By Dave Kopel & Paul Blackman
National Review Online, July 29, 2003, 10:35 a.m.
Last Thursday, the District of Columbia government filed a lawsuit in federal district court claiming that the district has the constitutional right to impose a "commuter tax" on people who live in Virginia or Maryland, but who work in D.C. These Virginians and Marylanders cannot, of course, vote in D.C. elections. Yet without a trace of irony, the D.C. tax advocates are claiming D.C.'s current inability to tax people who can't vote in D.C. is a form of "taxation without representation."
When the Great Britain's parliament began to raise money by taxing American trade in the Revenue Act of 1764, Samuel Adams and other colonists objected to "taxation without representation." Americans weren't represented in the parliament, and accordingly parliament had no authority to tax the Americans, the Americans argued.
After parliament passed the Stamp Act in 1765, imposing even more taxes on the Americans, delegations from nine American states met for the first time in a continental Congress. They declared that "no taxes ever have been or can be constitutionally imposed on them, but by their respective legislatures." The conflict over taxation eventually led to the American Revolution, which eventually led a new city being built, which was called the "District of Columbia."
Part of the compromise which led to the successful creation of the Constitution of the United States was a guarantee that the nation's capital would not be located in any state. Nevertheless, the local government of Washington, D.C., had taken to perpetually bemoaning the fact that the city is not a state, and claiming that the lack of statehood means that it is suffering "taxation without representation."
The United States Constitution explicitly gives Congress complete legislative control over the District of Columbia. According to Article I, section 8, the people of the United States grant Congress the power:
To exercise exclusive Legislation in all Cases whatsoever, over such District (not exceeding ten Miles square) as may, by Cession of Particular States, and the Acceptance of Congress, become the Seat of the Government of the United States….
So unlike much of what Congress does, congressional legislative supervision of the District of Columbia is a legitimate exercise of an enumerated constitutional power.
In 1974, Congress chose to give the district more local decision-making power, with the D.C. Home Rule Act. Section 602 of the Act explicitly forbids the district's local government from imposing a commuter tax.
Congress has consistently rejected the district's lobbying campaigns to let the district impose a commuter tax. In response, the city government began offering automobile license plates with the words "taxation without representation."
The local government of D.C. used to prefer plates with the words: "Nation's Capital." But those words might remind readers of D.C.'s special constitutional status — of the fact that D.C.'s very existence as a city, and its honor of serving as the nation's capital, is predicated on the district not being a state.
The City Council is also changing the D.C. flag to include the words "No taxation without representation."
In the past, D.C.'s flag, based on the coat of arms of George Washington, has been one of the few flags admired by flag experts, since vexillologists like flags that can serve as battle flags, readily recognizable at a distance by friendly and enemy forces. Now D.C. is actually claiming that its new design is a "battle flag," but is mucking up the flag's clarity by adding written text across the stripes, with "DC" tacked onto the bottom of the white background.
The "battle flag" creators claim that George Washington would "clearly not support the way national leaders who have followed him have treated the area that bears his name." Given the great Virginian served as president of the Constitutional Convention, it is doubtful that he shares the city council's moral outrage at the Constitution's determination that the capital city cannot be a state.
Washington also served as a delegate to the 1773 Williamsburg Convention, in which Virginians passed a resolution declaring that taxation and representation could be not separated. In 1774 he wrote, "I think the Parliament of Great Britain have no more right to put their hands into my pocket, without my consent, than I have to put my hands into yours for money." There is no reason to believe that George Washington would support a "battle" so that Virginians from his own County of Fairfax could be taxed without representation.
The new D.C. lawsuit is junk litigation, akin to D.C.'s 1998 lawsuit (which was thrown out of court) claiming that D.C. not being a state was unconstitutional.
A spokesman for Rep. Tom Davis (R., Va.), who chairs the U.S. House subcommittee on the District of Columbia, observed that the new D.C. suit "is akin to calling the Constitution unconstitutional."
"Has Congress read the Constitution of the United States?" fulminated D.C. councilman Adrian M. Fenty, a remark which arouses suspicion that if Fenty has read the Constitution, he did not read Article I, section 8.
The district's lawsuit points out that most states impose taxes on income earned by non-residents. Several cities impose commuter taxes on people who don't vote in the city. (A recent study from the National Taxpayers Union shows that such taxes do not lead to lower taxes for residents of the city, or to more effective government; rather, commuter taxes drive business out of the city, most notably in Philadelphia, where the commuter tax has played a major role in the destruction of the city's economy.)
The mere fact that commuter taxes are imposed in some jurisdictions where Congress has no control does not mean that Congress is constitutionally required to allow such a tax in a jurisdiction where Congress has complete legal control. D.C. claims that Congress is unconstitutionally discriminating against the district, but Congress's decision that D.C. must use a particular tax policy is simply the kind of choice that Congress has explicit constitutional authority to make.
By analogy, all states have the authority to create rules of criminal procedure in their state courts, but D.C. has no such authority in its local courts, according to the Home Rule Act. When Congress chooses to enact for D.C. a particular criminal-procedure rule which is used by some states but not used by other states, the congressional choice does not mean that Congress is "discriminating" against D.C.
In the late 18th and early 19th centuries, people tended to be serious about opposing taxes without representation. It was not uncommon for citizens who owned property, and therefore paid taxes, in more than one county, to be allowed to vote in the elections of both counties. If you were taxed in a county, you were entitled to vote in that county.
It was also generally agreed that people who owned no property, and consequently paid no taxes, did not possess the independence required to participate responsibly in making decisions for society through voting.
Clearly, we've come a long way. Now, political parties try to register "homeless" people to vote. The fact that a person is destroying himself with alcohol abuse and refuses to hold a job, to care for his family, or to support himself, and is grossly irresponsible regarding every aspect of his life does not apparently disqualify him from exercising the responsibility of selecting public officials. Virginia's great Senator John Randolph of Roanoke despised the notion that property owners should be ruled and taxed according to the vote of "that ragged fellow staggering from the whiskey shop," whose "slattern who has gone there to reclaim him," while his children are "Running about, ragged, idle, ignorant, fit candidates for the penitentiary."
Conversely, any effort to allow persons who pay property taxes on second homes to vote in county elections is unconstitutional, supposedly a violation of the Due Process and the Equal Protection clauses. It's hard to find, though, a single sentence in the debate over ratification of the Fourteenth Amendment in which the proponents (whose main objective was to expand civil rights for Freedmen) said that the Amendment would require the imposition of taxation without representation on property owners.
In practical terms, resistance to "taxation without representation" has been replaced by a different policy: "Don't tax you, don't tax me, tax that fellow behind the tree." (The quote comes from Senator Russell Long, long-time chair of the finance committee.)
American legislators love the idea of passing as many taxes as possible off onto non-voters. Commercial property is normally taxed at higher rates than residential property, and residential property is more likely to be owned by a voter in the jurisdiction imposing the tax. Taxes on homes are effectively higher for non-residents, because residents are often entitled to "homestead exemptions" to which out-of-jurisdiction or other investment homeowners are not.
Taxes on hotel rooms and rental cars may be two or three times higher than other sales taxes, with most such taxes paid by persons not voting in the city, or even the state, which imposes the tax.
The District of Columbia collects plenty of revenue from people who are not represented in its local government. Commuters, as well as tourists, pay D.C.'s sales tax of 5.75 percent (higher than 41 states), plus a hefty 12 percent tax on commercial parking. D.C.'s hotel tax of 14.5 percent is among the highest in the nation. The non-government employers of all the D.C. commuters also pay corporate income taxes and property taxes to the district.
Notably, the D.C. government has never provided any data supporting its claim that commuters consume more city services than they pay for already.
D.C. council officials complain that Marylanders and Virginians don't pay for the police services and road maintenance that the D.C. city government provides. D.C.'s roads have many more potholes than streets in nearby counties, but the D.C. road system does at least rise to a standard of mediocrity. The same cannot be said for the police protection which D.C. supposedly provides to commuters while they are in the city.
The District of Columbia is routinely in contention for crime capital of the United States. An American is at greater risk of being killed in D.C. than he is in Iraq. Many commuters cannot walk a mile, or even a few blocks from their office without taking a serious risk of being attacked. Office buildings in D.C. have to make heavy expenditures for private security guards, indoor parking controlled by sturdy metal gates, and other measures.
D.C. has one of the worst police forces in the entire nation. The city government's aggressive racial discrimination policy for police hiring has resulted in many officers so sub-literate they can't fill out a simple police report, and so apathetic that they skip court appearances, as detailed by Tucker Carlson in a pair of 1993 articles in Policy Review. The police chief was recently given a raise, even though crime has been rising even faster than his salary. His underlings use overtime to game the system to earn over $100,000 per year.
More fundamentally, it is ridiculous to complain that the federal government is being unfair to D.C. because Congress won't let the city council squeeze more money out of neighboring state residents. The District of Columbia enjoys an amazing financial relationship with the federal government. In no state is the imbalance between gigantic federal spending compared to minute federal tax revenue as great as is the imbalance in D.C.
The district is granted federal aid at a rate many times above the national per-capita average. The district receives a special Congressional grant which is given to no state. Most of the great civic facilities of the district — the museums, the parks, the monuments, and the government offices — are built and maintained at the expense of the federal government. The other important facilities, such as the non-government art galleries, are privately funded. Virtually nothing in the district which makes the district attractive is created by the district's local government.
In a Cato Institute Policy Study, "Capital Crimes: Political Centers as Parasite Economies," Richard K. Vedder explains how capital cities of over-large governments, such as ancient Rome, the modern District of Columbia, and some state capitals prosper not by creating wealth, but by siphoning wealth from the rest of society. Vedder points out the "successful bureaucratic efforts to redistribute income from the general taxpaying public, largely living in outlying areas, to the political center." He observes that "The taxes that finance affluent capitals crowd out private sector activity that is relatively more efficient and productive than governmental activity."
As the Federal Farmer warned in 1788,
This city, and the government of it, must indubitably take their tone from the characters of the men, who from the nature of its situations and institution, must collect there. This city will not be established for productive labour, for mercantile, or mechanic industry; but for the residence of government, its officers and attendants.…If we expect it will have any sincere attachments to simple and frugal republicanism, to that liberty and mild government, which is dear to the laborious part of a free people, we most assuredly deceive ourselves.
California Senator S. I. Hayekawa made the same point in 1978: "The economics of Washington, D.C., make it a unique place. There is no seaport, no industry, no agriculture. There are no major money-making businesses, only one money-spending one — the Federal Government."
Thus, the economies of the District of Columbia, as well as suburban Maryland and Virginia, are to a large extent parasite economies funded by 48 other states. D.C. residents travel on an excellent and extremely expensive Metro subway system, for which D.C. residents paid only a fraction of the construction costs. The federal government continues to pay maintenance costs for the Metro at a higher rate than the subsidies it provides for mass transit in other cities.
The vast majority of D.C.'s economy revolves around federal employees, federal buildings, federal monuments, and federal museums, plus people who provide services (such as taxicabs, groceries, or lobbying) to federal employees, and tourists who come to look at all of the federal stuff. Yet only a tiny bit of the money to pay for all those federal activities comes from D.C. taxpayers.
There is a subtext in the dispute over the D.C. commuter tax, and that is the fact that D.C.'s government is notoriously corrupt, incompetent, and hypocritical.
Corruption is endemic, with the flamboyant corruption of Marion Barry now replaced by the casual indifference to corruption of the current government. The educational system in the district is an expensive joke, although not funny for its student-victims. The D.C. school system spends $10,852 per pupil — more per-pupil than any state except New York or New Jersey. Yet many students in the D.C. schools don't even have desks. Many classrooms are totally out of control; incompetent teachers are retained and rewarded; and principals worse than Dolores Umbridge are in charge of too many schools. With so much spending, where does all the money go, since it plainly doesn't go anywhere that helps students?
Amazingly, the D.C. government makes itself money by encouraging people to break tax laws. The district has the best variety of liquor at the most reasonable prices in the area. Montgomery County, Maryland, and Virginia both use socialist government-run liquor stores for hard liquor, and these stores offer a limited selection at very high prices; a brandy that costs $25 in D.C. might cost $45 in Virginia, if the government store even carries that brand.
Accordingly, plenty of D.C.-taxed liquor is sold to Marylanders and Virginians in the district. Indeed, if all the liquor sold in D.C. were actually consumed in D.C., the district would rival Russia for drunkenness.
Now of course the D.C. government knows that a lots of D.C. liquor sales, and lots of D.C. tax revenue, come from Maryland and Virginia residents who are buying in D.C. to evade taxes in their place of residence.
Compare what the D.C. government does with liquor with what was alleged in another of the D.C.'s government's junk lawsuits which got thrown out of court: the lawsuit against handgun manufacturers. Handgun manufacturers sell their guns only to federally licensed dealers. The federally-licensed dealers are allowed to sell handguns only to buyers who can prove that they reside in the same state as the gun store. Ever since the Gun Control Act of 1968, a Virginia gun store can only sell handguns to Virginians, not to people from Maryland, West Virginia, or D.C. No handgun manufacturer sells handguns to D.C. residents (other than police), because of the 1976 D.C. handgun ban. Yet the D.C. suit alleged that the handgun companies should be financially punished because some handguns sold outside D.C. were illegally smuggled into D.C.
So the gun companies are, according to D.C.'s theory, responsible for illegal smuggling even when they ensure that sales are made only to a lawful state resident who can produce proper in-state identification. In contrast, D.C. allows — and greatly profits from — liquor store sales made in D.C. to people who show Maryland or Virginia driver's licenses for identification!
We admit that some Marylanders buying booze in D.C. actually plan to consume it in D.C. — perhaps a bottle of scotch for an office party on K Street. But the D.C. government makes absolutely zero effort to prevent illegal liquor smuggling: there are no restrictions on quantity sales, no requirements that liquor stores not load boxes and boxes of booze into cars with Maryland or Virginia plates; no restrictions on liquor stores operating just a few feet inside the D.C. border and plainly catering to an illegal non-district clientele.
When Virginia began deploying state police to catch rum-runners carrying D.C. liquor, the district successfully pressured Virginia to stop using Virginia police to enforce Virginia's own laws by shadowing D.C. liquor stores.
In short, D.C. city government is making loads of money by facilitating the illegal trade in liquor. Casablanca's Claude Rains seems like a dedicated temperance crusader compared to the D.C. city government's collusion in criminal bootlegging.
Yet for people driving into D.C. for purposes other than evading liquor taxes, things are not so rosy. Like several other jurisdictions, the district now uses cameras to photograph vehicular misdeeds — running red lights, speeding — in order to give tickets to the owners of the vehicles caught breaking the law. The pretense is that such Big Brotherish actions are for safety. But it has been reported by the Washington Times that Washington's cameras are placed not where the danger is greatest but where the non-resident fundraising opportunities are greatest. The vast majority of funds raised come from Marylanders and Virginians, rather than from people who can vote in D.C.
The D.C. government sits at the top of the food chain of a parasite economy, but no matter how much it consumes, and how little it provides to its residents/victims, it is never satiated. The government won't buy desks for all its schoolchildren, but it eagerly spends money on frivolous lawsuits.
D.C.'s population is about 571,000, and about 80 percent of that population is over the age of 18, and thus theoretically eligible to vote. About 200,000 people actually do vote in D.C. There are about 500,000 people who would be subject to the D.C. commuter tax, and almost all of them are over 18 and eligible to vote. Thus, a D.C. tax would result in a government which was chosen by about 200,000 people imposing a tax on about 500,000 people not allowed to vote by that same government. A more extreme case of taxation without representation would be difficult to find in modern America.
The principle of "no taxation without representation" is much older than the American Revolution. It was recognized as a fundamental liberty even in the Middle Ages. When Spain's Duke of Alba attempted to force taxation without representation on the Netherlands in 1572, he precipitated a revolution that eventually led to Dutch independence. As the great 19th-century constitutional scholar Thomas Cooley explained, the essential check on the taxing power is that "In imposing a tax, the legislature acts upon its constituents."
For the D.C. council to attempt to impose taxation without representation on Maryland and Virginia commuters, while claiming that the imposition is part of a fight against taxation without representation, is brazen hypocrisy. The "taxation without representation" motto on the D.C. license plates represents not protest but policy.
— Paul Blackman and Dave Kopel are co-authors of No More Wacos: What's Wrong with Federal Law Enforcement and How to Fix It.