Taxing power is a government’s ability to implement and collect taxes from individuals and businesses.
General Constitutional Authorization
Article I, Section 8 of the U.S ConstitutiongivesCongress 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…” This is also referred to as the "Taxing and Spending Clause," or Congressionalspending power, to use tax income to fund American necessities, like welfare aid or security/military funding.
Income Taxes
Under theSixteenth Amendment, Congress has the taxing power to collectincome taxes.
TheInternal Revenue Code(IRC) is the main law governing income taxes. The IRC codified asTitle 26 of the United States Code and contains federal statutes regulating tax laws.
States
States are also allowed to impose and collect their own taxes, which is included but not limited toincome taxes,sales taxes, andproperty taxes, all of which vary based on the individual state’s tax statutes.
Further Reading
For more on the taxing power, see thisArizona State Law Journal article and this Notre Dame Law Review article.
[Last updated in June of 2024 by the Wex Definitions Team]
