Pollock from the Dead
CJohnson at law.utexas.edu
Tue Oct 24 16:52:14 PDT 2006
In Murphy, the DC Circuit through Judge Douglas Ginsburg held this month
that Congress could not tax emotional damages. Justice has asked for
rehearing, and it might or might not make it to Supreme Court.
Congress in 1996 had constricted the personal injury tort damages
exclusion so that it applied only if you had physical injuries. Lots of
wage discrimination cases became wages received fro the first time and
fully taxable. To get an exclusion for emotional damages, you must
first have physical injury. Ginzburg said that Congress could not do
Ginsburg's decision required resurrection of Pollock v. Farmer's
Trust (1896), which held that income tax was like a direct tax or
requisition that had to apportioned among the states (originally
counting slaves at three fifths). Pollock itself reversed doctrine
going back 100 years that "driect tax" meant apportionable tax like a
requisition on the states at the core of the definition and if the tax
was not easily apportionable it was not requisition like enough to be a
direct tax. Income taxes cant be apportioned by population without
doubling the tax rates in the poor states and halfing them in the rich
Now Pollock was itself reversed by the 16th Amendment allowing
an income tax without apportionment. The Republican Party in charge
changed its mind about the wisdom of an income tax and passed it by the
requisition 2/3d of Congress, three quarters of the states and more.
So Ginsburg is saying a constitutional amendment in derogation of common
law (wrongly decided common law even) will be narrowly construed.
Murphy did not have any basis in his emotions, moreover, so he could not
have a recovery of capital rationale for an exclusion. All the money was
new money to him. Are wages not the recompense for the pain and
suffering of toil? If so, Ginsburg I guess would exclude wages too.
The exclusion was solely at will of Congress and Congress changed its
mind in 1996 on what income was and this is the kind of decision
Congress gets to make post Lochner era.
The Tax Prof discussion group has concluded that Ginsburg was
wrong for about six independent reasons and indeed has asked
uncharitably what he was smoking. Pollock was thought to be long dead.
Calvin H. Johnson
Andrews & Kurth Centennial Professor of Law
The University of Texas School of Law
727 E. Dean Keeton (26th) St.
Austin, TX 78705
(512) 232-1306 (voice)
FAX: (512) 232-2399
For reviews, chapters, discounts and news on Johnson, Righteous Anger at
the Wicked States: The Meaning of the Founders Constitution (Cambridge
University Press 2005) see
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