What does "without apportionment" mean in the 16th amendment of U.S. Constitution?

Question

Here's the text of the 16th amendment to the U.S. Constitution:

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.

What does "without apportionment among the several States" mean?

To me it sounds like something similar to the electoral college, where Florida has more people than Georgia by an approximate ratio of 29:16, therefore we will charge Florida 29% income tax but Georgia only 16%. That sounds absurd to me and I'm pretty sure it's not done that way (and hopefully wasn't done that way before the 16th amendment?). But I can't understand what else "without apportionment" might mean.

Answer 1

In Article I, section 9, the Constitution says:

No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or enumeration herein before directed to be taken.

A "capitation" is also called a head tax; it means you tax $X for every person. The meaning of "other direct Tax" is less clear; the historical understanding in the late 19th century was that it didn't apply to income. However, one thing that is clear is that it does apply to a property tax: if the federal government seeks to tax you on the value of your real or personal property, it must apportion the tax among the states on the basis of population. If Virginia has 2.5% of the US population and New York has 6.25%, then the total tax money collected from Virginia must be 2.5% of the total tax money collected nationwide, and likewise for New York; the total money collected from Virginia must be 40% the amount collected from New York.

This doesn't mean Virginia's rate is 40% of New York's. If Virginia's land had a total value of 40% what New York's did, then the rates would actually be the same. But the ratio between tax collected from the two states would have nothing to do with property value; it would be just based on population. This is a rather convoluted and silly system; one theory I've read suggests that part of the point was to discourage these sorts of taxes unless they're truly necessary (and if they do happen, to collect the most money from the states with the most congressmen that could vote on the bill). But it's unworkable for almost any actual tax that's not a head tax, and head taxes are very much out of fashion.

Most taxes have been considered to not be direct taxes. Income tax was generally not considered direct either. However, an 1895 Supreme Court case (Pollock v. Farmers' Loan & Trust Co.) found that a tax on income which was derived from property (rent, dividends, interest, etc.) was effectively a tax on the property, and so was a direct tax. This would apply to only a subset of income (wage income wasn't included), but it's a reasonably significant subset.

Many people didn't particularly like the decision; it pretty much said "the kind of income rich people make can't be taxed by a practical method, only this impractical apportionment system." The Supreme Court can be overruled via constitutional amendment; that's what the 16th Amendment did. It clarified that Pollock was no more, and that income tax didn't need to be apportioned no matter where the income came from. It was enacted precisely because apportionment is utterly impractical.

Answer 2

Before the passage of the 16th amendment Congress could only levy direct taxes if the proceeds of the tax were directly apportioned among the states. A good explanation of this is from Wikipedia:

Generally, a direct tax is subject to the apportionment rule, meaning taxes must be imposed among the states in proportion to each state's population in respect to that state's share of the whole national population. For example: As of the 2000 Census, nearly 34 million people populated California (CA). At the same time, the national population was 281.5 million people. This gave CA a 12 percent share of the national population, roughly. Were Congress to impose a direct tax in order to raise $1 trillion before the next census, the taxpayers of CA would be required to fund 12 percent of the total amount: $120 billion.

The same page defines what direct taxes were:

Before 1895, direct taxes were understood to be limited to "capitation or poll taxes" (Hylton v. United States) and "taxes on lands and buildings, and general assessments, whether on the whole property of individuals or on their whole real or personal estate" (Springer v. United States). The decision in Springer went further in declaring that all income taxes were indirect taxes—or more specifically, "within the category of an excise or duty." However, in 1895 income taxes derived from property such as interest, dividends, and rent (imposed under an 1894 Act) were treated as direct taxes by the Supreme Court in Pollock v. Farmers' Loan & Trust Co. and were ruled to be subject to the requirement of apportionment.

Thus an income tax without apportionment is disallowed under the constitution and an amendment had to be made before congress could institute a direct tax without apportionment. This part of the 16th amendment authorizes an income tax directly and without having to worry about collecting an equal share by population from each state.

Answer 3

Apportionment would make high income people in high populated states pay higher rate than high income people in less populated states.

It would prevent poor people from high populated and bankrupt states like California from taking money of rich people in less populated states.

Apportionment protected states from each other, which kept the union stronger. Without apportionment less populated states will eventually want to separate from the union to avoid feeding poverty in other states.

So it's not "convoluted and silly system" like @cpast wrote, it was smart and fair system, which was well designed by founders and successfully destroyed by 16th amendment.