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47 ACTEC L.J. 283 (2021-2022)
Progressive Taxation and a Conservative Supreme Court: Reading the Tea Leaves

handle is hein.journals/acteclj47 and id is 291 raw text is: Progressive Taxation and a Conservative Supreme Court: Reading the Tea Leaves Mitchell M. Gans* INTRODUCTION An obscure constitutional provision, forged at the founding in a compromise over slavery, limits Congress's power to impose a direct tax.1 Unlike an indirect tax, a direct tax must be apportioned among the states based on population.2 The constitution does not define the term direct tax, or indirect tax, and the Supreme Court has shifted its approach over the years in discerning the boundary between these two categories. In 1796, the Court took a narrow view of the direct-tax concept.3 But in 1895, giving the concept more expansive scope, the Court held the income tax unconstitutional on the ground that it was an unappor- tioned direct tax.4 In 1913, the Sixteenth Amendment overturned this result without directly amending or clarifying the source of the problem, the direct tax clause.5 The turn the Court took in 1895 is relevant today. The broader the scope of the clause, the more likely various progressive tax measures under recent consideration would be constitutionally vulnerable. For ex- ample, the various proposals calling for a national wealth tax rise the question whether it would be an unconstitutional direct tax if not appor- tioned. Take another example: Proposals calling for recognition of gain without a realization event might also run afoul of the clause - depend- * Rivkin Radler Professor of Law at the Maurice A. Deane School of Law at Hof- stra University, Adjunct Professor of Law at NYU School of Law, and Academic Editor of the ACTEC Law Journal. 1 For a discussion of the connection between the Constitution's apportionment re- quirement in the direct tax clause and slavery, see, for example, Bruce Ackerman, Taxa- tion and the Constitution, 99 COLUM. L. REV. 1, 1 (1999). See also Calvin H. Johnson, Fixing the Constitutional Absurdity of the Apportionment of Direct Tax, 21 CONST. COM- MENT. 295, 297-98 (2004) (arguing that the direct tax clause was only relevant to the question of how to count slaves in the event Congress chose to impose apportionment and that, otherwise, no one at the time of the original debates thought of apportionment as preventing any federal tax). 2 U.S. CONST. art. I, § 9, cl. 4; id. § 8, cl. 1. 3 See generally Hylton v. United States, 3 U.S. 171 (1796). 4 See Pollock v. Farmers' Loan & Tr. Co., 158 U.S. 601, 637 (1895). 5 See U.S. CONST. amend XVI. 283

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