Bartlett is also the Policy Counsel for the Institute for Policy Innovation, a free-market “think tank” dedicated to promoting lower taxes, fewer regulations, and a smaller, less-intrusive federal government. IPI currently focuses on tax cuts, long-term tax reform, educational choice, high-tech and Internet issues, and the rollback of harmful and counterproductive regulations.
Latest posts by Bartlett Cleland (see all)
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For years, perhaps decades, or perhaps forever, Washington D.C. has been the butt of jokes with punchlines about how the political class talks and talks and talks while little gets solved. But sometimes Congress speaks by staying quiet. Sometimes doing nothing really is an actively made decision. Multiple U.S. Supreme Court justices seem to understand this even if pro-expansionist government advocates have repeatedly missed the point.
Several states, led by South Dakota, undertook a scheme to overturn current law, intentionally passing unconstitutional laws to bait the Supreme Court into acting. And it worked. In South Dakota v. Wayfair, heard by the Court last month, the Court was asked to determine whether in fact there are limits on state taxing authority or in other words, whether state authority to tax and enforce is as deep and broad as the internet. The real goal of South Dakota and others who support the state’s efforts is to remove any restraints on how far a state can reach into other states across the country to tax and regulate the other state’s citizens. To achieve their end they would have the Court create law where Congress has decided not to do so by overturning the current rules as governed by the earlier Supreme Court decision in Quill Corp. v. North Dakota. Those rules prevent states from collecting sales taxes on purchases made remotely, such as via internet, catalog unless the seller had a physical presence in the state.
During oral arguments the Court seemed skeptical. As Chief Justice Roberts pointed out, if Congress wanted to change the rules they had plenty of time and opportunity to do so. Congress could have already made a decision, the decision that the current standards for when a state can force the collection of tax and compliance with their rules have worked fine for the last twenty-six years and that the issue need not be revisited. Justice Breyer pointed out that in fact, at least several in Congress had spoken directly to the issue. He noted that three Senators and Congressman Goodlatte, chairman of the House Judiciary Committee, made clear that Congress was about to act but stopped when the Court moved to decide the Wayfair case. But the states did not want to compromise and it seems their own scheme is working against them.
Justice Kagan went even further in suggesting that Congress not acting may in fact be the action, “[U]sually, when somebody says something like that, that Congress has not addressed an issue for 25-plus years, you know, it — it gives us reason to pause, because Congress could have addressed the issue and Congress chose not to. This is a very prominent issue which Congress has been aware of for a very long time and has chosen not to do something about that. And that seems to make the — your bar higher to surmount, isn’t it?” Such questioning also implies that this is an area that should be left to Congress. Justice Kagan continued by pointing out that when the Court gets involved a binary option develops, Law or no law, whereas Congress has the capacity to craft a compromise that addresses the wide range of issues involved.
Justice Alito pulled on the same thread when he asked if the Court overruled Quill, ruling in support of South Dakota’s arguments, what incentives the states would have to continue to work for a congressional solution. Of course, there would be no incentive which is in large measure the strategy the states have pursued – to have their way without having to find solutions acceptable to all.
As Justice Breyer pointed out, if the fifty states were truly as united as suggested by South Dakota there is no more powerful group to move Congress. “And you are 50 states. If you do not have the power to get Congress to do something, I don’t know who would.”
In Justice Breyer’s point the truth is told – the states that support their pro higher tax, bigger government plan do not speak for the country. In fact, they speak for a small minority of the people. When constituents understand the legal scheme that has been underway the politicians tax agencies who crafted and pushed the cynical plan will have wished that they, like congress, had intentionally said nothing at all.