Article I, Section 8, Clause 1 of the United States Constitution, known as the Taxing and Spending Clause states:

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

Two theories of the taxing power have been advocated by constitutional scholars: (A) the narrower Madisonian view that taxation must be tied to one of the other specifically enumerated powers such as regulating commerce or providing for the military, and (B) the broader Hamiltonian view that taxation is a separately enumerated, independent power, and that Congress may tax and spend in any way that will benefit the general welfare.

At one point in U.S. history, the United States Supreme Court had imposed a narrow interpretation on the Clause, holding in Bailey v. Drexel Furniture Co., 259 U.S. 20 (1922), that a tax on child labor was an impermissible attempt to regulate commerce beyond that Court's equally narrow interpretation of the Commerce Clause.

This view was later overturned in United States v. Butler, 297 U.S. 1 (1936). In that case the Court held that the power to tax and spend is an independent power; that is, that the Taxing and Spending Clause gives Congress power it might not have anywhere else. The tax imposed in that case was nevertheless held unconstitutional as a violation of the Tenth Amendment reservation of power to the states.

The modern Supreme Court has interpreted this clause to give Congress a plenary power to impose taxes and to spend money, including the power to force the states to abide by national standards by threatening to withhold federal funds. See South Dakota v. Dole, 483 U.S. 203 (1987).

Limitations

---

Other language in the Constitution expressly limits the taxing and spending power. Article I, Section 9 has several clauses so addressed. Specifically, Clauses 4 and 5 limit direct taxation, and duties on exports respectively:

No capitation, or other direct, tax shall be laid, unless in proportion to the census or enumeration herein before directed to be taken.

No tax or duty shall be laid on articles exported from any state.

The prohibition on unapportioned direct taxes was later eliminated with respect to income taxes by the ratification of the Sixteenth Amendment.

Clause 7 imposes accountability on Congressional spending:

No money shall be drawn from the treasury, but in consequence of appropriations made by law; and a regular statement and account of receipts and expenditures of all public money shall be published from time to time.

Notes

---

United States Constitution | Legislative branch of the United States government | Legal history of the United States | Taxation in the United States