]

Section 8. The Congress shall have Power to lay and collect
Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the
common Defence and general Welfare of the United States; but all Duties,
Imposts and Excises shall be uniform throughout the United States.

The Taxing-Spending Power

KINDS OF TAXES PERMITTED

By the terms of the Constitution, the power of Congress to levy taxes is
subject to but one exception and two qualifications. Articles exported
from any State may not be taxed at all. Direct taxes must be levied by
the rule of apportionment and indirect taxes by the rule of uniformity.
The Court has emphasized the sweeping character of this power by saying
from time to time that it "reaches every subject,"[216] that it is
"exhaustive"[217] or that it "embraces every conceivable power of
taxation."[218] Despite these generalizations, the power has been at
times substantially curtailed by judicial decision with respect to the
subject matter of taxation, the manner in which taxes are imposed, and
the objects for which they may be levied.

DECLINE OF THE FORBIDDEN SUBJECT MATTER TEST

In recent years the Supreme Court has restored to Congress the power to
tax most of the subject matter which had previously been withdrawn from
its reach by judicial decision. The holding of Evans _v._ Gore[219] and
Miles _v._ Graham[220] that the inclusion of the salaries received by
federal judges in measuring the liability for a nondiscriminatory income
tax violated the constitutional mandate that the compensation of such
judges should not be diminished during their continuance in office was
repudiated in O'Malley _v._ Woodrough.[221] The specific ruling of
Collector _v._ Day[222] that the salary of a State officer is immune to
federal income taxation also has been overruled.[223] But the principle
underlying that decision--that Congress may not lay a tax which would
impair the sovereignty of the States--is still recognized as retaining
some vitality.

THE RISE AND FALL OF COLLECTOR _v._ DAY

Collector _v._ Day was decided in 1871 while the country was still in
the throes of reconstruction. As noted by Chief Justice Stone in a
footnote to his opinion in Helvering _v._ Gerhardt,[224] the Court had
not then determined how far the Civil War amendments had broadened the
federal power at the expense of the States; the fact that the taxing
power had recently been used with destructive effect upon notes i