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The Origination Clause, sometimes called the Revenue Clause, is Article I, Section 7, Clause 1 of the United States Constitution. This clause says that all bills for raising revenue must start in the House of Representatives, but the Senate may propose or concur with amendments as in the case of other bills.
Article One of the United States Constitution establishes the legislative branch of the federal government, the United States Congress. Under Article One, Congress is a bicameral legislature consisting of the House of Representatives and the Senate. Article One grants Congress various enumerated powers and the ability to pass laws "necessary and proper" to carry out those powers. Article One also establishes the procedures for passing a bill and places various limits on the powers of Congress and the states.
The United States Constitution is the supreme law of the United States. The Constitution, originally comprising seven articles, delineates the national frame of government. Its first three articles embody the doctrine of the separation of powers, whereby the federal government is divided into three branches: the legislative, consisting of the bicameral Congress ; the executive, consisting of the President ; and the judicial, consisting of the Supreme Court and other federal courts. Articles Four, Five and Six embody concepts of federalism, describing the rights and responsibilities of state governments, the states in relationship to the federal government, and the shared process of constitutional amendment. Article Seven establishes the procedure subsequently used by the thirteen States to ratify it. It is regarded as the oldest written and codified national constitution in force.
Government revenue is money received by a government. It is an important tool of the fiscal policy of the government and is the opposite factor of government spending. Revenues earned by the government are received from sources such as taxes levied on the incomes and wealth accumulation of individuals and corporations and on the goods and services produced, exports and imports, non-taxable sources such as government-owned corporations' incomes, central bank revenue and capital receipts in the form of external loans and debts from international financial institutions. It is used to benefit the country. Governments use revenue to better develop the country, to fix roads, build homes, fix schools etc. The money that government collects pays for the services that is provided for the people. The sources of finance used by the central government are mainly taxes paid by the public.
The Origination Clause stemmed from a British parliamentary practice that all money bills must have their first reading (and any other initial readings) in the House of Commons before being sent to the House of Lords. This practice was intended to ensure that the power of the purse is possessed by the legislative body most responsive to the people, although the British practice was modified in America by allowing the Senate to amend these bills.
In the Westminster system, a money bill or supply bill is a bill that solely concerns taxation or government spending, as opposed to changes in public law.
The House of Commons of Great Britain was the lower house of the Parliament of Great Britain between 1707 and 1801. In 1707, as a result of the Acts of Union of that year, it replaced the House of Commons of England and the third estate of the Parliament of Scotland, as one of the most significant changes brought about by the Union of the kingdoms of England and Scotland into the Kingdom of Great Britain.
The House of Lords, also known as the House of Peers, is the upper house of the Parliament of the United Kingdom. Membership is granted by appointment or else by heredity or official function. Like the House of Commons, it meets in the Palace of Westminster. Officially, the full name of the house is the Right Honourable the Lords Spiritual and Temporal of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled.
This clause was part of the Great Compromise between small and large states. The large states were unhappy with the lopsided power of small states in the Senate, and so the Origination Clause theoretically offsets the unrepresentative nature of the Senate, compensating the large states for allowing equal voting rights to Senators from small states.
The Connecticut Compromise was an agreement that large and small states reached during the Constitutional Convention of 1787 that in part defined the legislative structure and representation that each state would have under the United States Constitution. It retained the bicameral legislature as proposed by Roger Sherman, along with proportional representation of the states in the lower house, but required the upper house to be weighted equally among the states. Each state would have two representatives in the upper house.
The Origination Clause, also known as the Revenue Clause,reads as follows:
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.
The federal Constitution was written in 1787 and adopted in 1789. Prior to 1787, several state constitutions followed British practice by providing that "money bills" must start in the more representative branch of the state legislature.
Vesting the power of origination in the U.S. House of Representatives was part of the Great Compromise, in which the framers also agreed to allow equality in the Senate regardless of a state's population, while creating representation based on a State's population in the House.The framers adopted the Great Compromise on July 16, 1787. At that point, the draft clause stated: "all bills for raising or appropriating money. ... shall originate in the [representative house], and shall not be altered or amended by the [other house]. ... "
The Origination Clause was modified later in 1787 to reduce the House's power by allowing the Senate to amend revenue bills,and by removing appropriation bills from the scope of the clause (the House and Senate have disagreed on the latter point). However, a proposal was defeated that would have reduced the House's power even more by changing "bills for raising revenue" to "bills for raising money for the purpose of revenue". James Madison explained:
In many acts, particularly in the regulations of trade, the object would be twofold. The raising of revenue would be one of them. How could it be determined which was the primary or predominant one; or whether it was necessary that revenue shd: be the sole object, in exclusion even of other incidental effects.
Regarding the decision to allow Senate amendments, some of the reasoning was given by Theophilus Parsons during the convention in Massachusetts that ratified the Constitution; Parsons said that, otherwise, "representatives might tack any foreign matter to a money-bill, and compel the Senate to concur or lose the supplies."Madison believed that the difference between a permissible Senate amendment and an impermissible Senate amendment would, "turn on the degree of connection between the matter & object of the bill and the alteration or amendment offered to it."
During that era, the Continental Congress had a rule stating: "No new motion or proposition shall be admitted under color of amendment as a substitute for a question or proposition under debate until it is postponed or disagreed to."At the Virginia convention to ratify the Constitution, delegate William Grayson was concerned that a substitute amendment could have the same effect as an origination: "the Senate could strike out every word of the bill except the word whereas, or any other introductory word, and might substitute new words of their own." Grayson was not convinced by Madison's argument that "the first part of the clause is sufficiently expressed to exclude all doubts" about where the origination must occur.
In its final form, the Origination Clause was a major selling point for ratification of the Constitution. James Madison, who supported the final version during and after the 1787 Convention,wrote the following in Federalist 58 as the debate over ratification was raging:
The house of representatives can not only refuse, but they alone can propose the supplies requisite for the support of government. They in a word hold the purse; that powerful instrument by which we behold, in the history of the British constitution, an infant and humble representation of the people, gradually enlarging the sphere of its activity and importance, and finally reducing, as far as it seems to have wished, all the overgrown prerogatives of the other branches of the government. This power over the purse, may in fact be regarded as the most compleat and effectual weapon with which any constitution can arm the immediate representatives of the people, for obtaining a redress of every grievance, and for carrying into effect every just and salutary measure.
This clause resonated with a citizenry opposed to taxation without representation.
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Many scholars have written about the Origination Clause. Among the most widely influential was Joseph Story, who wrote in 1833 that the clause refers only to bills that levy taxes:
[The clause] has been confined to bills to levy taxes in the strict sense of the words, and has not been understood to extend to bills for other purposes, which may incidentally create revenue. No one supposes, that a bill to sell any of the public lands, or to sell public stock, is a bill to raise revenue, in the sense of the constitution. Much less would a bill be so deemed, which merely regulated the value of foreign or domestic coins, or authorized a discharge of insolvent debtors upon assignments of their estates to the United States, giving a priority of payment to the United States in cases of insolvency, although all of them might incidentally bring, revenue into the treasury.
The U.S. Supreme Court has decided several cases involving this clause, and all of those challenges to federal statutes failed.For example, in the 1911 case of Flint v. Stone Tracy Company , the Court held: "The amendment was germane to the subject-matter of the bill and not beyond the power of the Senate to propose." But, the plaintiffs in one lower court decision succeeded in striking down a federal statute on Origination Clause grounds. The Supreme Court stated in the 1990 case of United States v. Munoz-Flores :
Both parties agree that "revenue bills are those that levy taxes in the strict sense of the word, and are not bills for other purposes which may incidentally create revenue." Twin City Bank v. Nebeker, 167 U. S. 196, 202 (1897) (citing 1 J. Story, Commentaries on the Constitution § 880, pp. 610–611 (3d ed. 1858)). The Court has interpreted this general rule to mean that a statute that creates a particular governmental program and that raises revenue to support that program, as opposed to a statute that raises revenue to support Government generally, is not a "Bil[l] for raising Revenue" within the meaning of the Origination Clause.
What this means exactly is disputed. According to one scholar, a statute is outside the scope of the Origination Clause if it, "imposes an exaction not to raise revenue, but to enforce a statute passed under the Commerce Clause or other enumerated power."However, according to another scholar, even exactions imposed only under the taxing powers of Congress are outside the scope of the Origination Clause if Congress "earmarks revenues to fund a program it creates." Regarding the latter view, Justice John Paul Stevens suggested in 1990 that its tendency was to "convert the Origination Clause into a formal accounting requirement. ... "
A bill that lowers taxes instead of raises taxes may still be a bill for raising revenue, according to the United States Court of Appeals for the Ninth Circuit.Assuming that a bill is for raising revenue, a further ambiguity in the clause involves how far the Senate's right to amend extends. According to law professor Jack Balkin, the Senate may take a House-originated revenue bill, and "substitute a different bill on a different subject." On the other hand, law professor Randy Barnett says: "The Supreme Court has never approved the 'strike-and-replace' procedure. ... "
Not only the House of Representatives, but also the Senate and the judiciary have sometimes tried to guard the role of the House with regard to origination of revenue bills. For example, as early as 1789, the Senate deemed itself helpless to pass a law levying a tax.And, as mentioned, a federal court in 1915 struck down legislation contrary to the clause. The U.S. Supreme Court has expressed willingness to address such issues, according to its 1990 opinion by Justice Thurgood Marshall in Munoz-Flores:
A law passed in violation of the Origination Clause would thus be no more immune from judicial scrutiny because it was passed by both Houses and signed by the President than would be a law passed in violation of the First Amendment.
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,though that issue was not addressed by the majority opinion. In 2014, Sissel v. U.S. Department of Health and Human Services , a challenge to the Affordable Care Act brought by the Pacific Legal Foundation based upon this clause, was rejected by a panel of the United States Court of Appeals for the District of Columbia, and that court later declined a request to put the matter before all of its judges ("en banc") over a lengthy dissent authored by Judge Brett Kavanaugh.
In 2013, during the United States federal government shutdown of 2013 and the United States debt-ceiling crisis of 2013, the Republican-led House of Representatives could not agree on or pass an originating resolution to end the government crisis, as had been agreed, so the Democratic-led Senate used bill H.R. 2775 to resolve the impasse by using the Continuing Appropriations Act, 2014, an insignificant bill that originated in the House, which it amended all the tax and appropriation measures so to satisfy the formal requirements of the Originating Clause.
The Fifteenth Amendment to the United States Constitution prohibits the federal government and each state from denying a citizen the right to vote based on that citizen's "race, color, or previous condition of servitude". It was ratified on February 3, 1870, as the third and last of the Reconstruction Amendments.
The Sixteenth Amendment to the United States Constitution allows Congress to levy an income tax without apportioning it among the states on the basis of population. It was passed by Congress in 1909 in response to the 1895 Supreme Court case of Pollock v. Farmers' Loan & Trust Co. The Sixteenth Amendment was ratified by the requisite number of states on February 3, 1913, and effectively overruled the Supreme Court's ruling in Pollock.
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The Three-Fifths Compromise was a compromise reached among state delegates during the 1787 United States Constitutional Convention. Whether, and if so, how, slaves would be counted when determining a state's total population for legislative representation and taxing purposes was important, as this population number would then be used to determine the number of seats that the state would have in the United States House of Representatives for the next ten years. The compromise solution was to count three out of every five slaves as a person for this purpose. Its effect was to give the southern states a third more seats in Congress and a third more electoral votes than if slaves had been ignored, but fewer than if slaves and free people had been counted equally. The compromise was proposed by delegate James Wilson and seconded by Charles Pinckney on June 11, 1787.
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The United States House of Representatives is the lower chamber of the United States Congress, the Senate being the upper chamber. Together they compose the legislature of the United States.
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United States v. Munoz-Flores, 495 U.S. 385 (1990), was a United States Supreme Court case that interpreted the Origination Clause of the United States Constitution. The Court was asked to rule on whether a statute that imposed mandatory monetary penalties on persons convicted of federal misdemeanors was enacted in violation of that clause, as the lower court had held.