Thursday, September 16, 2021

2021 NYU Tax Policy Colloquium Week 1: Brooks and Gamage on drafting a constitutional wealth tax, Part 1

 This past Tuesday (on September 14), Jake Brooks and David Gamage jointly appeared at the colloquium (Gamage by Zoom) for a discussion of their paper, The Indirect Tax Canon, Apportionment, and Drafting a Constitutional Wealth Tax

This was the first of our seven public colloquium sessions for the year (the other 6 meetings are just with the enrolled students, and generally serve to gear us all up for the public session). It was the first time we've had a "hybrid, " live plus Zoom colloquium, although last year we were all-Zoom. I thought the hybrid aspect went decently well, although Zoom participants could only see the stage (with Jake Brooks and myself), rather than all of the speakers. I gather that the acoustics were also mainly okay, although the fact that all live participants were wearing masks surely did not help in this regard. [Footnote: I hate masks, necessary though I agree that they are.]

I look forward to our having more remote attendees in the future, including perhaps from even faraway time zones. (We had a few Zoom attendees from well outside NYC on Tuesday, although technically I think they were all in EST.)

We conducted the discussion on Tuesday in two distinct segments. The first was the paper's discussion of using apportionment to render a wealth tax constitutional after all if the Supreme Court were to hold that it was a "direct tax" and thus unconstitutional otherwise. The second topic was "everything else."

Apportionment logically comes second as a discussion topic, and indeed that is how the paper is organized. But the novelty of the paper's approach to this issue, which I think the authors would agree is its most important new contribution, supports putting it first for our purposes.

1. APPORTIONMENT

Two points have generally attracted near-consensus in the literature discussing the possible enactment of a federal wealth tax. The first is that, if  the infamous 1895 Supreme Court case, Pollock v. Farmers' Loan & Trust Co., is binding precedent, then a federal wealth tax is a "direct tax" under the Constitution, making it unconstitutional unless duly apportioned between the states. The second is that so apportioning a federal wealth tax is impossible and unacceptable, with the consequence that applying Pollock would be a death knell for such an enactment.

On the first of these two standard claims, the paper adds context and background regarding Pollock's status (well-known to the cognoscenti) as a truly rogue case by a blatantly political Supreme Court that did not care about precedent, history, or the basics of coherent legal reasoning. It also argues that Pollock has been subsequently overruled in large part, not just by subsequent cases but also (beyond just the boundaries of the income tax, they argue) by the Sixteenth Amendment. But I will return to this in Part 2 of this discussion.

More notably, the paper also rejects the second of the above claims. It argues not only that apportionment between the states has frequently been done before - albeit, not for some time - but also that it can politically, practically, and reasonably be done today, with regard to the wealth tax or even certain expansions to the income tax that the current right-wing Supreme Court might strike down.

Apportionment is a bit of an intricate thing, so a simple hypothetical may help to present clearly what we are talking about here.

Apportionment hypothetical: Suppose there are just 2 states, New York (NY) and Alabama (AL). Each has a population of 10 people. Congress enacts a 10% wealth tax on wealth above a statutory threshold, yielding the following toy example:

                        Population     People Subject to WealthTax            $$ Subject to Wealth Tax

NY                       10                                3                                                 $500

AL                        10                                2                                                 $300

Unapportioned Wealth Tax: Absent apportionment, this 10% tax on wealth above threshold would raise $50 from New York and $30 from Alabama, for a total of $80.

Apportioned Wealth Tax: If the Supreme Court held that this was a direct tax requiring apportionment, then,the two states' equal populations would mean that equal $$ had to come from each. Thus,  assuming it was still raising $80 of total revenue, both NY and AL taxpayers would need to supply $40.

Solution: The standard response would be to say: In that case, the wealth tax rate must be 8% in NY and 13.3% in AL, thus raising $40 from each. But this is assumed to be crazy. A higher tax rate in the state that, at least only counting $$ above  the threshold, is poorer??

Drawing on 19th century precedents, the paper suggests instead doing something like the following:

(a) 8% wealth tax in both jurisdictions, raising $40 in NY and $24 in AL.

(b) To make up AL's shortfall, raise an additional $16 there through, say, a federal tax on AL's real property base, using AL valuations, and perhaps exempting, say, the bottom 5 (or whatever) of AL's taxpayers, based on their personal income or wealth,

(c) What's unfair here, they argue, is not AL's taxpayers paying higher rates on something as such - given federalism, taxpayers in different states pay different net state and local tax rates all the time - but rather, AL's not getting the money from this extra $16 federal tax. This does indeed relate to the apparent reasons for the apportionment rule, which related to the feds using tax bases that applied unevenly in practice, such that some states ended up contributing excessively (in relative terms) to the common federal purse. So they say, all we need to do is give Alabama $16 (or so back), in a manner that is sufficiently independent of and unlinked to the $16 levy here that the Supreme Court will not in good faith be able to group this return of the $$ with the extra $16 levy and disregard the latter as a sham.

The solution they propose, therefore, is that Congress also enact a fiscal equalization program between states like that which countries, with federal systems, that are more civilized than the US already have. AL, as the poorer state, would be losing in a certain sense relative to NY under the apportioned wealth tax, but winning under fiscal equalization, so overall it would be doing fine. And, we should take the fiscal equalization into account in deciding whether things are fair and just, but the Supreme Court must ignore it because they have no authority in this sort of context to look at EVERYTHING in the federal fiscal system - just at the particular tax instrument that is being tested under an apportionment requirement.

This might be done by enacting the straight-up wealth tax, but with back-up provisions implementing this thing instead if the Supreme Court, as expected given its right-wing political slant, upholds the applicability of Pollock to a modern federal wealth tax. Or maybe a tricky way of doing it is to enact the back-up proposal first - and then, a week later, enact the federal wealth tax, saying that it repeals the apportioned version, but conditional on its not being itself held a direct tax. This might have formal or technical advantages under Byrd Rule angles that I don't personally know much about.

We had an interesting discussion about all this on Tuesday, which even continued to a degree by emails between some of the participants afterwards. But, for present purposes, I will settle for offering the following discrete comments. (I am hoping that this blogpost will help the paper's analysis enter the broader dialogue for consideration by lots of people outside this particular space.) Anyway, here with the comments:

1) What with the lack of an explicit link (or one at the margin) to fiscal equalization, this might still be a hard sell politically. Also, if we did fiscal equalization just right but then added this, we would in effect now be giving AL, as the poorer state, too little. But then again, the US has no explicit fiscal equalization program today (although it does of course effectively transfer $$ between states).

2) While the best shouldn't be the enemy of the good, it is possible that this proposal, as it ended up operating, would be less to the taste of wealth tax proponents than the program that they preferred. A key feature is getting the make-up revenues from people below the top threshold where the wealth tax would otherwise have exclusively applied.

3) In this example, AL is by hypothesis both the poorer state and the one that gets socked with the extra $16 under apportionment. But a state that, in a pure wealth tax, would pay "too little" and thus get hit up for extra would not necessarily win under fiscal equalization that went from richer states to poor states. Suppose Minnesota (MN) is richer than Louisiana (LA) per capital because it has more middle class folks and fewer oppressed poor. But suppose as well that LA has more super-rich people (its oppressing plutocrats), or more precisely more $$ per capital held by rich people that is subject to the wealth tax. In short, while LA is richer at the top, MN is more affluent overall. Then MN would have to pay the supplemental tax under apportionment, AND fiscal equalization transfers might be expected to flow from MN to LA.

4) The paper also discusses doing this for income tax enactments that a right-wing Supreme Court might strike down under the authority (such as it is) of Eisner v. Macomber, with its ludicrously constitutionalized realization requirement. Suppose Senator Wyden's proposal to tax people above a certain threshold on a mark-to-market basis were struck down by the current Supreme Court - as they would no doubt be slavering to do, and I note that (ever since Barrett joined the Court as right-winger #6) their reluctance to do whatever they want has certainly declined. Applying apportionment here might be trickier, as the rest of the income tax would still presumably be valid. But that is not to say that it would be impossible, e..g, based on "stacking" the income from this provision on top of everything else in the tax code in order to determine its marginal revenue yield that then needed to be equalized relative to population.

5) More on this in Part 2 (which will be a separate blog post), but a Supreme Court that was acting in bad faith, as I for one certainly believe that the current majority does, would surely find a way - or perhaps, many ways - to strike it down, simply because they don't like it. The paths they might use, if so minded, might include at least the following:

a) Despite the clear precedents in favor of amalgamating the separate pieces of a given enactment - as here, where NY pays "too much" under the wealth tax proper and AL pays "too much" under the property tax add-on - they'd look at each part separately and ruled that both, albeit in opposite directions, violated apportionment. Why would they do this? A better question might be: Why wouldn't they do this?

b) They could call the extra piece a sham given fiscal equalization, even if the offset was imprecise and the two were not actually linked at the margin,

c) They could say that the interstate competitive pressure on AL to rebate fiscal equalization $$ about equal to the extra property tax placed them under an improper constraint, analogous to the reasons for the Court's holding that states must be allowed to reject free Medicaid $$ under the ACA.

d) No matter how the residual tax to even up the pure wealth tax part worked, they could say: Sorry, but you didn't do it just right, so the whole thing is invalid! Again, why wouldn't they do this?

In my next blogpost, Part 2 on the Brooks-Gamage paper, I will address selected aspects of "everything else" in the paper apart from apportionment.

Let me just say, however, that people who are interested in the prospects for a federal wealth tax - if not this year, than under a future Congress that has not loosed the shackles of a runaway right-wing Supreme Court - should definitely read the article for themselves.

6 comments:

Ric Clayton said...

I really want to thank Dr Emu for saving my marriage. My wife really treated me badly and left home for almost 3 month this got me sick and confused. Then I told my friend about how my wife has changed towards me. Then she told me to contact Dr Emu that he will help me bring back my wife and change her back to a good woman. I never believed in all this but I gave it a try. Dr Emu casted a spell of return of love on her, and my wife came back home for forgiveness and today we are happy again. If you are going through any relationship stress or you want back your Ex or Divorce husband you can contact his whatsapp +2347012841542 or email emutemple@gmail.com website: Https://emutemple.wordpress.com/ Https://web.facebook.com/Emu-Temple-104891335203341

Anonymous said...

Are you interested in any kinds of hacking services?
Feel free to contact TECHNECHHACKS.

For years now we’ve helped so many organizations and companies in hacking services.
TECHNECHHACKS is a team of certified hackers that has their own specialties and they are five star rated hackers.

We give out jobs to hackers (gurus only) to those willing to work, with or without a degree, to speed up the availability of time given to jobs!!

Thus an online binary decoding exam will be set for those who needs employment under the teams establishment.


we deal with the total functioning of sites like,


• SOCIAL MEDIA (Facebook, Twitter, Instagram, Snapchat, google hangout etc.)

• SCHOOL GRADES

• IOS/OS

• CREDIT SCORES

• BANK ACCOUNTS

• SPOUSES PHONE

Our special agents are five star rated agents that specializes in the following, and will specially be assigned to you for a special job well DONE.

• WESTERN UNION TRANSFER

• CREDIT CARDS INSTALLATION

• MONEY FLIPPING

• CRIMINAL RECORDS

• BTC RECOVERY

• BTC MINING

• BTC INVESTMENT

Thus bewere of scammers because most persons are been scammed and they ended up getting all solutions to their cyber bullies and attacks by US.

I am Jason williams one of the leading hack agent.

PURPOSE IS TO GET YOUR JOBS DONE AT EXACTLY NEEDED TIME REQUESTED!!!



And our WORK SUCCESS IS 100%!!!



We’re always available for you when you need help.

Contact or write us on:

Technechhacks@gmail.com

SIGNED....!

Jason. W

TECHNECHHACKS
2021©️All Right Reserved

Lydia Carol said...

Hello guys, I just want to share my joyful experience about HACK VANISH CREDIT SPECIALIST. Before the coronavirus pandemic, I had criminal Judgments, few evictions, and late payment which negatively impacted my credit score down to 487 and left me in difficult financial situation, as a single mum of 3, I needed a loan to keep the family running after I lost my husband as a result of COVID-19, all hope were lost, until Mrs. Olivia referred me to HACK VANISH, a credit genius who was very helpful in fixing my credit 6 days after I reached out to him via his contact details; Email: hackvanish (At) gmail (Dot) com and Phone: +1(650) 499 5548, throughout the process, I felt so involved because an open line of communication was maintained till I got my FICO score restored to 796, currently my loan application has been approved, I can now give my kids better life. If you need to hire a hacker, HACK VANISH is highly recommended.

Bank Instrument said...



My name is Mohammed Ahsan I'm a financial Consultant of a reputable firm Operating out of the United Kingdom
we provide Discrete Financial, Services for High Net Worth CEO's/Executives of Corporation & Senior Government Officials globally.
What we do is Legal & within the ambit of the law but following the Leakage of the Infamous United Kingdom
Papers & subsequent threat by the International Consortium of Investigative Journalists (ICIJ)
International Criminal Court (ICC)
Below is what my Sender can offer.
1, MT103 gpi automatic
2, MT103 wire transfer
3, MT103 TT
4, MT103/202 manual download
5, SBLC lease and Purchase

All bank instrument will be done via bank officer to bank officer, Receiver has to provide bank officer details
on DOA all brokers are welcome and guarantee of there payment after successful deal
kindly send me a message via email and WhatsApp.


Email: mohammedahsan877@gmail.com

WhatsApp- +19893413179

FIRMWARE HACKS said...

It Tears me Up Whenever we receive complaints from Clients About Their Experience With the Hackers They Met Before They Heard about us.
These Days There Are alot of Hackers Online, You Just Have to Be Careful about who you meet for help, because many people now don't know who to ask for help anymore but there's actually a solution to that which I am giving you for free, Don't go out there seeking for Hackers Yourself, Because the probability of getting a Real Hacker Out there Is Very Slim . ❌❌ ❌ Most Of Them are actually not who they say they're, they are just here to Rip people Off, You Can Always Identify Them With Their False Advertisements and False Testimonies Trying To Lure you Into their Arms, And most of them use yahoomails, gmails and other cheaper email providers which could easily expose their vulnerabilities, Please Don’t Fall For Them🚷 Come To Think Of It, Why would a Legit Hacker Be using a gmail or a cheap email provider that exposes his vulnerabilities????⚠️⚠️⚠️
Well, Our Purpose Here Is To Link You Up With Top Legit Hackers With Great Online Reputations and Impressive LinkedIn Profiles That’ll Blow Your Mind.

☑️ COMPOSITE FIRMWARE SECURITY SPECIALISTS is here to Provide you with The Best Hackers, So you can get saved from The Arms of the Fake Hackers❌❌.


☑️All our Specialists are well experienced in their various niches with Great Skills, Technical Hacking Strategies And Positive Online Reputations And Recommendations🔘
They hail from a proven track record and have cracked even the toughest of barriers to intrude and capture all relevant data needed by our Clients.

We have Digital Forensic Specialists, Certified Ethical Hackers, Software Engineers, Firmware Security Experts, Private investigators and more. Our Goal is to make your digital life secure, safe and hassle free by Linking you Up With these great Professionals such as JACK CABLE, ARNE SWINNEN, SEAN MELIA, DAWID CZAGAN, BEN SADEGHIPOUR And More. These Professionals are Well Reserved Professionals who are always ready to Handle your job with great energy and swift response so that your problems can be solved very quickly.
All You Need to Do is to send us a mail and we’ll Assign any of these specialists to Handle your Job immediately.

☑️ Below Is A Full List Of Our Services:
▪️ FUNDS RECOVERY ON SCAM INVESTMENTS, BINARY OPTIONS TRADING and ALL TYPES OF SCAMS.
▪️ WEBSITE AND DATABASE HACKING 💻
▪️ CREDIT REPAIR. 💳
▪️ PHONE HACKING & CLONING (giving you 📱 Unnoticeable access to everything Happening on the Target’s Phone)
▪️ CLEARING OF CRIMINAL RECORDS ❌
▪️ SOCIAL MEDIA ACCOUNTS HACKING 📱
▪️RECOVERY OF DELETED FILES 📤
▪️LOCATION TRACKING 📌
▪️BITCOIN MINING ⛏ And lot More.


☑️ CONTACT:
.....
firmwarehacks@gmail.com
🔘2021 © composite firmware specialists
🔘Want faster service? Contact us!
🔘All Rights Reserved ®️

Peeter said...

LEGIT FULLZ & TOOLS STORE

Hello to All !

We are offering all types of tools & Fullz on discounted price.
If you are in search of anything regarding fullz, tools, tutorials, Hack Pack, etc
Feel Free to contact

***CONTACT 24/7***
**Telegram > @leadsupplier
**ICQ > 752822040
**Skype > Peeterhacks
**Wicker me > peeterhacks

"SSN LEADS/FULLZ AVAILABLE"
"TOOLS & TUTORIALS AVAILABLE FOR HACKING, SPAMMING,
CARDING, CASHOUT, CLONING, SCRIPTING ETC"

**************************************
"Fresh Spammed SSN Fullz info included"
>>SSN FULLZ with complete info
>>CC With CVV (vbv & non vbv) Fullz USA
>>FULLZ FOR SBA, PUA & TAX RETURN FILLING
>>USA I.D Photos Front & Back
>>High Credit Score fullz (700+ Scores)
>>DL number, Employee Details, Bank Details Included
>>Complete Premium Info with Relative Info

***************************************
COMPLETE GUIDE FOR TUTORIALS & TOOLS

"SPAMMING" "HACKING" "CARDING" "CASH OUT"
"KALI LINUX" "BLOCKCHAIN BLUE PRINTS" "SCRIPTING"
"FRAUD BIBLE"

"TOOLS & TUTORIALS LIST"
=>Ethical Hacking Ebooks, Tools & Tutorials
=>Bitcoin Hacking
=>Kali Linux
=>Fraud Bible
=>RAT
=>Keylogger & Keystroke Logger
=>Whatsapp Hacking & Hacked Version of Whatsapp
=>Facebook & Google Hacking
=>Bitcoin Flasher
=>SQL Injector
=>Premium Logs (PayPal/Amazon/Coinbase/Netflix/FedEx/Banks)
=>Bitcoin Cracker
=>SMTP Linux Root
=>Shell Scripting
=>DUMPS with pins track 1 and 2 with & without pin
=>SMTP's, Safe Socks, Rdp's brute
=>PHP mailer
=>SMS Sender & Email Blaster
=>Cpanel
=>Server I.P's & Proxies
=>Viruses & VPN's
=>HQ Email Combo (Gmail, Yahoo, Hotmail, MSN, AOL, etc.)

*Serious buyers will always welcome
*Price will be reduce in bulk order
*Discount offers will gives to serious buyers
*Hope we do a great business together

===>Contact 24/7<===
==>Telegram > @leadsupplier
==>ICQ > 752822040
==>Skype > Peeterhacks
==>Wicker me > peeterhacks