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79-567: The Congress shall have Power To lay and collect Taxes, Duties , Imposts and Excises , to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States ; One of the most often claimed defects of the Articles of Confederation was its lack of a grant to the central government of

158-415: A whole ; and therefore there must exist a power somewhere, to preside, and preserve the connection in due order. This power is lodged in the parliament; and we are as much dependent on Great Britain , as a perfectly free people can be on another. I have looked over every statute relating to these colonies, from their first settlement to this time; and I find every one of them founded on this principle, till

237-591: A broad power to tax, and to expend revenues within its discretion. With the power to tax implicitly comes the power to spend the revenues raised thereby in order to meet the objectives and goals of the government. To what extent this power ought to be utilized by the Congress has been the source of continued dispute and debate since the inception of the federal government, as will be explained below. However, interpretations recognizing an implicit power to spend arising specifically from this clause have been questioned, with

316-466: A few examples of direct taxes existing in the United States (though not all of these meet the US constitutional definition of a direct tax, as stated below): Direct taxation has a few advantages and also some inconveniences in comparison of indirect taxes. It promotes equality and equity because direct taxes are based on ability to pay of the taxpayer and in the case of a progressive tax structure, every person

395-409: A group of delegates to the 1787 U.S. Constitutional Convention who dissented from the document sent to the states for ratification, objected over this kind of taxation, and explained: The power of direct taxation applies to every individual ... it cannot be evaded like the objects of imposts or excise, and will be paid, because all that a man hath will he give for his head. This tax is so congenial to

474-515: A larger group of states from "ganging up" to levy taxes benefiting them at the expense of the remaining, smaller group of states. A somewhat notable exception to this limitation has been upheld by the Supreme Court. In United States v. Ptasynski (1983), the Court allowed a tax exemption which was quasi-geographical in nature. In the case, oil produced within a defined geographic region above

553-406: A person. The tax is sometimes referred to, formally or informally, as a death duty . A gift tax on value given from one taxable entity to another. Direct tax Although the actual definitions vary between jurisdictions, in general, a direct tax is a tax imposed upon a person or property as distinct from a tax imposed upon a transaction, which is described as an indirect tax . There

632-496: A revenue thereby was never intended. – (emphasis in the original) The idea Dickinson conveyed above, explains University of Montana Law Professor Jeffrey T. Renz, is that taxing for the general welfare is but taxation as a means of regulating commerce. Renz expands upon this point: If we excise "general welfare" from the Tax Clause, we are presented with the claim that Congress may not levy duties for purposes other than paying

711-405: A tax imposed upon a transaction. In this sense, indirect taxes such as a sales tax or a value added tax (VAT) are imposed only if and when a taxable transaction occurs. People have the freedom to engage in or refrain from such transactions; whereas a direct tax (in the general sense) is imposed upon a person, typically in an unconditional manner, such as a poll-tax or head-tax, which is imposed on

790-474: Is a distinction between direct and indirect taxes depending on whether the tax payer is the actual taxpayer or if the amount of tax is supported by a third party, usually a client. The term may be used in economic and political analyses, but does not itself have any legal implications except in the United States of America , where the term has special constitutional significance because of two provisions in

869-572: Is a target-specific form of tax levied by a state or other political entity. It is often associated with customs , in which context they are also known as tariffs or dues . The term is often used to describe a tax on certain items purchased abroad. A duty is levied on specific commodities , financial transactions , estates , etc. rather than being a direct imposition on individuals or corporations such income or property taxes . Examples include customs duty , excise duty, stamp duty , estate duty , and gift duty . A customs duty or due

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948-530: Is contrasted with an argument that the Federal Constitution was a constitution for limited government that extended to issues about which individual states were "incompetent", while state constitutions were free to govern all the remaining issues. The final phrase of the Taxing and Spending Clause stipulates: but all Duties, Imposts and Excises shall be uniform throughout the United States. Here,

1027-483: Is no consensus among the academic literature to designate if direct taxation is more efficient or not. Earlier works based on static models favour direct taxation whereas the recent literature, based on neoclassical growth models, shows that indirect taxation is more efficient. The conclusions of these debates are that the answers are mostly conjectural, depending on the economic structure. Contrary to indirect taxes such as value-added taxes, direct taxes can be adjusted to

1106-470: Is not a direct tax, reasoning that the tax is neither a tax on property, nor a capitation in that “it is triggered by specific circumstances” rather than levied “‘without regard to property, profession, or any other circumstance. ’” In the United States , the Constitution requires that direct taxes imposed by the national government be apportioned among the states on the basis of population. After

1185-411: Is not restricted in meaning by the grant of them, and Congress consequently has a substantive power to tax and to appropriate, limited only by the requirement that it shall be exercised to provide for the general welfare of the United States. … It results that the power of Congress to authorize expenditure of public moneys for public purposes is not limited by the direct grants of legislative power found in

1264-403: Is taxed differently depending on their income. Another advantage of direct taxation is that the government and the taxpayer know the amount they will receive and they pay, even before the collection of the tax. Direct taxation and in particular income tax act as automatic stabilizers. Some direct taxes are easy to collect for the government and the fiscal administration because they are collected at

1343-415: Is the indirect tax levied on the import or export of goods in international trade. In economics a duty is also a kind of consumption tax . A duty levied on goods being imported is referred to as an 'import duty', and one levied on exports an 'export duty'. An estate duty (in the U.S. inheritance tax ) is a tax levied on the estate of a deceased person in many jurisdictions or on the inheritance of

1422-472: The Stamp Act administration. All before , are calculated to regulate trade, and preserve or promote a mutually beneficial intercourse between the several constituent parts of the empire; and though many of them imposed duties on trade, yet those duties were always imposed with design to restrain the commerce of one part, that was injurious to another, and thus to promote the general welfare. The raising of

1501-726: The Arctic Circle was exempted from a federal excise tax on oil production. The basis for the holding was that Congress had determined the Alaskan oil to be of its own class and exempted it on those grounds, even though the classification of the Alaskan oil was a function of where it was geographically produced. Language elsewhere in the Constitution also expressly limits the taxing power. Article I, Section 9 has more than one clause so addressed. Clause 4 states: No Capitation, or other direct, Tax shall be laid, unless in Proportion to

1580-620: The Argentine Court held that the General Welfare clause of the Argentine Constitution offered the federal government a general source of authority for legislation affecting the provinces. The Court recognized that the United States utilized the clause only as a source of authority for federal taxation and spending, not for general legislation, but recognized differences in the two constitutions. That argument

1659-745: The Patient Protection and Affordable Care Act was an unconstitutionally coercive use of Congress's spending power. To date, the Hamiltonian view of the General Welfare Clause predominates in case law. Historically, however, the Anti-Federalists were wary of such an interpretation of this power during the ratification debates in the 1780s. Due to the objections raised by the Anti-Federalists, Madison

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1738-606: The Twenty-fourth Amendment . The Constitution provides in the Origination Clause that all bills for raising revenue must originate in the House of Representatives. The idea underlying the clause is that Representatives, being the most numerous branch of Congress, and most closely associated with the people, know best the economic conditions of the people they represent, and how to generate revenues for

1817-604: The United States Court of Appeals for the Sixth Circuit to be “in full accordance with Congressional authority under the Sixteenth Amendment to the Constitution to impose taxes on income without apportionment among the states”; taxpayer's argument that wages paid for labor are non-taxable was rejected by the Court, and ruled frivolous). Direct tax is a form of collecting taxes applicable on

1896-481: The United States Court of Appeals for the Third Circuit ; taxpayer's argument—that because of the Sixteenth Amendment, wages were not taxable—was rejected by the Court; taxpayer's argument that an income tax on wages is required to be apportioned by population also rejected); Perkins v. Commissioner , 746 F.2d 1187, 84-2 U.S. Tax Cas. (CCH) paragr. 9898 (6th Cir. 1984) ( 26 U.S.C.   § 61 ruled by

1975-505: The 1895 Pollock ruling that taxes on income from property should be treated as direct taxes, this provision made it difficult for Congress to impose a national income tax that applied to all forms of income until the Sixteenth Amendment was ratified in 1913. Since then, Federal income taxes have been subject to the rule of uniformity but not the rule of apportionment. Before then, the principal sources of revenue for

2054-597: The Articles in an effort to supersede it. However, nothing ever came of those proposals until the Philadelphia Convention . The power to tax is a concurrent power of the federal government and the individual states . The taxation power has been perceived over time to be very broad, but has also, on occasion, been curtailed by the courts. United States v. Butler stated that the clause also granted "a substantive power... to appropriate", not subject to

2133-466: The Census or Enumeration herein before directed to be taken. Generally, a direct tax is subject to the apportionment rule, meaning taxes must be imposed among the states in proportion to each state's population in respect to that state's share of the whole national population. For example: As of the 2000 Census , nearly 34 million people populated California (CA). At the same time, the national population

2212-602: The Constitution. … But the adoption of the broader construction leaves the power to spend subject to limitations. … [T]he powers of taxation and appropriation extend only to matters of national, as distinguished from local, welfare. The tax imposed in Butler was nevertheless held unconstitutional as a violation of the Tenth Amendment reservation of power to the states. Shortly after Butler , in Helvering v. Davis ,

2291-423: The Court agreed with Justice Story's construction, holding the power to tax and spend is an independent power; that is, the General Welfare Clause gives Congress power it might not derive anywhere else. However, the Court did limit the power to spending for matters affecting only the national welfare. The Court wrote: [T]he [General Welfare] clause confers a power separate and distinct from those later enumerated,

2370-471: The Court upheld a federal law withholding a portion of highway funds from states that did not raise their minimum legal drinking age to 21. Several Constitutional provisions address the taxation and spending authority of Congress. These include both requirements for the apportionment of direct taxes and the uniformity of indirect taxes , the origination of revenue bills within the House of Representatives ,

2449-528: The District of Columbia Circuit has stated: “Only three taxes are definitely known to be direct: (1) a capitation [...], (2) a tax upon real property, and (3) a tax upon personal property.” In National Federation of Independent Business v. Sebelius , the Supreme Court held that the ObamaCare penalty imposed upon individuals for failure to possess health insurance, though a tax for constitutional purposes,

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2528-530: The General Welfare Clause is unusual when compared to similar clauses in most state constitutions, and many constitutions of other countries. Virtually every state constitution has a general welfare clause which is interpreted as granting the state an independent power to regulate for the general welfare. An international example is provided with a report from the Supreme Court of Argentina : In Ferrocarril Central Argentino c/ Provincia de Santa Fe ,

2607-639: The General Welfare Clause was repudiated in the election of 1800 , and helped establish the primacy of the Democratic-Republican Party for the subsequent 24 years. This assertion is based on the motivating factor which the Kentucky and Virginia Resolutions played upon the electorate; the Kentucky Resolutions, authored by Thomas Jefferson , specifically criticized Hamilton's view. Further, Jefferson himself later described

2686-515: The Necessary and Proper Clause being suggested as the actual source of Congress's spending power. While recognizing that the federal government is one of limited and enumerated powers, the Supreme Court has held that Congress may incentivize state governments via appropriations of federal funds to adopt and enforce federal policy goals that otherwise would lay beyond the powers of the federal government directly to impose. In South Dakota v. Dole ,

2765-552: The Sixteenth Amendment income taxes were constitutional even though unapportioned, just as the amendment had provided. In subsequent cases, the courts have interpreted the Sixteenth Amendment and the Brushaber decision as standing for the rule that the amendment allows income taxes on "wages, salaries, commissions, etc. without apportionment." Article I, Section 9, Clause 5 provides a further limitation: No Tax or Duty shall be laid on Articles exported from any State. This provision

2844-489: The Supreme Court held this provision prohibits Congress to tax any goods in export transit, and further forbids taxes on any services related to such export transit. Shortly after, the Supreme Court reaffirmed this provision in United States v. United States Shoe Corp. in 1998. As part of the Water Resources Development Act of 1986, a harbor maintenance tax ( 26 U.S.C.   § 4461 )

2923-532: The Supreme Court in Pollock v. Farmers' Loan & Trust Co. and were ruled to be subject to the requirement of apportionment. As the income taxes imposed under the 1894 Act were not apportioned in such a manner, they were held unconstitutional. It was not the income tax per se , but the lack of a provision for its apportionment as a direct tax which made the tax unconstitutional. The resulting case law prohibiting unapportioned taxes on incomes derived from property

3002-418: The Supreme Court interpreted the clause even more expansively, disavowing almost entirely any role for judicial review of Congressional spending policies, thereby conferring upon Congress a plenary power to impose taxes and to spend money for the general welfare subject almost entirely to Congress's own discretion. In South Dakota v. Dole (1987) the Court held Congress possessed power to indirectly influence

3081-495: The U.S. Constitution that any direct taxes imposed by the national government be apportioned among the states on the basis of population; and in the European Union , where direct taxation remains the sole responsibility of member states. In general, a direct tax is one imposed upon an individual person ( juristic or natural ) or property (i.e. real and personal property, livestock, crops, wages, etc.) as distinct from

3160-452: The United States, the term “direct tax” has acquired specific meaning under constitutional law: a direct tax includes taxes on property by reason of ownership (such as an ordinary real estate property tax imposed on the person owning the property as of January 1 of each year) as well as capitations . Income taxes on income from personal services such as wages are indirect taxes in this sense. The United States Court of Appeals for

3239-473: The ability to pay of the taxpayer according to their status (income, age...). So, direct taxes can be progressive (the tax rate increases as the taxable amount increases), proportional (the tax rate is fixed, it does not change when the taxable base amount increases or decreases) or regressive (the tax rate decreases as the taxable amount increases) according to their structure. It differs from indirect taxes which are generally regressive because everyone pays

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3318-422: The average tax rate increases also. This mechanism of progressive taxation participates to the stabilization of the economy, another function of the government in the works of Musgrave (stabilization branch of the government which prevents major fluctuations in real GDP). When incomes fall, tax revenues fall too (and in the case of progressive taxation, even tax rates drop also) reducing tax burden on taxpayers. In

3397-440: The basis of the person's very life or existence, or a property tax which is imposed upon the owner by virtue of ownership, rather than commercial use. Some commentators have argued that the distinction rests on whether the burden of taxation can be shifted from one legal person to another. Direct taxes are thought to be borne and paid by the same person. The person who pays the amount of direct tax does not recover all or part of

3476-588: The case of parent companies and subsidiaries of different member states (to avoid withholding tax when the dividend qualifies for application of the EC Parent-Subsidiary Directive, the financial transaction tax, interest and royalty payments made between associated companies and elimination of double taxation if the payment qualifies for application of the EC Interest and Royalties Directive. Regarding direct taxation for individuals,

3555-425: The debts and providing for the common defense. Indeed, omitting the general welfare phrase would eliminate nearly all duties for regulatory purposes. A strong argument could be made that while Congress might have the power to regulate foreign and interstate commerce, the omission of "general welfare" from the Tax Clause was intended to deny it the power to regulate commerce by means of duties. The narrow construction of

3634-474: The direct tax was a paramount concern of people in the 18th century seeking to escape tyrannical forms of government and to safeguard individual liberty. In The Wealth of Nations , Adam Smith was the first to extensively discuss in English the distinction between direct and indirect taxation by those names, as in the following passage : It is thus that a tax upon the necessaries of life operates exactly in

3713-409: The disallowal of taxes on exports, the General Welfare requirement, the limitation on the release of funds from the treasury except as provided by law, and the apportionment exemption of the Sixteenth Amendment . Additionally, Congress and the legislatures of the various states are prohibited from conditioning the right to vote in federal elections on payment of a poll tax or other types of tax by

3792-471: The distinction between the parties over this view as "almost the only landmark which now divides the federalists from the republicans...." Associate Justice Joseph Story relied heavily upon The Federalist as a source for his Commentaries on the Constitution of the United States . In that work, Story excoriated both the Madisonian view and a previous, strongly nationalistic view of Hamilton's which

3871-675: The federal government were excise taxes and customs duties. Their importance thus decreased during the twentieth century and the main federal government's resources have become individual income taxes and payroll taxes. Other evolutions were observed at the local and state level with a decrease of importance of property taxes whereas income and sale taxes became more important. In the context of income taxes on wages, salaries and other forms of compensation for personal services, see, e.g., United States v. Connor , 898 F.2d 942, 90-1 U.S. Tax Cas. (CCH) paragr. 50,166 (3d Cir. 1990) (tax evasion conviction under 26 U.S.C.   § 7201 affirmed by

3950-471: The funds for which it asked, either by paying only in part, or by altogether ignoring the request from Congress. Without the revenue to enforce its laws and treaties, or pay its debts, and without an enforcement mechanism to compel the states to pay, the Confederation was practically rendered impotent and was in danger of falling apart. The Congress recognized this limitation and proposed amendments to

4029-476: The general public by the means of their personal income and wealth generated and collected through formal channels and worthy government credentials such as Permanent account number and bank account details. Section 2(c) of the Central Boards of Revenue Act, 1963 of India defines "direct tax" as follows: Tax policy in the European Union (EU) consists of two components: direct taxation, which remains

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4108-513: The general welfare entailed: The parliament unquestionably possesses a legal authority to regulate the trade of Great Britain , and all her colonies. Such an authority is essential to the relation between a mother country and her colonies; and necessary for the common good of all. He who considers these provinces as states distinct from the British Empire , has very slender notions of justice , or of their interests . We are but parts of

4187-453: The limitations imposed by the other enumerated powers of Congress . The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises This power is considered by many to be essential to the effective administration of government. As argued under the Articles, the lack of a power to tax renders government impotent. Typically, the power is used to raise revenues for the general support of government. But, Congress has employed

4266-449: The most contentious. The dispute over the clause arises from two distinct disagreements. The first concerns whether the General Welfare Clause grants an independent spending power or is a restriction upon the taxing power. The second disagreement pertains to what exactly is meant by the phrase "general welfare." The two primary authors of The Federalist Papers set forth two separate, conflicting interpretations: Although The Federalist

4345-411: The nature of despotism, that it has ever been a favorite under such governments. ... The power of direct taxation will further apply to every individual ... however oppressive, the people will have but this alternative, either to pay the tax, or let their property be taken for all resistance will be vain. Direct taxation can apply on income or on wealth (property tax; estate tax or wealth tax). Here below

4424-411: The power to lay and collect taxes. Under the Articles, Congress was forced to rely on requisitions upon the governments of its member states. Without the power to independently raise its own revenues, the Articles left Congress vulnerable to the discretion of the several state governments—each state made its own decision as to whether it would pay the requisition or not. Some states were not giving Congress

4503-509: The reduction of inequalities and correcting difference in living standards among the population. Another effect of a progressive direct taxation is that such tax structure act as automatic stabilizers when prices are stable. Indeed, when incomes (in the example of a progressive income tax) decrease, as a result of recession, the average tax rate is reduced – individuals have to face lower tax rates because their earnings and their incomes have been reduced. And similarly, when incomes are increasing,

4582-429: The requirement is that taxes must be geographically uniform throughout the United States. This means taxes affected by this provision must function "with the same force and effect in every place where the subject of it is found." However, this clause does not require revenues raised by the tax from each state be equal. Justice Story characterized this requirement in a light more relevant to practicality and fairness: It

4661-476: The same amount regardless of ability to pay (meaning the burden of the tax is greater for the poorer than for the richer). Moreover, direct taxation are transfers which can have a redistributive preoccupation (combined with the will of increasing tax revenue). Indeed, taxation is a main tool of the redistributive function of the government identified by Richard Musgrave in his The Theory of Public Finance (1959). A progressive direct taxation could participate in

4740-460: The same end. This ruling appeared to have been reinforced in United States v. Butler , in which the Supreme Court of the United States ruled that the processing taxes instituted under the 1933 Agricultural Adjustment Act were an unconstitutional attempt to regulate state activity in violation of the Tenth Amendment . However, despite its outcome, Butler affirmed that Congress does have

4819-520: The same manner as a direct tax upon the wages of labour. ... if he is a manufacturer, will charge upon the price of his goods this rise of wages, together with a profit; so that the final payment of the tax, together with this overcharge, will fall upon the consumer. Justice William Paterson quotes Smith approvingly, noting that indirect taxes are “circuitous modes of reaching the revenue of individuals,” which implies that direct taxes are those which are not circuitous. The Pennsylvania Minority ,

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4898-426: The sole responsibility of member states, and indirect taxation , which affects free movement of goods and the freedom to provide services. With regard to European Union direct taxes , Member States have taken measures to prevent tax avoidance and double taxation. EU direct taxation covers, regarding companies, the following policies: the common consolidated corporate tax base, the common system of taxation applicable in

4977-411: The source. Yet, tax collection can be expensive depending on the efficiency of the fiscal administration. Running the tax collection office has some administrative costs (keeping the records of incomes of the population for example), in particular when different tax rates are applied. Moreover, direct taxes can be evaded (tax evasion affects mainly direct taxes) whereas indirect taxes cannot be evaded (when

5056-684: The spending power. Prior to 1936, the United States Supreme Court had imposed a narrow interpretation of the Clause, as demonstrated by the holding in Bailey v. Drexel Furniture Co. , (1922) in which a tax on child labor was an impermissible attempt to regulate commerce beyond that Court's equally narrow interpretation of the Commerce Clause . This narrow view was overturned in 1936 in United States v. Butler . There,

5135-533: The states into adopting national standards by withholding, to a limited extent, federal funds where a state did not meet certain conditions required by Congress. Following that ruling, the Court later held by a 7–2 vote in National Federation of Independent Business v. Sebelius (2012) that Congress conditioning a state's receipt of the entirety of its federal Medicaid funds on whether said state elected to expand its Medicaid program in accordance with

5214-444: The support of government in the least burdensome manner. Additionally, Representatives are regarded the most accountable to the people, and thus are least likely to exercise the taxing power abusively or injudiciously. to pay the Debts and provide for the common Defence and general Welfare of the United States; Of all the limitations upon the power to tax and spend, the General Welfare Clause appears to have achieved notoriety as one of

5293-402: The tax elsewhere. It is in this sense that direct taxation is opposed to indirect taxation. It is the notion of fiscal incidence which allows to analyse who ultimately, weights the burden of a tax, that determines whether the tax is direct or indirect. Direct taxation is generally declarative (established either by the person concerned or by a third party). The unconditional, inexorable aspect of

5372-408: The taxed transaction occurs, it is not possible to avoid the burden of the tax). Direct taxes decrease the savings and earnings of individuals and firms. Indirect taxation however make goods and services more expensive (the burden of the tax is reflected in the prices). Contrary to indirect taxation which leads to inflation (increasing of the prices), direct taxes can help to reduce inflation. There

5451-405: The taxing power in uses other than solely for the raising of revenue, such as: In 1922, the Supreme Court struck down a 1919 tax on child labor in Bailey v. Drexel Furniture Co. , commonly referred to as the "Child Labor Tax Case". The Court had previously held that Congress did not have the power to directly regulate labor, and found the law at issue to be an attempt to indirectly accomplish

5530-481: The whole property of individuals or on their whole real or personal estate" ( Springer v. United States ). The decision in Springer went further in declaring that all income taxes were indirect taxes—or more specifically, "within the category of an excise or duty ." However, in 1895 income taxes derived from property such as interest, dividends, and rent (imposed under an 1894 Act) were treated as direct taxes by

5609-468: Was 281.5 million people. This gave CA a 12 percent share of the national population, roughly. Were Congress to impose a direct tax in order to raise $ 1 trillion before the next census, the taxpayers of CA would be required to fund 12 percent of the total amount: $ 120 billion. Before 1895, direct taxes were understood to be limited to "capitation or poll taxes " ( Hylton v. United States ) and "taxes on lands and buildings, and general assessments, whether on

5688-512: Was an important protection for the southern states secured during the Constitutional Convention. With the grant of absolute power over foreign commerce given to the federal government, the states whose economies relied chiefly on exports realized that any tax laid by the new central government upon a single item of export would apply very unevenly amongst all the states and favor states which did not export that good. In 1996,

5767-513: Was crafted, as further evidence of his lack of constructive authority. An additional view of the General Welfare Clause that is not as well known, but just as authoritative as the views of both Madison and Hamilton, can be found in the pre- Revolutionary writings of John Dickinson , who was also a delegate to the Philadelphia Convention . In his Letters from a Farmer in Pennsylvania (1767), Dickinson wrote of what he understood taxing for

5846-402: Was imposed at the ad valorem (percentile) rate of 0.125% the value of the cargo instead of at a rate dependent entirely upon the cost of the service provided by the port. The Court unanimously affirmed the ruling of the lower Federal Circuit Court that a "user fee" imposed in such a manner is, in fact, a tax on exports and unconstitutional. Duty (economics) In economics , a duty

5925-484: Was later eliminated by the ratification of the Sixteenth Amendment in 1913. The text of the amendment was clear in its aim: The Congress shall have power to lay and collect taxes on income, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration. Shortly after, in 1916, the U.S. Supreme Court ruled in Brushaber v. Union Pacific Railroad that under

6004-456: Was not reliably distributed outside of New York, the essays eventually became the dominant reference for interpreting the meaning of the Constitution as they provided the reasoning and justification behind the Framers' intent in setting up the federal government. While Hamilton's view prevailed during the administrations of Presidents Washington and Adams , historians argue that his view of

6083-410: Was prompted to author his contributions to The Federalist Papers , attempting to quell the Anti-Federalists' fears of any such abuse by the proposed national government and to counter Anti-Federalist arguments against the Constitution. Proponents of the Madisonian view also point to Hamilton's limited participation in the Constitutional Convention, particularly during the time frame in which this clause

6162-464: Was rejected at the Philadelphia Convention . Ultimately, Story concluded that Thomas Jefferson's view of the clause as a limitation on the power to tax, given in Jefferson's opinion to Washington on the constitutionality of the national bank, was the correct reading. However, Story also concluded that Hamilton's view on spending, articulated in his 1791 Report on Manufactures, is the correct reading of

6241-399: Was to cut off all undue preferences of one state over another in the regulation of subjects affecting their common interests. Unless duties, imposts, and excises were uniform, the grossest and most oppressive inequalities, vitally affecting the pursuits and employments of the people of different states, might exist. In other words, it was another check placed on the legislature in order to keep

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