The Future of Taxpayer Standing in Establishment Clause Tax Credit Cases

Abstract

It is unusual for scholars and litigators who work in the Establishment Clause area to agree with what the Supreme Court has done to a doctrinal topic, particularly when that topic is standing. But that is what I do in this Article. While not the first piece to substantively address the Supreme Court’s recent decision in Arizona Christian School Tuition Organization v. Winn, it is the first to support that decision and its interpretation of the much-maligned Flast v. Cohen. Winn distinguished Flast and thus rejected taxpayer standing to challenge an Arizona law permitting taxpayers to claim a tax credit for donations made to school tuition organizations that provide scholarships to children attending private religious and non-religious schools. The decision has become fodder for those displeased with the narrow scope of the taxpayer standing exception, those numbering Flast’s days or already mourning its death, and those who believe the Roberts’ Court has invoked standing to avoid deciding Religion Clause cases because a new, more permissive jurisprudence in this area is afoot.

Rejecting each of these assessments, this Article offers a more realistic appraisal of the taxpayer standing doctrine and what Winn portends for future Establishment Clause tax credit challenges. It advocates for Flast’s preservation, advancing a normative, conscience-based theory of taxpayer standing that recognizes government-compelled taxing and spending scenarios wherein a taxpayer’s pocketbook harm implicates the conscience injury protected by the Establishment Clause. When the Flast exception is viewed in this light, Winn presents an example of doctrinal stability, not unrest.

Any article endorsing Winn would be incomplete without confronting Justice Kagan’s superbly written dissent, which predicts the complete demise of the taxpayer standing exception. I argue that Justice Kagan exaggerates the reach of Winn by ignoring the nub of the injury in Flast, conflating the legal incidence of tax credits and government expenditures in this area, overstating the potential for underenforcement of the Establishment Clause, and incorrectly assuming that the Flast exception applies to state taxpayers in federal court. More legitimate, however, is Justice Kagan’s larger fear that Winn encourages government(s) to launder direct financial aid to religion by using tax credits in lieu of direct appropriations. I acknowledge this policy-based failure and examine three potential legal solutions in the tax credit arena: abandoning the rule against taxpayer standing, creating taxpayer standing by statute, or allowing such actions to be brought in a non-Article III court. Ultimately, I conclude that the Judiciary remains the best protector of the purpose and consistency of the taxpayer standing doctrine, even if it is not a perfect guardian.

Keywords: Article III power, standing, taxpayer standing, First Amendment, Establishment Clause, law and religion, federal courts, jurisprudence, jurisdiction, civil procedure, litigation with the federal government, constitutional law, separation of powers, tax