AuthorJohnson, Calvin H.

INTRODUCTION 741 I. CONSTITUTIONAL MEANING 743 II. ORIGIN OF APPORTIONMENT BY POPULATION 745 A. Population Measures Wealth 745 B. A Government Based on Wealth or on People? 749 III. RETREAT OF "DIRECT TAX" WHERE APPORTIONMENT DOES NOT YIELD UNIFORM RATES 752 A. Impost 753 B. Excises and Duties 755 C. The Carriage Tax 758 D. Continuing Confirmation of Hylton 759 IV. POLLOCK'S PERVERSE APPORTIONMENT 760 A. Pollock 760 B. Contraction but Survival of Pollock 762 CONCLUSION 765 INTRODUCTION

The Constitution requires that direct taxes be apportioned among the states by population. (1) The original purpose of apportionment by population, shown by careful excavation of the history, was to reach wealth of the states by direct tax on the states, that is, by requisitions, and to guarantee uniform tax rates on wealth. When apportionment did not yield uniform rates, apportionment was abandoned in the early history of the Constitution by a tactical redefinition of "direct tax." Apportionment originally was a fair requirement to apportion requisitions on states to reach their wealth with a uniform tax burden. Apportionment was never intended to be a fatal requirement or an unreasonable burden on any form of tax.

The Founders, as forced by the circumstances, had to assume that per capita wealth was equal in every state. Population was the best measure of the wealth of a state available given that property valuations were manipulated by the states. The assumption that population and wealth were correct measures of each other also could not be impeached within the debates over the Constitution both because they had no better way to measure wealth and the assumption that population measured wealth avoided a conflict between delegates who thought that Congress should represent people and those who thought that Congress should represent wealth. Under the unimpeachable assumption that population measured wealth, tax rates on wealth would necessarily be uniform across all states.

Uniformity of rates across the states was the fundamental constitutional norm. As the states came together to fight and win a war for independence against the most powerful nation on earth, and then to coalesce into a single nation, they were jealous of advantages another state might have. Uniform rates were essential to the unification. Later on, when they faced tax bases that were not equal per capita among the states, the Supreme Court, still manned by Founders, held that apportionment was not required if apportionment by population did not yield uniform tax rates. (2) Uniform tax rates was the defining core of what constituted a "direct tax." Uniform tax rates generated by apportionment by population were thought necessary to protect any given state from bearing more than its fair burden. Apportionment of taxes by population was a just and reasonable solution, but only when population and wealth were reasonable measures of each other.

The Founders did not see it at the time, but if per capita wealth is not equal among the states, apportionment by population forces higher tax rates in poorer states. (3) In the 1930s the rich states had a per capita wealth that was roughly five times that of the poor states. Under those circumstances, the tax rates on wealth or indeed on any measure of economic position would have to be five times higher in the poor states. They had less tax base over which to spread their quota. The disparities have contracted since then, but not by enough that apportionment would now yield uniform tax rates. An extraordinarily higher rate in poorer states is not what the Founders were trying to accomplish. (4)

The definition of "direct tax" morphed fluidly in the 18th and 19th centuries to serve the underlying norm of uniform rates. When apportionment did not yield uniform rates for a tax, the tax ceased to be a direct tax. First, taxes on imports, called the "impost," then excises and duties, then carriage taxes, and then taxes on insurance companies and income tax were excluded from the scope of direct tax--consistent with the underlying purpose of apportionment, because apportionment was impossible or would yield unjust nonuniform tax rates. When apportionment would yield neither uniform rates nor reasonable results, the tax was therefore not "direct" so that apportionment would not be required. That is the historical principle, binding if history is binding on constitutional principle today.


    Language is a communication of the deal reached in a specific historical context. All words are tools to accomplish some program, trying to empower your allies, dishearten opponents and maybe convert a few fence-sitters to accomplish the program. Interpretation long after the fact requires you understand the program, as well as the framework of the debate, the dreads and aspirations of the times, to figure out what the words mean. Words are often too thin a reed to convey the deal. You need a serious historical excavation of the times and context to know what the deal is that is embodied by the words. (5) Reading the text a hundred or two hundred years after the words were written, without an understanding of the historical system and the historical battles, leads to a kind of ersatz textualism far removed from the Founders' agreement. Literalism long after the fact often yields error. With each reading, without the history, the text gets warped to pick up more and more of the values the current reader wants to put into the words long after the fact. By the fifth reading, the text seems to prove, so to speak, that my significant other was wrong in last night's argument and I was right, although that conclusion was not in the official historical bargain nor in what the Founders were trying accomplish. Literalism invites injecting the reader's own values into the interpretation. Early in the republic, historical excavation became the consensus mode of interpretation, even across those sharp partisan lines. (6) Reading in context to understand the system and program the words expressed remains the legitimate mode of interpreting text even today.

    The apportionment requirement has, unfortunately, been caught up in the illegitimate interpretative technique of reading the text without cognizance of its historical roots. Textual reading without history has turned the meaning upside down to get the apportionment requirement exactly wrong. Apportionment has turned from a just and reasonable requirement settling jealousies among the states into a monkey-wrench tax-killing requirement, within a document, the Constitution, that was written primarily to allow Congress unrestricted tax to keep up payments on the war debts and to provide for the common defense. (7)

    Pollock v. Farmer's Loan and Trust, (8) is an example of illegitimately reading the text without history to make a tax impossible. Pollock held that the Federal income tax of 1894 was unconstitutional because it was a direct tax that had not been apportioned among the states by population. Per capita income is uneven among the states, so that apportionment by population forces higher taxes where income is low. From that alone, law before Pollock defined income tax as not a direct tax so that apportionment was not required when it was perverse. Pollock reversed prior law that went back to the Founders to require a fatal apportionment. (9) Pollock itself was reversed by the 16th Amendment on the specific issue of an income tax, but the same text without history is now said to defeat the constitutionality of a federal wealth tax that has recently been under serious consideration. (10)

    Reading the text without history in Pollock turned apportionment upside down. The Pollock Court said the requirement was protecting wealth from the force of mere numbers, whereas in fact apportionment was written to tax wealth. Read literally without history, apportionment of tax by population sounds like it forces an equal amount of tax per person. In fact both Federalists and Anti-Federalists in the ratification debates hated the equal tax per person principle, saying for instance that it was "abhorrent to the feelings of human nature" (11) and an "unjust, unequal, and ruinous tax." (12) In the original design, "the numbers of people were taken," as John Adams put it, "as an index of the wealth of the state & not as subjects of taxation" (13)


    1. Population Measures Wealth

      Apportionment of tax by population arose in a 1783 proposal under the Articles of Confederation (the "Articles"), which preceded the Constitution, to apportion requisitions, that is, direct taxes upon the states. The Articles, before the 1783 proposal, determined each state's quota under the requisition according to the value of land and improvements within the state. (14) State wealth would be measured by the contribution to wealth by the labor of its people. Pennsylvania, however, submitted appraisals of its land and improvements that placed Pennsylvania's quota at half of Virginia's quota. Other states thought that Pennsylvania should be paying a quota about equal to Virginia's and that Pennsylvania was cheating. (15) Congress had neither the employees nor other means of estimating value and so it could not stop the manipulations. Indeed, even beyond Pennsylvania's appraisal, all quotas of direct taxes on the states were treated as provisional because Congress could not ascertain the value of surveyed lands and improvements. (16)

      The 1783 proposed amendment to the Articles would have apportioned requisitions, not by the manipulatable assessment of value, but according to the population of the state. (17) Population was the best measure of wealth that they had. In the Constitutional Convention, four years later, Nathaniel Gorham of Massachusetts told the Convention it made no difference in allocation of state tax between Boston and the rest of the state whether population...

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