Among the notable events of the year 1913, one of the most important in its influence upon the national finances and constitutional development of the United States is the adoption of an amendment to the Federal Constitution giving Congress 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 mere fact that an amendment of any kind has been adopted is notable, this being the first occasion on which the Constitution had undergone any change since the period of the Civil War, and the first amendment adopted in peaceful and normal times since the early days of the Republic.

It is a little remarkable, although perhaps not altogether accidental, that the adoption of this amendment should coincide with the return to power of the political party whose attempt to levy an income tax in 1894 was frustrated by the decision of the Supreme Court in that year.  Then as now an income tax was a component part of the program of fiscal and commercial reform to which that party was committed.  This program included the reduction of protective tariff duties and the direct taxation of incomes.  What the Democratic party failed to accomplish in 1894, it has had a free hand to do in 1913.  Indeed, the national taxation of incomes might almost be regarded as a mandate of the people of the United States.  At any rate, it was a foregone conclusion that the adoption of the constitutional amendment would be immediately followed by the enactment of an income-tax law.

The law instituting the income tax was approved October 31[?], together with the law revising the tariff, both measures being included in one comprehensive statute entitled “An Act to reduce tariff duties and to provide revenue for Government, and for other purposes.”  It is the object of the present article to give a general description of the income tax.  This seems to be especially well worth while because the tax can not be readily understood from a mere perusal of the involved and sometimes obscure phraseology of the law itself.  For the same reason, however, the task of interpretation is not easy or entirely safe.  The law has certain novel features; and some of the questions of detail to which they give rise can not be answered until we have the official construction placed upon the language of the act by the executive branch of the government and possibly by the courts.  At the same time, the main features of the tax become fairly evident to any one who makes a careful study of the provisions of the act, even though its application to specific cases may remain doubtful.