Abstract

Natural property rights theories have become the primary lens through which conservative jurists and scholars view the Constitution’s main property rights provision, the Takings Clause. One of their most striking arguments is that progressive income taxation — applying higher tax rates to higher incomes — is an unconstitutional taking of wealthy taxpayers’ property. This has become part and parcel of well-established battle lines between conservative property rights advocates and their liberal counterparts. What has gone unnoticed is that the very same argument deployed against progressive taxation also deems regressive taxation — applying lower tax rates to higher incomes — an unconstitutional taking of poorer taxpayers’ property. Combined with the stricture against progressive taxation, this means that natural property rights theory maintains that there is one and only one constitutional income tax: a “flat” that applies the same rate to incomes at all levels.

The first and most novel contribution of this Article is the contention that the cardinal sin of natural property rights theories is not excessive protection of the propertied class but rather the imposition of a straitjacket on policymaking. This problem is not limited to taxation. Natural property rights strictures against debtor relief, combined with a symmetric argument against creditor relief, end up imposing similarly binding shackles on the monetary authorities. Indeed, natural property rights theories categorically reject redistribution even if it helps the wealthy as well as the poor.

The second thesis of this Article is that the natural property rights case against progressive taxation has foundational faults. It fails to address the fact that charity is a public good that is undersupplied by “the market” — that is, private charity. It also fails to offer any explanation of how to choose the proper tax basis, for example income, sales, wealth, etc. There are some real quandaries here. The fact that a flat wealth tax likely approximates a progressive income tax seriously undermines the case against progressive taxation in general.

The last section of the Article does identify one point of agreement with natural property rights theorists: the Takings Clause does impose some constraints on legislatures’ power to tax. The common ground ends, however, with that basic observation. This Article suggests that a very modest “Continuous Burdens Principle” does bar tax laws that impose dramatically different tax burdens on taxpayers of similar economic circumstances. This principle forbids only relatively extreme taxes that single out individuals or small groups for particularly outsized tax burdens, and thus in stark contrast to natural property rights theory does not straitjacket tax policy.

Document Type

Article

Publication Date

4-2018

Publication Information

51 U.C. Davis Law Review 1351-1426 (2018)

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