Constitutional Review of Federal Tax Legislation

What does the Constitution mean when it says that “The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States” (U.S. Const. Article I, Section 8, Clause 1)? The definition of “tax” for constitutional purposes has become important considering the Supreme Court’s 2012 decision in National Federation of Independent Business v. Sebelius (“NFIB”), in which Chief Justice Roberts for the Court upheld the constitutionality of the individual mandate of the Patient Protection and Affordable Care Act (“ACA”) under the taxing power. This holding has resulted in commentators questioning the utility of Roberts’s distinction between a “tax,” where Congress’s power is nearly unlimited, and a “regulation,” where Congress’s power under the Commerce Clause is limited. We would propose a different distinction. A “tax” for purposes of the Taxing Clause is a pure tax: a tax implemented “to pay the Debts and provide for the common Defence and general Welfare of the United States.” Accordingly, a pure tax is intended primarily for raising revenue to finance the elected government’s policy and its implementation. Even a pure tax has constitutional limits; however, they are relatively few. The traditional bases for constitutional judicial review, such as discrimination based on gender, race, or sexual orientation, are applied to tax legislation in a very limited way. The Supreme Court has shown significant reluctance to review tax legislation in the U.S. on constitutional grounds. Nevertheless, one could argue that a tax provision that has a disparate impact on race, gender, or another protected category should be evaluated using strict scrutiny, as some provisions involving gender have been by lower courts. Other provisions should be reviewed on a rational basis ground, although we believe some of them should be struck down even on that basis. Pure taxes should be distinguished from regulatory taxes whose main purpose is not to raise revenue but are intended—in accordance with the rules of the free market—to impose the right economic price on those who financially benefit from the damages they cause to the whole community. Regulatory taxes include Pigouvian taxes, such as tobacco taxes and carbon taxes, which are designed to reduce negative externalities, and tax expenditures, which are negative Pigouvian taxes. They are designed to recognize the positive externalities that a particular behavior of a taxpayer that benefits the whole community. Therefore, all members of the community must compensate the taxpayer who created the positive externalities by paying the economic cost of the received benefit—through taxes higher than the taxes paid by the person who created the externalities. Regulatory tax legislation should be subject to constitutional review under various clauses of the Constitution, including the Due Process Clause, the Equal Protection Clause, the Establishment Clause, and the limits of the Commerce Clause. As discussed below, the “penalty” imposed by the individual mandate of the ACA, which was repealed in 2017, was a regulatory tax, not a pure tax, and therefore was subject to the limits on congressional power under the Commerce Clause, contrary to Chief Justice Roberts’s view. In our opinion, the individual mandate should have been upheld as consistent with these limits, per Justice Ginsburg’s dissenting opinion

Constitutional Review of Federal Tax Legislation

What does the Constitution mean when it says that “The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States” (US Const. Article I, Section 8, Clause 1)? The definition of “tax” for constitutional purposes has become important in light of the Supreme Court’s 2012 decision in NFIB v. Sebelius, in which Chief Justice Roberts for the Court upheld the constitutionality of the individual mandate of the Affordable Care Act under the taxing power. This has led to commentators questioning the utility of Roberts’ distinction between a “tax” (where Congress’ power is almost unlimited) and a “regulation” (where Congress’ power under the Commerce Cause is limited). We should make a very clear note at the outset: Tax law is a too broad term. It includes both provisions intended at raising revenue and provisions intended to regulate behavior. Personal income tax (PIT), corporate income tax (CIT) and even value added tax (VAT) laws include both type of provisions. Using the distinction that Prof. Stanley Surrey has proposed about 60 years ago, tax legislation includes both types of provisions; those that aimed at raising revenue in accordance with the tax base, and regulatory provisions as well ( tax expenditures ). In other words, almost any tax legislation includes both aspects. Hence referring to PIT means its base, and not necessarily all its code provisions. The purpose of this article is to draw this distinction and to use it for basic guidelines for constitutional judicial review over tax legislation. We would propose a different distinction. A “tax” for purposes of the Taxing Clause is a pure tax, namely a tax implemented “to pay the Debts and provide for the common Defence and general Welfare of the United States”, i.e., a tax intended primarily to raise revenues in order to finance the elected government’s policy and its implementation. In addition, a progressive “income tax” for purposes of the Sixteenth Amendment is a tax intended for redistribution of wealth from the rich to the poor. We do not address redistributive tax provisions (like the progressivity feature of PIT or a wealth tax) further, beyond noting that they are inherently political and therefore their distributive function (reducing inequality) should not be subject to judicial review. Even a pure tax has constitutional limits, but they are relatively few. It should be emphasized though, that the traditional basses for constitutional judicial review - such as discrimination on the basis of gender, race, or sexual orientation, are applied to tax legislation in a very limited way. As noted already, one could detect the Supreme Court’s significant reluctance to review tax legislation in the US on constitutional grounds, although one could also argue that a tax provision that has disparate impact on racial or gender grounds (or other protected category) should be evaluated using struct scrutiny (as some provisions involving gender have in fact been evaluated by lower courts). This should be distinguished from a regulatory tax legislation, i.e., tax legislation whose main purpose is not to raise revenue but to change taxpayer behavior. Regulatory taxes include Pigouvian taxes (e.g., tobacco taxes and carbon taxes) designed to reduce negative externalities and tax expenditures (deviations from a normative tax base, which we name negative Pigouvian taxes, since their purpose is to treat favorably taxpayers who create positive externalities). Regulatory Tax legislation should be subject to constitutional review under various clauses of the Constitution including the Due Process Clause, the Equal Protection Clause, the Establishment Clause, and the limits on the Commerce Clause. The penalty imposed by the individual mandate of the ACA, which was repealed in 2017, was a regulatory tax (i.e., not a pure tax) and therefore (contrary to Chief Justice Roberts’ view) subject to the limits on Congressional power under the Commerce Clause (although in our opinion the individual mandate should have been upheld as consistent with these limits, per Justice Ginsburg’s dissenting opinion). Any actual tax rule/legislation has more than one purpose. All tax rules influence behavior, and therefore come within our definition of regulatory taxes, and all taxes produce some revenue, and therefore come within our definition of pure taxes. But some taxes are primarily regulatory (e.g., Pigouvian taxes aimed to deal with negative externalities) and tax expenditures (deviation from a normative tax base which we name them Negative piguvian taxes since their purpose is to treat favorably taxpayers who create positive externalities) while others are primarily for revenue (e.g., VAT) . Other taxes have multiple purposes (e.g., corporate income tax, CIT, which has revenue and (as well as regulatory aims). Moreover, any given tax may have multiple provisions with different aims (e.g., the many tax expenditures embedded within PIT and CIT). When evaluating the constitutionality of any given tax provision, a court should first classify it as either a pure tax provision or a regulatory tax provision. If it is the former, the court should generally hold that it is constitutional under the Taxing Clause. If it is the latter, the court should evaluate it against the limits imposed by the rest of the Constitution

Altered Composition of Liver Proteasome Assemblies Contributes to Enhanced Proteasome Activity in the Exceptionally Long-Lived Naked Mole-Rat

The longest-lived rodent, the naked mole-rat (Bathyergidae; Heterocephalus glaber), maintains robust health for at least 75% of its 32 year lifespan, suggesting that the decline in genomic integrity or protein homeostasis routinely observed during aging, is either attenuated or delayed in this extraordinarily long-lived species. The ubiquitin proteasome system (UPS) plays an integral role in protein homeostasis by degrading oxidatively-damaged and misfolded proteins. In this study, we examined proteasome activity in naked mole-rats and mice in whole liver lysates as well as three subcellular fractions to probe the mechanisms behind the apparently enhanced effectiveness of UPS. We found that when compared with mouse samples, naked mole-rats had significantly higher chymotrypsin-like (ChT-L) activity and a two-fold increase in trypsin-like (T-L) in both whole lysates as well as cytosolic fractions. Native gel electrophoresis of the whole tissue lysates showed that the 20S proteasome was more active in the longer-lived species and that 26S proteasome was both more active and more populous. Western blot analyses revealed that both 19S subunits and immunoproteasome catalytic subunits are present in greater amounts in the naked mole-rat suggesting that the observed higher specific activity may be due to the greater proportion of immunoproteasomes in livers of healthy young adults. It thus appears that proteasomes in this species are primed for the efficient removal of stress-damaged proteins. Further characterization of the naked mole-rat proteasome and its regulation could lead to important insights on how the cells in these animals handle increased stress and protein damage to maintain a longer health in their tissues and ultimately a longer life

The Insulin-Like Growth Factor System in the Long-Lived Naked Mole-Rat.

Naked mole-rats (Heterocephalus glaber) (NMRs) are the longest living rodents known. They show negligible senescence, and are resistant to cancers and certain damaging effects associated with aging. The insulin-like growth factors (IGFs) have pluripotent actions, influencing growth processes in virtually every system of the body. They are established contributors to the aging process, confirmed by the demonstration that decreased IGF signaling results in life-extending effects in a variety of species. The IGFs are likewise involved in progression of cancers by mediating survival signals in malignant cells. This report presents a full characterization of the IGF system in the NMR: ligands, receptors, IGF binding proteins (IGFBPs), and IGFBP proteases. A particular emphasis was placed on the IGFBP protease, pregnancy-associated plasma protein-A (PAPP-A), shown to be an important lifespan modulator in mice. Comparisons of IGF-related genes in the NMR with human and murine sequences indicated no major differences in essential parts of the IGF system, including PAPP-A. The protease was shown to possess an intact active site despite the report of a contradictory genome sequence. Furthermore, PAPP-A was expressed and translated in NMRs cells and retained IGF-dependent proteolytic activity towards IGFBP-4 and IGF-independent activity towards IGFBP-5. However, experimental data suggest differential regulatory mechanisms for PAPP-A expression in NMRs than those described in humans and mice. This overall description of the IGF system in the NMR represents an initial step towards elucidating the complex molecular mechanisms underlying longevity, and how these animals have evolved to ensure a delayed and healthy aging process

The naked truth: a comprehensive clarification and classification of current 'myths' in naked mole-rat biology.

The naked mole-rat (Heterocephalus glaber) has fascinated zoologists for at least half a century. It has also generated considerable biomedical interest not only because of its extraordinary longevity, but also because of unusual protective features (e.g. its tolerance of variable oxygen availability), which may be pertinent to several human disease states, including ischemia/reperfusion injury and neurodegeneration. A recent article entitled 'Surprisingly long survival of premature conclusions about naked mole-rat biology' described 28 'myths' which, those authors claimed, are a 'perpetuation of beautiful, but falsified, hypotheses' and impede our understanding of this enigmatic mammal. Here, we re-examine each of these 'myths' based on evidence published in the scientific literature. Following Braude et al., we argue that these 'myths' fall into four main categories: (i) 'myths' that would be better described as oversimplifications, some of which persist solely in the popular press; (ii) 'myths' that are based on incomplete understanding, where more evidence is clearly needed; (iii) 'myths' where the accumulation of evidence over the years has led to a revision in interpretation, but where there is no significant disagreement among scientists currently working in the field; (iv) 'myths' where there is a genuine difference in opinion among active researchers, based on alternative interpretations of the available evidence. The term 'myth' is particularly inappropriate when applied to competing, evidence-based hypotheses, which form part of the normal evolution of scientific knowledge. Here, we provide a comprehensive critical review of naked mole-rat biology and attempt to clarify some of these misconceptions

The naked truth:a comprehensive clarification and classification of current 'myths' in naked mole-rat biology

The naked mole-rat (Heterocephalus glaber) has fascinated zoologists for at least half a century. It has also generated considerable biomedical interest not only because of its extraordinary longevity, but also because of unusual protective features (e.g. its tolerance of variable oxygen availability), which may be pertinent to several human disease states, including ischemia/reperfusion injury and neurodegeneration. A recent article entitled 'Surprisingly long survival of premature conclusions about naked mole-rat biology' described 28 'myths' which, those authors claimed, are a 'perpetuation of beautiful, but falsified, hypotheses' and impede our understanding of this enigmatic mammal. Here, we re-examine each of these 'myths' based on evidence published in the scientific literature. Following Braude et al., we argue that these 'myths' fall into four main categories: (i) 'myths' that would be better described as oversimplifications, some of which persist solely in the popular press; (ii) 'myths' that are based on incomplete understanding, where more evidence is clearly needed; (iii) 'myths' where the accumulation of evidence over the years has led to a revision in interpretation, but where there is no significant disagreement among scientists currently working in the field; (iv) 'myths' where there is a genuine difference in opinion among active researchers, based on alternative interpretations of the available evidence. The term 'myth' is particularly inappropriate when applied to competing, evidence-based hypotheses, which form part of the normal evolution of scientific knowledge. Here, we provide a comprehensive critical review of naked mole-rat biology and attempt to clarify some of these misconceptions

Blunted Neuronal Calcium Response to Hypoxia in Naked Mole-Rat Hippocampus

Naked mole-rats are highly social and strictly subterranean rodents that live in large communal colonies in sealed and chronically oxygen-depleted burrows. Brain slices from naked mole-rats show extreme tolerance to hypoxia compared to slices from other mammals, as indicated by maintenance of synaptic transmission under more hypoxic conditions and three fold longer latency to anoxic depolarization. A key factor in determining whether or not the cellular response to hypoxia is reversible or leads to cell death may be the elevation of intracellular calcium concentration. In the present study, we used fluorescent imaging techniques to measure relative intracellular calcium changes in CA1 pyramidal cells of hippocampal slices during hypoxia. We found that calcium accumulation during hypoxia was significantly and substantially attenuated in slices from naked mole-rats compared to slices from laboratory mice. This was the case for both neonatal (postnatal day 6) and older (postnatal day 20) age groups. Furthermore, while both species demonstrated more calcium accumulation at older ages, the older naked mole-rats showed a smaller calcium accumulation response than even the younger mice. A blunted intracellular calcium response to hypoxia may contribute to the extreme hypoxia tolerance of naked mole-rat neurons. The results are discussed in terms of a general hypothesis that a very prolonged or arrested developmental process may allow adult naked mole-rat brain to retain the hypoxia tolerance normally only seen in neonatal mammals