Constitutional Corner – When Governments Take Your Taxes

Is there anything more American than a good tax protest?

From the Boston “Tea Party” on 16 December 1773, to the nine other colonial “tea parties” which followed it,[1] to the 1794 Whiskey Rebellion, to the 1828 “Tariff of Abominations, to the 2009 protests which gave birth to the modern Tea Party movement, Americans have repeatedly and vividly demonstrated their love affair with tax protests.

Last week we examined the constitutionality of eminent domain as a means governments have of taking your property and the restrictions placed on that power by the Takings Clause of the Fifth Amendment; today we will examine the more “traditional” method governments use to extract your wealth, your property: taxes.

Let’s be clear; as long as there is to be government, a government which provides legitimate, Constitutional services and which keeps its citizens safe from attack, that government requires revenue. “Money is the nerve – the life and soul of a government.”[2]

Conservatives, particularly Tea Party types, are often unfairly accused of rejecting the whole concept of taxes.  I don’t think anyone disputes the necessity of taxes, or the futility of trying to completely avoid them.  In a 1789 letter to Jean-Baptiste Leroy, Benjamin Franklin wrote: “Our new Constitution is now established, and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes.

Taxes, in some form or another, are unavoidable if we are to have a functioning government.  The dispute lays principally in what is the proper level of taxation, i.e. how much revenue does government actually need to perform its constitutional duties, what form of taxes will it employ, and how and from whom are these taxes to be collected?   One final concern is expressed in Thomas Jefferson’s view in the Virginia Statute of Religious Freedom that: “To compel a man to furnish contributions of money [i.e. taxes] for the propagation of opinions which he disbelieves and abhors, is sinful and tyrannical.”

We should note that, under the Constitution, taxes are only one means our government has to raise revenue; they can set the value of money so as to make a profit on its creation, they can sell stamps at a profit, and, as we will see shortly, in Article 1, Section 8, Clause 1 they can also set duties, imposts and excises on imports and other goods, which were the primary means the federal government used to fund its activities up until the Civil War.

The Bible contains guidance on both the administration of as well as the payment of taxes. Exodus 30: 11-15 provides for a “half a shekel” capitation tax on everyone 20 years or older. This was not a progressive tax; it was a “flat tax” (in today’s parlance).  Verse 15 states: “The rich shall not give more and the poor shall not give less than half a shekel.”  Ezekiel 46:18 condemns the idea of an inheritance tax, such as we have today.  Both Jesus[3] and Paul[4] supported the idea of paying justly due taxes.

Today’s federal government is bloated with unconstitutional agencies, functions and services, requiring a level of taxation that many Americans find objectionable. Why should anyone have to work until “Tax Freedom Day”[5] before they are truly working for themselves?

The U.S. has nearly the highest corporate tax in the world;[6] the highest among the 34 nations that make up the Organization for Economic Co-operation and Development.  In 1952, the U.S. personal income tax rate reached a high of 92% (back down to 35% today).  Unfortunately, our current level of progressive taxation does not provide the revenue that Congress has appropriated to be spent (that is a separate story), requiring the government to borrow vast sums, unimaginable sums, which will likely never be repaid.  Furthermore, due to the great number of Americans who pay no income taxes and receive services nevertheless, many today see the taxation system as a wealth re-distribution system in disguise, taking from the “rich” to give to the “poor.”

In the colonial period, taxes imposed by the British Parliament without the accompanying representation of the colonies in Parliament, were of course one of the main reasons, but not the only reason for the colonies seeking independence; “Imposing Taxes on us without our Consent” was only one of twenty-nine complaints Jefferson listed in the Declaration.

The inability of the Articles of Confederation Congress to tax the states (they could only ask for “contributions”), and the hardship this imposed on the war effort, led to the several provisions we have today in the body of the Constitution dealing with taxes (ignoring the 16th Amendment for the moment).  These include (emphasis added):

Article 1 Section 8, Clause 1, which states: “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; but all Duties, Imposts and Excises shall be uniform throughout the United States.”

Article 1, Section 9, Clauses 1, 4 and 5 state: “The Migration or Importation of such Persons as any of the States now existing shall think proper to admit, shall not be prohibited by the Congress prior to the Year one thousand eight hundred and eight, but a Tax or duty may be imposed on such Importation, not exceeding ten dollars for each Person.

No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or Enumeration herein before directed to be taken.

No Tax or Duty shall be laid on Articles exported from any State.”

Let’s discuss these provisions one at a time.  The clear reading of Section 8, Clause 1 shows taxes were intended to be simply a revenue-raising mechanism; and the revenue thus raised to only be used to “pay the debts and provide for the common Defence and general Welfare of the United States.”  Over the years, the Supreme Court, in addition to corrupting the original meaning of “general Welfare,” also relaxed previous rulings that taxes should be used solely for raising revenue.  Although the idea of using taxes to discourage consumption was discussed at the 1787 Convention,[7] in 1937 (Steward Machine Co. v. Davis), the Court allowed taxes whose sole purpose was to “encourage” states to adopt laws for funding the unemployment compensation feature of Social Security.  In 2012’s infamous Obamacare case (National Federation of Independent Business v Sebelius), Chief Justice John Roberts allowed the individual mandate’s non-compliance penalty to be sustained as a tax, a “tax” clearly designed to “encourage” people to purchase health insurance and punish those who do not.

Section 9, Clause 1 allowed a tax not exceeding $10 to be assessed on imported slaves even though the slave trade itself could not be prohibited for twenty years — which it was, the moment Congress was free to do so.

Clause 4 requires that a capitation (literally, a tax on each person) or otherwise direct tax on individuals can only be assessed against the states if it is proportioned with respect to the population in each state.  If Virginia had 15% of the total U.S. population they would be required to come up what amounted to 15% of the total tax to be collected.  This is somewhat analogous to the requisition-scheme during the Articles of Confederation period where the amount asked of each state was related to the land values in that state.

Clause 5 prohibits Congress from levying any tax or duty on goods exported from a State.

And then we come to the 16th Amendment.  For long periods of our nation’s history, “no citizen saw a tax collector of the United States unless that citizen was in the business of importing foreign goods.”[8] Until the onset of the Civil War, the federal government obtained most of the revenue it needed from tariffs on imports (one reason the “Tariff of Abomination” became such an issue).  Tariff income was insufficient to fight a war, however.  To pay for the cost of the Civil War, Congress passed the Revenue Act of 1861. It consisted of a flat tax of 3% on annual incomes above $800 ($22,200 in today’s dollars). The following year, the Revenue Act of 1862 substituted a graduated tax of 3–5% on income above $600.  The 1862 act expired in 1866 and the government was back to tariffs, imposts and excises.

Various interest groups advocated re-adoption of an income tax in 1887 and 1892.[9] The Income Tax Act of 1894 (aka the Wilson-Gorman Tariff of 1894) imposed income taxes on any “gains, profits and incomes” in excess of $4,000 (taxed at 2%).  The following year, in Pollock v. Farmers’ Loan & Trust Company,[10] the Supreme Court ruled that unapportioned income taxes, like those in the 1894 statute, were, in effect, direct taxes, and were unconstitutional because of the requirement that all direct taxes be apportioned.

And there things stood until 1909: Congress could not raise revenue by taxing income, it would take a Constitutional Amendment.

On June 16, 1909, President William Howard Taft addressed Congress and proposed a 2% federal income tax on corporations by way of an excise tax (remember that).  He also proposed a constitutional amendment to implement his idea.  Less than a month later, on July 12, 1909, Congress passed a resolution proposing the Sixteenth Amendment and submitted the amendment to the states for ratification.  On February 25, 1913, Secretary of State Philander Knox proclaimed that the amendment had been ratified by the required three-fourths of the states.  Had it?  That is the subject of The Law That Never Was, which you can buy in book form or find around the web in abridged form.

The book’s author, Bill Benson, contends that the 16th Amendment was never legally ratified.  He claims:

Seven states[11] did not ratify the amendment, and this fact was reported accurately.

Two states[12] did not ratify the amendment, but Secretary of State Philander Knox reported that they did.

Eight states[13] were reported by Secretary Knox as having ratified the amendment, but the States actually have missing or incomplete records of the ratification procedures or votes, and there is no conclusive record that they ratified the amendment or reported any ratification to the Secretary of State.

Six states[14] did approve the amendment, but the Governor or another official who was required by their respective state constitutions to sign the legislation into law did not sign the legislation.

In twenty-five states[15] the legislature violated a provision of its state constitution during the ratification process.

Twenty-nine states[16] violated their state law or procedural rules during the ratification process.

Unfortunately, the Supreme Court has been unwilling to accept the argument that the Amendment was not properly ratified; the many people who have taken this argument into court have lost every time.  Since the Constitution is silent as to what constitutes a proper amendment ratification, the Court has said the issue sits with Congress, and Congress accepted the certifications of Secretary of State Knox, discrepancies and all.  Case closed, at least on this issue.

There is another issue surrounding the 16th Amendment however: the commonly held belief that the 16th Amendment requires everyone to pay taxes on their income “from whatever source derived.”  First we should note that the 16th Amendment, by itself, did not make taxing anything lawful, Congress still needed to pass statute law setting up a tax structure.

And that’s where things get interesting.  Peter Eric Hendrickson has studied carefully what Congress actually passed in our tax code and he contends, in “Cracking the Code- The Fascinating Truth About Taxation In America,” that the vast majority of Americans have been dutifully paying taxes on “income” that they shouldn’t have.  Unfortunately, no one in the government is going to say: “You’re doing it wrong,” they are more than happy to have the “contributions.”   I’m not going to try to explain all the reasoning behind Hendrickson’s claims, because I confess to not understanding all of it myself.  But this document and Hendrickson’s book are worth the read (I’ve read the book).  The author sums his whole argument by stating:  “As written, the ‘income tax’ remains a proper excise, and as such, doesn’t apply to the earnings of most Americans.”  Read the book and decide for yourself.

Moving on; nearly everyone agrees that our current tax code (whether the 16th Amendment is being interpreted correctly or not) is a complete disaster and in need of reform.  At 60,000 pages it is obviously too complex, written in language that only a tax accountant or lawyer can understand, and contains so many loopholes that many corporations and individuals alike pay no tax whatsoever.  There have been near non-stop attempts by the Congress to reform the tax code – both the Senate and House have committees at work year round – without any meaningful reform emerging.  The reason for this lack of progress is clear: no one wants to give up their hard-fought-for tax advantage.

In his superb book: “By the People, Rebuilding Liberty Without Permission,” Charles Murry shows why we are unlikely to ever completely abandon our present tax structure in favor of a Flat Tax or Fair Tax (the two main contenders to replace the current system — here’s a comparison of them): “institutional sclerosis.”  Institutional sclerosis results in advanced democracies like ours (don’t shoot me, I know we have a republic, not a democracy, I’m using Murray’s terminology) becoming unable to make significant changes due to “the dynamics of collective action.”  These dynamics are easy to illustrate but beyond the scope of this essay.  Suffice it to say that, despite widespread agreement that the tax system is “broken,” the present system nevertheless contains some feature or another, some deduction, some benefit, that each of us will fight to retain, be it the home mortgage deduction, or the educational deduction, or the charitable deduction, or whatever. (I’ll have more to say about Murray’s book in a later essay – it is a book every American should read.  Get a head start by buying or borrowing a copy now.)

On tomorrow’s “We the People” radio show we’ll be discussing our current tax fiasco and we will devote the second half of the show to an analysis of both the Flat Tax and Fair Tax proposals (as we understand them).  I encourage you to call in to tell us what you think Congress should do.  You may also use this simple survey to tell us what should be done (note: only one response per computer is allowed).

Of course, nothing’s going to happen until sufficient Americans are willing to communicate with their Congressmen and women and demand the system be fixed.  I guarantee Congress will act once enough people demand they act.

[1] See Ten Tea Parties; Patriotic Protests That History Forgot, by Joseph Cummins, Quirk Books, Philadelphia, 2010.

[2] Edmund Randolph, 7 June 1788, at the Virginia Ratifying Convention.

[3] Matthew 22:17-21

[4] Romans 13:6-7

[5] Defined as “the day when the nation as a whole has earned enough money to pay its total tax bill for the year,” April 24th this year.

[6] The third highest general top marginal corporate income tax rate in the world at 39.1 percent, exceeded only by Chad and the United Arab Emirates.

[7] The Original Constitution, What it Actually Said and Meant, by Robert Natelson, Tenth Amendment Center, 2011, p. 88.


[9] The Socialist Labor Party in 1887, and the Populist Party in 1892.

[10] Pollock v. Farmers’ Loan & Trust Company, 157 U.S. 429 (1895).

[11] Connecticut, Florida, Oregon, Pennsylvania, Rhode Island, Utah, Virginia.

[12] Kentucky and Tennessee.

[13] Delaware, Michigan, Nevada, New Hampshire, South Dakota, Tennessee, Vermont and Wyoming.

[14] Idaho, Iowa, Kentucky, Minnesota, Missouri, Washington.

[15] Arizona, Arkansas, California, Colorado, Georgia, Idaho, Illinois, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Mississippi, Missouri, Montana, New Jersey, New Mexico, North Dakota, Tennessee, Texas, Vermont, Washington, West Virginia and Wyoming.

[16] Arizona, Arkansas, California, Colorado, Georgia, Idaho, Indiana, Iowa, Kentucky, Louisiana, Maryland, Massachusetts, Minnesota, Mississippi, Missouri, Montana, Nebraska, New Jersey, New Mexico, New York, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Vermont, West Virginia and Wyoming.

The Constitution’s Week in Review – 12 March 2016

Article 2. Natural Born Citizen Clause (to be continued until it is definitively settled).

Another suit[1] challenging Ted Cruz’s eligibility and another suit dismissed on a technicality, this time for missing a New York filing deadline. Still no ruling on the merits of the case.

Article 3. Replacing Scalia

Judge Robert L. Wilkins’ name wasn’t on the first list I saw of possible replacements for Antonin Scalia. This article[2] reads like someone is suggesting the President consider Wilkins.

He was nominated by President Obama to a District Court position in 2010 and unanimously confirmed, but three years later, when Obama tried to elevate Wilkins and two others to the District of Columbia Appeals Court, Republicans in the Senate blocked all three nominees, arguing that the court didn’t have sufficient workload to justify filling its three open positions (there are anywhere from 6 [1st Circuit] to 29 [9th Circuit] seats on an appeals court but cases are normally only heard by three-judge panels instead of “en banc,” meaning by the entire court).

Republicans actions infuriated Democrats enough that Harry Reid exercised what’s became known as the “nuclear option,” changing the Senate rules so that only 51, rather than 60, votes were needed to advance a nomination. Wilkins was ultimately confirmed, 55 to 43, a reasonably close vote. This would indicate that, were he to be nominated to the high bench and actually given a confirmation hearing, he would come under close scrutiny.

Apparently not taking the hint over Wilkins, later in the week it was leaked[3] that the President had narrowed his list of potential nominees to five. Surprise, surprise, four of the five donated to his election campaign. Federal judges Sri Srinivasan ($4,250), Jane Kelly ($1,500), Paul Watford ($1,000) and Ketanji Brown Jackson ($450) were all donors. Judge Merrick Garland apparently had enough sense not to do so. I wonder whether these judges could be impartial when hearing a case challenging executive orders. Hmmm.

First Amendment. “It’s not over till its over”

 Those concerned with the Supreme Court’s ruling in Obergefell v. Hodges (homosexual marriage) can take heart in the Alabama Supreme Court’s opinion this week that Alabama judges are bound to follow existing Alabama law, which prohibits the issuance of marriage licenses to homosexual couples, rather than the U.S. Supreme Court’s Obergefell opinion. The decision, although lengthy, should be read in its entirety and may be downloaded here.[4] Justice Moore quotes extensively from Chief Justice John Roberts dissent in Obergefell[5] (which you should also have read by now)

Justice Moore’s ruling (and the Supreme Court’s Obergefell ruling) can be best summed by this statement from Moore’s opinion: “That a majority of the [U.S. Supreme] Court may identify an “injustice” that merits constitutional correction does not dispense with the means the Constitution has provided in Article V for its own amendment. Although the Court could suggest that the Constitution would benefit from a particular amendment, the Court does not possess the authority to insert the amendment into the Constitution by the vehicle of a Court opinion and then to demand compliance with it.”

Please help ensure that Justice Moore’s opinion is passed to all who you think are (or should be) interested. Perhaps other states will take similar action.

 The Gall! I had never encountered the word “hubris[6] before the word was used derogatorily of the last Bush administration.   Now that I know what the word means, I see examples of it all the time, principally in the way the Obama administration acts towards “mere citizens.”

But this takes the cake: apparently the Justice department has held discussions[7] (and may still be doing so, for all I know) over whether it would be appropriate to bring civil charges against those speaking out against “climate change.” Freedom of thought and speech be damned, there is only one “truth” for this administration, and it will be enforced!

Property Rights. Want to build a pond on your land? Have all the state permits required? Be careful before you start digging, the EPA demands you also get their OK. Good luck with that.

The EPA and Army Corps of Engineers make tens of thousands of determinations each year that private property contains wetlands protected under the Clean Water Act (CWA). On March 30th, the Supreme Court will hear oral arguments in U.S. Army Corps of Engineers v. Hawkes Co. The case will decide whether landowners have access to the courts to challenge EPA rulings that their property contains such wetlands and thus makes them subject to federal regulation.

This coming Monday, March 14, from 12:00pm – 1:30pm, the CATO Institute will host Shauneen Werlinger, Legal Fellow at the Pacific Legal Foundation; and Steven Eagle, Professor at George Mason University School of Law to discuss this issue, focusing on the question: What recourse do landowners have when federal agencies decide that private property contains wetlands?

Thirty states are now suing to overturn the newest CWA rule expanding power over “waters of the United States,” but invalidating that rule won’t change existing federal control over individual landowners if the agencies continue to assert similarly overbroad judicial review authority. If you are concerned about this issue I encourage you to tune in to the CATO live event. I’m concerned, I’ll see you there.

 Constituting America’s 90-Day Study

There’s talk of the Republicans having a “contested” nominating convention this summer. Ever wonder how political party nominating conventions got their start? This essay by Professor Joseph Postell answers that question, as well as who encouraged the strengthening of the two-party system.

Upcoming Events.

Redefining Humans. It’s not too late to register for Dr. Mark Jumper’s presentation Monday night, 14 March, as part of the Foundation for American Christian Education’s Lessons in Liberty series. $10 will get you into the FACE classroom in Chesapeake, VA or provide you with the online streaming link to watch the presentation from the comfort of home. From the flyer:

“Our times have seen revolutionary changes in the norms of sexual and social beliefs and practices that, far from just changing norms, alter the very definition of human beings and of social structure. Dr. Jumper will name and analyze these trends and propose redemptive Christian responses, both of thought and of practice.” to register.

Constitution Seminar for adults – 26 March. Mark your calendars; I’ll be holding a Constitution Seminar for adults on Saturday, 26 March from 9am to 6pm here in York County, VA. Space will be limited. Cost is $30 per adult, which gets you a 150-page student workbook, pocket Constitution, 150-page workbook and a whole lot of Constitutional knowledge. Email to register.

Constitution Seminar for Youth – 9 April. The Constitution seminar scheduled for March 5th has been postponed to permit more 10-15 year olds to attend. Same time (9-5), same location (Foundation for American Christian Education classroom in Chesapeake, VA), same focus (Juliette Turner’s “Our Constitution Rocks”). Register through email to

Constitution Seminar – 16 April. On Saturday, 16 April, I hope to be in the Valley Forge, PA, area presenting another Constitution Seminar in conjunction with WFYL Radio. Valley Forge was CLI’s inaugural 1-day seminar, the success of which led me to adopt the format as my standard. Save the date if you live in that area; details later.

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Constitutional Corner – America’s Fundamental Principles: Economic Freedom.

Open as PDF

Our last entry in the fundamental principle “sweepstakes” is the principle of economic freedom. Economic freedom encompasses several sub-principles: the freedom to acquire and use property; the freedom to engage in economic activity, i.e. buying and selling; freedom of contract, and others.

Economic Freedom was very much a part of the overall call for liberty in the colonies; for more than a hundred years Parliament had been passing laws which made life more difficult for America’s merchants and indeed for most citizens, as certain goods become the subject of protective tariffs (protective of British merchants in England and the West Indies mostly) and thus more expensive.

Beginning with the Navigation Acts of 1630 and ending with the nefarious Townsend duties on glass, lead, paints, paper and tea in 1767, the colonies had become England’s “cash cow” and the colonists didn’t appreciate the status one bit. Duties, imposts and taxes all served to deprive the colonists of a portion of their property, and this without true representation in Parliament.

“Pennsylvania Farmer” John Dickinson put it this way: “[W]e cannot be free, without being secure in our property … we cannot be secure in our property, if, without our consent, others may, as by right, take it away …”[1]

Supreme Court Justice William Paterson expressed a similar view in 1795. “No man would become a member of a community, in which he could not enjoy the fruits of his honest labour and industry.”

The Declaration of Rights and Grievances of the Stamp Act Congress (October 19, 1765) complained of Parliament’s incessant imposition of duties and proclaimed that it was “unreasonable and inconsistent with the principles and spirit of the British constitution, for the people of Great Britain to grant to his majesty the property of the colonists.”

The Declaration and Resolves of the First Continental Congress (October 14, 1774) had stated the colonists were entitled to “life, liberty and property: and they have never ceded to any foreign power whatever, a right to dispose of either without their consent.”[2]

The Declaration of the Causes of Taking-up Arms of the Second Continental Congress stated the colonists had taken up arms for: “the protection of our property, acquired solely by the honest industry of our fore-fathers and ourselves, against violence actually offered.”

To top it off, several of the complaints Jefferson made in the Declaration of Independence sprang from economic arguments the colonists had been making for years.

A war of independence ensued — hazarding their “lives, fortunes and sacred honor” — all to protect economic and other freedoms.

The Freedom To Acquire And Use Property.

The private ownership of property was seen by the Founders as fundamental to the concept of ordered liberty and was among the rights most consistently stated by the Founders. It is perhaps best elucidated in the Virginia Declaration of Rights, which comprises Article 1 of the Virginia Constitution: “That all men are by nature equally free and independent and have certain inherent rights, of which, when they enter into a state of society, they cannot, by any compact, deprive or divest their posterity; namely, the enjoyment of life and liberty, with the means of acquiring and possessing property, and pursuing and obtaining happiness and safety.” Other state Constitutions contained similar provisions.[3]

Yet the Founders recognized that this view was not a permanent fixture of society; in his Defence of the Constitutions of Government of the United States, John Adams stated: “The moment the idea is admitted into society that property is not as sacred as the laws of God, and that there is not a force of law and public justice to protect it, anarchy and tyranny commence. If ‘Thou shalt not covet’ and ‘Thou shalt not steal’ were not commandments of heaven, they must be made inviolable precepts in every society before it can be civilized or made free.”

Adams’ reference to the “commandments of heaven” reveals the source of this foundational truth: the Bible. If “Thou shalt not steal” does not equate to a right to own property, it has no meaning at all.

“The Bible offers 500 verses on prayer, less than 500 verses on faith, but more than 2,000 verses on money and possessions.”[4] Until the last century there was a traditional connection between economics and Christian thought, most notably found in the Summa Theologica of Thomas Aquinas and John Calvin’s Institutes of the Christian Religion, both of which contain whole sections devoted to economic questions.

Because man is created in the image of God, we are rational beings capable of choosing in a marketplace of competing products and services, including competing ideas. Because we are commanded to have dominion over the earth we can lay claim to property as a means of exerting that dominion.

Conversely, the Bible’s clear description of man’s sinful nature warns us, and government, to be on guard for selfishness, greed, and particularly, economic exploitation; thus we need to be wary of the concentration of power, whether in government or in private industry (i.e., monopoly).

From the Declaration, we know that the purpose of government is to secure our inalienable rights, so how does government go about doing so? How does government secure my right to acquire and possess property without infringing on the right of others to equally do so? And once I have acquired this property to what extent can government legitimately interfere with my right to enjoy it? To what extent can the government take my property for legitimate public purposes? The Founders and Framers wrestled with these questions, and more.

Take this simple test. Do I have the individual power to order my neighbor to not build a fence beyond a certain height? No, clearly I have no such power. So if government, including local government, obtains all its “just powers” from the “consent of the governed,” how in the world does my county government obtain the right to tell my neighbor or myself what height we can or cannot build a fence? How can I delegate to government a power I do not possess? Government’s power to control the use of property is often illegitimate.

Nevertheless, we find several legitimate protections of property in the Constitution:

First and foremost, the concept of a government limited to certain enumerated powers erects some protection, or did initially, over government illegitimately taking property through unjust means (this “wall” has taken some hits over the years).

Article 1, Section 8, Clause 8 granted Congress the power to “promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.” This clause not only promoted “the progress of science,” it secured the intellectual property of the creator, at least for a specified timeframe. Notice that such protection was intended for “limited times;” some argue that today’s granting of copyright protection for “a term lasting for the author’s life plus an additional 70 years[5] establishes, in effect, a monopoly.

Elsewhere in Section 8 we find the power to “regulate Commerce with foreign Nations, and among the several States , and with the Indian Tribes ” (Clause 3); enact “uniform Laws on the subject of Bankruptcies” (Clause 4), to regulate the Value [of money], and … fix the Standard of Weights and Measures (Clause 5), punish counterfeiting (Clause 6), and punish “Piracies” (Clause 10); all these clauses provide Congress other opportunities to protect private property.

Taxes were to be uniform so as not to jeopardize anyone’s property unfairly: “A just security to property is not afforded by that government, under which unequal taxes oppress one species of property and reward another species.”[6]

Property was also protected (in the original Constitution, at least) through non-interference with contracts: “No State shall … pass any … Law impairing the Obligation of Contracts.[7]

Conversely, we also have the ominous 5th Amendment, which gives the federal government the right to take private property for “public use,” with “just compensation.”[8]

The Founders were not laissez-faire capitalists. First, because “capitalism” had only recently been introduced (though not by that name, that came later) through publication of Adam Smith’s Wealth of Nations,[9] but also because the Founders were still in the midst of abandoning the principles of British mercantilism, which Smith had argued should be replaced. Wealth of Nations was published in 1776, so by 1787 its arguments were still being absorbed.[10]

The Framers and Ratifiers saw a definite role for government in promoting trade and supporting the success of business, thus protecting the property of those businesses. Tariffs, imposts and excises were judiciously used in the years after the Constitution went into effect.

In “Founders: Property Rights, Free Markets, and Sound Money,” a well-written and comprehensive essay, Thomas G. West argues that while the Founders often had disagreements over the extent to which the government should influence the economy, they didn’t waver in their agreement on these three main points concerning private property: “the legal right to own and use property in land and other goods; the right to sell or give property to others on terms of one’s own choosing (market freedom); and government support of sound money.” Let’s examine West’s last point.

“Government Support of Sound Money.”

Thanks to inflation caused by the Federal Reserve’s money policy, a dollar today buys less than 5% of what a dollar did 100 years ago. Our money system works today only because most Americans are too ignorant to understand how they are being manipulated by the “money changers.”

The Founders’ experience with money demonstrates that there were times when principle gave way to pragmatism.   Specie money (i.e. coin) was often scarce due to a perpetual imbalance in trade — colonists imported far more than they sold overseas, not unlike our current situation.

According to the eminent historian Forrest McDonald, the bulk of the Founders’ reading was in histories. During the Constitutional Convention, the delegates made nearly 400 references to history to justify their positions.[11] This reliance on history provided them abundant examples of both good and bad money policy. They knew of the Roman practice of devaluing their coins by reducing their alloy and the Founders themselves had seen the pernicious effects of “clipping.” They knew that the Chinese originated paper currency in the eleventh century, with disastrous results. Yet like a moth to the flame, from 1690 onward, the colonists resorted to the issuance of paper money to satisfy the insatiable demand for currency.

One of the few wise acts of the British Parliament in the pre-revolutionary period was the 1751 passage of The Currency Act, which prohibited the New England colonies from printing paper money. During the Revolutionary War, however, the Confederation Congress, unable to raise necessary funds through voluntary state requisitions, had no recourse but to print fiat currency, leading to the phrase: “Not worth a Continental,” and Washington’s 1779 lament: “A wagon of money will not buy a wagon of goods.”

Despite this lesson, with their post-war economies in shambles, Massachusetts and other states (including Virginia) succumbed to the demands of their citizens and printed their own paper money, with the predicable effect on its value.

In January 1787, as he pondered whether to accept Virginia’s invitation to become part of its delegation at Philadelphia that May, George Washington summed up his view of fiat money in a letter to Jabez Bowen: “Paper money will invariably operate in the body of politics as spirit liquors on the human body. They prey on the vitals and ultimately destroy them. Paper money has had the effect in your state that it will ever have, to ruin commerce, oppress the honest, and open the door to every species of fraud and injustice.”[12]

Jefferson owned: “That paper money has some advantages, is admitted. But that its abuses also are inevitable, and, by breaking up the measure of value, makes a lottery of all private property, cannot be denied. Shall we ever be able to put a constitutional veto on it?”[13]

Does the Constitution permit paper currency? Some claim that the phrase to “coin money” in the Constitution’s Article 1, Section 8, prohibits Congress from ordering the printing of paper money at all. Others (and I share this view) believe the phrase should be (and was) interpreted as in “coining” a phrase. The Founders were certainly aware of this usage, as Webster’s Dictionary confirms, but during the Grand Convention they actually disapproved resolutions that would have given them the power to print money. Other resolutions, however, that would have overtly prohibited the power to print money were equally voted down. They denied the states the power to emit Bills of Credit and to declare anything but silver and gold to be legal tender. Robert Natelson sums the situation up by stating: “Congressional power to ‘coin money’ and to ‘regulate…foreign Coin’ included money forged in any medium, not merely metallic coin – a point repeatedly affirmed during the ratification debates.” [14]

Let’s consider one final feature of economic freedom:

Free Markets.

“The Constitution created the largest contiguous area of free trade in the world.”[15] Until the first Congress met, we might add.

While the Founders knew the value of economic liberty, they had differing views as to the role of government in achieving it. The contrasting views were no better exemplified than in Thomas Jefferson and Alexander Hamilton. Jefferson as Washington’s Secretary of State, and Hamilton, as Secretary of the Treasury, found themselves on opposite sides of the issue of whether the government should interfere in the economy.

“A wise and frugal Government,” said Jefferson, “which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement.”[16]

Hamilton argued that: “True liberty, by protecting the exertions of talent and industry, tends more powerfully than any other cause to augment the mass of national wealth,”[17] but the means to that liberty, in Hamilton’s mind, was a strong central government acting in the interests of commerce and industry.

Hamilton won.

After independence, while under the Articles of Confederation, states had often imposed tariffs on each other’s goods, disrupting the already fragile wartime economy further and eventually causing creation of the Constitution’s Commerce Clause. “Regulating Commerce” gave Congress considerable power, and they used it right off the block. “The federal government would exercise functions the colonists had conceded to London. The states would retain those functions the founders had claimed for the colonial assemblies.”[18] “Duties, Imposts and Excises” were soon imposed, while being careful to observe the Constitution’s requirement that they be “uniform throughout the United States.”[19]

The Tariff Act of 1789 imposed rates on different goods ranging from 5% to 50%. This “temporary” tax did what it was intended to do. The United States collected 80 to 95% of its revenue from foreign imports. Few complained.

While the United States has never enjoyed a completely free market, the economy was markedly less regulated during the Founding Period than today. Today, while we tout our economy as based on free-market capitalism, the truth reveals a highly regulated economy with few differences from those of European socialist countries. (By the way, the entrance of Socialist Senator Bernie Sanders into the 2016 presidential race has brought a much-needed conversation on socialism to the forefront.)

Richard Williams, writing in the The Fiscal Times,[20] argues we have neither capitalism nor socialism in the United States today but rather “regulism.” “Regulism is characterized not by the state owning firms but rather by the state making all of the key decisions for firms. The most obvious example includes firms that have been designated by regulators as “too big to fail.’” “In an economy that is based primarily on capitalism, when firms close, it’s because they aren’t efficient, they don’t keep costs under control or they fail to meet the needs of customers. But in an economy characterized by regulism, with the government making the key decisions, it’s just as likely caused by government decisions as by poor business practices… In socialism, when firms fail, everyone knows it’s the government’s fault because they run the business. In an economy run by regulators, no one ever knows if it’s the government’s fault. As long as government regulators escape scrutiny for their bad performance, they can continue to drive the economy into the ground with no one being the wiser.”

In “Over-regulated America – The home of laissez-faire is being suffocated by excessive and badly written regulation,” Forbes staff writers argue that “America needs a smarter approach to regulation.”[21] Over the last eight years, the U.S. has fallen from the 6th freest economy in the world to 11th place.[22] Forbes writer Bill Frezza estimates the annual cost of regulation in the U.S. to be about $1.8 Trillion. “Any regulation that is expected to cost over $100 million is supposed to get a cost-benefit analysis. Obama added $20 billion in new regulatory costs just last year. Every year there are over 3,500 new rules that come out of the federal government. … [H]ow many rules got a cost-benefit analysis last year? Fourteen!”[23]

How did we reach this over-regulated state? I lay the blame at the feet of Congress, exacerbated by the Supreme Court’s sanction of Congress’ delegation of legislative power.[24]

For our first 100+ years Americans enjoyed the greatest amount of economic freedom of any nation on earth. It was never truly a free market, but the closest thing to it. Abundant resources, the avoidance of crippling wars, and a people intent on using the talents God had given them, lead us to rise to the pinnacle of world power and prestige. Today, however, the federal government smothers business large and small in needless and costly regulations, takes a large portion of our economic property in taxes to re-distribute to others, imposes onerous environmental regulations on our property, saddles succeeding generations with unimaginable debt, and wastes $25 Billion annually on frivolous projects (see: Solyndra). Unless we recapture the spirit of economic freedom in this country, and address our other defects, I fear America is headed for a fall of Biblical proportions.

We will be discussing this topic on “We the People, The Constitution Matters” on WFYL radio Friday morning, 26 February, 7-8am. You can “Listen Live” at, or, if you are fortunate enough to live in the station’s broadcast area, on the radio as you drive to work that morning.

You can later download the podcast of the show and listen at your leisure, or you can listen to one of the rebroadcasts during the weekend. I would love to hear your ideas on this topic. Hope you’ll join us.

“Constitutional Corner” is a project of the Constitution Leadership Initiative, Inc. To unsubscribe from future mailings by Constitution Leadership Initiative, click here.

[1] “A Warning to the Colonies,” in The Political Writings of John Dickinson, Esq. 1804.

[2] Notice the labeling of Parliament as a “foreign power.”

[3] Pennsylvania, 1776, Art. 1; Vermont, 1777, Art. 1; Massachusetts, 1780, Art. 1; New Hampshire, 1784, Art. 2; Delaware, 1792, Preamble. found in The Federal and State Constitutions, ed. Francis Newton Thorpe

(Washington: U.S. Government Printing Office, 1909).


[5] For anonymous works the term is “95 years from first publication or 120 years from creation.”

[6] James Madison, Essay on Property, 1792.

[7] Article 1, Section 10, Clause 1. This protection is no longer in effect; in 1934, the Supreme Court upheld a Minnesota law that temporarily restricted the ability of mortgage holders to foreclose on their mortgages. The Court found the law to be a valid exercise of the state’s Police Power. It explained that the temporary nature of the contract modification and the emergency caused by the Great Depression, justified the law.

[8] The 2005 case of Kelo v. City of New London so broadened the meaning of “public use” as to render it essentially meaningless.

[9] Long title: An Inquiry into the Nature and Causes of the Wealth of Nations.

[10] In 1790, Jefferson wrote in a letter to Thomas Mann Randolph stating: “… in political economy I think Smith’s wealth of nations the best book extant …”

[11] Forrest McDonald, A Founding Father’s Library.

[12] Letter to Jabez Bowen, January 9, 1787.

[13] Letter to Dr. Josephus B. Stuart, May 10, 1817.

[14] Robert Natelson, The Original Constitution, What It Actually Said and Meant, 3rd Edition, 2014, p. 112.

[15] Forrest McDonald, The Founding Fathers and the Economic Order, found at:

[16] Thomas Jefferson, First Inaugural Address, 1801.

[17] Defense of the Funding System,” July 1795.

[18] Natelson, p. 112.

[19] Article 1, Section 8, Clause 1.

[20] Found at:




[24] Mistretta v. United States :: 488 U.S. 361 (1989)


The Constitution’s Week in Review – 20 Feb 16

Article 2. Natural Born Citizen Clause (continued, ad nauseam).

Folks continue to come out of the woodwork, many with stellar conservative credentials, who think the case of Ted Cruz’ citizenship is a “slam dunk.” As I’ve said before in these pages, until the Supreme Court steps in, everyone is entitled to their opinion, but each will remain just that, an opinion. The Framers flat-out didn’t tell us what they meant by the phrase and all the circumstantial evidence remains circumstantial.

As this article points out we may soon have a judicial opinion from an Illinois judge, but if that opinion goes against Cruz he will surely appeal, and the appeals process will take some time. Meanwhile, the other three lawsuits proceed apace.

Article 3.

The world of law, indeed much of America, was shaken this week with the untimely death (at the brisk age of 79) of Supreme Court Associate Justice Antonin Scalia. With Scalia gone the court sits with three conservatives (Robert, Alito, and Thomas) one moderate swing vote (Kennedy) and four dyed-in-the-wool liberals (Ginsburg, Kagan, Sotomayer, and Breyer). As this article points out, the Court has also lost its Chief Mirth-Maker. Note: listening to oral arguments can be taxing but you get a sense for the plight of the poor lawyers who come unprepared.

Until Scalia is replaced you can expect some 4-4 ties; but that’s not to say that all decisions would result in ties; there have been several 9-0 decisions during the last eight years and everything in between. There are some incredibly important cases coming up this term and it is anyone’s guess how this will affect them. That’s not keeping some pundits from guessing.

Three important cases[1] have already been heard, and the Court has the option to order them reheard by the eight remaining Justices or just ignore Scalia’s now moot vote. Three more cases[2] are still to have their hearings, and Scalia would have played a big role in each, perhaps being tasked with writing one of the opinions.

The immediate question is: when will Scalia be replaced and what kind of jurisprudence will his replacement bring to the court? Will they be an originalist, as was Scalia, a moderate, or a progressive? With only one other originalist jurist still on the Court (Thomas) it would certainly be nice to see the President nominate someone of like-mindedness. But I’m not holding my breath on that. This Daily Signal writer thinks all the suspense over this issue proves that we have created a far-too-powerful Supreme Court. I agree; way too powerful.

President Obama will face considerable pressure from the Left to nominate a progressive, and would be disposed himself to do so. But he may surprise us all. If he nominates a “flaming liberal” it is unlikely the Senate will move to confirm at all, at least not until after the November elections and we see which party will be in the White House come January. If Obama actually wants to have his nominee confirmed he will nominate a moderate and thus throw the ball back into the Senate’s court (sorry for the pun).

But must the Court have nine justices? Article 3 of the Constitution provides Congress the exclusive authority to set the number of justices on the Court. The Supreme Court began in 1789 with six justices, moved to seven, then nine, then ten, back to eight, then finally settled once again at nine in 1869. It’s remained there ever since. FDR tried to pack the Court with six additional liberal justices in 1937 when the Court consistently refused to sanction his New Deal legislation. Fortunately, the Congress saw through the thin ruse and did not comply. If Congress wished the Court to remain at its present eight Justices they could pass legislation tomorrow so stating – providing the President didn’t veto it, unfortunately a near certainty.

The longest a Supreme Court seat has gone vacant was 391 days (in 1969-1970 when Abe Fortas resigned unexpectedly). Jeffrey Anderson, writing at the Weekly Standard, believes the Congress should just leave the Court at eight for the foreseeable future, and that there may even be benefits to this. Does the Senate have an obligation to confirm any particular nomination? No, but they will be under considerable pressure to demonstrate why the President’s nomination is singularly unfit for the highest bench. And that may be a tough case to make. Republicans have been castigated for talking delay, even as evidence that both Barack Obama and Hillary Clinton filibustered the nomination of Justice Samuel Alito.

Replacing Scalia with a liberal or progressive will tip the Court’s balance for quite some time, at least until the death or retirement of Ginsburg (83), Kennedy (79) or Breyer (78) gives the next President another opportunity. If a Democrat succeeds Obama in January all three of these jurists will probably quickly retire, confident their replacements will sustain the liberal presence. Stay tuned for a big fight this summer.

Property Rights.

Some farmers here in Virginia have had long standing fights with conservation easement managers over the proper use of the land the farmer owns or leases. The easement managers have imposed draconian requirements that threaten to put the farmers out of business, perhaps so that manager’s friends can come in and scoop up the land. Farmer Martha Boneta has had some success in getting the Virginia Assembly to come to her aid, and now a Virginia vintner has experienced success in court. The Land Trust will surely appeal, so we haven’t hear the last on this, but I’m certain that such trusts exist in other states and similar battles. Perhaps the citizens of other states can take heart at the successes here.

Upcoming Events.

Constitution Seminar for kids – 5 March. Youngsters ages 10-14 in the Tidewater, Virginia, area are encouraged to attend a seminar on the U.S. Constitution from 9am to 5pm on Saturday, 5 March at the Foundation for American Christian Education on Portsmouth Blvd. Held in partnership with Constituting America, the seminar focuses on the book by Juliette Turner: “Our Constitution Rocks.” Juliette will address the class live via Google Hangouts. There is a nominal charge of $5 per student and a box lunch will be served. Every student will receive a copy of “Our Constitution Rocks,” a pocket Constitution, and other informational materials. Email to register.

Constitution Seminar for adults – 26 March. Mark your calendars; I’ll be holding a Constitution Seminar on Saturday, 26 March from 9am to 6pm here in York County, VA. Space will be limited. Cost is $30 per adult, which gets you a 150-page student workbook, pocket Constitution, 150-page workbook and a whole lot of Constitutional knowledge. Email to register.

The “Constitution’s Week in Review” is a project of the Constitution Leadership Initiative, Inc. To unsubscribe from future mailings by Constitution Leadership Initiative, click here.

[1] Voting rights (heard Dec. 8), Affirmative action (heard Dec. 9), Labor unions (heard Jan. 11)

[2] Abortion (to be heard March 2), Contraception (to be heard March 23), Immigration (to be heard in April)