Constitutional Law I
Taxing & Spending Powers
Oct. 13, 2004
Spring 2004
Con Law I
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”
Are these additional
congressional powers?
Or are they limitations
on the power to tax?
Compare preamble
Power
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
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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?
Madison
Not confined to the
other enum-erated
powers?
Hamilton
Story
3
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 taxes
Stone: this tax is not a disguised regulation
 All taxes have some incidental regulatory effect
4
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.
5
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"?
6
S. Dakota v. Dole
(1987)
Limitations on taxing / spending power

Must be for general welfare
Otherwisegov't
as determined by congress, subject
will always be able
to purchase
rights
 Conditional
Grants generally
to RB test
 Unconstitutional Conditions Test

If gov't benefit is conferred only upon relinquishment by
Congress cannot use
Serves process
recipient
of
a
constitutional
right,
its taxing/spending
rationale of
power (or any other
 There must be a substantial relation between
purpose of
federalism
power) in violationthe
of grant and the condition imposed
specific prohibitions

Specific limitations on congressional power


e.g., spending for religious purposes
Additional requirement for grants to states
 Conditions must be unambiguous
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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 O'Connor substituting
her view of relatedness
for that of congress?
Is this too narrow a view
of congress' purpose?
8
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)?
9
Sabri v. US
(2004)
Types of constitutional challenges


Facial – law incapable of const’l application
As-applied – law unconst’l in this case
Valid 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)
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