The Claim of 'Not Easily Apportioned'

This article is part of the wealth tax series.

It was the nation’s first judicial review case; Congress had passed the Carriage Tax bill. The luxury tax would be imposed yearly on all owners of passenger carriages. The issue to Daniel Hylton, who owned 125 of such vehicles, was he believed it to be a direct tax requiring apportionment. So, Daniel sued.

Hylton v. United States was decided in 1796 and was found in favor of the United States. One of the reasons the Court gave was that if a tax couldn’t be easily applied, then it shouldn’t require apportionment.

This same sort of reasoning was used by other Courts in other cases and is the basis for many arguments today in attacking Pollock. Applying this rationale, it makes perfect sense to overturn the Pollock opinion because any wealth tax couldn’t be reasonably apportioned.

The entire argument that the Founders didn’t intend for taxes to require apportionment, if it would be too difficult, goes against the historical record. Organic Wealth proves the exact opposite. It proves the Founders intended for all direct taxes to require apportionment whether easily applied or not. In fact, they knew some direct taxes would be near impossible to be apportioned among the States. They wanted it that way.

It’s a mystery to me how the Courts and those who argued before them missed the historical truth. The evidence is clear and is revealed in Organic Wealth. Maybe some didn’t want the Framers’ true intent to come to light so the government’s taxing power could be expanded. They must have believed they knew better than our Founding Fathers. If so, subversives, that’s what they were.

Besides the original intent of the Constitution, using logic to combat their argument also works.

Uniformity — the Only Rule

The two Constitutional rules that govern taxes are the Uniformity Clause and the Apportionment Clause. If a tax is indirect, then it must adhere to uniformity where all objects of the tax are treated equally. If a tax is direct, it must conform to apportionment where the revenue raised from a state must be proportional to that state’s population percentage as compared to the total of all the states.

Wealth tax apostles make the claim that only taxes that are easy to implement should be considered a direct tax. Their argument not only fails the original intent of the Framers, but it also fails logically. The very fact that apportionment is a rule is proof that it was meant to make direct taxation very difficult to impose.

The reason is because easily implemented direct taxes have the exact same outcome as the rule of uniformity. If it was the case that the Founders only intended easily applied taxes, then uniformity would be the only rule needed.

The Courts have identified several objects of direct taxes: capitations, land; and because of Pollock, personal property. Despite the mental inventions of many, Organic Wealth reveals the Founders believed that any object could be the subject of a direct tax.

To illustrate why uniformity is only needed, take the Constitutional direct tax of capitations. A capitation tax is a head tax where each person who is of a certain age has to pay a tax. This kind of tax is easily apportionable because everyone would be taxed the same amount and the total raised from each state would be proportional to that state’s population percentage.

Imposing a capitation tax by apportionment has the same outcome as imposing a capitation tax by uniformity. Therefore, it’s absurd to allege only taxes that are easily apportionable can be direct taxes that must follow the apportionment rule because the only rule necessary for such taxes is uniformity.

The very existence of the apportionment rule was meant to distinguish certain taxes from others. The writers of the Constitution used the apportionment rule to place a check on Congress to prevent them from taking the wealth away from the States.

The easily apportionable assertion further breaks down when you consider land taxes. This is another undisputed Constitutional direct tax requiring apportionment. A land tax would not be easily applied. That’s the very reason why there isn’t a federal real estate tax. It would be impossible to impose because it would have to conform to the apportionment rule.

There you have it. You can debate such ideas using the Founders original intent as revealed in Organic Wealth. You also have two logical arguments. To summarize, easily apportionable taxes have the same outcome as uniformity. Therefore, the Founders would have only required uniformity. Secondly, land taxes are nearly impossible to impose with apportionment and they’re direct taxes.

Photo by Samuel Uhrdin, Public Domain