A Tax or Not a Tax: That is the Question

Green Bag 2d, Vol. 14, p. 368, Summer 2011

Case Legal Studies Research Paper No. 2011-31

5 Pages Posted: 3 Nov 2011

See all articles by Erik M. Jensen

Erik M. Jensen

Case Western Reserve University School of Law

Date Written: August 3, 2011

Abstract

This piece is part of the author’s probably misguided effort to take seriously the Sixteenth Amendment phrase “taxes on incomes.” The piece (in form a letter to the editor, but complete with footnotes!) responds to a reader who had noted that, because of a cap, the basic Social Security “tax” does not reach higher levels of income. Because the author had earlier argued that a tax “on” incomes should result in higher tax liability for higher-income persons, it might seem that the Social Security levy is unconstitutional (or the author just wrong). This piece makes several points: (1) The Social Security levy might be understood as payment for a specific benefit, a retirement and disability plan, not a tax. If so, constitutionality would not depend on the taxing power. (2) Even if the levy is a tax, it might still be treated as a “tax on incomes” because by far most Americans have income less than the cap and therefore do pay an amount tied to income. (3) In any event, there are serious issues here, and no court has explicitly addressed the relationship between Social Security levies and the taxing power.

Keywords: tax on income, income tax, Sixteenth Amendment, direct tax, apportioned tax, OASDI tax, capped tax, social security, constitutional law

JEL Classification: K34

Suggested Citation

Jensen, Erik M., A Tax or Not a Tax: That is the Question (August 3, 2011). Green Bag 2d, Vol. 14, p. 368, Summer 2011; Case Legal Studies Research Paper No. 2011-31. Available at SSRN: https://ssrn.com/abstract=1954009

Erik M. Jensen (Contact Author)

Case Western Reserve University School of Law ( email )

11075 East Boulevard
Cleveland, OH 44106-7148
United States
216-368-3613 (Phone)
216-368-2086 (Fax)

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