Also known as: tax and spend power · tax-and-spend powers · taxing-and-spending power · spending power · taxing and spending clause
Written by attorneys · grounded in primary & secondary sources — see below
A constitutional authority granted to Congress to lay and collect taxes and to spend the resulting revenue for the general welfare of the United States. The power permits Congress to attach conditions to federal grants provided the conditions promote the general welfare, are unambiguous, relate to the federal interest in the funded program, and do not require states to engage in independently unconstitutional conduct.
State X permits persons age 19 to purchase low-alcohol beer. Congress enacts a statute offering states highway construction grants only if they raise the drinking age to 21. State X refuses to change its law and the federal agency withholds the funds. State X sues, arguing the condition exceeds the tax-and-spend power.
Congress imposes a payroll tax on employers and employees to fund old-age benefits. Employer Davis refuses to pay, claiming the tax-and-spend scheme exceeds federal authority. The Court sustains the tax because the revenue is spent for the general welfare through a national insurance program.
Select any source to read its text and confirm it supports the definition.
Congress offers states federal funds to build radioactive waste disposal sites but requires states to take title to waste if they fail to meet federal deadlines. State officials argue the take-title provision commandeers state legislatures rather than using the tax-and-spend power. The Court distinguishes permissible conditional spending from impermissible commandeering.
After a final judgment against a company in a securities case, Congress enacts a statute directing federal courts to reopen certain settled cases and apply new spending-related rules. The company argues the statute violates separation of powers by directing courts how to apply previously appropriated funds. The Court holds Congress cannot use its tax-and-spend authority to reopen final judgments.
A taxpayer sues to challenge secret CIA appropriations, claiming the expenditures violate the tax-and-spend power because they lack public accountability. The Court denies standing, holding that generalized grievances about federal spending do not present a concrete case or controversy.
Congress requires individuals to obtain health insurance or pay a monetary exaction collected by the IRS. Challengers argue the exaction exceeds the tax-and-spend power because it functions as a regulatory penalty. The Court upholds the payment as a valid tax because it is collected through the tax system and raises revenue for the general welfare.
The conditions must promote the general welfare, be unambiguous, relate to the federal interest in the funded program, and not require states to engage in independently unconstitutional conduct. The test also includes a limit against financial coercion that is not triggered by a single modest grant program.
Supporting sources
Yes. Congress may condition federal grants on state adoption of a uniform minimum drinking age when the condition relates to the federal interest in the funded program, such as campus safety or highway construction. The condition remains valid even though alcohol regulation is traditionally a state matter.
Supporting sources
A monetary exaction functions as a tax when it is collected by the IRS with income tax returns, varies with income or revenue measures, and is expected to raise substantial revenue regardless of congressional label. Practical operation and effect control the classification rather than statutory labels or regulatory motives.
Supporting sources
…one House of Congress to have been guilty. [^maj-9]: When Congress grants particular individuals relief or benefits under its spending power, the danger of oppressive action that the separation of powers was designed to avoid is not implicated. Similarly, Congress may authorize the admission of individual aliens by special Acts,…