Changes

The U.S. Constitution give the new national government the authority to raise money by taxing imports (goods shipped from foreign nations) and interstate commerce, and denied the States their longstanding power to raise money in that manner.  This was a massive shift in power from the States to the federal government.  Rhode Island refused for several years, even after George Washington was president, to ratify the Constitution and join the United States, because Rhode Island raised its money by taxing imports into its harbors along the Atlantic Ocean (including the slave trade).  (The Constitution does prohibit any taxes on exports -- goods shipped from our Nation to foreign nations -- by the federal government.)

The U.S. Constitution give the new national government the authority to raise money by taxing imports (goods shipped from foreign nations) and interstate commerce, and denied the States their longstanding power to raise money in that manner.  This was a massive shift in power from the States to the federal government.  Rhode Island refused for several years, even after George Washington was president, to ratify the Constitution and join the United States, because Rhode Island raised its money by taxing imports into its harbors along the Atlantic Ocean (including the slave trade).  (The Constitution does prohibit any taxes on exports -- goods shipped from our Nation to foreign nations -- by the federal government.)

But the original U.S. Constitution limited the power of the government to tax individuals, in Art. I, Section 9, Clause 4:

But the original U.S. Constitution limited the power of the government to tax individuals, in Article I, Section 9, Clause 4:

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

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

This meant that a direct income tax on individual Americans could only be imposed in proportion to how many people lived in an area, rather than in proportion to how much money they make.  Wealthy areas could not be taxed more than poor areas.  As result, the federal government could not easily impose an income tax like what exists today.

This meant that a direct income tax on individual Americans could only be imposed in proportion to how many people lived in an area, rather than in proportion to how much money they make.  Wealthy areas could not be taxed more than poor areas.  As result, the federal government could not easily impose an income tax like what exists today.