April 7, 2011

"Justice Kagan's First Dissent."

I admired it myself (for the nicely clear writing), but the Atlantic's Andrew Cohen is downright fawning?
She was even willing to spend some time offering a "hypothetical" to make her point -- just like they taught her at Harvard Law School. Justice Kagan wrote:
Our taxpayer standing cases have declined to distinguish between appropriations and tax expenditures for a simple reason: Here, as in many contexts, the distinction is one in search of a difference. To begin to see why, consider an example far afield from Flast and, indeed, from religion. Imagine that the Federal Government decides it should pay hundreds of billions of dollars to insolvent banks in the midst of a financial crisis. Suppose, too, that many millions of taxpayers oppose this bailout on the ground (whether right or wrong is immaterial) that it uses their hard-earned money to reward irresponsible business behavior. In the face of this hostility, some Members of Congress make the following proposal: Rather than give the money to banks via appropriations, the Government will allow banks to subtract the exact same amount from the tax bill they would otherwise have to pay to the U. S. Treasury. Would this proposal calm the furor? Or would most taxpayers respond by saying that a subsidy is a subsidy (or a bailout is a bailout), whether accomplished by the one means or by the other? Surely the latter; indeed, we would think the less of our countrymen if they failed to see through this cynical proposal.
Well, that is really spiffily written, but I don't see enthusing about her being "even willing to spend some time" writing it. Settle down, Andy. But you see why he's excited, don't you? It's been so demoralizing to liberals to have Justice Scalia writing readable, quotable dissents all these years while the other side of the Court has been so... boring.

30 comments:

Scott M said...

Given her softball stance and a facial profile that suggests a propensity to hang out under bridges waiting for the odd passing goat, I'm sure Justice Kagan would warmly welcome any news that's she's been able to excite a man.

rhhardin said...

It's a tedious bit of writing and wrong on top of that.

The Americans aren't interested in the legalities, but she's supposed to be.

Use a panel of distinguished judges instead of countrymen and the example doesn't work. Why is that?

Chris said...

The bailout hypo seems kind of silly, since these firms obviously need a lot more money than they pay in taxes. And Texas Monthly standing handles the other ones. See, e.g., Chris Lund's concession at http://prawfsblawg.blogs.com/prawfsblawg/2011/04/quick-question-about-arizona-christian-tuition-organization-v-winn.html.

jnseward said...

If the bad banks have just suffered billions of dollars in losses, how will a tax credit help them? Obviously they will not owe any taxes. Bad hypothetical.

traditionalguy said...

Is Kagan seriously arguing that legal fictions are fictional? That only exposes that SCOTUS decisions are based upon fictions. But it is OK when it is our fictions Staring Decisively down at us. We only argue when it is the other sides silly fictions.

MartyH said...

Pay Kagan in tax credits. Maybe then she'll see the difference between a tax credit and cash.

themightypuck said...

@rhhardin, you present Kagan with a catch-22. Using a panel of distinguished judges is what lead to the dissent and hypothetical in the first place.

themightypuck said...

led

zeppelin

you can lead a horse to water

Calypso Facto said...

Succinctly to the point, Marty. Love it!

Smilin' Jack said...

...we would think the less of our countrymen if they failed to see through this cynical proposal.

I wouldn't.

cubanbob said...

It's silly reasoning. By her logic, taken to its conclusion all tax credits and exemptions would be impermissible.
Whatever is being subsidized one can always find a connection to a religious viewpoint or belief. So therefore any tax credit or exemption would be invalid since it would be promoting some form of religion.

I wonder what the Amish think of subsidizing renewable energy, Catholics subsidizing Planned Parenthood and Bob Jones University paying taxes while Yale and Harvard Divinity are exempt.

Real American said...

that's what happens when an unqualified president nominates unqualified candidates for SCOTUS: lefty media get tingles up their legs when the justice can string 2 sentences together.

themightypuck said...

@cubanbob, The thorny implications of the broad language of the first amendment with respect to religion have been elegantly finessed by the Court. Thus you can't slaughter goats or eat peyote if those things are otherwise restricted and the state has a compelling reason for said restriction.

EDH said...

Rather than give the money to banks via appropriations, the Government will allow banks to subtract the exact same amount from the tax bill they would otherwise have to pay to the U. S. Treasury.

As I said in my comment on the prior post, the crucial distinction with a difference is between tax deductions and tax credits against tax liability, and refundable tax credits, which are pure "tax expenditures" irrespective of any existing tax liability.

And it appears Kagan walked right past that "distinction... in search of a difference."

Rich B said...

If you think everyone's money belongs to the government and it graciously allows you to spend it for your own purposes, sure Kagan's logic makes sense. This outlook is the reason that Congress is so agitated by "tax expenditures". Those damn citizens waste their money on frivolous or harmful things.

Nice work, MartyH!

WineSlob said...

Over Kagen the Press Goes All Ga-Ga
That She Presents a Dissent as a Ha-Ha
But the Genuine Reason
That Elena Does Please 'Em
Is She's All Rah-Rah O'er Corrupt Lefty Caca.

tim maguire said...

Prof., I'm curious about why you admire this excerpt given that it is patent nonsense. Either Kagan doesn't know that business losses are already deductible such that these companies would pay no taxes (as pointed out by commenters above) or, more likely, Kagan doesn't know the difference between a tax deduction and a tax credit.

If she meant tax credit, then she would be right, but it doesn't get her very far because it would simply be a bailout routed through the IRS--not quite the tax deduction scenario she is imagining or hoping we imagine.

Simon said...

"But you see why [Cohen]'s excited, don't you?"

I sure do. Justice Kagan is winsome and single, and maybe if he strokes her ego enough she'll look on me with favor...

Richard Dolan said...

Kagan is making a point about standing (an Article III concern), not the First Amendment. From that perspective, her argument is that the form in which the Gov't subsidizes a particular activity makes no real-world difference to the objecting taxpayer, and can't be the factor that distinguishes those with standing from those without. Standing is supposed to focus on the immediacy of the injury to the litigant asking the judiciary to resolve a particular dispute -- and the form in which the Gov't uses the tax system to provide a subsidy is far removed, logically and factually, from that inquiry.

Her point is true (obvious, really) as far as it goes. But the 'distinction without a difference' argument turns on accepting Flast's basic rationale. Flast has never made sense as a standing decision -- standing is supposed to separate those having a sufficient stake in the controversy from those who don't, and taxpayer standing (by definition) doesn't even try to do that. The majority refused to extend Flast to a different form of tax subsidy (indirect, and mediated by private decisionmaking) but the alternative was overruling Flast entirely. Scalia and Thomas wanted to get rid of Flast altogether.

The real raason (IMO) that the Court keeps Flast around is that, without it, the Court would largely become powerless to enforce the First Amendment. Without Flast, it would be the rare case where anyone would have standing to challenge Gov't taxing or spending decisions on First Amendment grounds. At the bottom of these 'standing' disputes is the allocation of power between the branches.

Carol_Herman said...

Here's how Noah Feldman phrases it:

"How did secularism emerge as the official test of constitutionality under the Establishment Clause."

His answer was to let a taxpayer step forward, and getting recognized by the Supreme's as "having standing."

I think the court's case was "Abington."

Meanwhile, Kagan is considered "Harvard quality." Meaning why get too surprised that she has brains? Sotomayor is just an embarrassment. But there were so many others, including David Souter, why quibble?

I still think Anthony Kennedy got pissed off when Roberts was named Chief Justice. And, he learned how to sell his soul via Sandra day O'Connor. Who used to negotiate with 4 justices ... that IF they let her write the majority opinion, she'd be the 5th vote.

Politics was never livelier. Except when William O. Douglas was marrying them younger and younger.

Oh, yeah. Orin Hatch is the go-to guy for candidates to "pass muster."

If, in 2012, Obama wins, again. You can just about kiss the Supreme-O's goodbye.

Sloanasaurus said...

The classic leftist view of our economy is that the state owns everything and allows you to keep stuff via taxation policy. To argue that giving you a credit on the taxes you would have paid rather than appropriating money fits that view.

But, more fundamentally, during a financial crisis, banks would not be earning money, and thus would not have taxes to keep... that's why it is a financial crisis.

Leo Ladenson said...

Not that spiffy. She didn't hyphenate the phrasal adjective "taxpayer standing" that modifies "cases." Hyphenating phrasal adjectives is a sure mark of a good stylist.

Titus said...

She's a big dyke. I bet her and Sonya do a little beaver bumping in the locker room.

hombre said...

The lucidity may vanish the next time she hires a new clerk. Time will tell.

cahlmeeishmael said...

Maybe the bank bailouts would have been marginally less offensive if, instead of the government giving money directly, it had included banks within the class of entities eligible for deductible charitable contributions. While that's a deduction instead of a tax credit, it would take the decision whether to provide money from the government and give it to private parties.

reader_iam said...

I so very often find Richard Dolan's contributions very helpful in trying to understand the thinking of lawyers,judges and justices in issues such as this (remember, I'm not a lawyer and am not [self- or otherwise] trained as one).

Thanks, Richard Dolan.

Megan said...

There is a fatal flaw with that argument, however. In order to get the "bailout" by simply not paying taxes that you would otherwise owe, you first have to have income upon which to pay the taxes. In most of the bailout cases, the bailout has come because there has been no income, or not enough income to even warrant the paying of taxes. This is a clever argument to make it seem as though reducing taxes IS actually a way of the government taking money from the poor to pay to the rich, when in fact, the government would have no funds in the first place if it had not already taken it from the rich.

Richard Dolan said...

Reader: you're welcome.

cubanbob said...

@themightypuck said...

in general yes but there have been a few exceptions for peyote and then there has been an exception for Santeria. It's more in the eye of the court than in any hard and fast standard to can be applied easily.

Duncan said...

"Thus you can't slaughter goats"

Actually the Supremes determined in the Hialeah Santeria animal sacrifice case (chickens), you can.

Church of Lukumi Babalu Aye v. City of Hialeah.

Since Kagan is a member of a highly protected sexual minority, anything she says must be effusively praised if you know what's good for you.