Let me begin with some of the alternative titles to this post. Two tiles I considered were the year progressives took over the government and the year the government took over our lives.
1913 began as a great year for America. Wages were up about 4% compared to the typical 2% rise the previous years. The unemployment rate was only 4.7%. American economic output per capita was the highest in the world. The economic forecast was terrific! The progressive era was in full swing. What could go wrong? The federal government stepped in to "fix" things. That is what went wrong. Four significant things happened in 1913 that would change the role of government in America forever.
February 3rd, 1913 saw the ratification of the 16th amendment establishing the first permanent federal income tax. When the tax was enacted only the top 6% of incomes in America were taxed. To say that another way, 94% of Americans were not effected by the Revenue Act of 1913. At the time it was said that the income tax would never rise above 2%. That was obviously a lie. My federal income tax rate was 22% last year plus medicare and social security taxes. The ratification on the 16th amendment also started the rise to power of the Internal Revenue Service.
March 4th, 1913 another more subtle expansion of Washington DC power occurred. The ten year old Department of Commerce and Labor was split in two. The new Department of Commerce contained three subordinate departments, The Census Bureau, U.S. Bureau of Fisheries and U.S. Coast and Geodetic Survey. This split made the expansion of the two new departments easier.
April 8th, 1913 the 17th amendment to the constitution passed changing one of the fundamental founding principles of our republic. Until the 17th amendment US Senators were elected by the state legislators. The 17th amendment changed this to a popular election stripping state legislators of all power in DC. The founders insisted that the states and the people held the ultimate power. Member of the House of Representatives were accountable to We the People and Senators were accountable to their state legislators. This change completely flipped the balance of power effectively giving all the power to the federal government. This makes the enumerated powers in the constitution and the restrictions reiterated in the 10th amendment merely formalities.
The fourth death nail to the US Constitution was hammered in on December 23rd, 1913. President Woodrow Wilson created he Federal Reserve. The US Government seized control of our money and interest rates. Now our money is not tied to any physical reserves and some group of bureaucrats decide how much it will cost to borrow money. The government decides what currency is worth and then dictates the interest rate on loans of the arbitrarily valued money.
1913, the heart of the progressive era, saw these huge power grabs by the US Government and probably others that I haven't considered. The US Constitution, the most perfect document ever penned by human hands was ignored for the sake of progress.