In 1909 Congress proposed the Sixteenth Amendment. This amendment reads as follows:

*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.*

By February 1913, the required three-fourths of the states ratified the Sixteenth Amendment, thus adding the amendment to the constitution.

Later that year, Congress enacted the Revenue Act of 1913. The tax ranged from 1% on income exceeding $3,000 ($97k in 2025 dollars) to 7% on incomes exceeding $500,000 ($16.2m in 2025 dollars).