Taxing and Spending Flashcards
Taxing and Spending Power: R: Art. 1, § 8, Cl. 1:
The Congress can lay and collect 4 different types of revenue: Taxes, Duties, Imposts and Excises; and can use that money to pay for: debt, provide for Common Defense, and General Welfare.
Court gives Congress broad discretion in its taxing and spending powers. Spending condition attached to a grant is justified if… (Dole factors)
- Exercise of spending power must be for gen. welfare
- Condition must be unambiguous
- Condition must be rationally related to federal spending program
- Condition cannot violate other constitutional provisions
- Cannot be so coercive as to compel state to accept
Taxing and Spending Power: A: U.S. v. Butler
Upholding the constitutionality of an agricultural tax when its purpose is to provide for general welfare. (Holding making it unconstitutional not relevant b/c it regulated “product”) Good law is the scope of the tax/spend power
- The tax at issue was to pay for a subsidy for famers who were forced to take land out of production (Tax was on companies that processed farm products)
- Court holds that tax/spend power broad because it is a separate and distinct power in Art. 1, Sec. 8 (Tax/Spend clause has its own limitations, nothing in the other Section 8 clauses that define the legislative powers of Congress - This is a broad reading of Tax and Spending)
- Extends to spending power: expending public monies is not limited by direct grants of leg. power found in constitutional doctrine
Taxing and Spending Power: A: Steward Machine Co
The subject matter of taxation open to the power of Congress is as comprehensive as that open to the power of the States
Like a police power in the realm of taxation can impose as long as Congress believes taxes to be in the “general welfare” of the U.S.
Taxing and Spending Power: A: South Dakota v. Dole
Holding that Congress can justifiably withhold federal funding for a highway fund if the State does not increase the drinking age.
Dole factors:
- Spending is for gen. welfare. Courts should defer to Congress’ judgment about what promotes the general welfare
- Says Congress is reasonable to conclude the spending provision is designed to serve GW.
- Condition must be unambiguous
- Raise drinking age or lose funds, easy to understand
- Condition must be rationally related to fed. spending program
- Is directly related to one of the main purposes for which highway funds are expended – safe interstate travel
- Condition cannot violate other constitutional provisions
- No violation of 10th b/c there is no 10th amendment limitation on “the range of conditions legitimately place on federal grants”
- No violation of 21st Amendment b/c its not regulating liquor sales, but regulating conditions
- SD can choose to reject the funds in any way its wishes
- Cannot be so coercive as to compel a state to accept
- Only small % of specific highway funds
- Only lose 5% of specified highway grant programs
Tax and Spending with N/P: R: Court will uphold a law under the Necessary and Proper clause IF
(i) Legitimate end
(ii) Appropriate means
Tax and Spending with N/P: A: Sabri v. U.S.
Upholding a federal law that made it a crime to bribe any state or local gov. official if the state or local gov. that receives more than $10k in federal funding under N/P.
- D is a local contractor who offered bribes to city councilman in Minneapolis to get him to approve hotel and retail building plan.
- D says that prosecutor should have to prove that there was a connection between the bribe of a state official and the use of federal dollars not the case b/c money is fungible
- Congress creates JX hook by only penalizes officials charged with administering federal funds of more than $10k
- N/P analysis: Congress can ensure taxpayer dollars appropriated pursuant to this power are spent for gen. welfare
- Legit end: ensuring that taxpayer funds are spent for gen. welfare
- Appropriate ends: criminalizing bribes to local officials is an “appropriate means” of safeguarding the use of federal dollars
