Brent Nyitray
Fairlington Blade
Let the mutherfuker burn!
jnc4p
Kevin S. Willis
Michigoose
lmsinca
markinaustin
Arcanaut
novahockey
quarterback
ScottC
yellojktThe WSJ reports:
Nonprofits across the state are campaigning against a provision in President Barack Obama’s jobs bill that would limit itemized deductions, including charitable deductions, for individuals with an annual income of $200,000 or more.
The federal proposal, which would cap itemized deductions at 28% from the current 35%, has provoked particular concern in New York, where nonprofits last year lost a fight against a state bill that reduced deductions from 50% for individuals earning $10 million or more.
While that policy ensnared an influential but limited portion of the oppulation, New York charities fear that the federal proposal will curb charitable giving among a much broader swath of potential donors, possibly compounding the impact of the state law.
Why is it that discriminatory laws that would be deemed outrageously abusive (and certainly unconstitutional) if targetting any other demographic of the country are considered perfectly acceptable when targetting a group defined arbitrarily by their income?
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All Things in Moderation 
I just can't get too exercised about this. Giving to charity shouldn't be a political football and any tax deduction is generous IMO. How would this be unconstitutional? It's not as if they're wiping out the the deduction entirely. I understand a lot of non-profits are suffering because of the economy but do you think it's because of a fear by benefactors of a little less tax deduction?
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The tax code of course already does a lot of this kind of thing. It always strikes me as akin to rubbing salt in a wound. We're going to tax you at a much higher rate, and then we're going to cut off your deductions, too. It's hard not to see it as anything other than spite for political purposes. The academic justification is always along the lines of redefining equal treatment to say something like, "We are just treating unequals unequally," and by resort to the supposed democratic justification — if a majority supports expropriating the minority, it's right.It is interesting, too, how this intersects with the discussion in Nova's post about libertarianism and government crowding out of private charity and civic responsiblity. That crowding out is really part of the affirmative if often unacknowledged vision of bureaucratic big government, social democracy, modern liberalism, whatever one calls it.
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On the constitutionality of measures like this, assuming the question is equal protection, they get away with it because income is not treated as a protected classification. Since this means the classification only has to be rationally relate to a legitimate purpose, it is virtully impossible to challenge it. That standard was almost never met until the (crazy) Colorado gay rights case in which Anthony Kennedy wrote that an initiative banning gay rights laws had no rational basis. (Another of his contributions to the worst opinions ever written.)
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qb:From a constitutional point of view, how can disparate tax treatment of various people based on income be justified? I mean if a law was passed that gave blacks fewer deductions than anyone else, or said that Californians had to pay a higher rate than citizens of other sates, it would be overturned immediately. So how is it that such blatant discrimination against people of a certain, entirely arbitrary income level is allowed to stand?
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Sorry…you posted the answer just as I posted the question.
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Btw, the constitutionality question raises an issue surprising to many people. The Equal Protection Clause is contained in the 14th Am, applicable only to states. There is no similar clause expressly applicable to the federal government. There was a companion case to Brown v. Board involving DC schools, only there was no EPC clause that really applied. The Court just sort of swept that problem under the rug. Robert Bork incurred liberal wrath for pointing out that this was not a very good way to deal with the issue.
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Bolling v. Sharpehttp://scholar.google.com/scholar_case?case=16234924501041992561&hl=en&as_sdt=2&as_vis=1&oi=scholarr.I think it bears reading and should not be dismissed the way Bork did. One cannot be denied equal protection on something less substantial than a right, or a privilege, or an immunity. Thus a Fifth Amendment due process analysis is not a big stretch, it seems to me.Warren did not invent the due process rationale for DC.See Hurd v. Hodge:http://scholar.google.com/scholar_case?case=17115974254897619372&hl=en&as_sdt=2,44&as_vis=1Where the Vinson Court said DC courts could not uphold racially restrictive zoning.Warren concedes that the =pro clause is far more specific than the DP clause of the 5th Amendment. I think Warren directly confronted the absence of the =pro clause and simply reached back to Hurd to support the DP analysis.
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I should add that Hurd had a more gymnastic way to get to the result. The Court relied on the Civil Rights Acts of 1866, which did not directly deal with the issue at hand, but which were applicable to federal jurisdictions, and then said the CRAs were so entwined with the 14thA [they were; they are the statutes Congress passed to enforce the 14thA which is not a self effectuating Article] that the =pro language had to be applicalbe against federal territory too.
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Permit me a moment to cry a few crocodile tears. Because, dear friends, I have been discriminated against indiscriminately and IT… MUST… STOP…There are plenty of tax deductions out there that sunset with income. We went above the level where we could deduct student loan interest some time ago. I think we get around 1/4 to 1/2 of the child care credit. There are many provisions in the tax code that sunset with higher income. Rage against them all you like, but please don't pretend that you're raising something that is either new or has a constitutional basis.This is also a slight bugaboo of mine, but your title is incorrect. Wealth >< income. It's the same difference between debt and deficit. Mind you, I'm moderately wealthy even though the bulk of my assets are in retirement funds and my house. If I were to get fired, my income drops to zero, but my wealth remains the same.BB
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Bork did not simply dismiss Bolling. But he did not shy away from the truth about it. His position was and is quite respectable and shared by many.This is a key difference between conservative and liberal constitutional approaches imo. The liberal Senators like Spector (an appalling and impenetrable dunce) simply could not comprehend how anyone could say the Constitution as written does not provide for the result they want in every case. This is simply wrong to conservatives. When we imagine that the document provides the "right" answer to every case, we aren't really following and applying the text any longer but are simply using and manipulating it.
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Fairlington:There are many provisions in the tax code that sunset with higher income.Yes. And they are all discriminatory in a way that would not be tolerable if applied on any other demographic. Rage against them all you like, but please don't pretend that you're raising something that is either new or has a constitutional basis.I never said it was anything new, so not sure where you got that from. As for a constitutional basis, would it be constitutional to have tax code discriminate based on location, ie Californians have a different tax rate and deductions than Texans? If not, then why is it constitutional to discriminate based on income?This is also a slight bugaboo of mine, but your title is incorrect. Wealth >< income.Yes, you are correct. I should not have used this standard liberal shorthand. (I look forward to seeing your objections the next time someone mentions "tax cuts for the rich".) The headline should read "…the moderately well paid."
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Scott – I have *repeatedly* objected to the conflation of income with assets in my comments on the Plum Line and will continue to do so. I've called Greg out on this particular point. I'm perfectly happy to disagree with you, but you are way off base accusing me of inconsistency. The headline should have been high income as that is the accurate description.Where I got the new point is that the Obama proposal suddenly got you into high dudgeon.You have invented from whole cloth the notion that a progressive tax code is unconstitutional. Any sort of exemption is discriminatory based on income. Thus, you have set out the position that any income tax other than a flat tax with zero exemptions is unconstitutional. Somehow, I think that the Supremes might have noticed this in the past century that we had progressive income tax rates. Either Republican presidents have been spectacularly incompetent at appointing justices who understand the constitution or you might want to reconsider your evaluation of what is or isn't unconstitutional.One of my favorite quotes from a movie comes from the Princess Bride. To be precise, Inigo Montoya (Mandy Patimkin): "You keep using that word. I do not think it means what you think it means."My reading of this exchange is that you use the word "unconstitutional" as shorthand for "I don't like this". I await anyone who can cite case law showing that the progressive income tax is unconstitutional.BB
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Scott didn't say it was unconstitutional; no one did. He rasied and asked a question about why it is considered acceptable and constitutional. I answered the constitutional question above.A standard defense of progressive taxes is, "We are treating everyone equally. Everyone who earns over x will pay Y%. Of course, this isn't really much of an argument, since, using Scott's comparison, you could say the same thing about racially discriminatory laws.
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Fairlington: I'm perfectly happy to disagree with you, but you are way off base accusing me of inconsistency. I haven't accused you of anything. I simply said that I looked forward to you demonstrating your consistency the next time someone speaks of "tax cuts for the rich". And I do.You have invented from whole cloth the notion that a progressive tax code is unconstitutional. At no point have I said that it was unconstitutional. All I have done is compared it to things that would plainly be considered unconstitutional, and asked why this is any different. It is notable that you haven't been able to point out how it is any different.Any sort of exemption is discriminatory based on income.Yes, it is. The question is why is such discrimination acceptable to you when it would be wholly unacceptable if applied to a differently defined demographic. Again, would allowing Texans exemptions that were disallowed to Californians be acceptable to you? Do you think it would be considered constitutional? How is this any different?My reading of this exchange is that you use the word "unconstitutional" as shorthand for "I don't like this"Oh no, not at all. There are plenty of things that I don't like that are clearly constitutional. In fact, quite the opposite, I think that far too many people (liberals, mostly, but sometimes conservatives too) think that anything they like must necessarily be allowed by the constitution. And just to be clear, I am definitely not saying that there is case law establishing the progressive income tax as unconstitutional. I am simply wondering why there isn't, given that such discrimination as the progressive income tax applies would indeed be considered unconstitutional, and certainly abhorrent and unacceptable, if applied to a demographic defined in virtually any way other than by income. I still don't really have a reasonable answer to this.
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Scott, the answer is because a progressive income tax involves revenue. And the discrimination negatively impacts people essentially by how blessed they are (yes, I know they work hard, but I think the perception is that the problems of first-world, healthy, wealthy people don't matter, as whatever discrimination they suffer is irrelevant, given that they start with so many advantages in their favor–"start" meaning, once they are rich, not when they are poor before working their way up to rich).
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Scott – I should note that I'm feeling my way here. My first comment was snarky, so I should expect a bit of snark back. I'll try to limit that. I enjoy spirited debate and so welcome it. You hit back on one point (income vs. wealth) where I have had an entirely consistent view and have held to it. I don't change my opinion depending upon the audience, though I may frame my argument differently.Words matter. Income vs. wealth. Constitutional. I am personally amused at folks claiming fealty to the Constitution and carrying around a pocket copy of the Constitution. Having a copy of the Constitution no more makes you an Constitutional expert than does carrying around a copy of the periodic table makes you a chemist.If I am inconsistent, call me out on it. Don't make assumptions as to what I believe as you may not be right. If you're curious, ask me. I'm more than happy to be forthcoming. You'll gradually get a sense of my overall views if both of us hang around here for awhile. BB
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I started my second comment and got interrupted by a meltdown. Oh, the joys of raising autistic kids. All was settled by finding an effing 1" rubber yellow airplane. One entire good day ruined. I hope to elaborate at some point. So, I didn't see intervening posts.With regards to income and wealth, you don't have to look forward to anything. Either accept what I said (and Plum Line archives bear me out) or call me a liar. Be civil is somewhere in the raison d'etre of this site. A simple "well, yeah, I meant income" is fine by me. I used "standard liberal shorthand" sounds like you can't give on anything in the slightest. In which case, it's difficult to have a conversation.OK. So much for style. Let's get to constitutionality. That's why I hope to become a contributor here (other than your food columnist). Here's what I understand to be your argument. It's not constitutional to discriminate on the basis of location, so why is it constitutional to discriminate on the basis of income? It doesn't take Clarence Darrow to figure out that you believe that progressive taxation is unconstitutional. We'll leave aside the fact that there are some aspects of federal treatment that do discriminate on geography (locality pay, jumbo mortgages).Moreover, the flat tax is entirely consistent with progressive taxation. Any flat tax that I've heard proposed is asymptotically progressive. Let's say that a person has an income of $X dollars per year and there is a flat tax of f with an exemption of $Y dollars per year. THe tax that one pays is therefore max(0,$X – $Y)*f. Plot that out and you will find that overall tax rate increase with income up to an asymptotic value of whatever you think f should be. There's an old joke attributed to Winston Churchill (but someone else as well). He comes up to a woman at a party and offers her a million pounds to sleep with him. She accepts. He then offers her 10 pounds to sleep with him. She exclaims "What kind of woman do you think I am?" He responds that they've already established that, now they're just haggling about price.If you think that there should be an exemption at all, we've already established that you believe in progressive taxation. We're just haggling about rates.BB
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"Don't make assumptions as to what I believe as you may not be right. If you're curious, ask me."This merits repeating. There's no communication going on when you tell people what they think or believe. I don't see progressive taxation as being unconstitutional myself, but then I'm for it, which probably impacts my judgement. Although it would never happen, I expect an additional caucasian tax, though racial, would not be unconstitutional, if it was structurally an arbitrary way to raise revenue. I am not a constitutional scholar, however.
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Dang, Kevin. You read through two posts and hit the heart of it. I hope to add some original contributions that give people a better sense of me. That will be a bit delayed as this hits at a time when my wife is out of town for a couple of weeks. Full time job + taking care of kids = limited time on line. THen subtract the work in getting the bowling league going.Cheers,Paul
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Kevin:Scott, the answer is because a progressive income tax involves revenue. And the discrimination negatively impacts people essentially by how blessed they are That probably is the answer, but it is still a pretty unsatisfying one, both philosophically and constitutionally. The law is supposed to treat people equally, regardless of their station in life or how 'blessed" they are. And it is not simply a matter of being indifferent to such discrimination…"I have bigger things to worry about than discrimination against some highly paid person." There is an pro-active desire (as you readily admit of yourself) to discriminate against such people. This makes a complete mockery of the notion of equal treatment under the law. The test of whether a principle is indeed a principle is not whether you hold to it when it results in things you like, but rather whether you hold to it when it results in things you don't like.
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Fairlington:Words matter.I very much agree. I have often been accused of being too concerned with semantics precisely because I belief so strongly that words matter.Don't make assumptions as to what I believe.I didn't.It doesn't take Clarence Darrow to figure out that you believe that progressive taxation is unconstitutional.I think it ought to be unconstitutional. Words matter. Moreover, the flat tax is entirely consistent with progressive taxation.Well, what you describe is actually a quasi-flat tax, and it is the "quasi" part that makes it seemingly consistent with progressive taxation. But still, I think there is a substantial difference between treating most taxpayers equally while positively discriminating in favor of a small slice of people and treating most taxpayers equally while negatively discriminating against a small slice of people.If you think that there should be an exemption at all…I don't. As I have stated in the past, if we are to have an income tax at all, then I believe all income ought to be taxed equally, not only as a matter of principle, but also so that even low income voters are actually accountable in some way for the things they vote for. Would I be willing to compromise politically by negotiating away some low income exemption in order to get more equitable taxation overall? Sure. That doesn't, however, establish that I believe in progressive taxation. I don't.
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Kevin:This merits repeating. There's no communication going on when you tell people what they think or believe. I haven't seen anyone actually do this here in this forum. Have you?
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