Senator Norris Brown (R-Nebraska), a member of the United States Senate from 1907 to 1913, was the author of the 16th Amendment to the Constitution, also known as the Income Tax Amendment.
From about 1880 until the 16th Amendment was purportedly ratified in 1913, the income tax issue was hot in America. The 16th Amendment was an attempt to solve the problem of the unequal distribution of taxes. Before 1913 wage-earners paid a higher percentage of the nation’s taxes than the wealthy did under the tariff system.
Back then, there were no entitlement programs (like welfare) and mostly what the government provided the Citizens was protection. The wealthy, with more property to protect, received more benefit from government as compared to wage-earners who had a lesser need of protection. It was a raw deal for wage-earners.
The goal of the Income Tax Amendment was to strike down the Supreme Court’s Pollock Rule (Pollock v. Farmer’s Loan & Trust Co., 158 U.S. 601 ) whereby the collection of an income tax became constitutionally very difficult and politically impossible. The Pollock Rule had converted an income tax on the net income of businesses and investments from an indirect tax into a direct tax required to be apportioned by the Constitution.
Senator Brown’s intent in drafting the 16th Amendment can be determined from congressional debates and from an article he wrote entitled: Shall the Income Tax Amendment be Ratified (Senate Document No. 705, 61 Congress, 1910). This article also appeared in Editorial Review, April, 1910. Brown maintained that the Pollock Rule was unjust, inequitable, and politically impossible.
In his article, Senator Brown never referred to the taxation of people. He only referred to taxing incomes. In addition, he specifically stated what the Amendment intended to tax:
“If the income arises from an investment in lands, it should be taxed; if it arises from investments in manufacturing enterprises, in railroads, in banks, in newspapers, in the mercantile business, or in steamship lines, it should be taxed. Why should an income arising from an investment in State or municipal bonds not be taxed? [For a discussion on the state and municipal bond issue see the book Constitutional Income: Do You Have Any?] Why should the holder of these securities enjoy his income free from any contribution to assist this Government, which protects him and his property no less than it protects other people owning another class of property? Why should he escape and other people be compelled to pay?”
Notice the actual vocabulary used as well as the theme of his writing. He does not suggest taxation on the working class, or its wages, but rather on the profits gained from proprietary investments such as property.
On April 28, 1909, Senator Brown stated on the Senate floor, “It is the theory of the friends of the income-tax proposition that property should be taxed and not individuals.” Congressional Record, pg. 1570. Senator Brown goes on to argue that the ratification of the 16th Amendment will act to sustain the nation and its sovereignty by reinvesting in its security. Senator Brown intended that the 16th Amendment protect the people’s property and promote prosperity for the entire nation.
The totality of Senator Brown’s argument focused on the very items that were at issue in the Pollock Case. The entire purpose of the Income Tax Amendment was to bring tax relief to those who earned wages and paid a greater proportion of their earnings in taxes under the tariff system (tax on consumption) and to place a greater tax burden on the accumulated wealth and investments of the country by way of an income tax. Tax relief for wage-earners was Brown’s Agenda.
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