Hamilton vs. Jefferson In Supreme Court Direct Tax Jurisprudence

Joshua Cutler (Boise State; Google Scholar), Hamilton vs. Jefferson in Supreme Court Direct Tax Jurisprudence, 32 S. Cal. Interdisc. L.J. 389 (2023):

Increasingly frequent calls for some form of a wealth tax highlight the importance of understanding whether such a tax would be considered an unconstitutional “direct tax” if not apportioned according to population. The definition of direct tax was left deliberately vague at the Constitutional Convention, and consequently its meaning has been shaped through battles between the opposing political philosophies of Alexander Hamilton and Thomas Jefferson. Hamilton and his allies prioritized an energetic national government with adequate taxing powers to support its functions and unite the states; had great respect for tradition, precedent, and practical experience; and preferred a broad mode of constitutional interpretation that showed strong deference to Congress. Jefferson and his allies prized individual liberty above all and viewed the national government as the chief threat to that liberty.

Accordingly, Jeffersonians wanted strict limits on the national government’s taxing powers; supported the rights and powers of state governments as a buffer between individuals and the national government; and wanted the Supreme Court to strictly interpret the Constitution and exercise judicial supremacy over Congress, in order to serve as a bulwark for individual rights. I trace the key Supreme Court cases interpreting the Direct Tax clause and show that these Hamiltonian and Jeffersonian beliefs consistently appear in and shape the Court’s opinions. The Hamiltonian vs. Jeffersonian contest is far from settled, and will surely play a role in deciding the fate of any future wealth tax.