Democratic presidential candidate Senator Elizabeth Warren is trying to get your vote by promising to confiscate money from an exceedingly small group of Americans and then give their money to other Americans. Warren’s money grab is an asset tax levied against one’s net worth. But because it would hit only the top 0.1 percent of us, it is a wealth tax. Warren unveiled her bright idea on January 24 and she calls it the “Ultra-Millionaire Tax.” The response was immediate, and the big question is whether Warren’s new tax is constitutional.

On Jan. 25, the Tax Foundation ran “Unclear if Warren’s Wealth Tax Proposal is Constitutional” by Joseph Bishop-Henchman (link added):

So the question is, what is and is not a direct tax? …However, those taxes in some way involve a transaction, while the Warren wealth tax does not… Based on that and the precedents, my inclination is that Warren’s proposal would be found unconstitutional. But it’s not a slam-dunk case, as the precedents go both ways.

On Jan. 30, Bloomberg ran “Wealth Tax’s Legality Depends on What ‘Direct’ Means” by Noah Feldman. Feldman is a professor of law at Harvard, so it may not surprise one to read his opening statement: “If I were on the U.S. Supreme Court, I would probably vote to find Senator Elizabeth Warren’s proposed wealth tax constitutional.” But in the blurb we read that the constitutionality question is “not an easy call.” Feldman goes into capitation (the head tax), the Constitution’s three-fifths clause, and he even speculates that Alexander Hamilton would have thought Warren’s tax unconstitutional. 

On Feb. 10, New York ran “Constitutional Concerns Are a Major Risk for a Federal Wealth Tax” by Josh Barro, which touches on the Pollack case of 1895 that made necessary the 16th Amendment legalizing the income tax. Pollack decided that the taxation of income from property was itself a property tax, and therefore a direct tax. Barro explains:

…if the federal government is going to levy a direct tax, it has to do so in such a way that an equal amount of tax is collected per capita in each state… So. What the hell is a direct tax? …a direct tax is a tax that applies to a state of being, while an indirect tax applies to an action. Lots of early federal taxes were taxes on transactions -- excise taxes, tariffs, and the like. Because these apply to people only when they engage in a specific commercial act, they are indirect taxes. Taxes on wage income are also indirect, as they apply to a transaction of labor for money.

On June 25, Forbes ran “Wealth Tax -- That Pesky Constitution Might Get In The Way” by Peter J. Reilly. Reilly is a CPA, but like the other articles here he examines judicial precedent, and one that he looks at is Hylton v. United States:

So even though that carriage tax was not a direct tax, the judges were not really sure what might be one.  This is very troubling.  You or I might not be able to ask the Founders what they thought a direct tax was, but that decision came down in 1796.  William Paterson, one of the judges, was one of the signers of the Constitution.

On August 8, The Federalist ran “Here’s Why Elizabeth Warren’s Wealth Tax Is Completely Unconstitutional” by Kyle Sammin, a lawyer whose prose comes with gnarly attitude. He contends that Warren’s wealth tax is a direct tax and that it is unconstitutional because it is not apportioned. In the last section of the article, Sammin shows how unfair that would be:

If the wealth tax is illegal as an unapportioned direct tax, Warren’s answer might be to apportion it as the Constitution directs. But apportionment has stood in the way of direct taxes since the country’s founding, for a good reason: It produces bizarre and inequitable results. Justice Chase observed in Hylton that apportioning such a tax is so odd that he could not believe Congress would ever do it.

On September 26, National Review ran “Elizabeth Warren’s Wealth-Tax Trap” by Veronique de Rugy. Ms. de Rugy’s article mainly explores the economic impacts of wealth taxes, but she also touches on the constitutional issues:

Most experts will agree that, with the exception of the income tax, which is authorized by the 16th Amendment, the Constitution prohibits federal direct taxes that are not apportioned by population. The question then becomes whether the wealth tax is a direct or an indirect tax. On this point experts disagree. Even if implemented, the wealth tax may end up being tied up in the courts for years.

In a 2008 confrontation with Joe the Plumber, candidate Barack Obama defended his plans to hike taxes by admitting that he wanted to “spread the wealth around.” In 2019, candidate Bill de Blasio’s slogan was: “There’s plenty of money in this country; it’s just in the wrong hands.” Democrats are all the same. They want to relieve the wealthy of their money because only they, the Democrats, know best how to spend it. And besides, the rich “don’t need it.”

But why would Liz Warren propose a new tax on individuals when we already have a tax on individuals that brings in trillions of dollars? In fact, the federal individual income tax brought in $1.68T in fiscal 2018, the most ever. If Liz thinks the “tippy top” should pay more, then the obvious solution would be to simply raise the income tax rates for those folks, not institute a brand-new tax that will get resistance and probably litigation.

Warren wants to have both the old income tax and her new wealth tax. You see, she wants to continue to be able to dole out favors, i.e. the exceptions to paying taxes provided by the exemptions, deductions, write-offs, loopholes, etc. of the individual income tax. Like all good socialists, she wants to control the lumpen proles, and the hideously complex income tax code is a great way to do that. Also, the complexity of the tax code can create criminals out of ordinary Americans, and that’s always a big plus for control.

In January of 2016, American Thinker ran “Getting ‘Medieval’ on the Top 400 Taxpayers” by yours truly, and Liz Warren ought to read it. The article showed that there are some stark disparities in the effective tax rates paid not only by those in the One Percent, but also by those in the top 0.1 percent, Warren’s prey. If one wanted all billion-dollar earners paying income taxes at the same effective rate, then all their exceptions would need to be eliminated. But Democrats wouldn’t do that because it would hurt their campaign coffers.

Raising rates on an existing tax is just so much pussyfooting for Liz, as she and her socialist comrades want to tax everything, including Josh Barro’s aforementioned “states of being.”(Expect the Dems to propose a tax on “Being” itself, a metaphysical tax.) What we should be doing is putting some constraints on the ability of politicians, especially Congress, to tax anything and everything and at any tax rate they decide.

Why would a President Warren need all these extra trillions of dollars of revenue? Would she use the extra revenue to balance the budget? If so, then why not cut spending first? It’s beyond me how any real American could even consider voting for a member of Congress to be president. It’s Congress that has put us $22T in debt. Unless the federal budget is balanced, no member of Congress should even be considered for higher office.

Whether or not Warren’s wealth tax is constitutional will be debated. But just as an impeachable offense is anything the U.S. House says it is, a tax is anything the Supreme Court says it is. So conservatives should not think that the Supreme Court would be driven by logic and law to strike down Warren’s wealth tax; remember the ObamaCare decision. The Court needs more Trump justices.

Jon N. Hall of ULTRACON OPINION is a programmer from Kansas City.