At Law & Liberty, Robert Natelson: Direct Taxes and the Founders’ Originalism. From the introduction:
Professor Donald Drakeman’s response to my essay on direct and indirect taxes presents an opportunity to offer some background on constitutional originalism.
My thesis was that the longstanding uncertainty over the Constitution’s distinction between direct and indirect taxes persists because probative Founding-era evidence continues to be overlooked. In addition to references in eighteenth-century literature, that evidence consists of (1) uncontradicted comments by participants in the ratification debates which mesh well with (2) a plethora of eighteenth-century British and American direct tax statutes. (Detailed citations can be found here and here.)
These sources tell us that direct taxes include capitations and levies on real and personal property (i.e., wealth), income, and occupations. Indirect taxes (duties) include levies on consumption of domestically-sold goods (excises), customs (exactions on imports and exports), and levies on certain other transactions and events.
Professor Drakeman’s response cited his 2013 co-authored article on the 1796 Supreme Court case of Hylton v. United States. The participants in that case included such leading Founders as Alexander Hamilton, James Iredell, and William Paterson. The central issue was whether an annual tax on carriages for personal use was direct or indirect. Professor Drakeman tells us that the disagreements among those directly and more remotely involved in Hylton demonstrate that evidence of original public meaning (the goal of what he calls the “new originalism”) sometimes conflicts. When it does conflict, he favors returning to the intention of the framers, which he calls the “old originalism.”
Professor Drakeman certainly is correct to say that evidence of original meaning sometimes conflicts. His co-authored article is not quite the “deep dive” into the direct-indirect distinction he suggests, but it is an excellent summary of Hylton and the general issues surrounding eighteenth-century excise taxes. I believe his suggestion, however, that Hylton is relevant to originalism, is based on misunderstandings.
As explained below, documentary interpretation during the Founding era was governed by “original understanding originalism.” This approach was different from either the “old” or “new” variety Professor Drakeman identifies. It also is far older than either. But under any version of originalism, the Hylton case is useless, or worse than useless, as evidence of constitutional meaning. It should be disregarded.
Extensive methodological discussion follows, including this observation:
With very rare exceptions, only evidence arising previously to or contemporaneously with the ratification is useful for discerning the content of the ratification bargain. Later evidence is too often adulterated by changed circumstances, altered incentives, failing memories, and absent witnesses.
I wouldn't put it quite so strongly, but I agree post-ratification evidence needs to be treated carefully, for the reasons stated. (Also I agree that Hylton isn't as important as people think it is.)
(Via Paul Caron at TaxProf Blog.)
UPDATE: Donald Drakeman has this response on the methodological points: Framers, Founders, and Originalism.
(Thanks to Michael Rosman for the pointer.)
Posted at 6:29 AM