Tax Analysts®Tax Analysts®

My Subscriptions:

Featured News

May 26, 2015
You Know Scalia's Right
by David Brunori

Full Text Published by Tax Analysts®

This viewpoint is written by Tax Analysts Deputy Publisher David Brunori, who welcomes comments at david.brunori@taxanalysts.org.

In this viewpoint, Brunori dissects Justice Antonin Scalia's dissent on the dormant commerce clause from last week's Wynne decision.


* * * * *

The Supreme Court kept state tax folks busy last week by deciding
Comptroller of the Treasury of Maryland v. Wynne. By far the most interesting and entertaining part of the decision was Justice Antonin Scalia's dissent. He colorfully called the dormant commerce clause, upon which the majority hangs its hat, a judicial fraud.

The majority used some really old precedent from cases tangentially on point to strike down part of Maryland's income tax scheme. Walter Hellerstein, Joseph Henchman, and a lot of other people think the Court decided Wynne correctly. It seems so, although four justices disagreed. The Wynnes were going to be double taxed, and if you don't give credit for taxes paid to other states, you run the risk of violating the commerce clause.


Scalia's Dissent

In his dissent, Scalia wrote, "The fundamental problem with our negative commerce clause cases is that the Constitution does not contain a negative commerce clause. It contains only a Commerce Clause." Scalia said other irreverent things as well, including calling the evolution of the dormant commerce clause a "bestiary" of ad hoc tests. He then criticized the Court's "ad hocery" in using the internal consistency test. All other justices pale in comparison when it comes to putting pen to paper.

Scalia believes the dormant commerce clause is a made-up rule that is read into the Constitution. I realize that liberals dismiss out of hand the argument that we should be guided by the plain language of the Constitution. After all, if you're locked into what the Constitution actually says, iconic decisions such as Griswold v. Connecticut andRoe v. Wade would have come out differently. There would be no constitutional right to privacy hidden in the penumbras of other words.

But maybe we should pay more attention to the actual text of the commerce clause. Article I, section 8, clause 3 of the Constitution says Congress has the power to "regulate commerce with foreign nations, and among the several States, and with the Indian Tribes." That's it. It doesn't say anything else. There is no hint of it being self-executing. There is no mention of an inherent limitation on state taxing authority. The majority in Wynne say the authors of the Constitution were concerned about the Balkanization of the country into little economic fiefdoms. A lot of commerce clause opinions say the Founding Fathers were concerned about Balkanization even though the term wasn't invented until 1919. And the majority in Wynne cites the great Justice John Marshall's dicta in Gibbons v. Ogden for the self-executing proposition. Ever since Marshall wrote that, courts have assumed it to be true. Scalia likens that assumption to weeds with deep roots.

I question Marshall warily. After all, he resides in the pantheon of jurists. But consider for a moment that maybe the Constitution actually means what it says. Congress can regulate interstate commerce, but only if it chooses to do so. If we are concerned about Balkanization or even Scandinavianization, Congress should do something about it. It can require states to give credits like those Maryland refused to grant. It can prohibit or require taxation of remote sales. It can address any of the myriad issues that give rise to state protectionism through tax laws. Of course, that would require Congress to take a break from doing nothing and actually think about interstate commerce.

Scalia's argument is consistent with the position asserted by Maryland in its Wynne brief. The state argued that there was a political solution to the problem presented by the Wynnes. If the people of Maryland don't like their tax structure, they can push their legislators to change it. There was a solution before making a state, and then federal, case out of the issue. But the dormant commerce clause has the insidious effect of prompting everyone with a grievance to turn to the courts. The authors of the Constitution may have wanted that, but they sure didn't say it.

The dormant commerce clause is here to stay, with precedent and established expectations and all, but it would be nice if we just admitted that we made it up.

About Tax Analysts

Tax Analysts is an influential provider of tax news and analysis for the global community. Over 150,000 tax professionals in law and accounting firms, corporations, and government agencies rely on Tax Analysts' federal, state, and international content daily. Key products include Tax Notes, Tax Notes Today, State Tax Notes, State Tax Today, Tax Notes International, and Worldwide Tax Daily. Founded in 1970 as a nonprofit organization, Tax Analysts has the industry's largest tax-dedicated correspondent staff, with more than 250 domestic and international correspondents. For more information, visit our home page.

For reprint permission or other information, contact communications@tax.org