Who has the power to impose taxes in the United States?

The power to impose taxes in the United States is shared by both federal and state governments. This arrangement is established by the Constitution, which grants Congress the authority to levy taxes for federal purposes, such as funding government operations, maintaining national defense, and providing public services. Additionally, state governments have their own taxing powers, which allow them to impose taxes on income, property, sales, and various transactions to support state and local functions.

This division of taxing authority ensures that both levels of government can generate revenue needed for their respective responsibilities, ultimately providing a more comprehensive governance structure. Local governments may also impose taxes, but they derive their taxing powers from the state. Thus, the option indicating that both federal and state governments have the power to impose taxes accurately reflects the constitutional framework and the practical realities of taxation in the U.S.