Taxes have been considered a form of regulation since the Founding. Concluding one doesn’t come with the other amounts to believing Congress delegated the use of economic nuclear weapons, but only nuclear weapons, even when a scalpel might better serve the same purpose.
In principle, I agree with the notion that our constitutional order does not imbue unlimited tariff power in the hands of a single individual. Setting aside that the Constitution itself doesn’t mention tariffs directly and previous decisions have held that the power can be delegated to the Chief Executive, we should all be honest enough to admit that your position on President Donald Trump’s tariffs are closely correlated with your position on President Trump himself. If you like the President, you are far more likely to support him wielding the power. If you dislike him, you are likely to believe he shouldn’t be able to do so. If the President were a Democrat rather than a Republican, say Senator Bernie Sanders was suddenly elevated to the office, the roles would be almost entirely reversed. Those championing tariffs now would not be doing so in that case, and those decrying them would become their staunch defenders. In this sense, Justice Neil Gorsuch’s concurring opinion striking down tariffs enacted under the International Emergency Economic Powers Act last week resonates. “For those who think it is important for the Nation to impose more tariffs,” he wrote, “I understand that today’s decision will be disappointing. All I can offer them is that most major decisions affecting the rights and responsibilities of the American people (including the duty to pay taxes and tariffs) are funneled through the legislative process for a reason. Yes, legislating can be hard and take time. And, yes, it can be tempting to bypass Congress when some pressing problem arises. But the deliberative nature of the legislative process was the whole point of its design. Through that process, the Nation can tap the combined wisdom of the people’s elected representatives, not just of one faction or man. There, deliberation tempers impulse, and compromise hammers disagreement into workable solutions. And because laws must earn such broad support to survive the legislative process, they tend to endure, allowing ordinary people to plan their lives in ways they cannot when the rules shift from day to day. In all, the legislative process helps ensure each of us has a stake in the laws that govern us and in the Nation’s future. For some today, the weight of those virtues is apparent. For others, it might not seem so obvious. But if history is any guide, the tables will turn and the day will come when those disappointed by today’s result will appreciate the legislative process for the bulwark of liberty it is.”
In another, the decision by the Court makes absolutely no sense and is deeply unsatisfying. While Justice Gorsuch specifically noted the taxes and tariffs that were struck down by the ruling, he failed to acknowledge the awesome, even more and still rather unspecified powers that six justices affirmed can be delegated to the President under the IEEPA and remain delegated to the President. Signed into law by President Jimmy Carter in 1977, the act in general allows a President to declare an “unusual and extraordinary threat … to the national security, foreign policy, or economy of the United States” that originates “in whole or substantial part outside the United States.” After the emergency is declared, it “provides the President broad authority to regulate a variety of economic transactions” and “sweeping powers to the President to control economic transactions” according to Congress.gov’s summary. As they put it, one of the key points underlying the bill was the reality that the Constitution itself wasn’t clear on these matters in the modern world and therefore a new approach was required, “The issue of executive discretion has been at the center of constitutional debates in liberal democracies throughout the twentieth and twenty-first centuries. Specifically, the question of how to balance a commitment to the rule of law with the exigencies of modern political and economic crises has been a consistent concern of legislators and scholars in the United States and around the world. The U.S. Constitution is silent on the question of how to handle emergencies. As such, over the past two centuries, Congress and the President have answered that question in varied and often ad hoc ways. In the eighteenth and nineteenth centuries, the answer was often for the President to act without congressional approval in a time of crisis, knowingly risking impeachment and personal civil liability. Congress claimed primacy over emergency action and would decide subsequently either to ratify the President’s actions through legislation or indemnify the President for any civil liability. By the twentieth century, a new pattern began to emerge. Instead of retroactively judging an executive’s extraordinary actions in a time of emergency, Congress enacted statutes authorizing the President to declare a state of emergency and make use of extraordinary delegated powers. The expanding delegation of emergency powers to executives, and the increase in governing via emergency power by executives, was a common trajectory among twentieth-century liberal democracies.”
Somehow, the Court managed to conclude that the regulatory power delegated to the President under the IEEPA does not bring with it the ability to levy tariffs because tariffs aren’t specifically mentioned and the taxing power originates with the Congress. In other words, it includes every other type of regulation included bans and outright embargoes, but not even the most minor tariffs. There are, perhaps needless to say, a number of problems with this even if you agree with the outcome. First, the regulatory power also resides with the Congress, according to the Constitution only the legislature has the ability to “To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.” If that authority can be delegated, so can taxing, and there is a reasonable argument that the two work together in many ways. In fact, taxation has been widely considered a potential form of regulation since before the Founding. In 2012, Law & Liberty considered, “Taxation v. Regulation: A Revolutionary Question.” As they noted, “the 1764 Sugar Act imposed a tax of three pence per gallon on all foreign molasses imported into the colonies. Actually, it was slightly more complicated than that. The Act reduced the old levy from 6 to 3 pence per gallon, and imposed a duty on other items as well. The act, officially called the ‘Revenue Act,’ set off howls of protest from the colonies. In part, this was simply an objection to the cost. The old Molasses Act of 1733 had been very loosely enforced, and the colonists often evaded it. But there was much more going on. The Sugar Act was an innovation. The innovation is directly on point for us. This was the first such regulation that was imposed for the purpose of raising revenue, rather than for the purpose of trade regulation. Previously, all such laws that imposed a charge did so to encourage certain behavior, and discourage other behavior. The purpose of imposing a high charge on the importation of foreign molasses was to make its use prohibitively expensive. So too with other such charges imposed by Parliament on trade within the empire. But this tax was created as a tax–its stated purpose was to raise revenue. Others would follow in its wake.” Nine years later, Thomas Rixen and Bridgette Unger wrote a research paper, “Taxation: A Regulatory Multilevel Governance Perspective.” They summarized the connection in the modern world by making four claims, “First, tax systems at the national, regional and global level are regulatory systems. They can and should be studied as that. Second, taxation is an important extension to regulatory scholars’ empirical field of inquiry. It is a hard case to test prominent theories of new, softer modes of governance. Third, in the era of liberalization and globalization tax governance exhibits similar institutional changes as regulatory governance. It has changed (1) from national to multi-level governance, (2) from public and direct to indirect with increased involvement of private actors, and (3) from hierarchical and coercive to cooperative and responsive. Fourth, since the global financial crisis, the new sites of tax governance have increasingly been involved in the fight against tax evasion and avoidance and have become more politicized.”
Needless to say, supporters of the decision would likely argue that regulation is specifically mentioned while taxes and tariffs aren’t and that is the fundamental divide. Since they reside in two separate sections of Article I, Section 8, they need to be called out separately in any bill delegating the power regardless of whether the power to regulate has generally included taxes since before the Founding. Legally, they might be right in a narrow sense, but logically arguing that one doesn’t come with the other amounts to believing Congress authorized the President to deploy the equivalent of economic nuclear weapons without their specific blessing – and only nuclear weapons, even when a scalpel might better serve the same purpose. Justice Gorsuch’s colleague, Justice Brett Kavanaugh made this aspect plain in his dissent when he noted that the 6-3 majority concluded that the IEEPA allows the President to block all trade with any country or any number of countries on his own, but not levy a penny in tariffs; meaning, President Trump cannot levy tariffs, but he can shut down imports entirely. As he put it, tariffs are a far more modest measures than quotas, other limitations, or outright embargoes of imports that the majority believes are delegated under the blanket term “regulation,” which suggest that they should clearly be seen as part of the acceptable spectrum. “If quotas and embargoes are a means to regulate importation, how are tariffs not a means to regulate importation? Nothing in the text supports such an illogical distinction,” and “As the [majority of justices] interpret the statute, the President could, for example, block all imports from China but cannot order even a $1 tariff on goods imported from China.” Does anyone truly think that was Congress’ intent, that the President was empowered to ban all imports entirely, to figuratively nuke trade, so long as he doesn’t tax it? To my knowledge at least, no one has made that argument, not even the majority justices themselves. Instead, they skirted around it, as if the law required them to be the equivalent of the Biblical Solomon and cut the baby in half for our benefit. Tariffs no, embargoes yes. For those like myself who tend to cynical, it’s enough to make one wonder if they ruled this way because something as drastic as an outright embargo on a major trading partner is likely to prompt a rebellion in Congress large enough for a veto proof majority to overturn it whereas, as we have seen with almost a year of President Trump’s tariffs, Congress has not taken enough of an interest to do anything. In other words, they were able to effectively nullify the statute without actually nullifying it.
On a more practical level at least, we see some evidence of that tendency in their failure to make any decision regarding refunds or what happens if a country subject to tariffs under this statute has agreed to a more favorable trade deal. To be sure, at least some of this hesitance may be because the Supreme Court isn’t the proper venue for deciding such things. As they describe their role themselves, “Article III, Section II of the Constitution establishes the jurisdiction (legal ability to hear a case) of the Supreme Court. The Court has original jurisdiction (a case is tried before the Court) over certain cases, e.g., suits between two or more states and/or cases involving ambassadors and other public ministers. The Court has appellate jurisdiction (the Court can hear the case on appeal) on almost any other case that involves a point of constitutional and/or federal law. Some examples include cases to which the United States is a party, cases involving Treaties, and cases involving ships on the high seas and navigable waterways (admiralty cases).” In this case, they couldn’t even come up with one, single decision and a corresponding dissent. Though six out of the nine ultimately voted to overturn the tariffs, they did so for a variety of different reasons leading to seven decisions in total counting the dissent. In fact, only three – Chief Justice John Roberts, Justice Gorsuch, and Justice Amy Coney Barrett – ruled against the tariffs under the major questions doctrine which holds that Congress needs to grant specific powers in clear language, and because they did mention tariffs in the IEEPA, they cannot have been delegated. Perhaps this shouldn’t be surprising when the Courts are not administrators, executors, or legislatures. They rule for or against, and in some instances like this one, they ruled somewhere in the middle, finding that the President has even more power than he was claiming, but not the power that he claimed. To me at least, that’s why I’ve always believed the Courts should do everything possible to stay out of disputes that are best handled between the legislative and the executive branches alone. Congress could, if it wanted, update, rescind, change, alter, or do whatever to the statute at any time. That they haven’t done so is indeed a choice which should be respected by the Court, rather than interfered with.
Confessions of a Conservative Atheist 