The information provided in the first two sections recount the history and reasoning behind the proposed and adopted Sixteenth Amendment, as reflected by The Congressional Record of 1909-10. The following sections trace the progression of the Federal Income Tax from the original "intent" of the Amendment in 1913, up to our current system under the 1954 Internal Revenue Code. The changes in terminology are subtle, yet immense in reality. Congressman Berger of Wisconsin, in his address to the House of Representatives on December 12, 1925, provides an interesting clue as to what changes occurred; and the Congressional Record tells us when and how. His statements are recorded on pages 747 and 748 of Volume 67, Part 1, of the Congressional Record. Under the heading "Word ‘income’ used in two ways", he says:

"Moreover, the word ‘income’ in these statistics is misleading.

Whenever the word ‘income’ is applied to a corporation or business, it means net profit. It means the surplus which remains after provision is made for all expenses and the maintenance and replacement of machinery.

On the other hand, whenever the term is applied to the individual worker, it simply means his wages or salary. There is no consideration for the human asset that is being used up—none for the replacement of the person worn out by the stress of modern industry---no provision for the raising of a family."

It seems the term "income" is now interpreted by its meaning as used in statistics, not as it was intended to mean under the Sixteenth Amendment. This change, in terminology, may seem to be of no importance at first glance; but considering the implication, when viewed from the point of substance, it is quite material. In the first instance, as stated by Congressman Berger, the term "income" is used to mean net-income or profit when applied to corporations and businesses, yet in the second, it seems to mean gross yearly wages or compensation (all that comes in). Are the two forms of income, i.e. "net-income" and "all that comes in", the same "income" in relation to the provisions of the Sixteenth Amendment? If they are, then the Federal "Income Tax" is, in reality, a "capitation, or other direct, Tax", levied without apportionment. Congress settled that argument, when they rejected S.J.R. 39, prior to submitting the Amendment for ratification to the States. Follow the progression of the Federal "Income Tax" from its roots in the 1894 Income Tax Act, to its application today. You will find, in reality, only two major changes in the income-tax structure have occurred; namely, the definition of "net-income", and the reduction in the allowance for "personal living and family expenses".