What major fiscal change was established by the Sixteenth Amendment?

The Sixteenth Amendment to the United States Constitution, ratified in 1913, established the federal government's authority to impose and collect income taxes. This was a significant fiscal change because it provided a reliable source of revenue for the government, allowing it to fund various programs and services. Prior to the amendment, the federal government primarily relied on tariffs and excise taxes for its funding, which could be inconsistent and limited.

This change addressed the financial needs of a rapidly growing country and enabled the government to play a more active role in the economy and social welfare. The amendment was a response to the increasing demand for government services and the need for a more equitable tax system, especially as the country experienced industrial growth and urbanization.

Thus, the establishment of an income tax represented a fundamental shift in how the federal government generated revenue and interacted with its citizens' economic activities, making it a cornerstone of modern fiscal policy in the United States.