United States Federal Wealth Tax - Constitutional Or Not

[S'task]

So, it seems Senator Warren has introduced a proposal for a wealth tax. Leaving aside the effectiveness or how bad or good of an idea this is, I got to mulling it over and, well...

I'm wondering if a Federal Wealth Tax would even be Constitutional on its face.

The Constitution actually gives very limited avenues of taxation for the Federal Government. The taxation powers rest in Article 2 Section 8:

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;

and this being limited by Article 2, Section 9:

No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or Enumeration herein before directed to be taken.

No Tax or Duty shall be laid on Articles exported from any State.

And these limits being further altered by 16th Amendment:

The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.

So, per my person reading a Wealth Tax would appear to be a Direct Tax upon an individual, but not one tied to their Income, and thus may well be unconstitutional under A2S9. What are other's thoughts on this?

 

[Arch Dornan]

How much more loopholes will the wealthy get the fuck out of dodge?

 

[Bacle]

I mean I think you got a good read on it; it does seem to violate those statutes.

However, the real question is if it even matters, as we've seen the Constitution is effectively a dead letter when it comes to things the Dems want to push.

Though I do expect the corpo Dems will raise hell against this, and I doubt it would ever get through the Senate.

 

[Wargamer08]

This feels like some sort of power consolidation play. Wealthy members of the correct party gain exception and special status for their brave contributions to the cause, wrong thinkers have their assets taken from them.

 

[Husky_Khan]

How much more loopholes will the wealthy get the fuck out of dodge?

Article II, Section VIII of the Constitution is a pretty big loophole I reckon.

 

[LordsFire]

If we actually adhered to constitutional limitations, something like 3/4ths of the Federal Government would be dissolved.

So, I wouldn't expect the Constitution to act as much of a limitation in this regard.

 

[S'task]

I mean I think you got a good read on it; it does seem to violate those statutes.

These aren't statues, these are Constitutional Provisions. There's actually a significant difference.

However, the real question is if it even matters, as we've seen the Constitution is effectively a dead letter when it comes to things the Dems want to push.

You're suffering from a bit of a perspective bias filter. There's been a LOT of stuff shut down by the courts the Democrats have pushed over the years. The recent spate of election cases is, well... I think it's mainly the court keeping its powder dry and not drawing agro to early. With an even less conservative makeup, Obama faced a LOT of pushback by Court, and while I get the frustration due to the election cases not being heard, you also have to remember that the courts so far have shut down Biden's entire border and border control scheme hardcore, that's not a small thing.

Article II, Section VIII of the Constitution is a pretty big loophole I reckon.

Not really. It's severely limited by Article 2, Section 9. A wealth tax appears to me to be a direct tax (which Congress cannot enact) and it doesn't fit through the loophole that was explicitly carved out via the 16th Amendment.

The real loophole might be something making an end run around the fact it's a direct tax by claiming it's a tax on income that is calculated by how much wealth the person has. This is, functionally, how the Obamacare lack of insurance penalty was made into a tax. That said, given the new makeup of the Court, I wonder if they'd let that fly again, given how the Obamacare decision went (very close thing, and actual opinions for upholding it was highly split, with the 4 Liberal justices writing their own opinions on the matter and not signing onto the Chief Justices, while the 4 dissenting Conservative justices wrote their own, very scathing, joint dissent that read way, WAY more like a majority opinion than the actual majority opinion.

 

[Wargamer08]

And yet the Obamacare tax is the law of the land. Forgive me for thinking that we’ll see another politically motivated tax come out of the SCOTUS, I’m sure with completely useless finger shaking dissents.

 

[Bacle]

You're suffering from a bit of a perspective bias filter. There's been a LOT of stuff shut down by the courts the Democrats have pushed over the years. The recent spate of election cases is, well... I think it's mainly the court keeping its powder dry and not drawing agro to early. With an even less conservative makeup, Obama faced a LOT of pushback by Court, and while I get the frustration due to the election cases not being heard, you also have to remember that the courts so far have shut down Biden's entire border and border control scheme hardcore, that's not a small thing.

It's not keeping the powder dry, it's Robert's hating Trump and doing anything he could to keep him from being re-elected.

You have too much faith in a system that has been shown to be about the Swamp protecting the Swamp, not representing the American people.

However, as I said, I doubt this tax issue will get to SCOTUS though, because I don't see it making it through the Senate.

 

[Battlegrinder]

National Review had a similar article, discussing only the technical hurdles rather than justification/morality of such a tax. The short version thus:

1. Constitutionally, it's debatable, with people on both sides making all manner of arguments defending/condemning it. I personally think it's unconstitutional, though I suspect that's more because the arguments of the pro-side strike me as being more motivated reasoning than serious study, and because my view of it as immoral no doubt colors my perception of the legal side.

2. Administratively, it would be very complicated (which is why Warren's plan for actually evaluating how much wealth someone holds was "have someone else figure that out"....bad sign), and it notes that most counties that have had a wealth tax have dumped it, citing this is as one of the reasons.

It also mentions that this tax proposal includes a provision that seizes 40% of someone's wealth if they renounce their citizenship, which strikes me as a simply reprehensible rule.

3. The amount raised is estimated by left leaning economists to be on the order of 3 trillion over 10 years, which I'd disagree with the article and call a trivial amount. The US collects ~3.5 billion in taxes each year, assuming that keep steady (rather than rising as the overall economy grows, which it almost certainly will), this tax would move revenue from 35 trillion all the way up to 38 trillion. Wooo.

 

[Buba]

How much more loopholes will the wealthy get the fuck out of dodge?

As many as they need.
They paid for the campaigns of the Congresscritters, remember?