This only lasted for 10 years, however. In 1894 Congress enacted a flat rate federal income tax, but this was ruled unconstitutional the following year. The 16th Amendment allowed for internal revenue collections to reach a milestone over the billion-dollar mark in 1918. By 1920, the collections had surpassed $5 billion. As W. Eliot Brownlee said: With the passage of the Revenue Act of 1916, the modest income tax of 1913 became an expansive effort to impose the progressive taxation of personal and corporate income, and of estates, to share in wartime sacrifices, to redistribute social power, and to expand economic opportunity. (Brownlee) .
The income tax quickly became a hit among the government as it generated an unforeseen cash flow that could be used for numerous governmental expenses. Immediately, cash was used for wartime expenses, but would eventually branch out to stabilize the economy. The mandatory withholding tax was introduced in 1943 and this increased tax revenue to nearly $45 million by 1945. Most recently, in 2010, the IRS collected roughly $1.2 trillion from taxes on individuals and $226 billion from corporations. So, it is safe to say that the ratification of the 16th Amendment has been extremely beneficial to our government.
Calvin Coolidge, our 30th President, was only in office for a little over one term. However, the feats he accomplished while in office were next to none. With assistance from the Secretary of Treasury at the time, Andrew Mellon, the two enforced tax policies with one thing in mind, lower taxes. Coolidge wanted to increase cuts and decrease spending to help the government prosper, and prosper is what it did. The Revenue Act of 1924 set a record for lowering taxes among Americans. In 1926 and 1928, two more Revenue Acts were passed by Congress, which ultimately forced only the richest 2% of taxpayers to pay federal income taxes. By the end of his term, Coolidge had 98% of the population paying no income tax at all.
