Maule at law.villanova.edu
Sun Sep 19 09:57:06 PDT 2010
Mark's reference to the federal-state relationship caused me to think of what I consider to be an interesting area of federal-state relationship, one from which some lessons can perhaps be learned. That is, of course, taxation. Consider, for example, how businesses are taxed, that is, whether the income is taxed to the entity or taxed to the members (partners, shareholders) without entity level taxation. There is a federal income tax with one set of rules (with no room for wild guesses), almost 50 state-level income taxes, and gobs of local level income taxes.
At present, states can select whichever approach they wish, and it has been the case that they have been inconsistent. A business thus must comply with inconsistent rules, making the cost of being in business higher than it otherwise would be. In the agrarian economy of the late 18th century, this was no big deal. Virginia could tax a business as it wished, and it meant little to a business in a small Massachusetts town. In terms of federal-state relationship, it was all-in-all a state matter.
But now we live in a global world, one in which businesses fare better the less inconsistency they face. It is impossible to do business in a small town without being affected by what is going on -- including taxation -- in other states, because the small business (except for a rapidly disappearing handful of special instances) must deal with suppliers who are all over the place, customers who move away and retain a business relationship, and so on. Consider the insanity of jurisdictional issues with respect to another tax issue, collection of use tax. Surely, the TPM could hold up that constraint on doing business as "proof" that government is too big, but the problem isn't that government is too big, it's that government is "too many" (an issue also contributing to higher than necessary school taxes in places like New Jersey that have huge numbers of tiny school districts, with local control advocates blocking any sort of efficiencies through consolidation).
Ideally, conformity makes the cost of doing business less, putting the nation in a better competitive position, an outcome with which few of any stripe can disagree. Conformity can be achieved through cooperation, such as interstate compacts (though those need federal approval), or state legislatures having the sense and wisdom to enact laws based on model acts (but rarely does the model act end up unmodified). Would one unified national approach to taxation be too much government for the TPM? Or would it be hailed as a great achievement because it reduces the number of governments with which one needs to apply? Or is TPM simply trying to reduce federal government size so that state governments can grow (which would make America's effort to compete become even more at risk)?
In a 21st century world, the notion of state and local control doesn't have the luster it once had. It may be philosophically attractive but it's pragmatically antiquated for many issues. Do we hold onto it, nay, even increase it, in the face of a global world that would have increasing advantages? Or do we take steps to become more and more a coherent nation?
In the scheme of things, taxation might not present the news cycles with the "hottest" of topics (cf. abortion, same-gender marriage, gun control) but it reaches every corner of the country. My point is that reshaping the federal-state relationship ought to reflect the realities of the 21st century and not by nostalgic (mis)interpretations of a totally different 18th century world.
From: conlawprof-bounces at lists.ucla.edu [mailto:conlawprof-bounces at lists.ucla.edu] On Behalf Of Mark Graber
Sent: Sunday, September 19, 2010 8:34 AM
To: conlawprof at lists.ucla.edu
Subject: RE: Repealer Amendment
I confess to thinking that much of the discussion is based on a confusion about the nature of the American constitution. Both sides strike me as taking the position that a fixed relationship exists between the states and the federal government, one that cannot be altered by constitutional amendment. This might be true of, say, the German constitution or other constitutional regimes in which there is a strong notion of unconstitutional constitutional amendments. The late Walter Murphy insisted that this was also true of the United States. Most of American history, however, seems inconsistent with Murphy's analysis.
If this is correct, than whether the repealer amendment is or is not consistent with the present genius of the American constitutional system is somewhat beside the point. The tea party movement wishes states to have a much stronger and more sovereign role in the political system. Whether there analysis of the constitutional past is correct has little bearing on the merits of the proposed amendment. In short, we need a more forward looking constitutional debate than we have been having at present.
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