TaxesTaxes

Benjamin Franklin once said those famous words “In this world, nothing is certain but

death and taxes.”

The Power to TaxThe Power to Tax

• One of the many powers given to the Congress. The power to tax fall under Article 1, Section 8, Clause 1 of the Constitution.

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

Constitutional Constitutional LimitationsLimitations

• The power to tax is not unlimited, as with all other powers of Congress it must be exercised in accordance to the Constitution and as a result fall into four categories of expressed limits

Number 1Number 1

• Congress is given the power to tax to pay the debts and provide for the common defense

Number 2Number 2

• Expressed limits, means that no tax or duty shall be laid on articles exported from any State.

• In other words, tariffs can only be applied to imports

• This idea falls under the Commerce Compromise of 1787

Number 3Number 3

• Direct Taxes equally apportioned and distributed among the state. But because of its unfair nature to larger and smaller states alike, as well as higher and lower incomes, Congress chooses not to impose direct tax, except for the annual income taxes

Number 4Number 4

• All duties, imposts and excises shall be uniform through the US. Which means all indirect taxes (at the Federal level) are set at the same rate.

Vocabulary Words For Vocabulary Words For TodayToday

Progressive Tax Custom DutyTax Return InterestPayroll Tax DeficitRegressive Tax SurplusExcise Tax Public DebtEstate Tax Corporation Income

TaxGift Tax Implied Limitations