Taxation in the US: Taxing and Spending Clause (Part One)

The Taxing and Spending Clause (which contains provisions known as the General Welfare Clause and the Uniformity Clause), Article 1, Section 8, Clause 1 of the United States Constitution, grants the federal government of the United States its power of taxation. While authorizing Congress to levy taxes, this clause permits the levying of taxes for two purposes only: to pay the debts of the United States, and to provide for the common defense and general welfare of the United States. Taken together, these purposes have traditionally been held to imply and to constitute the federal government's taxing and spending power.

Constitutional text.

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;

Background.

One of the most often claimed defects of the Articles of Confederation was its lack of a grant to the central government of the power to lay and collect taxes. Under the Articles, Congress was forced to rely on requisitions upon the governments of its member states. Without the power to independently raise its own revenues, the Articles left Congress vulnerable to the discretion of the several State governments—each State made its own decision as to whether it would pay the requisition or not. Some states were not giving Congress the funds for which it asked by either paying only in part, or by altogether ignoring the request from Congress. Without the revenue to enforce its laws and treaties, or pay its debts, and without an enforcement mechanism to compel the States to pay, the Confederation was practically rendered impotent and was in danger of falling apart.

The Congress recognized this limitation and proposed amendments to the Articles in an effort to supersede it. However, nothing ever came of those proposals until the Philadelphia Convention.

Powers granted.

The power to tax is a concurrent power of the federal government and the individual states. The taxation power has been perceived over time to be very broad, but has also, on occasion, been curtailed by the courts. United States v Butler stated that the clause also granted "a substantive power... to appropriate", not subject to the limitations imposed by the other enumerated powers of Congress.