Kara Sears
In the United States, the House of Representatives alone can propose tax laws. This is due to the Origination Clause, also known as the Revenue Clause, which is Article I, Section 7, Clause 1 of the U.S. Constitution. The clause states that all bills for raising revenue must start in the U.S. House of Representatives, although the Senate may propose or concur with amendments. This clause originated from a British parliamentary practice that all money bills must have their first reading in the House of Commons before moving to the House of Lords. The House Committee on Ways and Means, which has jurisdiction over tax policy, controls the appropriations process.
| Characteristics | Values |
|---|---|
| House that can propose tax laws | House of Representatives |
| Where do the proposed tax laws start the formal tax legislation process as a bill | House of Representatives |
| Which house has the "power of the purse" | House of Representatives |
| Which house can initiate tax and revenue-related legislation | House of Representatives |
| Which house has jurisdiction over tax policy | House of Representatives |
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What You'll Learn
The Origination Clause
> All Bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with Amendments as on other Bills.
This clause was influenced by British parliamentary practice, which dictated that all money bills must have their first reading in the House of Commons. However, the American version of this clause was modified to allow the Senate to amend these bills. This was part of the Great Compromise between small and large states, as large states were unhappy with the disproportionate power of small states in the Senate.
While the Origination Clause gives the House of Representatives the sole power to propose tax laws, the Senate can amend these bills, and the final legislation requires approval from both houses of Congress and the President.
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The House has the 'power of the purse'
The "power of the purse" is a critical concept in the relationship between the United States Congress and the President. It refers to the ability of Congress, and in particular, the House of Representatives, to control the actions of another group by withholding or stipulating funding. The House of Representatives is the only group that can propose or refuse the supplies requisite for the government's support. This power is derived from the Origination Clause (also known as the Revenue Clause), which states that all bills for raising revenue must originate in the House of Representatives. The clause is based on the British parliamentary practice that all money bills must have their first reading in the House of Commons, ensuring that the power of the purse is held by the body most responsive to the people.
The power of the purse has been used throughout history to limit executive power. For example, the Foreign Assistance Act of 1974 eliminated military funding for South Vietnam, ending the Vietnam War. Similarly, Congress placed limitations on military funding for Ronald Reagan, leading to the withdrawal of US Marines from Lebanon. The power of the purse has also been used to compel US states to pass laws, such as in the case of the drinking age, where Congress passed a law to withhold 10% of federal funds for highways in any state that did not raise the drinking age to 21.
The formal tax legislation process in the United States begins with a tax bill introduced in the House of Representatives. Once the Ways and Means Committee reaches an agreement, the proposed tax law is written. The bill is then presented to the full Senate, where the Finance Committee may rewrite the proposal. After Senate approval, the tax bill is sent to a joint committee of House and Senate members who work to create a compromise version. This version is sent back to the House and Senate for approval. Once passed by Congress, the bill is sent to the President for approval or veto.
The power of the purse has been a point of contention in recent years, with Congress seeking to reclaim and safeguard its Constitutional power through the Congressional Power of the Purse Act (CPP). This act aims to protect Congress' authority and prevent the executive branch from undermining its power of the purse.
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The Senate can propose amendments
In the United States, the process of formal tax legislation requires the consent of both houses of Congress – the Senate and the House of Representatives – and presidential approval. The House of Representatives holds the "power of the purse", meaning that it has the ability to tax and spend public money for the national government. This is also known as the Origination Clause or Revenue Clause, which is Article I, Section 7, Clause 1 of the U.S. Constitution.
The Origination Clause states that "all bills for raising revenue must start in the U.S. House of Representatives". This is because the House is supposed to represent individual citizens, rather than whole states, as with the Senate. However, the Origination Clause also allows the Senate to propose or concur with amendments, as with other bills. For instance, the Senate may take a House-originated revenue bill and "substitute a different bill on a different subject".
The Supreme Court has decided several cases involving the Origination Clause, and all challenges to federal statutes have failed. In the 1911 case of Flint v. Stone Tracy Company, the Court held that "the amendment was germane to the subject-matter of the bill and not beyond the power of the Senate to propose". In 2012, the joint dissent in the U.S. Supreme Court case National Federation of Independent Business v. Sebelius mentioned that "the Constitution requires tax increases to originate in the House of Representatives" per the Origination Clause.
Once a bill is introduced in either the Senate or the House of Representatives, it is assigned to a committee whose members will research, discuss, and make changes to the bill. The bill is then put before that chamber to be voted on. If the bill passes one body of Congress, it goes to the other body to go through a similar process of research, discussion, changes, and voting. Once both bodies vote to accept a bill, they must work out any differences between the two versions.
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Citizens can influence tax laws
In the United States, citizens can influence tax laws through the informal tax legislation process. This includes various methods such as contacting members of Congress and other elected officials, attending town or county meetings, participating in lobbying efforts, circulating and signing petitions, and voting for specific candidates. Citizens can act individually or collectively through these methods to make their views known to legislators and influence the outcome of the formal tax legislation process.
The formal tax legislation process in the United States requires the consent of both houses of Congress (the Senate and the House of Representatives) and presidential approval. According to the Origination Clause (Article I, Section 7, Clause 1 of the U.S. Constitution), tax bills must originate in the House of Representatives, as it represents individual citizens rather than whole states. This clause is based on British parliamentary practice, aiming to ensure that the power of the purse lies with the legislative body most responsive to the people.
Once a tax bill is introduced in the House of Representatives, it is referred to the Ways and Means Committee. The committee members work on the proposal, and once they reach an agreement, the proposed tax law is written. The bill then moves to the Senate, where it may be amended. After Senate approval, the bill is sent to a joint committee of House and Senate members who create a compromise version. This compromise version is sent back to both houses for approval.
If Congress passes the bill, it is sent to the President for approval. The President can either sign it into law or veto it. If vetoed, the bill is returned to the House, along with a statement outlining the reasons for the President's opposition. Congress can then make the requested changes or override the veto with a two-thirds vote in each house, at which point the tax bill becomes law without the President's signature.
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The Ways and Means Committee
The Committee on Ways and Means, also known as the House Ways and Means Committee, is the chief tax-writing committee of the United States House of Representatives. It is the oldest tax-writing body in the House of Representatives, having been established in 1789. The committee has jurisdiction over all taxation, tariffs, and other revenue-raising measures, as well as a number of other programs including Social Security, unemployment benefits, Medicare, the enforcement of child support laws, Temporary Assistance for Needy Families, foster care, and adoption programs.
Some recent major issues that have gone through the Ways and Means Committee include welfare reform, a Medicare prescription drug benefit, Social Security reform, George W. Bush's tax cuts, and trade agreements, including the North American Free Trade Agreement (NAFTA) and the Central America Free Trade Agreement (CAFTA). The committee also holds hearings on policy issues, considers and develops bill proposals, and reports legislation and recommended changes to the full chamber.
The formal tax legislation process in the United States requires that all tax bills must originate in the House of Representatives and be referred to the Ways and Means Committee. Once the committee members reach an agreement, the proposed tax law is written and presented to the full Senate. The Senate may then rewrite the proposal before presenting it to a joint committee of House and Senate members who work to create a compromise version. This compromise version is then sent back to the House and Senate for approval. Once passed by both houses, the tax bill is sent to the President for approval, who may sign it into law or veto the bill.
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Frequently asked questions
The House of Representatives.
The Origination Clause, sometimes called the Revenue Clause.
That "all bills for raising revenue must start in the U.S. House of Representatives, but the U.S. Senate may propose or concur with amendments, as in the case of other bills."
It stemmed from a British parliamentary practice that all money bills must have their first reading in the House of Commons before moving to the House of Lords.
The tax bill must be introduced in the House of Representatives and referred to the Ways and Means Committee. Once an agreement is reached, the proposed tax law is written. Following this, the bill is sent to the full Senate, where it may be rewritten by the Finance Committee. After Senate approval, the bill is sent to a joint committee of House and Senate members who create a compromise version. This version is sent back to the House and Senate for approval. Once passed by Congress, the bill is sent to the President for approval, who may sign it into law or veto it.
