Constitutional Law I

Taxing & Spending Powers

March 3, 2005

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The Tax & Spend Clause“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” Power

Are these additional congressional

powers? Congress shall have power to pay the debts of the US

-and-Congress shall have power to provide for the common defense and general welfare

Or are they limitations on the power to tax?Compare preamble

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US v. Butler (1936)Gen’l welfare clause not independent power, but qualification on taxing power “The Congress shall have power to lay

and collect taxes … for the general welfare”Confined to the

other enumerated

powers?

Not confined to the other enum-erated powers?

Madison Hamilton

Story

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US v. Butler (1936)Power to tax … for general welfare is an independent power in congress

Scope of this

power?

Who decides meaning of “general welfare”?

No need to decide since AAA “invades the reserved rights of the states” It is “beyond the powers delegated to the federal

government.” US may not indirectly accomplish impermissible ends

by taxing I.e., US can tax for gen’l welfare, but cannot regulate

via taxesStone: this tax is not a disguised regulation All taxes have some incidental regulatory

effect

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Taxes: Regulation or Revenue

Roberts’ Test: A tax that is regulatory must be valid under one of

congress’ substantive enumerated powers A revenue tax (w/o regulatory effect) need not be

Is there such a thing?

Steward Machine v. Davis Cardoza: congress’ power to

tax is as broad as the states’ Specific limitations

Uniform levies No income/wealth tax

Reversed by 16th Amend.

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Conditional Grants to States

Basic Issue: If tenth amendment prohibits congress

from regulating states, may congress buy compliance with conditional grants?

• This becomes a serious problem as revenue sharing becomes more important to states

• When does inducement turn into "coercion"?

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S. Dakota v. Dole (1987)Limitations on taxing / spending power Must be for general welfare

as determined by congress, subject to RB test Conditional Grants generally

Unconstitutional Conditions Test If gov't benefit is conferred only upon relinquishment

by recipient of a constitutional right, There must be a substantial relation between

purpose of the grant and the condition imposed

Otherwise gov't will always be

able to purchase rights

Serves process rationale of federalism

Additional requirement for grants to states Conditions must be unambiguous

Specific limitations on congressional power e.g., spending for religious purposes

Congress cannot use its taxing/spending power (or any other power) in violation of specific prohibitions

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S. Dakota v. Dole (1987)Brennan dissent 21st Amd imposes specific prohibition

Judicially construed to give states plenary power to regulate alcohol

O'Connor dissent Condition not "reasonably related" to

grant Drinking age unrelated to highway

construction

Is this too narrow a view of congress'

purpose?

Is O'Connor substituting her view

of relatedness for that of congress?

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Sabri v. US (2004)18 USC § 666(a)(2) – bribing state/municipal officials if the agency receives federal $$Which congressional power? Commerce clause? commercial

transaction? (Thomas concur.) Tax & Spend clause?

substantial relation between purpose of grant and condition imposed

Jurisdictional element (proof of connection req’d)?

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Sabri v. US (2004)Types of constitutional challenges Facial – law incapable of const’l application As-applied – law unconst’l in this caseValid exercise of T&S/N&P clauses because: Conviction only if proof that fed money mispent Enough federal $ pouring in to give congress a

stake in the integrity of local administration Money is fungible (liquid)

Operates on individual officers, not states ?Thomas (concur) Rejects RB test (misreading of McCulloch)