Final answer:
The sixteenth amendment is important in the system of fiscal federalism as it authorized the federal government to impose a federal income tax. The introduction of a progressive income tax provided a more equitable way to generate revenue while reducing tariffs.
Step-by-step explanation:
The sixteenth amendment is an important element in the system of fiscal federalism because it authorized the federal government to impose a federal income tax. Prior to the enactment of this amendment, the national government primarily relied on tariffs for revenue, which placed a burden on the working poor. The introduction of a progressive income tax provided a more equitable way to generate revenue while also allowing the federal government to reduce tariffs and promote economic growth.