apportioned among the states in proportion to population the Sixteenth
Amendment to the Constitution was proposed and ratified. This amendment
provides that

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.

When the amendment was submitted to the states for approval some lawyers
apprehended that the words "incomes from whatever source derived" might
open the door to the taxation by the Government of income from state and
municipal bonds. Charles E. Hughes, then Governor of New York, sent a
special message to the Legislature opposing ratification of the
amendment on this ground.

Other lawyers, notably Senator Elihu Root, took a different view of the
scope of the amendment, holding that it would not enlarge the taxing
power but merely remove the obstacle found by the Supreme Court to the
Income Tax Law of 1894, i.e., the necessity of apportionment among the
states in proportion to population. This latter view has now been
confirmed by the Supreme Court. In a case involving a tax on income from
exports the Court said:[1]

The Sixteenth Amendment ... does not extend the taxing power
to new or excepted subjects, but merely removes all occasion,
which otherwise might exist, for an apportionment among the
states of taxes laid on income, whether it be derived from one
source or another....