More on the dissent: sales tax exemption
destro at LAW.EDU
Thu Apr 30 01:26:17 PDT 1998
Just a quick follow up on the Texas Monthly point. I agree with the
dissent: Texas Monthly doesn't make any sense, either from a taxation
perspective, or from the all-important separation of powers angle.
In fact, I have always been mystified by the outrage over Employment
Division v. Smith; for it was actually Texas Monthly that set down the
groundwork for much of what was done there. It was the late Justice
Brennan, after all, who stated in Texas Monthly that no exemption for
religious exercise was permissible save in the case of demonstrated
"concrete need" established before a court. [His phrase was: "a
demonstrated and possibly grave imposition on religious activity
sheltered by the Free Exercise Clause."]
I argue much of this in my Indiana Law Review article [29 Ind. L. Rev.
1], so I'll just snip out and present here the main points:
Texas argued that its tax exemption was justified as an accommodation
of the religious publishers' rights under the Free Exercise Clause.
The Texas Monthly argued that, whatever the result under Religion
Clause analysis, the exemption was forbidden by the Speech and Press
Clause. The Court thus faced what might be called a "true categorical
conflict": one norm or the other would have to yield. And it was on
the question "Which one?" that the three opinions in the plurality
Justice Brennan announced the judgment of the Court in an opinion
joined by Justices Marshall and Stevens. Its sole focus was the
relationship between the Establishment Clause claims made by The Texas
Monthly and the Free Exercise interests the State of Texas sought to
protect by the sales tax exemption. No attempt was made to discuss
the Free Speech implications of the controversy, to strike a balance
between free exercise and the non-establishment concerns, or to
reconcile the apparently disparate requirements of the three
constitutional norms alleged by the parties to be controlling.
Justices Blackmun and O'Connor dealt at some length with the
relationship among the three lines of authority and the conceptual
difficulty of the structural task of reconciling them; yet they were
troubled by the substantive implications of resolving them in the
manner suggested by either Justice Brennan (limiting the scope of the
free exercise norm) or Justice Scalia (limiting the categorical nature
of both non-establishment and speech analysis). They suggested that
it might be wiser for the Court to "avoid most of these difficulties
with a narrow resolution of the case."
The disagreement among these five justices was over whether or not it
was possible (or desirable) to avoid a head-on collision between the
Establishment and Free Exercise Clauses. Justices Brennan, Stevens
and Marshall saw a categorical conflict and resolved it by holding
that the Establishment Clause limits the permissible scope of the Free
Exercise Clause claims to cases of empirically demonstrable,
"concrete," individual need.
"It is virtually self-evident that the Free Exercise Clause does
not require an exemption from a governmental program unless, at a
minimum, inclusion in the program actually burdens the claimant's
freedom to exercise religious rights." Tony and Susan Alamo
Foundation v. Secretary of Labor, [citation omitted]. In this
case, the State has adduced no evidence that the payment of a sales
tax by subscribers to religious periodicals or purchasers of
religious books would offend their religious beliefs or inhibit
religious activity. The State therefore cannot claim persuasively
that its tax exemption is compelled by the Free Exercise Clause in
even a single instance, let alone in every case. No concrete need
to accommodate religious activity has been shown.
This, however, was the precise categorical conflict-and the
result-that Justices Blackmun and O'Connor sought to avoid when they
suggested that the Court consider a theory permitting a "narrow[er]
resolution of the case." Since they agreed with Justice Brennan that
the ultimate question to be decided was "whether a tax exemption
limited to the sale of religious literature by religious organizations
violates the Establishment Clause," the only way to avoid the
conflict was to reserve for decision in a later case "the extent to
which the Free Exercise Clause requires a tax exemption for the sale
of religious literature by a religious organization." [i.e. the issue
presented in Swaggart]
This characterization of the issues would have preserved the
possibility that the Free Exercise Clause might be construed, at some
time in the future, to require a "religious exemption" in a very
limited class of cases. Such a characterization of the "reserved" Free
Exercise issue would also enable them to characterize the non-
establishment issue in the case before them as one of discretionary
financial assistance to religion, unsullied by free exercise concerns.
But by focusing on Follet v. McCormick and Murdock v. Pennsylvania ,
and deferring decision on "the ultimate scope of [those cases] ...
[to] another day", Justices Blackmun and O'Connor unwittingly
underscored the futility of their attempt to develop "narrowing"
characterizations. Murdock makes it clear that the activity
involved-sale and distribution of religious tracts-is "a combination
of both" preaching (which is both "pure" speech and religion) and the
distribution of literature (which is both religion and press). As a
"hybrid" activity (to borrow a phrase from Smith II ), it has "the
same claim to protection as the more orthodox and conventional
exercises of religion" as well as "the same claim as the others to the
guarantees of freedom of speech and freedom of the press."
As a result, the only way to "narrow" the Texas Monthly case in the
manner suggested by Justices Blackmun and O'Connor is to isolate its
free exercise and speech components from those which sound in
non-establishment. And the only way to do that would have been to
focus on the action of the State (granting a tax exemption) without
regard to its intended purpose -- or its position in a larger taxing
scheme that defines the scope of the term "retail sale."
Viewed from an "establishment only" perspective, it is indeed possible
to characterize the case as one involving only a tax exemption limited
to religious publications, but the problem with such a device is both
that it is too obvious -- and clearly wrong as a matter of both fact
Current standards under both components of the Religion Clause require
an examination of the policy's intended purpose. So does the Equal
Protection Clause. But under the formulation suggested by Justices
O'Connor and Blackmun in Texas Monthly, an inquiry into both the
purpose and effect of the tax exemption on the interests of
others--most notably the religious groups which will lose their
exemption and the press organizations which are ineligible to claim
it--does not appear to be necessary. Nor does an examination of the
claim that the "exemption" is enjoyed only by religious literature
bear up under scrutiny. [There were lots of "exemptions" from the
Texas Sales Tax!] The individual liberty interests at stake, including
free exercise, free press, and, arguably, equal protection, simply
drop out of the picture. Small wonder that none of the other seven
Justices viewed the Blackmun/O'Connor approach as a viable one.
Justice White ignored the Religion Clause altogether and held that the
Speech/Press Clause required the invalidation of the "content based"
Justice Scalia was right: Not only was the majority's view of the Free
Exercise norm too narrow, but that its very approach to the issue made
no sense. It doesn't -- either as a matter of "First Amendment
jurisprudence," as a "tax" opinion, or as a matter of separation of
powers (or federalism). It is not simply that an exemption should be
permissible under the EC or S&P Clauses if arguably protected by the
FX Clause, it is that "exemptions" are not always "subsidies." If they
are, then whatever part of your income Congress does *not* tax (i.e.
that is "exempt" or "excluded") is a "subsidy."
Remember that next April 15.
Robert A. Destro Destro at law.edu
Columbus School of Law 202-319-5202
The Catholic University of America fax:202-319-4498
Washington, D.C. 20064-8005 http://www.law.edu
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