Final answer:
The Sixteenth Amendment to the U.S. Constitution, ratified in 1913, authorized the federal government to impose a federal income tax on individuals, which replaced revenue lost from lower tariffs and provided a stable source of government revenue. Initially targeting only the wealthiest, over time tax rates increased, and more Americans became subject to taxation.
Step-by-step explanation:
Understanding the Sixteenth Amendment
Before the Sixteenth Amendment to the United States Constitution was ratified in 1913, there was no constitutional authority for a federal income tax on individuals. The amendment emerged from the need for the federal government to replace revenue that was lost due to lower tariffs. In essence, as the government's expenses grew, just like individuals need income to pay for daily expenses, the government required steady revenue through taxation. The first federal income tax was implemented during the Civil War to fund government expenses, but because this power was not enumerated in the Constitution, it faced legal challenges. The Supreme Court declared earlier federal income tax laws unconstitutional, leading to the creation of the Sixteenth Amendment which explicitly granted Congress the power to lay and collect taxes on incomes, thereby legalizing federal income tax.
The new progressive tax system, which taxed individuals based on their income bracket, aimed initially to tax only the wealthiest Americans, with the majority of workers earning under the threshold and thus not being subject to federal income tax. Over time, as government grew and required more funds, tax rates increased and exemptions were lowered, which meant a larger portion of the population became subject to federal income taxes. This shift brought greater public awareness and scrutiny over federal tax policies.
Ultimately, the Sixteenth Amendment addressed the issue of revenue generation for the federal government by allowing for a direct tax mechanism that did not require apportionment among the states nor reference to any census figures, making it a pivotal change in American fiscal policy.