Con Law Fellow Sesh 5 feat Brian Macaulay

Con Law Fellow Sesh 5 feat. Brian Macaulay

The Power to Tax. . . “The Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States; but all duties, imposts and excises shall be uniform throughout the United States; ” Art. I, Sec. 8, Cl, 1 The tax power cannot be used to regulate behavior, even if all taxes affect behavior in some way. Congress cannot impose taxes which are effectively a penalty for bad behavior.

Some Case Notes— US v. Butler: What’s the “general welfare? ” Madison thought the tax/general-welfare grant of power was only a tool to be used for executing Congress’ other enumerated powers, and as such should be a judicially enforceable federalism limit. Hamilton’s view was that it was broad grant, and as such a separate power not tied to any other. In this case, the Court reasoned that the power to tax/spend is already implied in the grant of those other powers. If “common defense and general welfare” weren’t something more, they would be mere surplusage. The Court goes on to strike down the law at issue under the 10 th Amendment (using it as a judicially enforceable Federalism limit) but that’s not why the case is studied today. What’s important is that the power to tax and spend is not limited to the other enumerated powers.

Some Case Notes— Steward Machine Co. v. Davis: a Federal law imposed unemployment tax on employers, but granted tax huge credits to employers who contributed to State unemployment funds. Did this coerce States, in violation of the 10 th Amendment, to create such funds? No. The States have a choice here. Sabri v. United States: Bribe$. . . it is illegal under Federal Law to bribe any local official if they are part of an entity receiving Federal money. Sabri claimed the law was unconstitutional because it didn’t require any proof of a connection between his local bribe and the Federal money; a “jurisdictional hook” (a clause explaining how the statute falls within Federal power). WRONG. ● The Necessary and Proper clause allows Congress to enact any provision rationally related to its spending powers for the promotion of the general welfare. It’s enough that the bribery money flows into a governmental entity that receives federal funds. Money is fungible.

Some Case Notes— South Dakota v. Dole: Congress passed a law withholding Federal highway funds from any state whose drinking age was <21. In SD, a 19 year old could buy beer. SD claimed this ran afoul of the Spending clause. This is called Conditional Spending, and we use a special test: i. The spending must be in pursuit of the general welfare. ii. Any condition on the receipt of those funds must be unambiguous (NOTICE). iii. The condition must be related to the main purpose for which the funds are expended (RELATEDNESS). iv. The condition cannot require the State to violate the Constitution. v. The condition cannot be coercive.

What’s COERCION? Does the State have a real choice about whether or not to do what Congress wants? ● ● ● Coercion is not mere influence. Coercion is when pressure turns into compulsion. The Court doesn’t give us a good measuring stick in Dole, but clearly 5% of a State highway budget is pretty miniscule. The hope of $$$ gain by a State is not by itself coercive. The threat of loss? That can be a different story… ● Sebelius, pt. II: conditional spending. Law promised big gains for States that adopt the new provisions of Obamacare. But if you don’t? -100% of what we’re giving you now. On average, this meant the loss of 10 -20% of ENTIRE STATE BUDGET. This was coercive. This was a gun to the head of the States.

What’s coercion? We don’t know precisely. Totally okay use of the Spending Power We don’t know precisely these contours. You may have to argue it. Totally unconstitutional coercive law ? ? ? ? ? ? ? Dole: ● Kind of a buzzkill, but a Constitutional one. ● Worst case scenario means State loses 5% of its highway budget Sebelius: ● Expansion of Healthcare, but unconstitutionally coercive. ● Law would eat 10 -20% of the entire budgets of States which refused to comply.

Taxes as Penalties: a final note on Sebelius (I promise) Taxes are okay, but penalties (using the tax power) are not. The individual mandate (the “tax” a person who didn’t purchase healthcare was required to pay under this law) was not a penalty in this use of the word. Example of a penalty: where Congress couldn’t regulate child labor, they taxed it to the tune of fully 10% of profits. How do we know it’s a penalty and not a tax? Because of that price tag. Where a tax is enormous, it is an unconstitutional penalty for bad behavior. The individual mandate was not an enormous tax. It was a relatively small fee tied to income, and was assessed the same for all those affected, whether they forgot to buy healthcare and or simply rejected the idea of doing so. Penalties are generally used to punish intentional conduct.

The 14 th Amendment, Sec. 5 “The Congress shall have power to enforce, by appropriate legislation, the provisions of this article. ” The Fourteenth Amendment extends (among other things) due process to the States. The clause in the Fifth Amendment reads: No person shall. . . be deprived of life, liberty, or property, without due process of law. While the clause in the Fourteenth Amendment says: . . . nor shall any State deprive any person of life, liberty, or property, without due process of law.

Enforcement against the States Whose conduct is regulated? STATE ACTORS. Not private parties. This is your local DMV, the public school bus, and its driver. This is not your local mechanic, car dealership, or Joey (a bad driver you know). This is why Heart of Atlanta Motel and Katzenbach v. Mc. Clung (though note that concurrences in Katzenbach by Goldberg and Douglas thought they were 14 A cases), while being cases about discrimination, were examples of Congress using the Commerce Power, and not its power to enforce the 14 th Amendment. This 14 th Amendment power is REMEDIAL. Congress can remedy and prevent discrimination, not say what discrimination means under the Constitution. That’s the job of the Court. Remember—the Separation of Powers. The best way for Congress to remedy discrimination is to use its power to open the courthouse doors. e. g. 42 USC § 1983 Where the badges and incidents of slavery are concerned, private parties are now fair game for Congress to regulate.

Burning Questions ● The material for this week. ● Anything about the practice midterm.