The Taxing and Spending Power

The first power listed in Article I, Section 8 is the power to lay and collect taxes, duties, imposts, and excises, to pay the debts and provide for the common defense and general welfare of the United States. The Articles of Confederation had left Congress dependent on requests to the states, which often went unpaid. The Constitution required duties and excises to be uniform across the country and direct taxes to be apportioned among the states by population, a rule that led the Supreme Court to strike down a federal income tax in 1895 until the Sixteenth Amendment of 1913 removed it for income taxes.

Madison argued that spending for the general welfare was limited to the other enumerated powers, while Hamilton argued it was a separate power to spend for any national purpose. In United States v. Butler in 1936 the Court adopted Hamilton's view, and in Helvering v. Davis in 1937 it upheld Social Security as spending for the general welfare. Congress may attach conditions to federal grants, as the Court held in South Dakota v. Dole in 1987, but conditions must be clear, related to the program, and not so coercive as to compel states, a limit applied in NFIB v. Sebelius in 2012 to the Medicaid expansion.

The taxing power is broad: in NFIB v. Sebelius the Court upheld the health insurance mandate as a tax, and in Moore v. United States in 2024 it upheld a one-time tax on certain foreign earnings without deciding whether Congress may tax unrealized gains. Conditions on federal funds remain contested, as in disputes since 2025 over withholding grants from states and cities that limit cooperation with immigration enforcement. Supporters of a broad spending power say it lets Congress address national problems through cooperation with states, while critics say it lets Washington buy control of matters reserved to the states.