One of the Safeguards of the Constitution: The Direct Tax Clauses Revisted

James Madison's insistence that the apportionment rule governing the imposition of direct taxes by Congress was a constitutional safeguard highlights a puzzle that has plagued constitutional law since the early days of the Republic. The Constitution does not bar Congress from imposing direct taxes, but twice provides that direct taxes "shall be apportioned among the several States which may be included within this Union, according to their respective Numbers." In times of crisis, notably during the War of 1812 and the Civil War, Congress levied direct taxes on real estate and slaves. It specified the aggregate amount to be collected by direct taxation, and apportioned this amount among the states according to population. Congress authorized the appointment of assessors to ascertain the value of such property in collection districts, and named collectors to receive payments from individual owners subject to the tax. Alternatively, states could pay their respective quotas to the Treasury, raising the required revenue under state laws. In that event there would be no further federal collection proceedings regarding individuals. Congress has not enacted a levy which it acknowledged as a direct tax since 1861. In practice, of course, the apportionment rule was difficult to administer and discouraged reliance on direct taxes as a source of revenue. "Direct taxes may be laid," Charles A. Beard explained, "but resort to this form of taxation is rendered practically impossible, save on extraordinary occasions, by the provision that they must be apportioned according to population ...." Unless the tax basis was uniformly distributed across the country, the apportionment rule could lead to absurd consequences. The tax assessed upon individuals would be at different rates depending on the number of taxable persons in the jurisdiction. States, unlike Congress, retained the unrestricted power of direct taxation.