Abstract

https://ssrn.com/abstract=2754321
 


 



The Economic Foundation of the Dormant Commerce Clause


Michael S. Knoll


University of Pennsylvania Law School; University of Pennsylvania - Real Estate Department

Ruth Mason


University of Virginia School of Law

March 24, 2016

Virginia Law Review, Forthcoming
Virginia Law and Economics Research Paper No. 8
U of Penn, Inst for Law & Econ Research Paper No. 16-9

Abstract:     
Last Term, a sharply divided Supreme Court decided a landmark dormant Commerce Clause case, Comptroller of the Treasury of Maryland v. Wynne. Wynne represents the Court’s first clear acknowledgement of the economic underpinnings of one of its main doctrinal tools for resolving tax discrimination cases, the internal consistency test. In deciding Wynne, the Court relied on economic analysis we provided. This Essay explains that analysis, why the majority accepted it, why the dissenters’ objections to the majority’s reasoning miss their mark, and what Wynne means for state taxation. Essential to our analysis and the Court’s decision in Wynne is the idea that states are capable of discriminating not only on an inbound basis, but also on an outbound basis, and that the Commerce Clause prohibits discrimination on either basis. To aid in explicating our position, this Essay introduces the term “retentionism” as an analogue to protectionism. Whereas taxes or regulations are protectionist when they discourage outsiders from engaging in economic activities within a state, taxes or regulations are retentionist when then discourage in-state economic actors from engaging in out-of-state activities. As we show, the tax struck down in Wynne was both protectionist and retentionist.

Number of Pages in PDF File: 42

Keywords: dormant commerce clause, Wynne, tax discrimination, competitive neutrality, protectionism


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Date posted: March 25, 2016 ; Last revised: April 23, 2016

Suggested Citation

Knoll, Michael S. and Mason, Ruth, The Economic Foundation of the Dormant Commerce Clause (March 24, 2016). Virginia Law Review, Forthcoming; Virginia Law and Economics Research Paper No. 8; U of Penn, Inst for Law & Econ Research Paper No. 16-9. Available at SSRN: https://ssrn.com/abstract=2754321

Contact Information

Michael S. Knoll
University of Pennsylvania - Real Estate Department ( email )
Philadelphia, PA 19104-6330
United States

University of Pennsylvania Law School ( email )
3501 Sansom Street
Philadelphia, PA 19104
United States
215-898-6190 (Phone)
215-573-2025 (Fax)
Ruth Mason (Contact Author)
University of Virginia School of Law ( email )
580 Massie Road
Charlottesville, VA 22903
United States

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