Taxes and the Constitution

Response to an op-ed piece in the NYT:

Richard Epstein argues that, in granting to Congress the power to tax, the Constitution restricted the use of this power to what he calls “public goods.” He defines public goods as benefits that must be given to all citizens if they are given to any, and then makes a rhetorical leap: “General welfare … is best read as covering only matters that advance the welfare of the United States as a whole.”

I suspect that Mr Epstein, confronted with a student’s argument that some text is “best read” in one way and not in some other, would ask why. And surely he owes his readers the same courtesy, particularly because he goes on to assert that “the redistribution of income, or ‘transfer payments’ among citizens … doesn’t qualify for taxation …”

It would be instructive to learn how, for instance, the transfer of payroll taxes collected in Chicago to retirees in Florida, in the form of Social Security benefits, does qualify. Or how the expenditure of federal funds to address the problems caused New Orleans by the Katrina hurricane is permissible. And, of course, if the power to tax can be used “to pay the Debts” of the government, does Epstein mean to suggest that the government may not incur a debt, unless the related expenditure passes the test of benefiting the United States as a whole? How is that test to be applied?

But more fundamentally, Epstein should tell us who gets to decide what “advance(s) the welfare of the United States as a whole.” If providing our Congressional representatives and their families health insurance coverage, at taxpayer expense, benefits the United States as a whole, but providing the same benefit to other citizens does not, what is the principle at work?

If we allow the recent trends to continue, until the polity consists of one hundred fifty million citizens who have no income, and one hundred fifty million who each have incomes of one million dollars, so that the average income is a half million dollars, would Epstein argue, first, that the welfare of the United States as a whole is undisturbed, and second, that the power to tax cannot be used to take (by taxation), say, five per cent from the top half and transfer it to the bottom half so as to keep half the population from living and dying in the streets?

I think Epstein has labored too strenuously to produce an argument that, ultimately, says the power to tax cannot be used for any purpose that does not directly benefit each and every American. If we take him at his word, most of the budget of the United States is subject to the charge of being unconstitutional. Maybe that is his point.