Government and Politics Issues

When Congress Delegates Taxing Power

The U.S. Constitution gives Congress -- and only Congress -- the power to levy taxes. Yet the Federal Communications Commission is about to impose a new 5 percent federal tax on long-distance phone bills.

The President's budget assumes a revenue potential of $13 billion from this tax -- equal to twice the amount motorists now pay in federal gasoline taxes.

How can this be?

  • Constitutional scholars charge that Congress used veiled language in the 1996 Telecommunications Act to authorize the FCC to impose the tax in violation of its constitutional responsibilities.

  • Until the 1920s, the Supreme Court consistently made it clear that Congress could not delegate its legislative powers to the executive branch, legal scholars assert.

  • But since then, the justices have let Congress authorize bureaucrats to impose laws through agency regulation and have even signaled that Congress might be able to delegate the power to tax.

Defenders of the Constitution are heartened, however, by a 1996 Supreme Court decision in the case of Loving v. U.S. The justices declared then that "the lawmaking function belongs to Congress...and may not be conveyed to another branch or entity."

Critics say patent filing fees present another instance of the executive branch imposing taxes. The fees far exceed the requirements of the Patent and Trademark Office. So Congress and the President have used the surpluses to pay for such unrelated programs as legal aid and welfare.

Rep. George Gekas (R-Pa.) reportedly plans to introduce a bill next week that would stop any tax levied by an administrative agency from going into effect unless Congress formally approves.

Source: David Schoenbrod (New York Law School) and Marci Hamilton (Benjamin N. Cardozo School of Law), "Congress Passes the Buck -- Your Tax Buck," and editorial, "The Gore Tax," both in the Wall Street Journal, June 12, 1998.

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