Introduction
The U.S. Constitution is a foundational article which outlines the federal government powers, and more significantly, the rights which it does not have. In this case, there are various Bill of Rights, including one that guides business in the country. This means, within the constitution, there are articles which guide the conduct of businesses within the states in the U.S. such as the “the Commerce Clause.” As such, this paper focuses on discussing the Commerce Clause and its effects on business activity. This Commerce Clause is a section of the constitution that grants power to the Congress to regulate international as well as interstate trade in America.
Effects of Commerce Clause on Business Activity
The Commerce Clause of the Constitution of the United States is found in Article 1, section 8, clause 3 and it states that the Congress shall have the power “to regulate commerce with foreign Nations, and among the several States, and with the Indian tribes” (Dachille, 2010). This clause gives Congress the ability and right to regulate global commerce as well as interstate trade. This means as it is from the text that the Commerce Clause gives the Congress the power of regulating business flow among and between the fifty states (that is the flow of goods through states). As such, this clause forbids states from regulating commerce of the interstate unreasonably. In this case, the term “commerce” as used in the constitution, on one hand, refers to commercial or business exchanges in all and any of its forms between various states citizens. On the other hand, domestic or interstate commerce refers to trade which takes place solely within one state geographic borders (Saad, 2003).
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Thus, the so-called “dormant Commerce Clause” gives states restrictions from being selective against interstate trade through favoring in-state trade over the commerce of out-of-state, and forbids the states from imposing restraints that are excessive on interstate commerce (Dachille, 2010). According to Thomas and Tatelman (2014), the Commerce Clause was formulated to eliminate the strong rivalry between the state groups that had an incredible commercial advantage due to their proximity to the main harbor and those states which were not close to a harbor. This disparity was the reason for constant economic scuffles among the states. Woodman (2018) adds that the Commerce Clause was designed to bring uniformity to commerce between the American states. This is because if the states were left to work out interstate trade process amongst themselves, then this may have given rise to policies differences leading to arguments and disagreements (Kent, 2014).
On this background, the Commerce Clause has impacted business in various ways. First, the clause gives Congress the power to collect and lay taxes, excises, duties, and imposts. This brings taxation uniformity among the states (Kent, 2014). No state is taxed less or more for its business people as long as the law is applied. Meaning the taxation of business people among the states is uniform and businessmen from one state do not have to worry about doing business in another state due to variability in taxation (Woodman, 2018). Second, it is the Commerce Clause, under the Controlled Substances Act, which is the source that led to federal drug prohibition laws (Woodman, 2018). As such, the clause resulted in laws which regulated the trade of drugs, specifying both the legal and illegal drugs and ones which were allowed to for people to cultivate and trade.
Third, the Commerce Clause provides businesses with an opportunity to operate throughout the nation and do not have to worry concerning individual state laws which may destroy their ability to carry out business (Kent, 2014). This is because the Clause prohibits the states from unreasonable regulation of trade among states through uniform law to guide commerce. This gives the opportunity to traders from among the fifty states to set up and run business in any of the states without worrying about the laws in that different state that may interfere with their businesses. As a result, the laws created under the Commerce Clause encouraged trade among traders between various states within the U.S. due to the positive and solid relationships with one another brought by uniformity in business laws (Kent, 2014).
Conclusion
The Commerce Clause has impacted business activities in the U.S. in various ways as evident from the above discussion. Without the Commerce Clause, conflicts could have risen among the 50 states due to variability in trade laws from one state to another, which would have created barriers for business people from these states to perform their businesses in a different state. As a result, the Clause brought uniformity in trade laws among the states and accordingly, encouraged interstate commerce.
References
Dachille, K. (2010). Regulating Tobacco Advertising and Promotion: A" Commerce Clause" Overview for State and Local Governments.
Kent, C. (2014, July 23). How to Understand the Commerce Clause in One Simple Sentence. The Blaze . Retrieved January 21, 2019, from https://www.theblaze.com/contributions/how-to-understand-the-commerce-clause-in-one-simple-sentence
Saad, S. (2003). Commerce Clause Jurisprudence: Has There Been a Change. J. Land Resources & Envtl. L. , 23 , 143.
Thomas, K. R., & Tatelman, T. (2014). The Power to Regulate Commerce: Limits on Congressional Power. Congressional Research Service, the Library of Congress.
Woodman, C. (2018, November 8). How Does the Constitution Affect Businesses? Bizfluent. Retrieved January 21, 2019, from https://bizfluent.com/info-8405704-constitution-affect-businesses.html
