The estimable R.R. Reno’s wit is as dry as his martinis, so it is hard for me to know how seriously he meant the proposal in his “On the Square” essay “Martinis and Taxes” today, for a federal wealth tax. His friend, however, led him astray by invoking the takings clause of the Fifth Amendment as an obstacle to such a tax. Not so; there is no such thing as a tax, otherwise valid, that runs afoul of the clause that says that a taking of private property for public use must be compensated–else we would find that the government is disabled entirely from undertaking any kind of taxation (hmm, wait a minute . . .)
No, the very real problem with a wealth tax is that it would have to be “apportioned” geographically by state, according to the latest census. That’s because it is a “direct” tax on a person’s property, not on the transactions in which he engages, as is the case of the income tax. And this apportionment requirement creates a real nightmare, as I explained at NRO‘s Bench Memos last month when the idea of a wealth tax appeared in a New York Times op-ed. The apportionment requirement may be idiotic, and its historical origins obscure, but it’s very real, and there is no way a wealth tax could be made to work without backfiring.
December 10th, 2012 | 1:33 pm
“No, the very real problem with a wealth tax is that it would have to be “apportioned” geographically by state, according to the latest census. That’s because it is a “direct” tax on a person’s property, not on the transactions in which he engages, as is the case of the income tax. ”
The reason an income tax does not have to be levied according to enumeration or apportionment, is that those requirements were removed for income taxes by the Sixteenth Amendment, not because it’s a tax on transactions.
The apportionment requirement is not idiotic, if for no other reason than it serves as a barrier to the voracious appetite of government and the unlimited creativity of legislators and executives in appropriating funds for their use.
Although it’s meaning obscured, it is by the fact that we have in just under a century, completely accepted the idea of the federal government enacting tax code that mocks equality before the law, is as much designed to affect behavior as finance the government, uses frustration and exhaustion as implicit tools of compliance, and is as often as not, arbitrary and capricious.
(Hint, think about why is it you pay a special penalty tax of 10% on early withdrawals of your pension/tax deferred accounts until you are 59 AND 1/2?, i.e., not 59, not 60?)
December 11th, 2012 | 12:00 pm
Only the U.S. Supreme Court can resolve the Constitutional question but as an attorney I note that many legal scholars believe that a net wealth tax would not require a “direct tax” apportionment (see Fixing the Constitutional Absurdity of the Apportionment of Direct Tax by Calvin H. Johnson, 21 Constitutional Commentary 295, 2004). A major boost to the legal argument also came with the Supreme Court’s recent approval of a tax on the failure to obtain health insurance (not a penalty or transaction) without apportionment because it, like a net wealth tax, is not the kind of “direct” or “indirect” tax envisioned when the constitution was drafted. In other words, new types of taxes are not subject to the constitutional apportionment requirement – particularly where the wealth and the liabilities transcend state borders. Moreover, a net wealth tax is a replacement for estate and capital gains taxes which do not require apportionment.
December 11th, 2012 | 2:04 pm
I find the inclination and capacity of attorneys to employ (twist) language in the service of novel new state incursions against individual persons, their pursuits and private property amazing and disturbing.
Witness Kelo v. New London, where private homes were put at peril by municipal scheming that interestingly, resulted in real “blight”, when the “development” schemes evaporated.
But, hey why not bulldoze a few homes if we can just assume the state and it’s friends really will make life grand if they can just take what they refused to purchase. From this, we know that “legal” isn’t necessary sagacious.
When did “the law” become aracana to be discussed by a cartel of modern pharisees, who need only clever wordplay for the arrogation of arbitrary, if not plenary authority.
Despite all pretenses to the contrary, one cannot arrive at principles of law like physical sciences, and the old saw that “the law is what the judge says it is”, is something that applies more and more generallyand absolutely, at odds with self-governance. Of course, Samuel Johnson made a much more succint and accurate characterization.
Pardon me if I dismiss the dark arts of “legal scholars” and their tortuous interpretations, even when published in the echo chambers of law reviews and met with acclaim by the barristry.
Only God knows whether the Roberts Obamacare opinion was capitulation to the public threats of Obama and Leahy, who clearly threatened to subject the thin reeds of Court authority to public disdain if he didn’t uphold their takeover of medicine.
Unfortunately, John Roberts will not be subject to a question of dereliction of duty, there’s only hope that his opinion will be judged as harshly as Plessy v. Ferguson, Buck v. Bell and Korematsu v. United States and a myriad of other abominations (let’s not forget Harry Blackmun’s magnum opus) that should tell us that being “Supreme” doesn’t mean inerrant or infallible.
Links
Blogs
Find Us
Contact