Taxation

Question 1

Taxing Power

Answer 1

1. Regulation: Congress can probably regulate under the guise of taxing (as long as revenue is produced)

Question 2

Limits on Taxing Power

Answer 2

A) Direct Taxes: Must be allocated among the states in proportion to population.
B) Customs Duties and Excise Taxes must be Uniform:
- Must be nationwide (not state by state)
C) No Export Taxes: Congress may not tax exports from any state.

Question 3

Effect of Calling a measure a “Penalty”

Answer 3

• Labeling a measure a “penalty” does not prevent the measure from being upheld as a valid tax (as long as it functions in a way that resembles a tax). ACA Decision.
• Produces Revenue.

Question 4

Spending Power

Answer 4

Congress also has the power to pay debts and provide for the common defense and general welfare of the USA.
- Independent Power

Question 5

Use of Conditions

Answer 5

Congress may generally place conditions on the use of its spending power, even if the purpose is to Regulate.

Conditions = Justified under the Necessary and Proper Clause.

Question 6

Witholding of funds to Achieve a Regulatory Goal

Answer 6

• Congress can indirectly regulate through the use of it’s spending power.

South Dakota v. Dole (Congress can withhold federal HW funds to regulate)

Question 7

South Dakota V. Dole (Limitations on Spending power)

Answer 7

1) the exercise of the spending power must be in pursuit of “the general welfare.”

2 Second, [if] Congress desires to condition the States’ receipt of federal funds, it “must do so unambiguously, [enabling] the States to exercise their choice knowingly, cognizant of the consequences of their participation.”

3) our cases have suggested (without significant elaboration) that conditions on federal grants might be illegitimate if they are unrelated “to the federal interest in particular national projects or programs.”

Question 8

Conditions Can’t Amount to “COERCION”.

Answer 8

If congress leaves states “no other option but to aquiesce” to the new program or conditions = Coercion (Which goes beyond the scope of Congress’ Spending power) NFIB v. Sebelius (Only case)

Question 9

DOLD TEST (FOUR STEP TEST for CONDITIONS PLACED ON SPENDING)

Answer 9

1) Spending Program promotes general Welfare.
2) Congress desires to condition the States ’ receipt of federal funds, it “must do so unambiguously, [enabling] the States to exercise their choice knowingly, cognizant of the consequences of their participation.”
3) our cases have suggested (without significant elaboration) that conditions on federal grants might be illegitimate if they are unrelated “to the federal interest in particular national projects or programs.”
4) other constitutional provisions may provide an independent bar to the conditional grant of federal funds.