Under Constitutional law, Congress is given the power of taxation. The Sixteenth Amendment of the Constitution provides for this authority as it states, “The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.”
Even though the Constitutional provision explicitly provides Congress as a whole to the power of taxation, it is the House of Representatives that deals with all aspects of income taxes and revenue. Therefore, the Senate cannot initiate any bills that impose any kind of taxation. The House of Representatives also limits the Senate from initiating any bills that deal with the spending of federal funds.
However, the Senate does have the power to amend taxation bills or reject them, for any bill to be considered into legislation must be approved by both houses of Congress under Constitutional law. Over the years, there has been some controversy regarding the implications by which the Constitution provides for a wide interpretation of the clause regarding the taxation powers to be implemented by Congress. The practice of the House having sole power to initiate taxation bills has its roots in British Parliament, in which the House of Commons can only raise issues based on taxation.
However, this practice is also balanced by the fact that the Senate can amend bills to the extent that the original content can be stricken, and new provisions can be drafted. Furthermore, the Senate can also reject the bill entirely. Therefore, even though the dispute itself has not been subject to revision in terms of changing or amending laws and legislature, it has been settled by the Senate’s practice regarding taxation bills.
Before the passage of the Sixteenth Amendment, all types on income taxation were considered to be indirect taxes. Indirect taxes were required to be imposed with geographical uniformity. Conversely, direct taxes, such as taxation on property, were required to be apportioned among the states in accordance to population numbers.
There were many issues regarding the implementation of certain kinds of taxation, specifically among farmers and those belonging to professions of an industrial nature. The Sixteenth Amendment would provide for distinct definitions and limits regarding income taxation, which would help dissolve the dispute.
Furthermore, it also allowed for Congress to impose taxation on income, regardless of what source. It also allowed that apportionment of income taxes would not be implemented by Congress as well.