Constitutional Law I Taxing & Spending Powers March 3, 2005

Spring, 2005Con Law I - Manheim2 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

Spring, 2005Con Law I - Manheim3 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

Spring, 2005Con Law I - Manheim4 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

Spring, 2005Con Law I - Manheim5 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 16 th Amend.

Spring, 2005Con Law I - Manheim6 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"?

Spring, 2005Con Law I - Manheim7 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

Spring, 2005Con Law I - Manheim8 S. Dakota v. Dole (1987) Brennan dissent 21 st 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?

Spring, 2005Con Law I - Manheim9 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)?

Spring, 2005Con Law I - Manheim10 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)