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H.R. 5442, A Bill to impose a tax on corporate and individual incomes . . . , January 24, 1894

Representative Benton McMillin of Tennessee advocated taxing income as an equitable way to raise federal revenue. In January 1894 he introduced a bill proposing a two-percent tax on incomes of more than $4,000. Added to a tariff bill to compensate for tariff reductions, it passed Congress in February 1894. The U.S. Supreme Court ruled it unconstitutional a year later.

Records of the U.S. House of Representatives, National Archives and Records Administration

H.R. 5442, A Bill to impose a tax on corporate and individual incomes . . . , January 24, 1894

The Sixteenth Amendment: Income Tax

In 1872 Congress repealed a national income tax that helped finance the Civil War, but the question of whether to tax income reemerged after an 1893 financial panic heightened the need for federal revenue. Representative Benton McMillin of Tennessee introduced an income-tax amendment to a tariff bill in 1894. It passed Congress, but the new income-tax law was short-lived. In 1895 the U.S. Supreme Court declared it unconstitutional. Congress finally secured its power to tax income in 1913 after it approved, and the states ratified the Sixteenth Amendment.

Is it not time that great estates which are protected by our Army, which are defended by our Navy, which are benefited by the various operations of Government, should contribute in some greater degree to carry on that Government?

Representative Benton McMillin of Tennessee, Speech to the U.S. House of Representatives, January 29, 1894