First clause of Article I, section 8, of the U.S. Constitution, authorizing Congress to collect taxes and spend money for the general welfare.
The taxing and spending clause grants Congress the authority to acquire revenues to finance federal government programs, make payments to individuals, and provide grants-in-aid to states. The power to tax became controversial after the Civil War (1861-1865) when Congress imposed taxes on incomes, but the constitutionality of these taxes turned on the distinction between direct and indirect taxes. In Springer v. United States
The taxing power also became controversial because it was used to regulate behavior. The Court upheld these taxes when it found an independent source of constitutional authority. In Veazie Bank v. Fenno
The Court first addressed the spending clause in United States v. Butler
The Court quickly abandoned Butler’s restrictive interpretation of the taxing and spending clause when its opinion, along with several striking down other major New Deal programs, provoked President Franklin D. Roosevelt’s Court-packing proposal. In Sonzinsky v. United States
The issue of taxing or spending for the general welfare became even less important because the Court abandoned its restrictive interpretation of the commerce clause in National Labor Relations Board v. Jones and Laughlin Steel Corp.
Cox, Archibald. The Court and the Constitution. Boston: Houghton-Mifflin, 1987. Gunther, Gerald, and Kathleen Sullivan. Constitutional Law. 14th ed. Westberry, N.Y.: Foundation Press, 1997. McCloskey, Robert G. The American Supreme Court. 2d ed. Chicago: University of Chicago Press, 1994.
Bailey v. Drexel Furniture Co.
Butler, United States v.
Commerce, regulation of
General welfare clause
Hammer v. Dagenhart
Helvering v. Davis
Pollock v. Farmers’ Loan and Trust Co.
South Dakota v. Dole
Steward Machine Co. v. Davis
Veazie Bank v. Fenno