The Constitutionality of the Wealth Tax

February 11, 2021

New Roosevelt brief argues Congress can implement a federal wealth tax


During the 2020 Presidential race, Senators Elizabeth Warren (D-MA) and Bernie Sanders (I-VT) both introduced proposals to tax the wealth of multi-millionaires and billionaires arguing that a well-designed wealth tax can level the playing field in an unequal society and promote shared economic prosperity. At the time, these reforms generated broad public support—even among many Republicans —and broadened the conversation over the future of progressive tax reform. At the same time, critics did argue that a wealth tax would be unconstitutional because of the Constitution’s apportionment rule, which requires certain taxes to be apportioned among the states according to their populations.

Now Sen. Warren’s new seat on the Senate Finance Committee has put the possibility of a wealth tax back on the table.  

Anticipating the coming debate, the Roosevelt Institute published Why a Federal Wealth Tax is Constitutional,” the first in a series of two briefs that responds to arguments against a wealth tax. Authored by Ari Glogower (Associate Professor of Law, The Ohio State University Moritz College of Law), David Gamage (Professor, Indiana University–Bloomington, Maurer School of Law), and Kitty Richards (Roosevelt Fellow), this paper argues that an unapportioned federal wealth tax is constitutional. 

The authors find that: 

  • Constitutional history and Supreme Court precedent support a measured interpretation of the apportionment rule: it requires apportionment in limited instances, but should not be seen as interfering with Congress’s ability to levy a tax on net wealth.
  • The apportionment rule is a vestigial relic of the Founders’ compromise on slavery. Critics of wealth taxation overstate the rule’s original purpose and role in the constitutional structure. 

The final section of the paper addresses the separate question of whether Congress should enact a wealth tax at a time when particular members of the Supreme Court may rely upon the apportionment rule to strike it down.

Insight from the authors:

“Congress can exercise its broad taxing power under the Constitution to implement an unapportioned federal wealth tax. Claiming otherwise inflates the ambiguous, peripheral, and historically contingent apportionment rule into a major obstacle to the taxing power,” said Glogower.

“To support a wealth tax, you don’t need to entirely abandon the apportionment rule, you just need to apply a measured interpretation that fits its historical role,” said Gamage.

“The COVID-19 pandemic has laid bare the deep inequities that have plagued our society and economy for decades. Millions of Americans — disproportionately BIPOC — have lost their jobs, their homes, and their lives, while those with great wealth have been protected by better healthcare and housing, stable remote work, and a growing stock market. To truly recover, and build inclusive prosperity, we must ask these wealthy, predominantly white households, to contribute more. A wealth tax is an important step, and it should not be derailed by extreme interpretations of the constitution.” said Richards.


About the Roosevelt Institute

The Roosevelt Institute is a think tank, a student network, and the nonprofit partner to the Franklin D. Roosevelt Presidential Library and Museum that, together, are learning from the past and working to redefine the future of the American economy. Focusing on corporate and public power, labor and wages, and the economics of race and gender inequality, the Roosevelt Institute unifies experts, invests in young leaders, and advances progressive policies that bring the legacy of Franklin and Eleanor into the 21st century.

To keep up to date with the Roosevelt Institute, please visit us on Twitter or follow our work at #RewriteTheRules.