Co.",, the Supreme Court, through Justice Pierce Butler, stated:

Federal courts have ruled that the Sixteenth Amendment allows a direct tax on "wages, salaries, commissions, etc. without apportionment".

Although the Sixteenth Amendment is often cited as the "source" of the congressional power to tax incomes, at least one court has reiterated the point made in "Brushaber" and other cases that the Sixteenth Amendment itself did not grant the Congress the power to tax incomes, a power the Congress had since 1789, but only removed the possible requirement that any income tax be apportioned among the states according to their respective populations. In "Penn Mutual Indemnity", the United States Tax Court stated:

The United States Court of Appeals for the Third Circuit agreed with the Tax Court, stating:

On December 22, 2006, a three-judge panel of the United States Court of Appeals for the District of Columbia Circuit vacated its unanimous decision (of August 2006) in "Murphy v. Internal Revenue Service and United States". In an unrelated matter, the court had also granted the government's motion to dismiss Murphy's suit against the Internal Revenue Service. Under federal sovereign immunity, a taxpayer may sue the federal government, but not a government agency, officer, or employee (with some exceptions). The Court ruled:

An exception to federal sovereign immunity is in the United States Tax Court, in which a taxpayer may sue the Commissioner of Internal Revenue. The original three-judge panel then agreed to rehear the case itself. In its original decision, the Court had ruled that was unconstitutional under the Sixteenth Amendment to the extent that the statute purported to tax, as income, a recovery for a nonphysical personal injury for mental distress and loss of reputation not received in lieu of taxable income such as lost wages or earnings.

Because the August 2006 opinion was vacated, the Court of Appeals did not hear the case "en banc".

The Court stated that "[a]lthough the 'Congress cannot make a thing income which is not so in fact',... it can "label" a thing income and tax it, so long as it acts within its constitutional authority, which includes not only the Sixteenth Amendment but also Article I, Sections 8 and 9." The court ruled that Ms. Murphy was not entitled to the tax refund she claimed, and that the personal injury award she received was "within the reach of the Congressional power to tax under Article I, Section 8 of the Constitution" – even if the award was "not income within the meaning of the Sixteenth Amendment". See also the "Penn Mutual" case cited above.

On April 21, 2008, the U.S. Supreme Court declined to review the decision by the Court of Appeals.