The practice of imposing taxes on incomes has been general in Europe for years, and even in this country several of the states have had income-tax laws. During the Civil War the national government collected a tax on incomes. Later, in 1894, Congress again provided for a federal income tax. A few years later the United States Supreme Court declared this law unconstitutional on the ground that it was a direct tax not apportioned, as the Constitution required, among the states according to population. The people then took matters in their own hands. The result was the Sixteenth Amendment, which gives the federal lawmakers authority to tax incomes. The first income-tax law under the new amendment exempted all incomes below $3000 ($4000 for man and wife), and provided a progressive tax on all incomes above that point. The total amount raised the first year (1915) was approximately one hundred million dollars. Our entry into the Great War (1917) caused Congress to lower the exemption to $1000 and $2000 and to increase rates above that point.

Until recently it was the general opinion that an income tax would prove to be unsatisfactory in this country. Our few years' experience, however, now leads us to the contrary view. This tax falls only on the well-to-do and the rich and it is difficult to shift. It comes out of incomes, is easily collected, and has not proved excessively unpopular even among those who feel its exactions. It seems safe to predict, therefore, that the income tax will become increasingly important, both as a source of revenue and as a means for lessening the inequalities in distribution.