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Supreme Court

... did not "create income tax."  Proposed by President Taft in 1909, it would close a loophole (created in 1895 by the Pollock v. Farmers case) by which corporations could partly dodge being taxed.  The Pollock ruling held that [corporate] income could not be taxed if the source from which the income was derived was property. The 16th Amendment:  Congress shall have the power to lay and collect taxes on all incomes, from whatever source derived.  However, this does not mean what people think it does.

In 1916, the Supreme Court laid out the nature of the 16th Amendment in the case of Brushaber v. Union Pacific Railroad, which perspective remains in force today. Pollock allowed the creative linking of "privileged earnings" to property; Brushaber prohibited this once and for all.

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