Monday, January 08, 2007

That Which Cannot Be Taxed

Benjamin Franklin once said that nothing was certain but death and taxes. We've all rolled our eyes upon hearing a crazy tax scheme cooked up by some freshman legislator. "What won't they tax?" is a comment likely to originate from a face behind a newspaper folded open to the poltical section. But let me ask you a serious question of civics: is anything 'sacred' when it comes to taxes? Can you name one thing that is truly off-limits to the tax man?

The year was 1819; the states were still adjusting to their relationship with the fledgling federal government. James Madison was president. The US Constitution had been in effect only 30 years now, yet turf battles were already being waged between the state and federal governments. This year, Maryland would demonstrate to the other states the ability of the US Congress to act in ways not explicitly authorized by the Constitution...
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3 Comments:

Anonymous Jason Sheppard said...

The national bank-- long a dream of Alexander Hamilton's and a recurring nightmare of Thomas Jefferson's-- was back thanks to congressional approval of its second charter three years ago. With operations headquartered in Philadelphia, the bank had opened a Baltimore branch within two years.

The Maryland legislature, threatened by the bank for several reasons, responded by passing a considerable tax on all banks not chartered by the state legislature itself (i.e., the national bank). The US bank refused to pay the tax, and Maryland's attorney general proceeded to successfully sue the bank branch's cashier, one James McCulloch (a.k.a. "McCullough"), through every appeal in the state courts. The cashier then appealed the case to the US Supreme Court, which agreed to hear the case. McCullough v. Maryland, decided in the early Spring of 1819, would become a landmark case.

The state's claim was that the US Congress did not have explicit constitutional authority to establish a national bank, so a case could not be made that the Maryland legislature, in taxing the national bank, did anything to interfere with the federal government's constitutional rights or duties. Note the assumption here which remains with us still today: you cannot tax a right.

Well, the court ruled in McCullough that the "necessary and proper" clause found in Article I, sec 8 of the constitution implied authorization for the US Congress to do all things reasonably necessary to carry out its explicit duties and further determined that a national bank was indeed covered under said necessary-and-proper clause. Thus, the state of Maryland could not impose a tax on the institute.

By tracing authorization back to the constitution, the court had placed congress' actions off-limits to taxation by the states. As Chief Justice John Marshall wrote in the unanimous opinion,

That the power to tax involves the power to destroy; that the power to destroy may defeat and render useless the power to create; that there is a plain repugnance in conferring on one Government a power to control the constitutional measures of another, which other, with respect to those very measures, is declared to be supreme over that which exerts the control, are propositions not to be denied.

Or, as may be said today, what good is a "right" given by one government (e.g. state, federal, etc.) if another government could tax it out of practical existence?

Well, that was then, this is now. That was a state's attempt to tax the purview of the federal government. Enter in Hollis Wayne Fincher (a.k.a. "Wayne Fincher"), or, an attempt of the federal government to tax the purview of a state government.

Mr. Fincher, you may know, was arrested last year after an 8-month investigation of his militia activities. It seems the BATF, a federal agency, was alerted to a local newspaper article about Fincher's militia. The article included a photo showing Fincher cradling a Browning 1919 fully automatic machine gun. Now, if you're like most pre-programmed Americans, at this point you're thinking, "that's illegal, right?" Actually, definitely not. Even by the federal government's own admission and current practice, all that is essentially necessary for a citizen to own a fully automatic machine gun is that he pay a hefty tax to purchase a permit for the weapon. Fincher didn't do this. Thus, the arrest on his otherwise spotless record.

By all that I've prefaced this paragraph with, you should be asking, "how is such a tax possible since the 2nd Amendment of the U.S. Constitution guarantees the right to keep and bear arms without infringement?" Good point. You see, since 1934 the federal government has been justifying such a tax by alluding to the "interstate commerce clause" of the constitution, relying on the aforementioned "necessary-and-proper" clause to infringe upon the uninfringable: an explicit right enumerated in the Bill of Rights. Now you understand why it is the BATF, a division of the Treasury Department, who is investigating and prosecuting Mr. Fincher. But one major problem in this instance is that, presumably unlike most machine gun owners, Fincher didn't engage in any interstate commerce. In fact, he made much of the weapon himself! And, unlike weapons merchants who the courts have held are assumed to be engaged in interstate commerce due to the sheer volumes of guns they typically sell, Fincher is not an arms dealer.

Now, though the creation of a national bank is an implied right of the US Congress (according to the USSC), the right to keep and bear arms is an explicit right reserved for the states to handle. And guess what? Arkansas' constitution has already addressed that right. It guarantees Fincher "the right to keep and bear arms for the common defense" (Article 2, sec. 5) as well as guaranteeing that his militia be armed and equipped (Article 11, sec. 1).

But what good are these and other "rights" when the federal government can illegally and arbitrarily tax them to whatever degree they want? And what good is a "guarantee" in the Arkansas Constitution when the state figuratively sits on its hands while watching one of its own innocent citizens waste away in a federal prison located within the state's own borders?

I urge the state of Arkansas to assist Wayne Fincher in his fight against this encroachment by the feds, just as the US Government assisted James McCulloch in his plight against the state of Maryland. Because a right, by definition, should not be taxed.

8:27 PM, January 08, 2007  
Anonymous Anonymous said...

That is flawless legal reasoning Jason. You "get it", too bad most of our federal judges lack your grasp of constitutional issues.

8:29 PM, January 08, 2007  
Blogger Jason Sheppard said...

Thanks (Mark)! At first I wondered how someone could read the article in just 2 minutes, but then I realized you had re-posted the article right before replying.

10:19 AM, January 10, 2007  

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