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Monday, April 04, 2011

Arizona Tax Standing Case and the Kagan dissent

This case is within Rick Garnett's baliwick and if he is torn, as his post indicates, far be it from me to offer any wisdom.  But I do commend to you Justice Kagan's remarkably coherent, rigorous, and lawlerly dissent.  Kennedy v. Kagan . . . "it's on," the wrestling referee might say!

The insistence by the newest justice that there is an equivalence between an appropriation and a tax credit (captured shrewedly by Harvard's Stanley Surrey in his original conception of tax expenditures) seems accurate.  There may well be compelling policy arguments to configure a difference for the purpose of taxpayer standing in Establishment clause jurisprudence, but EK seems sharply persuasive in suggesting that AK hasn't conjured up much in his florid (!) majority opinion. 

In any case, there's just a lot of stuff packed into this well-written dissent.  There is an interesting exegesis on the purposes behind state tax policymaking; there are some meaningful comments about the survivability of Flast; there are some lucid notes about Madison and the concerns about expropriation in the religious context; and there are hard-hitting, though mannerly, criticisms of the majority's reasoning.  One should be cautious about tea leave reading in the middle part of a justice's freshman year I suppose, but this well-composed dissent in (perhaps) an otherwise unremarkable taxpayer standing controversy intrigues nonetheless.

Posted by dan rodriguez on April 4, 2011 at 11:21 AM in Constitutional thoughts, Judicial Process, Tax | Permalink


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And I was just going to say!

Posted by: Micah Schwartzman | Apr 4, 2011 10:58:57 PM

And don't say Micah's paper on this--I've already tapped that excellent resource... =)

Posted by: Chris Lund | Apr 4, 2011 8:19:22 PM

Rick (or Dan),

I've always tended to think that there is a significant difference between taxpayers being forced to pay for religions they don't like and taxpayers being forced to pay for bridges they don't like. Such a distinction may seem indefensible to us now. But it does seem like a distinction that Madison and the rest embraced, right? Am I hopelessly wrong here? (Where should I go to learn about my wrongness?)

Thanks in advance!

Posted by: Chris Lund | Apr 4, 2011 8:17:49 PM

Rick says: Justice Kennedy thinks it's important to preserve Flast, I guess, because (see Hein) he thinks that the Madisonian "government spending that benefits religion works a distinctive and judicially cognizable injury on the freedom of conscience" argument works. I don't.

Suppose Kennedy is right about Madison and the framers of the Establishment Clause. That is, suppose they believed (as many of them surely did) that being taxed to support religion is an infringement on the freedom of conscience. Should that matter here? In other words, if you think the framers held that view but that they got it wrong, what should your attitude be toward the law?

A separate question about the symbolic issue: if you think that Winn involves letting people keep their money, what about tax credits for private health insurance that covers contraception and abortion? Is that an example of "government letting people keep their money," or is it a case of "government spending"? Those aren't meant to be legal questions. They are normative questions about how the credit/subsidy distinction is used politically. Are the arguments against tax credits for health care but for tax credits to promote school choice consistent? Of course the two issues can be distinguished on substantive grounds. My question is only about whether they can be distinguished with respect to the way in which they are financed. Can we say in one case: "I don't want my tax money to be used to fund that," but not in the other?

Posted by: Micah Schwartzman | Apr 4, 2011 8:12:22 PM

Yes, I do see this as a symbol but, to me, it's little more than a trope. What the complaint is about is: "Gov't is using the tax system to subsidize programs with which I disagree in ways that matter for my freedom of conscience." What Surrey, et al, argued persuasively is that these tax credits are essentially the same in their use of "your" money. You pay me $100 in taxes and I, the gov't, put it in a big pot for use, inter alia, of the NY Yankees when they need a new stadium.

The symbolism strikes me as equivalent. To rest the symbolic difference on, say, the notion that ordinary folks don't see the difference strikes me as weak.

Posted by: dan rodriguez | Apr 4, 2011 2:31:34 PM

Prof. Garnett can obviously speak for himself, but wouldn't the symbol (slogan) here be "it's your money, not the government's money"?

Posted by: Mark | Apr 4, 2011 2:17:52 PM

I don't really disagree with you on the basics of Flast's weaknesses -- in particular, the sort of Establishment clause exceptionalism embodied in the logic of the doctrine. But I do disagree that there is a functional difference worth crediting between direct taxes and tax subsidies. If one takes Flast on its own terms, the nature of the individual injury stemming from choices made by the state to subsidize religious activity is identical. It can't be the mere fact that the gov't is picking the pockets of citizens and giving it to religious orgs; rather, it is that the state, through its tax policy (taxes + tax credits) is choosing to favor one activity over the other. Why is Kagan (or Surrey or Pigou or. . . etc., etc.) fundamentally wrong about this equivalence argument? If it's only about symbolism, what is the essential symbol being proferred?

"ds" raises an intriguing point. I'm not sure I would push this functional equivalence argument from the tax subsidy area as far as he suggests (although some of the academic writing on the dormant commerce clause & econ subsidies does raise similar issues). But I see this as an argument that at least deserves from scrutiny and some reasonable response.

Posted by: dan rodriguez | Apr 4, 2011 12:57:03 PM

Does anyone else see this as a partial preview of the tax part of the ACA case? One side argues from formalism/political process that the classification of a type of government policy has legal consequences (here direct spending is different from a tax credits/in that case a tax is different from a penalty) and the other argues that the fact that two policies have identical real-world effects should mean that two policies are treated identically legally (tax expenditure = spending/in the aca case, the argument that the lack of insurance penalty is just like a income-related tax and a deduction rolled into one).

Posted by: ds | Apr 4, 2011 11:52:57 AM

Dan, I think that it is important -- even if only as a matter of symbolism -- to distinguish "government spending" from "government letting people keep their money", even when the practical (and, perhaps, intended) effect is the same. Whether that distinction should be (or can coherently be) incorporated in Flast is another matter. I think, again, that Flast is wrong, and its premises not compelling. It's not clear to me that Justice Kagan's dissent does anything to make the case any stronger. The case for (a broad) Flast, so far as I can tell, boils down to this: "Without (a broad) Flast, I would not be able to use courts to challenge legislatures' decisions to enact school-choice and similar programs that I oppose . . . so (a broad) Flast is required." Justice Kennedy thinks it's important to preserve Flast, I guess, because (see Hein) he thinks that the Madisonian "government spending that benefits religion works a distinctive and judicially cognizable injury on the freedom of conscience" argument works. I don't.

Posted by: Rick Garnett | Apr 4, 2011 11:44:40 AM

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