The Sixteenth Amendment simply removes, from one of the great powers granted to Congress by the citizens of America in their First Article, a federal limitation upon its exercise, a limitation entirely for the benefit of the states which are political entities.
In the “conventions” we have just left, the First Article grant of power to the new government to impose direct taxation was the object of incessant attack. No prerogative of government is more cherished by any government than its ability to exact financial tribute from human beings by means of taxation. Under the old federation of states, although the federal government needed money, it was without any power of taxation. All it could do was to ask the various state governments to supply it with the money. Article VII of the “Articles of Confederation” provided that the expenses of the federal government “shall be defrayed out of a common treasury, which shall be supplied by the several states, in proportion to the value of all land, within each state, granted to or surveyed for any person, as such land, and the buildings and improvements thereon, shall be estimated, according to such mode as the United States in Congress assembled shall, from time to time, direct and appoint. The taxes for paying that proportion shall be laid and levied by the authority and direction of the legislatures of the several states, etc.”
Section 8 of the First Article of the proposed new Constitution read that “The Congress shall have power to lay and collect taxes, duties, etc.” At Philadelphia, in 1787, a tremendous fight was made against the proposal of this grant by the citizens of America to their government. Many delegates at Philadelphia, who had the financial welfare of their particular state government at heart, contended that, if the new government were given the power of direct taxation of the people, the new government would leave the people with no money to be collected by the state governments for their own purposes. The nationalists at Philadelphia, however, knew that a national government without power of direct taxation over its own citizens would be a helpless government. Therefore, they insisted that the proposed grant of this power remain in the First Article. As a concession to the opposition made on behalf of the state governments, there was added to the proposed First Article a purely federal limitation on the exercise of the national power of direct taxation. This federal limitation, on behalf of the states and their governments, read: “No capitation, or other direct, tax shall be laid, unless in proportion to the census or enumeration hereinbefore directed to be taken.”
In the conventions of the citizens of America, the friends of the respective state governments made every effort to defeat the First Article grant of national power to impose direct taxation upon the citizens of America.
In the Virginia convention, from Randolph and from Henry, arguing respectively for and against the grant, we get our certain knowledge that the apportionment limitation on the exercise of the granted power was a purely federal limitation aimed entirely to secure to the respective state governments the just amount of the moneys which could be collected by taxation from the Americans living in the respective states.
Randolph argued: “The difficulty of justly apportioning the taxes among the states, under the present system, has been complained of; the rule of apportionment being the value of all lands and improvements within the states. The inequality between the rich lands of the James River and the barrens of Massachusetts has been thought to militate against Virginia. If taxes could be laid according to the real value, no inconvenience could follow; but, from a variety of reasons, this value was very difficult to be ascertained; and an error in the estimation must necessarily have been oppressive to a part of the community. But, in this new Constitution, there is a more just and equitable rule fixed—a limitation beyond which they cannot go. Representatives and taxes go hand in hand; according to the one will the other be regulated.... At present, before the population is actually numbered, the number of representatives is 65. Of this number, Virginia has a right to send ten; consequently she will have to pay ten parts out of sixty-five parts of any sum that may be necessary to be raised by Congress. This, sir, is the line.” (Randolph, 3 Ell. Deb. 121.)
As to the granted power of direct taxation, Henry argued: “We all agree that it is the most important part of the body politic. If the power of raising money be necessary for the general government, it is no less so for the states.... The general government being paramount to the state legislatures, if the sheriff is to collect for both—his right hand for Congress, his left for the state—his right hand being paramount over the left, his collections will go to Congress. We shall have the rest. Deficiencies in collections will always operate against the states.... Congress will have an unlimited, unbounded command over the soul of this Commonwealth. After satisfying their uncontrolled demands, what can be left for the states? Not a sufficiency even to defray the expense of their internal administration. They must therefore glide imperceptibly and gradually out of existence.” (Henry, 3 Ell. Deb. 148 et seq.)
The Sixteenth Amendment merely removed, in one respect, this federal limitation upon the exercise of the national power of direct taxation granted by the First Article. The Amendment read: “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.” This Amendment, being nothing but a change in the federal aspect of the Constitution, being a change in the protection given to each state as a political entity, was an Amendment which the state legislatures, each acting as attorney in fact for its own respective state, were entirely competent to make.
The Seventeenth Amendment has no relation to human freedom. It merely provided that the state governments should no longer elect the august Senators in the American Congress, some of whom we shall meet later herein.
This last Amendment, prior to 1917, provided that those Senators should be thereafter elected in our states by ourselves, the American people. Curiously enough, it is from the Senate in which they sit that came the proposal which caused the trouble which is obliging us to educate ourselves to find our “when” and “how” between 1907 and 1917 we became “subjects” instead of keeping our status as citizens of America.