16th Amendment
Definition
The 16th Amendment to the United States Constitution allows Congress to levy an income tax without apportioning it among the states on the basis of population.
Analogy
Think of a group of friends deciding to order pizza. Instead of everyone paying an equal share (apportionment), they decide that those who earn more should contribute more towards the pizza (income tax). The 16th Amendment is like this agreement, but on a national scale.
Related terms
Federal Income Tax: A tax levied by the United States Internal Revenue Service (IRS) on the annual earnings of individuals, corporations, trusts, and other legal entities.
Constitutional Amendment: A modification or addition to a constitution. In U.S., it requires approval by two-thirds majority in both houses of Congress and ratification by three-fourths of states.
Progressive Tax: A tax that takes a larger percentage from high-income earners than it does from low-income individuals. The 16th amendment made progressive taxation possible at federal level.
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