It allowed incomes to be taxed as a clear response to the Supreme Court decision in the Pollock v Farmers' Loan and Trust Company (Fonder and Shaffrey 2002). Congress previously passed an income tax law in 1894, which the Supreme Court found to be unconstitutional, not being divided among the states by population. Before the 16th Amendment, the Constitution protected citizens in Article 1, Section 9, which provided that no capitation, or other direct tax chall be laid, unless in proportion to the census or enumeration. This protection was eliminated with the passage and ratification of the 16th Amendment, which gave Congress the power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the States and without regard to census or enumeration. Before the 16th Amendment, taxation was based on consumption and not income. Tax based on consumption would be a security against excess, according to Alexander Hamilton. Taxation should be restricted to support and finance only those expenses constitutionally reserved for the central government. Current progressive income tax penalizes hard work and success in the free market and also discourages economic growth by burdening consumers and the private sector.
Resolution by Rep. Ron Paul of Texas seeks to amend the Constitution in abolishing personal income, estate and gift taxes and prohibiting the U.S. Government from competing with its citizens. It would eliminate the government's prerogative to levy inequitable taxes and conform more closely to constitutionally defined structure. The 16th Amendment should be replaced with a national sales tax, accompanied by reductions in government expenditures, guided by Constitutional parameters for central government activity.
When declaring their independence from Britain in 1776, the colonies reacted against the British unitary system and the concentration of all political and economic power in London. A product of that reaction was the creation of the Articles of Confederation by the states, which moved virtually all powers to the states (College Board Advanced Placement Program). The framers of the Constitution attempted to balance potential tyranny by a unitary system with potential chaos by the confederal system through a hybrid federal system in the Constitution. Federalism, then, worked to preserve freedoms while maintaining order in the new nation. But knowing that they could not construct a comprehensive list of powers for the national or state governments, the founders produced a "necessary and proper clause" to Article 1, which gave Congress the power "to make all laws which shall be necessary and proper for carrying into execution the foregoing powers."
Federalism is good in that it can mobilize political activity for citizens to be heard. If local officials refuse to listen, citizens may raise their appeal to the state or national level. It prevents interest groups from forcing their will upon less powerful groups. Small groups have a better chance of getting heard and influencing legislation. Diverse policies among states encourage experimentation and creativity. Uniform laws do not make sense in many areas. Federalism, on the other hand, creates confusion in political activity because of the various levels of government. Small but fiery motivated interest groups can hamper the will of the majority for a prolonged period of time. Diverse policies among states conduce to inequality between citizens of different states and create confusion, such as in matters like speed limits.
The drafting of the first federal constitution, called the Articles of Confederation, by the 13 new American states on July 12, 1776 was guided by the lesson learned from their colonial experience under the centralized government of Great Britain (Superintendent of Documents 2003). The framers, thus, carefully endowed the states with as much independence as possible and explicitly limited the functions of the federal government to avoid a recurrence. But the Articles underwent many revisions for several years before final adoption on November 15, 1777. Causes for the delays included a preoccupation with the Revolutionary War and disagreements among the 13 states on matters like boundary line, equal representation in Congress with larger states, state taxation according to population, the control of western territories. The Articles created a nation, which was to be "a league of friendship and perpetual union," and under this structure, state governments retained most of their power and gave the central government only a subordinate position. As a result, the central government lost respect and could not accomplish much because of its loss of jurisdiction...
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