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Taxing and spending clause
| Federalism |
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| •Key terms • Court cases •Major arguments • State responses to federal mandates • Federalism by the numbers • Index of articles about federalism |
The taxing and spending clause, which also contains what is known as the general welfare clause, refers to Section 8 of Article I in the U.S. Constitution, which grants the federal government the power to impose and collect taxes.[1]
This clause specifically allows Congress to levy taxes for only two purposes: to repay debts, and to provide for the common defense and general welfare of the United States. While the power to tax has been perceived to be broad, curtailments have occasionally been introduced by the courts.[1]
Background
- See also: United States v. Butler
The taxing and spending clause gives Congress the power to impose taxes in order to repay debts and provide for the general welfare of the country, per Section 8 of Article I of the U.S. Constitution:[1]
"The Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States; but all duties, imposts and excises shall be uniform throughout the United States..."
The power to tax is a concurrent power of the federal government and the individual state.[1]
General welfare
Debates about the taxing and spending clause concern in part whether the general welfare clause grants an independent spending power or is a restriction upon the taxing power and what exactly is meant by the phrase "general welfare."[2]
James Madison and Democratic-Republicans argued the taxing and spending clause permits spending by Congress only when it relates to other powers enumerated in Article I of the U.S. Constitution. Alexander Hamilton and Federalists argued that the Clause authorizes spending for general purposes that go beyond Congress’ enumerated powers. A notable court case pertaining to the scope of general welfare is United States v. Butler.[2]
The following section provides a selection of notable court cases related to the taxing and spending clause and the concept of general welfare.
United States v. Butler
United States v. Butler is a 1936 U.S. Supreme Court case that helped define the constitutional restrictions of Congress' power to raise taxes for the country's general welfare. The court held that the 1933 Agricultural Adjustment Act, in which Congress implemented a processing tax on agricultural commodities to redistribute to farmers who promised to reduce their acreage, was unconstitutional because it attempted to regulate and control agricultural production, a power delegated to states. This case established that Congress' spending and taxation powers are reserved only for situations in which they are being used for the general welfare of the people. Agricultural production is under state discretion, and therefore is not considered general welfare.[3]
See also
External links
Footnotes
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