The Ratification Of The Sixteenth Amendment To The United States

* Corporations incur taxes at the corporate level at marginal rates; while, distributions to shareholders are taxed at dividend rate

“When it came to levying taxes the Articles stated Congress could request states to pay taxes. The Constitution states Congress has the right to levy taxes on individuals” (Feldmeth, Greg D. "U.S. History Resources" http://home.earthlink.net/~gfeldmeth/USHistory.html (31 March 1998). “A federal court the Articles

b. Ken sold 1,000 shares of stock for $32 a share. He inherited the stock two years ago. His tax basis (or investment) in the

What potential tax problems might result if an individual pursues his plan to transfer 40% of the corporate stock to his two children as gifts? Would it make any difference if an individual received all voting stock and had the new corporation transfer nonvoting stock to his children?

19) In the current year, Bonnie, who is single, sells stock valued at $60,000 to Linda for $15,000. Later that year, Bonnie gives Linda $25,000 in cash. Bonnie's taxable gifts from these transfers total

The Revenue Act of 1862 is the first instance of income tax in America. It imposed a progressive income tax rate on Union citizens in order to raise money for the war effort against the Confederacy. http://money.howstuffworks.com/personal-finance/personal-income-taxes/income-tax.htmThe income tax was abolished in 1872, declared unconstitutional in 1895, and then passed as an amendment in 1913.http://www.archives.gov/publications/prologue/1986/winter/civil-war-tax-records.html Cite everything above! The 16th amendment states “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.” (YOU NEED

In July 1861, the Congress passed a 3% tax on all personal net income above $600 a year that is equitant to about $10,000 today. However, no revenue was ever raised because a second tax passed before the first was due on June 30, 1862. The war 's demand on resources made the earlier tax ineffective, and

c. What is your determination regarding reducing the taxable amount of income for both (a) and (b) above?

• “The taxes for paying that proportion shall be laid and levied by the authority and direction of the legislatures of the several states within the time agreed upon by the United States in Congress assembled.” Articles of Confederation, Section VIII • Without a way to collect taxes , congress could not pay war debts or make a national budget. • “The Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States; but all duties, imposts and excises shall be uniform throughout the United States.” United States Constitution, Article I, Section VIII, Clause I • After levying taxes became a federal power

Among these last few Articles is where the Constitution lays out how and when the state is allowed to tax its citizens. In three short pages, it manages to lay out how property, real estate, estates, motor vehicles and fuel, income, inheritance, and food can be taxed.

In 1861, Lincoln levied the first federal income tax by signing the Revenue Act. Needing cash with which to fund the Civil War, Abraham Lincoln and the Congress agreed to impose a 3 percent tax on annual incomes over $800.00. The wording of the Revenue Act was broadly written to define income as a monetary gain derived from any kind of property, or from any specialized trade, employment, or vocation carried on in the United States or elsewhere or from any source whatever. (A&E Television Networks, 2014)

The case would determine that the source of income would be used in order to classify whether the income was direct or indirect, and thus, allowing for the definition of what kind of income tax would be levied. Income taxes on wages were not to be apportioned by the population numbers, while those on interests, dividends and rent were. here are still some debates on whether the 16th Amendment is constitutional or not. America’s Founding Fathers who designed the constitution wanted the power between the federal government and the states to be balanced. Therefore, the national government was not allowed to collect taxes from individuals directly.

The origin of the income tax on individuals is generally mentioned as the passage of the 16th amendment, which was passed by congress on July 2,1909. The history of individual income tax in the U.S.A goes back to 1861. During the civil war, congress passed the revenue act of 1861, which included taxing on personal incomes to help pay the expenses of the war. This tax was repealed after the war. In 1894, congress made a flat rate federal income tax, but the U.S Supreme Court ruled it unconstitutional. During the following

(A) Historical meaning- The 16th amendment means that Congress can impose and collect taxes on the income of citizens. The 16th amendment was influenced by a certain court case and also by the Income Tax Act of 1894. The Income Tax Act was a law that taxed interest, dividends, and rents of citizens. The Supreme Court stated that the Tax Act was a direct tax and was labeled unconstitutional.

* Gift Tax: living transfer of property; $14,000/yr/donee exclusion ($28,000 if joint), unlimited marital & charity deduction, once in a lifetime exemption for gifts & estate of $5,340,000