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. [U.S. Constitution, 16th Amendment]

Did you have a big birthday celebration for the US Income Tax earlier this month? Of course, it isn’t a celebration in which many American wanted to participate, but the 16th Amendment authorizing the US Income Tax became law 100 years ago on February 3, 1913.

It was on that date that Delaware became the 36th state to ratify the 16th Amendment. This was significant because it meant 75 percent of the states had passed the amendment (there were 48 states at that time) making it the law for the entire country.

The 16th Amendment settled once and for all that a federal income tax was constitutional. Immediately after ratification of the amendment, Congress created the first income tax. The declaration form was only four pages long at the time (including instructions).

The top tax was seven percent and only applied to “rich” people. The personal exemption for single filers in 1913 was $3,000, equivalent to almost $70,000 now; the exemption for couples was $4,000 or $93,000 by today’s standard. Because incomes were so much lower in 1913, only 358,000 returns were filed that first year.

As with all taxes, people don’t like the income tax, but know that it is a part of life. Ballooning from four pages to hundreds of pages, the income tax code is complex. It is also the biggest tax in the federal revenue system, though it has not come close to paying for federal spending for more than a decade. So, with our tongues in our cheeks, we say, “Happy 100th Birthday Income Tax.”