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Not The Power To Destroy: An Effects Theory Of The Tax Power, Robert D. Cooter, Neil Siegel

Robert Cooter

The Supreme Court of the United States requires a tax power jurisprudence that is consistent with its restrictions on the Commerce Clause. Otherwise Congress could “tax” its way around any judicially enforceable limits on the commerce power. Existing case law, however, does not offer such jurisprudence. This paper provides the missing theory by analyzing constitutional text, structure, history, and precedent with help from economics. The key difference between a tax and a penalty turns on the effects of the exaction. Taxes raise revenues because they dampen behavior without preventing it for many people. Penalties, by contrast, raise little or no …