At Volokh Conspiracy, Steven Calabresi: The Amar Brief in Moore v. United States Should Not be Embraced. From the introduction:
The constitutional question in Moore v. United States is whether wealth taxes and taxes on unrealized capital gains have to be apportioned among the states based on their respective populations, which it is practically impossible to do, or whether wealth taxes and taxes on unrealized capital gains have to be merely uniform in every state, which could be easily accomplished. Ed Meese, Gary Lawson, and I argue that such taxes are direct taxes, which must be apportioned among the states, while the Amar brothers say they are indirect taxes that must merely be uniform among the states, which would make them much easier to enact.
The Taxing Power itself is granted in Article I, Section 8, Clause 1, which says:
"The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States."
Article I, Section 9, Clause 4 then critically limits the federal taxing power by saying that:
"No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or Enumeration herein before directed to be taken."
The rule of apportionment thus applies to "direct taxes"; the rule of uniformity applies only to such indirect taxes as "Duties, Imposts, and Excises.
The flaw in the Amar brothers' brief that I will discuss today is that it construes the text of the Constitution according to the expected applications of certain historical figures rather than its plain objective meaning. The Amar brothers rewrite Article I, Section 9, Clause 4 to say:
"No Capitation, or Land Tax shall be laid, unless in Proportion to the Census or Enumeration herein before directed to be taken."
They argue that wealth taxes and taxes on unrealized capital gains in your house or Vanguard fund are perfectly constitutional. They say, contrary to the text of the Constitution, that Article I, Section 9, Clause 4 bans only federal capitation and land taxes and that nothing else is a direct tax.
The post continues:
The original public meaning of the words "direct tax" is clearly set forth in two law review articles: Robert Natelson, What the Constitution Means by "Duties, Imposts, and Excises"— and "Taxes" (Direct or Otherwise), 66 Case West. U. L. Rev. 297 (2015) and Erik M. Jensen, The Apportionment of "Direct Taxes": Are Consumption Taxes Constitutional?, 97 Colum. L. Rev. 2334 (1997). Both authors conclude that "direct taxes" included many more taxes than merely a capitation or federal land tax.
Natelson demonstrates conclusively that the phrase "direct taxes" also included taxes on:
"1) Wealth employed in business and domestic life. Direct taxes included those imposed on land, improvements to land, ('stock in trade'), business equipment, and livestock; 2) Personal and business income. Direct taxes included levies on rents, business profits, wages, interest, and other income; 3) Business enterprises. Levies on business profits and occupational fees were direct taxes; 4) Heads. Poll taxes, also called head taxes or capitations, existed in all of the New England states and in most other states as well. They were levied both on free persons and slaves. Capitations were the prevalent way of taxing slaves." Natelson, supra at 314-316.
Seems right to me. For my thoughts on the Amar brief and Ware v. Hylton, see here. I don't think this necessarily means the Moores win, though.
Posted at 6:09 AM