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Encyclopedia > General Welfare clause

Article I, Section 8, Clause 1 of the United States Constitution, is known as the General Welfare Clause, the Uniformity Clause, the Welfare Clause, and the Taxing and Spending Clause.[1] Wikisource has original text related to this article: Article One of the United States Constitution Article One of the United States Constitution describes the powers of the legislative branch of the United States government, known as Congress, which includes the House of Representatives and the Senate. ... Wikisource has original text related to this article: The United States Constitution The United States Constitution is the supreme law of the United States of America. ...

Contents

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

-1... In economics, a duty is a kind of tax, often associated with customs, a payment due to the revenue of a state, levied by force of law. ... This page is a candidate to be moved to Wiktionary. ... Tax rates around the world Tax revenue as % of GDP Economic policy Monetary policy Central bank   Money supply Fiscal policy Spending   Deficit   Debt Trade policy Tariff   Trade agreement Finance Financial market Financial market participants Corporate   Personal Public   Banking   Regulation        Excise tax, sometimes called an excise duty, is a type of... Debt is that which is owed. ... The common good is a term that can refer to several different concepts. ...

Appropriations of revenue for the general welfare

While both of the primary authors writing in the Federalist Papers agreed that the clause delegated to Congress a general power of taxation (i.e., to lay any tax they found appropriate in order to raise revenues), two theories of the spending power were put forth: An advertisement for The Federalist The Federalist Papers are a series of 85 articles arguing for the ratification of the United States Constitution. ...

  • the narrower view of James Madison that spending must be tied to one of the other specifically enumerated powers, such as regulating interstate or foreign commerce, or providing for the military;[2][3] and
  • the broader view of Alexander Hamilton that spending, so long as it is deemed necessary and proper, is an independent enumerated power that Congress may exercise to benefit the general welfare, such as to assist agriculture or education.[4]

What is surprising about the Hamiltonian school of thought is that is gives life to the precise fears over which the Anti-Federalists expressed concern during the ratification of the Constitution, the very objections that gave Madison reason to author his contributions to the work in an attempt to quell. James Madison (March 16, 1751 – June 28, 1836), was an American politician and the fourth President of the United States (1809–1817), and one of the Founding Fathers of the United States. ... Alexander Hamilton (January 11, 1755 or 1757[1]—July 12, 1804) was an Army officer, lawyer, Founding Father, American politician, leading statesman, financier and political theorist. ...


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),[5] that a tax on child labor was an impermissible attempt to regulate commerce beyond that Court's equally narrow interpretation of the Commerce Clause. The Supreme Court Building, Washington, D.C. The Supreme Court Building, Washington, D.C., (large image) The Supreme Court of the United States, located in Washington, D.C., is the highest court (see supreme court) in the United States; that is, it has ultimate judicial authority within the United States... Drexel Furniture Company was fined over $6000 in tax, because of a child labor tax enacted by congress. ... // The United States Reports, the official reporter of the Supreme Court of the United States Case citation is the system used in common law countries such as the United States, England and Wales, Ireland, Canada, New Zealand, Hong Kong, Australia and India to uniquely identify the location of past court... is the employment of children under an age determined by law or custom. ... Article I, Section 8, Clause 3 of the United States Constitution, known as the Commerce Clause, states that Congress has the exclusive authority to manage trade activities between the states and with foreign nations and Indian tribes. ...


This view was later overturned in United States v. Butler, 297 U.S. 1 (1936).[6] In that case the Court held that the power to tax and spend is an independent power; that is, that the General Welfare 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 Court wrote: Holding The Agricultural Adjustment Act is an unconstitutional exercise of power. ... // The United States Reports, the official reporter of the Supreme Court of the United States Case citation is the system used in common law countries such as the United States, England and Wales, Ireland, Canada, New Zealand, Hong Kong, Australia and India to uniquely identify the location of past court... For Ireland, see Tenth Amendment of the Constitution of Ireland. ...

The [General Welfare] clause confers a power separate and distinct from those later enumerated [,] is not restricted in meaning by the grant of them, and Congress consequently has a substantive power to tax and to appropriate, limited only by the requirement that it shall be exercised to provide for the general welfare of the United States. … It results that the power of Congress to authorize expenditure of public moneys for public purposes is not limited by the direct grants of legislative power found in the Constitution.

The modern Supreme Court has interpreted this clause to give Congress a plenary power to impose taxes and to spend money for the general welfare, 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).[7] A plenary power or plenary authority is the complete power of a governing body. ... Federal courts Supreme Court Circuit Courts of Appeal District Courts Elections Presidential elections Midterm elections Political Parties Democratic Republican Third parties State & Local government Governors Legislatures (List) State Courts Local Government Other countries Atlas  US Government Portal      A U.S. state is any one of the fifty subnational entities of... was a precident-setting legal case concerning Federalism. ... // The United States Reports, the official reporter of the Supreme Court of the United States Case citation is the system used in common law countries such as the United States, England and Wales, Ireland, Canada, New Zealand, Hong Kong, Australia and India to uniquely identify the location of past court...


Limitation on taxes: Apportionment of some direct taxes

Other language in the Constitution expressly limits the taxing and spending power. Article I, Section 9 has several clauses so addressed. Clause 4 states:

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

A tax (if any) subject to the apportionment rule would have to be imposed among the states in proportion to each state's population. This means that the dollar amount of such taxes imposed on the taxpayers within any given state would be required to bear an arithmetical relationship to the total dollar amount of such taxes imposed in the entire nation that would be equal to the ratio of that state's population to the total population of the nation. A poll tax, head tax, or capitation is a tax of a uniform, fixed amount per individual (as opposed to a percentage of income). ... Tax rates around the world Tax revenue as % of GDP Economic policy Monetary policy Central bank   Money supply Fiscal policy Spending   Deficit   Debt Trade policy Tariff   Trade agreement Finance Financial market Financial market participants Corporate   Personal Public   Banking   Regulation        The term direct tax has more than one meaning: a colloquial...


Until 1895, all income taxes were deemed to be indirect taxes, or excises. Direct taxes were limited to property taxes "imposed by reason of ownership," and to capitations (head taxes). Because some income taxes (taxes on income from property, such as interest, dividends, and rent) were, however, treated as direct taxes in the 1895 U.S. Supreme Court decision in Pollock v. Farmers' Loan & Trust Co., the prohibition on unapportioned direct taxes was later eliminated with respect to income taxes by the ratification of the Sixteenth Amendment. In 1916 in the case of Brushaber v. Union Pacific Railroad, the U.S. Supreme Court ruled that under the Sixteenth Amendment, income taxes were constitutional even though unapportioned. In subsequent cases, the courts have interpreted the Sixteenth Amendment and the Brushaber decision as standing for the rule that the Amendment allows a direct tax on "wages, salaries, commissions, etc. without apportionment."[8] Tax rates around the world Tax revenue as % of GDP Part of the Taxation series        The federal government of the United States imposes a progressive tax on the taxable income of individuals, corporations, trusts, decedents estates, and certain bankruptcy estates. ... Tax rates around the world Tax revenue as % of GDP Economic policy Monetary policy Central bank   Money supply Fiscal policy Spending   Deficit   Debt Trade policy Tariff   Trade agreement Finance Financial market Financial market participants Corporate   Personal Public   Banking   Regulation        Excise tax, sometimes called an excise duty, is a type of... Holding --- Court membership Case opinions Laws applied --- Pollock v. ... Amendment XVI in the National Archives Amendment XVI (the Sixteenth Amendment) of the United States Constitution was ratified on February 3, 1913. ... Holding It is erroneous to assume that the 16th Amendment provides for a hitherto unknown power of taxation; that is, a power to levy an income tax which, although direct, should not be subject to the regulation of apportionment applicable to all other direct taxes. ...


Limitation on taxes: No taxes and duties on exports

Article I, Section 9, Clause 5 prohibits taxes and duties on exports:

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

Regarding taxes on exports, the 0.125% harbor maintenance tax on the value of commercial cargo involved in a taxed port use under 26 U.S.C. § 4461 was unanimously ruled unconstitutional in the case of United States v. United States Shoe Corp., 523 U.S. 360, 118 S. Ct. 1290, 98-1 U.S. Tax Cas. (CCH) paragr. 70,091 (1998). The government had argued that the tax was only a "user fee." The Court ruled that it was an unconstitutional tax on exports. The Internal Revenue Code (or IRC) (more formally, the Internal Revenue Code of 1986, as amended) is the main body of domestic statutory tax law of the United States organized topically, including laws covering the income tax (see Income tax in the United States), payroll taxes, gift taxes, estate taxes...


Limitation on spending

Article I, Section 9, 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.

References

  1. ^ Garner, D. and Nyberg, C. (October 5, 2004) "Constitutional Clauses & Their Nicknames" (University of Washington: M.G. Gallagher Law Library)
  2. ^ The Federalist Papers No. 41 General View of the Powers Conferred by The Constitution
  3. ^ Letter to the House of Representatives, James Madison,Veto of federal public works bill, March 3, 1817
  4. ^ Hamilton, A. (5 December 1791) "Report on Manufactures" The Papers of Alexander Hamilton (ed. by H.C. Syrett et al.; New York and London: Columbia University Press, 1961-79) 10:302-4
  5. ^ 259 U.S. 20 (Text of the Bailey v. Drexel Furniture Co. opinion from Findlaw)
  6. ^ 297 U.S. 1 (Text of the United States v. Butler opinion from Findlaw)
  7. ^ 483 U.S. 203 (Text of the South Dakota v. Dole opinion from Findlaw)
  8. ^ Parker v. Commissioner, 724 F.2d 469, 84-1 U.S. Tax Cas. (CCH) paragr. 9209 (5th Cir. 1984) (closing parenthesis in original has been omitted).


 
 

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