What Power Does Congress Have to Collect Taxes?

The United States Constitution gave Congress the power to lay and collect taxes. Not only does the U.S. Constitution authorize the collection of taxes, but it also authorizes other forms of taxation such as duties, imposts and excises.

Congress' authority to tax comes from Article I of the U.S. Constitution. Many people refer to the portion of the Constitution that discusses Congress' authority to tax as the Spending Clause or Spending Power of the U.S. Constitution.

Supreme Court cases offer additional insight into the Congressional power to tax. In 1936, the Supreme Court decided the case of United States v. Butler. In that case, the Court ruled that the particular tax in question went beyond Congress' powers to collect taxes as stated in the Constitution. The Supreme Court said that, in passing the tax, Congress sought to regulate agriculture rather than to raise revenue. In 1922, the Supreme Court invalidated a law that taxed child labor because the Supreme Court said that the tax's true intent was regulation rather than revenue generation.

However, in 1987, the Supreme Court expanded Congressional power to tax and spend when it decided the case of South Dakota v. Dole. In that case, the Court answered whether Congress could condition its apportionment of highway funding to states based upon requiring each state to raise the drinking age to 21. The Supreme Court found that the contingency passed constitutional muster, and the Court upheld the law.

The Supreme Court approved of Congressional power to establish an income tax in Springer v. United States. In its opinion, the Court referenced the Constitution's Spending Clause to say that an income tax is an excise tax, and as such, the U.S. Constitution allows it.