Article I, Section 07, Clause 1 of the United States Constitution
Article I, Section 7, Clause 1
1: 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.
Article I, Section 7, addresses the process by which legislation is enacted. Before the general process itself is laid out, clause 1 of that section directs that all bills for raising revenue shall originate in the House of Representatives. The Senate is given the power to respond with amendments. Therein, as it turns out, lies a fatal flaw. The House has also frequently asserted that this provision applies as well to appropriations measures. Though not entirely persuasive based on the text, as a practical matter, most appropriations bills originate in the House.
There was virtually no discussion about this clause at the Philadelphia Convention. How could this be? The reason is that the belief that the power of taxation lies with the people was a key component of American republicanism. That article of faith, no, self-evident truth, was the culmination of centuries of evolution of English constitutional doctrine that meshed well with American colonial practice and found expression in such Revolutionary War-era slogans as “no taxation without representation.” The House of Representatives is the only institution of the general government for which the original Constitution made explicit provision of popular election. That fact, and the limited term of office and the frequent recourse to elections for members, made the House the natural repository of republican sentiment in the Framers’ view. There was no need for extensive debate over the (to them) obvious.
The triumph of Parliament over King on the issue of taxation was a process centuries in evolution. The King had revenues from royal properties and various prerogatives, such as assessing import duties. Beyond that, general taxes of persons or wealth were seen as “gifts” from the commons to the crown. Otherwise, taxes would be nothing but exactions against will, backed only by superior force. There would be little difference, then, between such an exaction and one procured by a highwayman. To the English, taxes were dangerous devices by which a person’s freedom was readily destroyed as he was reduced to penury.
But government still needed money, especially during war. The fiction used to get around the obstacles of the “taxes-as-gifts” theory was that the commons, represented in Parliament, could vote to assess themselves and offer such “gifts” to the crown. While this obviously did not please those who did not agree to the tax, it did provide a political tool to limit royal fiscal voraciousness that other monarchies of the time lacked. Once Parliament separated into Commons and Lords, this power fell to the former. By 1407, the Commons had sole power to originate money bills. Attempts by the Lords to have at least an amending or revisory power were rejected. By the end of the Glorious Revolution nearly three centuries later, not only did the House of Commons have plenary power over revenue bills, but it had also won the power to direct the appropriation thereof.
The colonies and, later, the states followed this model. The colonial assemblies saw the enactment of local revenue bills as their prerogative because of their connection to the people through a comparatively broad electoral franchise in many colonies. Pre-Revolutionary War rhetoric, from John Dickinson’s “Letters from a Farmer in Pennsylvania” to the Stamp Act Congress Resolutions echoed this unquestioned dogma of the, frankly rather lightly-taxed, Americans. A similar sentiment prevailed, once the states declared independence. For example, the language of Article I, Section 7, cl. 1, appears almost verbatim in the Massachusetts constitution of 1780 (except for the cosmetic distinction that the state used “money bills” instead of “bills for raising revenue”).
Why, then, are taxes today as high as they are? Historical experience (rather than dogma) provides an insight. In England, as well as in America, the application of constitutional principle resulted in legislatively dominant groups engaging in the entirely understandable practice of having someone other than themselves make these “gifts.” In England, when the House of Commons was controlled by the landed gentry, taxes tended to fall on activities of commerce. When upper and upper-middle class commercial interests came to predominate, they sought to impose consumption taxes (excises) on a broad variety of items used by the (unrepresented) middle and lower economic strata. In the colonies and states, legislatures controlled by middle-class farmers and artisans saw great sense in wealth taxes that targeted the upper-middle and upper classes who were repeatedly being exhorted to pay their fair share based on their greater ability to do so. Thus operates human nature.
Taxation as a form of giving (by the people), not taking (by the government), is an idea that seems to have little currency in certain quarters. It often seems today that those in government, including our representatives, believe that the money is theirs, while the citizenry is at best a collection of tenants at sufferance of their own earnings and wealth. Thus, it comes as little surprise that the technicalities of Article I, Section 7, cl. 1, have not proven to be bulwarks against excessive taxes. The dynamic of the political system for decades has been to extract more and more money from some to fund more and more desires of others. The House still, on occasion, guards its formal pre-eminence in money matters against the Senate and the President, though the current House will soon reveal the extent of its substantive effectiveness in curtailing a budget dominated by gargantuan programs of non-discretionary spending.
As well, there is little in the text to prevent a determined Senate from taking a House bill and “amending” it by deleting all language after “Be It Hereby Enacted” from a House bill. That has happened repeatedly, with Supreme Court approval of the practice over at least the last century. More recent examples of this include a Reagan-era tax law and the 2008 TARP bill. Most infamously, the “reconciliation” process involving ObamaCare began as a Senate gutting of a House revenue bill. The lesson to be remembered yet again is that the carefully drawn balance in the Constitution ultimately depends on the willingness of the citizenry to hold the government to its obligations.
An expert on constitutional law, Prof. Joerg W. Knipprath has been interviewed by print and broadcast media on a number of related topics ranging from recent U.S. Supreme Court decisions to presidential succession. He has written opinion pieces and articles on business and securities law as well as constitutional issues, and has focused his more recent research on the effect of judicial review on the evolution of constitutional law. He has also spoken on business law and contemporary constitutional issues before professional and community forums. Read more from Professor Knipprath at: http://www.tokenconservative.com/ .
Fascinating! Decades ago, I learned that the House originated tax law, but I never knew the historical background. This makes so much sense; too bad “we the people” haven’t ever really understood the rationale and exercised our authority to “give” instead of “have taken.” Thanks for the clarity Prof. Knipprath.
Obviously, we must educate ourselves to the ins and outs of our Constitution. And then INSIST that Congress and especially our President follow the Constitution, instead of stomping and trampling on it.. We must Know what we are defending!! “We have to pass the bill so you can find out what’s in it”.. How ridiculous and arrogant!! If we understand our Constitution and its historical context and rationale, THEN we can intelligently defend it!!
The idea that it is a “gift” to the government puts an entirely different light on the subject. If it were generally understood there just might be a revolution in government.
With out receiving objections from CA or Professor Knipprath I will re-post this this afternoon!
What is worthy of note is that the draft constitution that went into the Philadelphia Convention actually did bar the Senate from amending on the bills raising revenue; but I do not know the reasons why that was not kept. So the original draft was much more closer to the custom of the House of Commons. Perhaps the reason was to curtail any populist rage for paper money by having an additional check in the Senate. My Mentor Books copy of the Anti-Federalist Papers edited by Ralph Ketcham 1986 has the draft copy in it.
On July 26th, 1787 the convention formed a committee on detail and on August 6th presented a draft constitution having 23 articles instead of concluding with the ratified 7 that came about. Much of what we know now as sections in the Constitution were often separate articles in that draft. On my page 135-136, where is draft Article 4 Sec 5 it states:
“All bills for raising or appropriating money, and for fixing the salaries for the officers of Government, shall originate in the House of Representatives, and shall not be altered or amended by the Senate. No money shall be drawn from the Public Treasury, but in pursuance of appropriations that shall originate in the House of Representatives.”
So what we have is that both raising and appropriating funds were barred from amendment from the Senate. At this point I do not know why that changed. Nowadays procedural appropriation rules are used in the Senate to add laws in what is a bill concerning money such as we saw with ObamaCare so that the 60% super majority rule of the Senate on legislative bills can be curtailed by calling a law a money issue. Such sophistry effectively renders the 60% super majority rule moot.
I wonder if it might have something to do with the fact that, originally, the House and Senate represented different interests. After the 17th Amendment, they no longer do. Perhaps the idea was that, say, an interestate highway might be desired by some or all of the states as a way to generate additional or faster commerce for its businesses and citizens, so they add an amendment to do so on the federal bill, since trying to get, say, 10 states to agree to build the road and fund it might be difficult or impossible.
Thank you all for reading and commenting. Ralph, that earlier draft is quite interesting. As I wrote, House members still assert that as constitutional doctrine now and then, and, in fact, most appropriations bills do originate in the House. But, on both ends, taxation and appropriations, the fine details of constitutional text and the heritage of constitutional practice in these matters has done nothing to slow down the pace of growth of the government. I think the problem in this area has less to do with the Senate representing the states and the House the people, or any change wrought by the 17th Amendment, than it does with the fact that the electoral franchise was extended so greatly, beginning in the early to middle 19th century. The Constitution in many ways is premised on the workings and ideology of a more classic republic than the far more participatory system that emerged after the “Age of Jackson.” For the last two centuries, we have been following the cycle of political systems that Plato described in the Republic (he would call it the corruption or degeneration of systems).
There may well be benefits from extending the voting franchise as we have, but there are also political and economic costs. Of course, it is impolitic to mention those, but I think the bills are coming due.
Dear Professor Knipprath, I thank you for joining us again today! As always, your essays are filled with historical information that shines light on both the Constitution and our obligations to hold our representatives accountable to it. The “gifts” aspect is enlightening as is the historical account of why there was such a deeply embedded need for “no taxation without representation.” They didn’t want it that way in England and we didn’t want it that way here. I believe we are in a mess now re taxation and the snowball effect of a now massive government fraught with the weight of entitlement programs. As the ice starts to crack – will we as a country avalanche into obscurity like the lost city of Pompey – buried in our own self -righteousness instead of self – reliance.