Nate Silver/538-Warren's Wealth Tax Isn't The Slam Dunk Progressives Want It To Be

[Gothmog]

3. Constitutional Concerns Are a Major Risk for a Federal Wealth Tax

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“Any answer regarding the constitutionality of a wealth tax should come with the caveat that we have no idea what the Supreme Court would say,” Hemel wrote to me. “I think that rebates to states would satisfy the apportionment requirement but it’s conceivable that the Court would say apportionment applies to gross revenues rather than net revenues.”

The last Supreme Court case to deal with the direct tax issue at length was NFIB v. Sebelius, the case upholding the Affordable Care Act individual mandate as an exercise of Congress’s taxing power. Since the Court held the mandate was a tax, they had to address the question of whether it was a direct tax, and whether it must therefore be apportioned.

“Even when the Direct Tax Clause was written it was unclear what else, other than a capitation (also known as a ‘head tax’ or a ‘poll tax’), might be a direct tax,” Chief Justice Roberts wrote in the opinion of the court. He provided a tour of other things the Court had called direct taxes over the course of its history: land taxes, real-estate taxes more generally, and, in Pollock and Macomber, taxes on personal property. He then went on to note that the ACA mandate penalty was none of these things, and therefore was not a direct tax, and therefore was constitutional.

This does not address the question of which of the kinds of taxes the court has called direct taxes in the past it would still call direct taxes today.