Senator and 2020 presidential candidate Elizabeth Warren has proposed a national wealth tax—a 2 percent annual levy on a person’s net worth above $50 million.

At best, the wealth tax would be constitutionally problematic. Congress has the power to tax almost anything, other than exports, but the Constitution imposes limits on this broad power. For one thing, if a tax is a “duty, impost, or excise”—usually called an indirect tax—it must be uniform throughout the United States. The tax rates and what is taxed must be the same in Massachusetts as in Mississippi. The uniformity rule is usually easy to satisfy, but the wealth tax is unlikely to be considered an indirect tax.

The wealth tax is more likely to be considered a direct tax, and enacting a workable direct tax is hard to do—intentionally so. The Founders worried that Congress might use the relatively dangerous direct taxes as everyday revenue-raisers. To prevent abuse, the Constitution requires apportioning a direct tax among the states based on population: regardless of how the tax base is distributed across the country, taxpayers in each state in the aggregate must pay tax in proportion to their state’s share of the national population. The apportionment rule makes imposition of a direct tax often technically—and politically—impossible. That’s not a glitch, as some suggest; that was the point.

Suppose Warren’s wealth tax had to be apportioned. Imagine two states—one rich, one poor—each having a population of, say, 2 million. Despite the disparity in wealth, the tax collected from the two states must be the same. To make the numbers work, either tax rates would have to be higher in the poorer state than in the richer one, or some other absurd mechanism would have to be used. The result would obviously not satisfy Senator Warren’s goals. If apportionment is required, the proposed tax is dead in the water.

There’s no clear definition of “direct tax” in the Constitution, but the Founders—at the Constitutional Convention, in ratification debates, in the Federalist Papers, and in the Supreme Court’s 1796 decision in Hylton v. United States—assumed, almost without exception, that a land tax is a direct tax. And a land tax was a wealth tax: well-to-do Americans in the late eighteenth century had most of their wealth tied up in real estate. Hard as it is to imagine today, several apportioned national real-estate taxes were enacted between 1798 and 1861; Congress took it for granted that such wealth taxes would have to be apportioned. No such levy has been imposed since, presumably, in part, because of the difficulty of apportionment.

Nothing in the law has changed on this basic point since then. And the Supreme Court in 1895, in the Income Tax Cases, concluded that a tax on any property, not just real estate, is direct. That understanding was reiterated as recently as 2012 when, writing for a majority in NFIB v. Sebelius, Chief Justice John Roberts concluded that the individual-mandate penalty in Obamacare was a tax authorized by the Taxing Clause of the Constitution—but not a direct tax that would have to be apportioned. The chief justice wrote that only two types of taxes are unquestionably direct—a tax on property, and a capitation or head tax (levied on all persons without regard to income or circumstances).

The Sixteenth Amendment, ratified in 1913, exempted “taxes on incomes” from apportionment. That made the modern income tax possible, but the amendment doesn’t allow an unapportioned wealth tax. The income tax targeted the wealthy, but late nineteenth-century and early twentieth-century debates specifically distinguished taxes on income from taxes on wealth. Senator Norris Brown of Nebraska, who in 1909 introduced the resolution that ultimately became the amendment, refused to extend the amendment’s scope beyond taxes on incomes. Many members of Congress wanted to do away with apportionment altogether—to make the meaning of “direct tax” irrelevant—but Brown said no, and he prevailed. As a result, a direct tax that is not a tax on incomes remains subject to apportionment. Like it or not, that’s the law.

After ratification of the Sixteenth Amendment, people generally stopped worrying about the direct-tax apportionment rule. The individual income tax became such a cash cow that it hasn’t been necessary to consider new, and constitutionally suspect, forms of national taxation. To my mind, that should remain the case.

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