Back to Law

I've had a lot of non-legal posts lately (I was distracted with grading), so back to a good old law topic for today.

Earlier this week, the Supreme Court came down with an interesting Commerce Clause case, Department of Revenue of Kentucky v. Davis. Kentucky, like many states, exempts income derived from its own bonds from state income tax, but requires its residents to pay state income tax on income derived from bonds of other states. The question was whether this practice violates the "dormant" Commerce Clause.

The Commerce Clause of the Constitution says that "The Congress shall have Power . . . To regulate Commerce . . . among the several States." It does not expressly forbid the states from doing anything, but for nearly 200 years it has been understood to have the negative (or "dormant") implication that it generally prohibits state discrimination against interstate commerce. A state could not, for example, impose a 3% sales tax on goods produced within the state but a 6% sales tax on goods imported from other states. The result of this important prohibition is that the United States is a "free trade zone." It's not a point one thinks about much, but as other nations form free trade zones of their own, we appreciate more how important the dormant Commerce Clause is.

Does Kentucky's tax scheme violate the dormant Commerce Clause? Not too surprisingly, the Supreme Court said no. As the Court observed, 41 states treat give special tax treatment to income from their own bonds, and the practice has been around for nearly a century, so it would have been a bit of a surprise to find out that it's been unconstitutional this whole time.

The interesting part of the case is Justice Thomas's concurrence. Thomas agreed with the Court's result, but not its Commerce Clause analysis. Rather, Thomas said that he agreed with the Court's rejection of the plaintiff's dormant Commerce Clause argument on the ground that there is no such thing as the dormant Commerce Clause. Thomas said that he would entirely discard the Court's dormant Commerce Clause jurisprudence.

Wow. I often wonder about whether Justice Thomas is serious when he says stuff like this. He's proved time and again that he's the most radical Justice, a Beamon jump beyond the others. In addition to saying that he would give up on the dormant Commerce Clause, he has said that he would really enforce the nondelegation doctrine (which could prohibit Congress from delegating power to administrative agencies) and what he perceives as the originally intended limits on Congress's Comerce Clause power. If all of these views were enforced, a pretty huge chunk of the federal government would be unconstitutional.

It's one thing to say stuff like this when there's only one of you. But what if there were four others on the Court? Would Thomas really vote to eliminate half or more of the federal government? I wonder if he's really serious about this stuff or if he's just indulging himself while he can.