Paul L. Caron
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Friday, October 4, 2024

Tobin Presents Have Your Cake And Eat It Too, An Apportioned Wealth Tax Today At Boston College

Donald Tobin (Maryland; Google Scholar) presents Have your Cake and Eat it Too, An Apportioned Wealth Tax at Boston College today as part of its Tax Policy Collaborative hosted by Diane Ring:

Donald tobinAs economic inequality in the United States becomes more extreme, there are increased calls for raising taxes on the wealthiest Americans. Some proposals seek to tax the wealthy by taxing the increase in the value of capital assets or by taxing wealth. While Congress’s taxing power is extremely broad, opponents of these tax proposals argue that these proposals are unconstitutional and are not within Congress’ taxing power. These arguments rest on the notion that Congress’ taxing power is constrained by provisions in the Constitution requiring the apportionment of direct taxes. Opponents argue that a tax on the increase in the value of capital assets or on wealth is a direct tax and that classification of a tax as a direct tax either dooms its constitutionality (if it is not apportioned) or practicality (if it is).

This article argues that contrary to common assertions, the determination that something is a direct tax is not fatal to its constitutionality or to its implementation. Our sophisticated financial system, computers, and other technological innovations, combined with a complex tax system with provisions that transfer wealth make apportionment possible. By using a fairness tax credit, transfer payments to individuals, or transfer payments to states, we can design a system to apportion taxes that is both administrable and fair. Recognizing that apportionment is possible, though in some cases complicated, allows Congress to debate the actual merits of a particular tax at issue without being concerned whether it is constitutional.

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https://taxprof.typepad.com/taxprof_blog/2024/10/tobin-presents-have-your-cake-and-eat-it-too-an-apportioned-wealth-tax-today-at-boston-college.html

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