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Friday, July 22, 2011

SCOTUS's free speech doctrine & Grover Norquist: Both Lost in Baseline Hell

What do Grover Norquist and the SCOTUS's free speech doctrine have in common? Both are lost in baseline hell. Whenever one refuses to put forward a good-faith theory of distributive justice by which to define "neutral" treatment, one must labor in Baseline Hell at the Sisyphean task of screaming about whether some financial exaction is loss of a "subsidy" (to which one is not entitled) or imposition of a "penalty" (that confiscates one's property). One must scream because reasoning about "neutrality" is impossible without a normative theory about proper distribution.

Consider, first, Norquist's op-ed this morning in the New York Times defending his "no new taxes" pledge from critics like David Brooks who charge that Norquist is a beltway bandit holding America's full faith & credit hostage to his peculiar fanaticism. Such critics argue that eliminating a tax loophole should count on the conservative side of the ledger as a spending reduction -- cutting a "tax expenditure" -- and not a tax increase. To this charge, Norquist writes:

Others have tried to redefine 'tax increase,' specifically by arguing that eliminating a tax credit, exclusion or deduction in order to rake in more tax revenue should not count as a tax hike. The theory is that any dollar the government failed to take from you in taxes had in fact been given to you in a spending program. By this reasoning, the deduction-killing Alternative Minimum Tax is not a tax hike — a cruel joke on the millions of Americans who get hit by it every year. When a mugger passes you on the street leaving you unmolested, he did not in fact give you your wallet.

This is status quo fanaticism with a vengance: By Norquist's logic, taxpayers are entitled to every current tax credit as a matter of property rights, even if the tax credit in question is morally indefensible according to Norquist's own self-declared conservative theory of taxation. To extend Norquist's analogy, a storeowner's pledge not to "raise prices" means that a shopper who has routinely shoplifted goods from the store in the past cannot be forced to open up his wallet to pay for what he has hitherto stolen, because making people pay their fair share for what they consume would be "raising prices." This reasoning leads Norquist to defend (for instance) the ethanol tax credit, apparently on the theory that farmers should continue to rob the rest of us taxpayers by paying less than their "fair" share of taxes (as "fair is defined in conservative circles -- viz., no special treatment for industries that government happens to like), simply because farmers got away with it in the past. Even bona fide conservatives like Tom Coburn (who voted to repeal the ethanol credit) choke on that piece of logic. Of course, Norquist's mindless defense of current tax baselines position has landed Norquist in Baseline Hell, where he suffers mockery from every thinking conservative while he futilely explains why we must risk the full faith and credit of America to stand by ethanol subsidies.

But before you snigger at Norquist, consider the SCOTUS's failure in Arizona Free Enterprise Club's PAC v Bennett to distinguish Regan v Taxation With Representation. If public subsidies for one's campaign opponent cannot vary with one's own "speech" (i.e., spending), because the selective bestowing of a subsidy based on the content of speech constitutes a "penalty" on speech, then why is not the selective withdrawal of deductibility for 501(c)(4) organizations based solely on their engaging in lobbying not also a "penalty" on speech that is squarely within AFECPAC's prohibition?

Taxation With Representation reasoned that, because no one was entitled to the "subsidy" of tax deductibility for lobbying, the loss of this deductibility based on a specific type of speech activity visited no burden on freedom of speech. In a question-begging passage worthy of Norquist, the Court stated:

The Code does not deny TWR the right to receive deductible contributions to support its nonlobbying activity, nor does it deny TWR any independent benefit on account of its intention to lobby. Congress has merely refused to pay for the lobbying out of public moneys. This Court has never held that Congress must grant a benefit such as TWR claims here to a person who wishes to exercise a constitutional right.

How can AFECPAC escape this "logic"? As with deductibility, no one also has any entitlement to an opponent without public funding for their campaign expenses. The complaint in either case is that a financial burden on speech is imposed selectively, based on protected speech activities (either one's fundraising in AFECPAC or one's lobbying in Taxation With Representation). If selectivity of subsidy suffices to violate the First Amendment AFECPAC, then the current system of selectively imposing massive tax burdens on organizations that lobby should be overturned. If, by contrast, selectivity dos not matter when the burden in question is characterized as the withholding of a subsidy, then Arizona's scheme should be upheld.

Yet the majority in AFECPAC ignored Taxation With Representation and, more generally, the subsidy-penalty distinction, airily responding to Justice Kagan's dissent by stating:

"In disagreeing with our conclusion, the dissent relieson cases in which we have upheld government subsidies against First Amendment challenge, and asserts that '[w]e have never, not once, understood a viewpoint-neutral subsidy given to one speaker to constitute a First Amendment burden on another.' Post, at 16. But none of those cases—not one—involved a subsidy given in direct response to the political speech of another, to allow the recipient to counter that speech. And nothing in the analysis we employed in those cases suggests that the challenged subsidies would have survived First Amendment scrutiny if they were triggered by someone else’s political speech."

True enough: The Court's other cases like Taxation With Representation did not "involve[] a subsidy given in direct response to the political speech of another, to allow the recipient to counter that speech." Those other cases also did not involve a respondent whose name began with a "B": So what? Why should this distinction matter? If the federal government can reduce your funding because you speak to a congressperson, then why cannot they reduce your freedom from a well-funded opponent because you spend more on a political campaign? If the government's directly taking away money that you would otherwise have constitutes a permissible burden on protected speech, then why is the government's indirectly burdening you by giving more money to your opponent less permissible?

The Court did not bother to explain for precisely the same reason that Norquist invoked the cack-handed analogy between the Congress' eliminating farmers' ethanol tax credit to a thief's taking one's wallet: To engage more deeply with the problem of defining the right baseline of entitlement would be a major headache that would detract from the rhetorical force of simple and largely meaningless slogans. The peculiar version of Baseline Hell that this intellectual laziness condemns the Court is 5-4 decisions with no staying power but lots of invective. As soon as a Democratic President replaces Kennedy and switches the balance of power on the Court, the Court will uphold payment schemes functionally equivalent to that struck down in AFECPAC based on the same sort of formalistic distinctions that the AFECPAC Court used to distinguish cases like Taxpayers With Representation. Meanwhile, intelligent observers discount the Court's so-called "reasons" and count noses based on spatial attitudinal analysis.

I hasten to add that I take no position as to whether either or both AFECPAC or Taxation With Representation were rightly or wrongly decided. I argue only that one cannot make any claim to intellectual coherence if one invokes the distinction between "subsidies" and "penalties" in one case (Taxation With Representation) to eliminate a First Amendment violation only to ignore the distinction in another case (AFECPAC) to create a violation. Such maneuvers invite -- indeed, practically require -- the accusation that the Court's distinctions are based on nothing more than its unspoken moral beliefs about spending inequalities in elections. As with Norquist's beliefs about what constitutes a fair tax code, we cannot tell from the Court's selective invocation of the subsidy-penalty distinction what those beliefs really are from its disingenuous hand-waving about baselines and neutrality.

Posted by Rick Hills on July 22, 2011 at 09:35 AM | Permalink


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It seems to me very helpful to put a label on the concept of "baseline hell" as Rick has here. I just Googled and Westlawed "baseline hell," and it looks like Rick's turn of phrase. I think it could find use as a coined term for talking about this ancient logical quagmire in all kinds of contexts.

One I see all the time concerns the "property" in intellectual property, as in whether a failure to extend copyright durations is a taking of property. (That particular flourish of copyright extremists goes back centuries.)

BTW, even "subsidy-penalty distinction" gets only 42 hits on Google.

Posted by: Eric E. Johnson | Jul 22, 2011 6:41:55 PM

(concurring in all but the first sentence of the last paragraph, and the third word of the sentence following)

Posted by: BDG | Jul 22, 2011 4:36:27 PM

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