MBE Fast Fact: The Taxing Power

I remember my Constitutional Law professor in law school mentioning that Constitutional Law can be broken down into two main areas: powers and limitations. I think he had a point.

There are quite a few congressional powers and one of those powers is the power to tax.  Specifically, Congress has the power to lay and collect taxes, duties, imposts, and excises to pay the debts and provide for the common defense and general welfare. And so with this rule in mind, it follows that a congressional act purporting to be a tax will be upheld if it raises revenue or if it was intended to raise revenue as raising revenue is deemed to be providing for the common defense and general welfare.

In addition, as long as Congress has the power to regulate the activity taxed, the necessary and proper clause can form a basis for Congress to tax that activity.

So, in short, it's best to remember that if Congress has the right to regulate an activity (as per a power granted to it in the Constitution) then the tax is very likely to be upheld as per the necessary and proper clause.  But even when Congress does not have the power to regulate an activity taxed, a tax will likely be upheld if its dominant intent is to raise revenue.