United States Constitution: Taxes & Alcohol

THE 16TH AMENDMENT
Passed by Congress July 2, 1909. Ratified February 3, 1913.

Note: Article I, section 9, of the Constitution was modified by Amendment 16.

"The Congress shall have 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."

• This allowed the Federal government to collect direct taxes on income.
• Before this Amendment, the only way the Constitution allowed direct taxes was by the proportion of the population of a State. If Florida's population was five percent of the population, five percent of the direct taxes would be collect from Florida's population. To calculate this formula would have been a nightmare if the Congress wanted to create a national direct taxing system. In addition, it would mean that the residents of the more populous richer States would pay less than the residents of poorer States.
• Pollock v Farmer's Loan and Trust Co. had declared a Federal income tax law unconstitutional.
• The Constitution only exempted indirect or "excise" taxes.
• Form 1040 was the original filing document though it has been changed many times over the years.
• April 15th became the official filing date in 1954.
• Al Capone and other gangsters were sent to prison not for the crimes they committed but for not paying their taxes on illegally-gotten income.
• The 16th Amendment allowed the Federal government to tax based on income, not on population, in addition to excise taxes.

Source: The complete idiot's guide to the U.S. Constitution

THE 18TH AMENDMENT
Passed by Congress December 18, 1917. Ratified January 16, 1919. Repealed by amendment 21.

• Banned the manufacture, sale or transportation of intoxicateing beverages.
• Gave a grace period of one year.
• Set a seven-year deadline.
• Only one of two Amendments that outlawed personal behavior. The other Amendment was the 13th Amendment, outlawing slavery.
• The Volstead Act of 1919 defined what "intoxicating liquors" meant and the penalties for the purchase, possession and consumption of alcohol.
• The Volstead Act allowed small qualities of wine and alcoholic drinks with no more than 5 percent alcohol.
• Led to a large public resistance and the growth of organized crime.
• The illegal transportation of alcohol led to the new sport of stock car racing.

THE 21ST AMENDMENT

Passed by Congress February 20, 1933. Ratified December 5, 1933.

• Section 1. Repealed the 18th Amendment
• Section 2. Gave the States the right to regulate alcoho.
• But South Dakota v Dole (1987) ruled that Congress could withhold highway funds if States did not enact a national minimum drinking age.
• Section 3. The Amendment had to be ratified within seven years.
• And it was to be ratified by State conventions, not by State legislatures the way all other Amendments were ratified.