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s playing the toy soldiers and doing the sums in his head. ave to pay for the toy sold says emphatically, clearly in the federalist papers my friend david agrees and

nothing else says that philadelphia philadelphia here is what he said. here is his philadelphia plan taxes on l this is a volume of three of record taxes on land, houses other real estate and taxes shall be proportioned. that is his. i've been studying this f0 years but there are 10 pages in this book to waging more a dedicated and then spout s your man. urrect john marshall right now he listen to alexander he holds hamilton in awe and hamilton ows his stuff. >> no unforced i do not have that. it has that magic power i wish thatleslie breaks the fourth

why can't real life be like this? because it is not. hamilton at philadelphia and going to read it again. this is his account of what should be taxes on land, houses and other real estate and capitation taxes. the words do not say that but that's hamilton and he is gone through. there are seven federalist he said taxes on landnd nothing else. then he argues hilton. it is true in some notes he says something seems to go a little broade i talk about this because i've known about it forever brief which i would like you to read i tak the following position. i am highly doubtful these early notes reflect what he actually said in oral argument. and i will tell you why. because at oral argument people

played hooky just to leaves to see if all the diplomats come beca even then. this is the only oral argument he ever makes. the supreme court justices unanimously back him contra jefferson was not even there in philadelphia. contra and it's all carriage taxes perfectly valid jefferson says no. i don't understand any of this stuff. i signed it because you told me, you came up with a plan. the supreme court justicesly come independent when he reached the issue cite heads and land and nothing they don't know taxes are complicated but everyone is hamilton. i do not believe he actually to have some early notes.

they can't resurrect who said this it by the way way justice but let's talk about the current chief justice. here is wt he says again this is john roberts and aportant tax case. the hilton court was unanimous in those injustices who wrote opinions either indirectly asserted or strongly suggested only forms or direct. capitation and land and their pay stocks. you asked me a question and i'm stupid enough to answerxes and everything else are a cluster of things. what's easily upside down? that slavery aut i don't. this l in capitation and nothing else. i just have done that. and he has to prove that fiscal is no strong evidence for this.

to coteach together. steve comesp with ideas and retrac and told meat me monopolies are unconstitutional. i hate them. the bank of the unitedm n states never mind. will be coached at first this fiscal right stuff i can favor the state or thattaxing it one more or less but by sending more in one state or less. as a practical matter if i tax oil uniformly pumping out of the ground that's going to affect texas more than it is going to affect he told about france and germany today. so in fact i believe it is about slavery and patterson says so and i can readt to you. it is slavery. slavery does not fully understand land there is never

just one thing. complicated thing. here are my two claims. must understand to mean and head taxes and that is what hamilton says of philadelphia that's his philadelphia plan. ven federalist papers when people are ratifying. here's the reason why thinkin that. they're basically whatever you opinion. and generally are believe me he knows that and i know that. now, why did they do it? i w book 20 years will call american constitution of biography. it it is comprehensive. is this word or that things.

way more democratic tn wit put it to a vote. up and down the continent. if congress and its representative is saying you should be tax you don't like itvote against it. that is democracy. it's way more about national which is why bdersant. it's way more about slavery. their son about stuff. that might beat be france and germany today. you don't have oliver ellsworth really? are you serious? john marshall is blowing out of his hindquarters alexander hamilton has been dreaming about taxation forever but he is the guys who designed the tax plan and a c plan. he says again and again and again the heads in fact isw slavery. and patterson says that prove

you talk about john marshall, john marshall harlan it's all and lots of people but may meet my friends i don't even an income tax which is why you needed a constitutional did say that in the politics john marshall harlan the elder said we just got rid of slavery.y provision to make itif did of slavery? that is all in john marshall harland is in the great dissenter in plessy versus ferguson harlan that it's in see.t i think it was about but i do not need to prove that to you but patterson does say it. john marshall harland is a genuine question for my friend david. was it rightly i think it was preposterous.

sign i law his name was abraham lincoln if were talking about names. you d the 16th amendment at all. lisa supreme court screwed thepooch in the pollock case just like they did in the plessy case but just like the gym in the lochner case. this is justices i do not hold in high regard the personigh regard is john marshall hardly and i hope he is on my side but if you have any doubts you quite sure it's based on 10 pages of this book despite how long you have to read the book. if you want cases of very short it is page opinion. read them. they're overwhelmingly on my side and david would agree with that. they don't say thing aboutscal graves or anything like that. they just don't. our regionalism is taking seriously. taxes or a

washingtonwashington agreed to in the early supreme court. if there were a difference between hamilton later on in hamilton when the constitution is being ratified the ordinary of realism would say pay more attention to the in fact my evidence is the justices are basicallygring with him and they do not say anything. he would love it if he could point to it. none of the close has the wealth or anything it's kinda like wealth they could've said this and that. he said if it is just l and they could have said that clearly. david you are one 100% right for that is true of be more clear always. have to be perfection i have to have a better argument than my friend. often more evidence than my friends and i think i do. clocks begin missing agreed on almost everything, right?

[laughter] >> do you agree the courtt hilton is with professor and alexander hamilton's withim h step back. how often have you heard someone say could you pass the kleenex please? why is he saying this? because what i think they really mean is wouldou please pass the product tissue paper which kleenex is the most common example. do think when people said taxes one actually intending the british parliamentary sense in the way the states were using it taxes on land when the omnibus taxes included and i do think therefore there substance to the idea that they did not say it cap dictations and rea taxes. i don't even think ishat hamilton meant when he said in the fed society. in the federalist

papers i don't agree the taxes on land mn only real estate. but even if it did hamilton the lawyer was giving it much more hat was intended, what was the general have a picture of wall i showed told you that already does not mean i would support his proposal at the convention as you probably know it's the president is going to limit the states entirely have a nationally appointed regional governors. his view did n replyse consensus. even if he's right about taxing on land and i don't think he is. hamilton's view did not control on everything. it is pretty clear other people thought this was a broader category.

i do think taxes on land necessarily mean what my friend says it means. i also think it is not in the language of the constitution. >> i think as i told you indirect taxes the tax on a transaction. i think is a tax on a transaction. much of the time. and so if your tongue met pat rent i think that should have been upheld. if you are talking that attacks on unrealized appreciation actually not a tax on my own view and you can jump ahead to the andment at sometime soon. my own view is without the 16th ame proposal of a market to market tax would not qualify as an cise tax. but a tax on the sale wou actually my opinion i that. but for different reasons.

market to market tax because a 16 the moment but it would have fa one. >> is very helpful. and in your position closer to mine and mine is closer. but here is what i did tell you. it is a nice question. if a bump is really a machine gun or not? literalists say it is not. if it functions like it. now actually david has said lands and heads ybe we could understand own lands a little bit more metaphorically rather than literalistic now i need to tell you a little bit maybe at thi i thought they actually hadspecial

rules about land. do not need to tell you why out it's a big stinky compromise. and you know that. and the inciden and all sorts of stuff. i have a theory about special and why wealth today is not really like lands. some people could say more. next please, go ahead. >> okay. looks atwhat's at some point get your question. >> mygi please. >> okay then let me just say i don't agree hamilton supports. i have said so. >> no hamilton. i do not think. i basically heard akil say two things. hamilton is on my side. ton is on his side mostly. so i do i think that cape can be read consistent with my theory.

and then he goes the other opinion in the case an opinion on the case is there is no necessity or proprrmining what is not or is a direct tax in all cases. so this is before john marshall to the way the cd in the opinion but we are not really supposed to do that so i personally can't put that much and definitely don't put any into what patterson says

of that passage what he is really saying upseti can find a quote basically he is saying the rule of apportionment is a work of compromise. it cannot be listen to the objection. why should the species of property be represented more than any other property the world therefore ought noto be by obstruction. he wasn't talking about the tax part compromise. he was offended by the idea that when allocating representation among the states be any representation afforded to an enslaved people want to remind you who has heard of the newersey compromise? basically the first moment in the convention randolph comes in and says let's forget about the article every state is equal let's represent a states b their size or their wealth.

that is the big state plan.ld way under the articles every state should be equal while the representative from new jersey proposed the new jersey plan and it didn't work. i think there's a lot of sour grapes in the way that he's remembering what happened so yes but i'm not sure that he is neutral arbiter of exactly what played out. in any eve let's go back to the holding because i think that important. best argument for his view and i want to be clear i don't agree withers. i think this is the best argument for the view is the attack and it's not a tax on all of the properties but a piece of the property and the court said it doesn't have to be apportioned sohey are saying other than real estate don't have to apportion it. but then you look are actually doing. both patterson talked about the

attack on the consumable commodities. i think we can read the holding as consistent with our if the future supreme court justices in the audience agrees with me otherwise, you can simply read it that way and if you look at the article that's just been posted and we will show you the language in the case that they keep emphasizing the attack not necessary.

>> my friend david can see that it's not on transaction but it's when you want it or not or got it as a gift or inherited or have been to have it. if he wants to focus so much of transactions, pay no attention if there is no transaction, then that's how we are going to do things and then you can say whether it is realized or not you can treat it as income b facto kind of long the formal transaction. but a big step back. i told you why head taxes because you texas taxslaves and they will never go for that and this is how the some people don't know this. this is why writing books the entire constitution i thought about every provision.

slavery is there in a whole bunch of provision standpatters and understands that he was there. so, if he really wanted to slide with them, book of the biography to see how things fitogether. the judges can look at the constitution on a little slice. a democracy, slavery and war.into federalism, which is my theory. but not this whole thought because sometimes you need to pump money into this region it's it matters whether madison or washington, madison says it is unconstitutional and jefferson is joined at the hip with him on all of this. they don't like it because they see it acting and not to put too fine a point on it it's a technical legal term but they

get kicked in the supremeourt unanimously they smack them down. we are going to follow george washington into this bill andlton who drafted is now defending it so they believe every bank in the ponzi scheme that if you don't keep all of your reserves in the vault, if you lend money out against that and it's actually just a scam. it's in the book. th board. the south will never accept something that could allow them to be taxed and therefore out of existence. now to explain what land is all about with special want to build on

what my friend of confederation didn't they said to states are supposed to pay up the requisition on basically the wealth of the state. it turns out to be a really hard thing to measure so they say we are going to use population as a proxy for wealth, but then how to think about slaves is it people can move around, they will move to richer states and so roughly people are easier to the principal might be that's going to be hard to measure so people will have for placed of even out in the endy roughly and it's

athedebate about the proxy for the constitution mainly for the representations but in order to hide all of that because the northern delegates are embarrassed that they are giving away so much to the south on thetaxation and some fo this purpose if they are smart they representation. but they are not going to come from direct taxes. we acknowledged almost all the taxes are going to come from sports and other things where this is all the worst part of delegates are from their constituents

so this going on. some people in the north people in rhode island and massachusetts, we want the south to pay more not thinking there wi direct taxes that will come fromheher thing is actually there was a for figuring out how much each in the land assessment because you can actually ass land. in their head they are connectingea taxes with the census with land because that of this was cashed out under the articles confederation. and now here is one final point final points, second the zero problem. david knows what i'm tabout and maybe some of you

here's the something a direct suppose the tax carriages if it were a there are two states equal population, to free states, equalates equal population if they had the same number of carriages you could have the same number of carriage tax and generate thetotal population, but one has 100 has ten. now you have to tax the state at ten times the rate and that is a luxury no sense. prohibit carriages in our state so now they have zero carriages and y can't divide by zero so

you can have a attacks on carriages anywherehat screws everything up. in theory there could be zero so that can't be treated as direct. you will never have a state that has zero persons or zero land, so you don't have the it all and all that. you can't have a state with zero land or zero people. the point they can't turn

it into money and there perceived by california> proposition 13 i have a house and maybe it is a lot i don't have any money pay for the unrealized appreciation. i am that you can usell the rest but back then, i think that we should do broadly becausebroadlybecause back then it created hardships who inherited and now have to sell it+ to pay the tax man and we don't have that problem today assets because if such markets andd made a really interesting argument even if it were just about land let's see today as the modern equivalent i think no

let's not do that because the reon taxes were treated specially and we want to make them hard don't exist today actually even for land because you could borrowt for the office of other assets. so in three sentences, id here. so i will say fleeting assets like carriages with the tobacco et cetera, it was fixed and hard imagine that it could be made part of a manageable census unlike many other itt and every census census. it is aer and david will tell probably true of every tax issue. it is a complicated cluster of considerations, truth be told. why did they draw the line here

and not >> i want to switch gears a little bit to get to questions from everyone as well. unless you've been completely checked out for the last h you may know that whether the n the gains and again unless you've been totally checked out the fact they filed an amicus brief in that case and dean spicer has as >> there's the different positions that are more friend steve's. >> assuming everybody doesn't have that on their beach reading >> why not? you're actually going to the beach instead? >> can i ask you to summarize your position and then if you -- >> i think the mprobably be decided

on your approach it's a very sensible and maybe there will be conference on the rest but why don't you tell your approach first i think yours is going to be what convinces. >> to get people's attentions or anything else that is not just one thing. >> we could go on about this play know i have to shift gears a little bit so i'm going to spend a minute explaining the issue to those that don't know it. congress is thinking about following problems. when you had the multinational corporation with the foreign was if the foreign subsidiaries were earning money, the u.s. wouldn't tax that moneyidend

up to its parent a the effect of that was paradoxical and not desirable and think if you wouldfew woulddefend it. it meant u.s. companies wanted to keep their cash out of the sitting and if you care about for the country he tries to do discouraging investment in the home country it is pretty much opposite. we are not going to make the dividend the key anymore. we going to start taxing this income at a reduced rate. it has a wonderful acronym as guilty low tax intangible income it doesn't matter we are going to tax it but what you knew about the $2.5 trillion? in theory they could have said well when dividends come back we will look and see where the cash came from and if it is after 20 lynx, we won't tax before,

we will. and that's a nightmare money is fungible. what congress a bid is passed to the mandatory tax and basically said for everything that is out there, reduced rate and then everything tha comes back there's no tax. so you have the petitioners in the case and they boughttock in an indian company not multinational, u.s. individuals and they said wait, wait what's going on here. you just taxed us text us and we never sold they said that's not authorized by the 16th amendment because we think the 16th amendment when it says taxes on income it means rlize we would like you to decide the question of whether the realizatio constitutionally required you is not presented here. basically what i said is because

there have been realizations incompany level so the question is not can you tax without a realization but can the company to the owners of the company. if you know how they are taxed it's the a partnership one third, one third third. the partnership sells something. we didn't sell it, but each of us is going to pay tax on the third of the income and the years ago that was fine. so bat the supreme court challenging question about whether the realization rule is constitutionally required. i have the view i can share it but i don't think it isented here. so i was interested. the question december 5th in the oral argument was justice thomas who said can you tell us about the difference between attribution and realization. and for the n pretty much the entire

discussion was a debate about the series that my prediction is the way the majority will go wi uphold this lot deciding whether the realization is constitutionally required, but by saying actually this is not a test for proposition. so, we just affirmed thepredict also there will be a couple of concurring opinions that look like justice alito were very concerned the unrealized gains and i predict that they will have a concurring opinion saying that's a difficult question but it awaits analysis. we are concerned and by the way the tax is definitely a no go. someone asked the represetax if you're just taxing every year y unconstitutional so she agrees with me but in any event i a conference. justice jackson seemed to be eluding to the theory possibly saying i don't care the amendment. this would all be fine anyway. let me turn it over to you to about

your theory. >> please actually tell us your fury is about the constitutional issue of unrealized income and not realized in the t

meaning to who not just the would you consult the voters in 1913 by the way also 2024 you've got stock on it appreciated, do you have income there's a number of people who would say i don't think so because cal meaning within the pr i think it's income. >> and our friend thinks there has to be aealization and we disagree with that.

about everything you said. i might go and a little further and say i wouldn't be surprise if they wrote the opinion and he doesn't need to decide certain things and you've you need to take positions in the amicus brief. it'she difference between your net wealth. it would be how much is coming in and the outflow

income fallen and it is it's not about realization the current wealth for the first time the first transaction would go all the way back a the original baseline. but way before we pasw or the income tax but if wgo all the way back. it's not to have the accrued income before 1913 1913 supporting

that fact pattern aside it is utterly conventional and no one has questioned i bought stock 20 years a a isolate tomorrow it accruedy the way they might have changed the t changed the tax rate this year. >> they would understand that, but the idea persuasive what i do want to emphasize two might sound different but i will say then anyway. first i find impulse among progressives to push for the wealth because most of what they presumably want to they could do during thee tax. i have a friend who is democrat. i'm clearly not as you can tell who jokes about how when he was on the hill, his boss would come in and say what has freshened you and i would say not a lot but i have a lot of good radios, so i think this

flirtation with the wealth tax because it's differentyou don't need the amendment at all so whetherd or not because i am with mr. lincoln who signed the income tax into the original constitution i thoughtmitted that the end of the supreme court in the case called springer said that was all fine and changed their mind and john

and he said it would be a disaster. the people ros down the supreme court and they've only done that three other times in all of american history. dred scott the 11th amendment, dred scott and with the 18-year-ole rose up and said pollock was wrong we are with john marshall. i think it matters or ify think it is declaratory all this should have been in thetanding. the court hates admitting they made a mistake on anything. they still overrule the slaughterhouse cases and have nonsense talk and a whole bunch of domains rather than privileges because they don't want to admit some of these test cases are problematic.

if you didn't even need the amendment that might haveome technical implications. >> just a reminder i do think ase. i think the 16th amendment changes the rule because we have transaction when you have a transaction i think that the 16th amendment allows it to tax

ted to dory to carry out how much someone owed and let pay overtime you would need tax is pretty clear what they were doing and they just couldn't write it out so i do think that it can be squared with my view but i also think -- >> on that very view if you i can tell you about my portfolio was worth in this nano second whether i sold it were so every day that i choose not to sell as an implicit. you know lots of implicit stuff in the tax law. >> can i answer? >> start lining up at the microphone if youe just so we know if there are people who do, >> that came up with thersonally implicated

by all this. a yale man came up this theory and it's a funny story. >> i think the there was a transaction in article one. again going back to the meaning there were transactionaxes and i don't think that is the way the which is why when you say today it's different i would the 16th amendment for income you can do it differently but i don't think -- >> let's start over here if you canw@ you're from before you ask your questions. >> my question is for both of you on the taxation clauses. article one, section nine is a very specific limitation on the tax you can place on the importation so what is the relevance of that provision

about the taxation of your respective arguments? >> they are trying to close every door, t slaveholders. so if you can tax the slave heads thatsleeveheads that are existing at any rate at a is going to mean they will be able to tackle so we prevent that by saying it has two generated the netonal revenue but now there's a different way we are worried about what congress is trying to do between 1808 we 18 await we are worried they might disclose the new imported so to p any other article immediately but not slaves. there is a 20 year window. but suppose they don't prohibit in that 20 year window. they to ask them like they tax other things it and so than they actually have a on the tax

so that i like the question because you're saying there's lot of provisions in the constitution andlaratifies. we have the electoral college. at the big state wins every time we had them in all of american history. i think pierce, zachary taylor, joe biden and bill clinton. it's not a big state a small e. that is the housing in the senate. it is a democracy not no one reads the federalist ten. it's not about medicin they put the constitution to be vote. the electors are they are not a college. yale is a college princeton. the electoral college is all about slavery because without electoral college the north would win every time south can't count it slaves. they don't vote but with electoral count

albeit the the nine are one-w the whole thing and judges don't because the cases are litigated by clause and you have to state the whole thing. the constitutionle. who might that be. so it's about a lot of things. but a correct understanding with lots of provisions. that's another one the trade from the caribbean and just >> i was going to add that there's another provision that says you can't tax experts. what's that doing their? the point is some exported and some didn't. of anxiety how it was going to be treated in the union and although the deal wasn't persuaded by germany and france analogy, i think all of you should be not bg abses original

as him but because it is a way to understand what was happening at the convention, which was protecting their about one regionhing the end of the self exporting tobacco which is a product of slave labor. they don't want to use the word. they are in embarrassed to variant lincoln says that a persone' generalize it among the region to say no it's all about export because way is preventing tobacco from being ported. >> there's lots of people that are implicated it is another reason fair share idea can't be cashed out.

it would be a horrible doctrinerine today thatry regulation has to have some quota by a disparate effect across a different region. >> definitely not. and when you proposed a portion tidying the three fifths of the which you mentioned it before but you kind of lift this out, we originally wanted to do it for all taxes and then people said it doesn't work except direct taxes. >> into that because again -- most peo taxes work/.

he's helping the northerners the deal because he knows this is going to be on the popular. to their home states and try to get elected to the first congress we caved to the south because we had to. and he says that this was the he almost uses the word this was a way of trying to hide some of hired it by not using the word slave and sayingce or labor, other persons of deals having to do with slavery and norther delegates no what it's about and they truthfully don'tant thr constituents. >> president of the university of maryland undergraduate

the constitution tends to focus on nominal rather than real. the reason we read tlly so this $20 in the sev the use why because judges salaries can't be decreased but they can be increased. residents salaries can't be increased or decreased either one. why? presidents only have four year terms into judgesave five times terms and expected that there would be inflation have to increase judges salaries. tell your mom i a judge because they will be around for a time. they expected inflation. can you actuall peg this to

some. what is a proper measure of the inflation with different not and gas and if ever pay attention to this, medicine proposed this. he proposes a kd of crude and it turns out know that isn't going to work so well because it isn't the only place in the world and when you read the constitution holistically it is clear they are focus on the nominal value. you could take the position if you were only keeping up ou are really not any better off. >> into the truth is lots and lots of people have proposed over time to do more on the tax code in one clumsy of the justifications for having a lower rate or ordinary income rate is the capital gains usually

applies for a while he and others and in facet recognition that some of it is inflation. but i would be interested in this conversation for another day. >> some things are in the index like the social security and other things and others aren't. you know what really makes the judges mad there was a time made more then the law proposes and not so much. farmers used to talk about prices between 1909 to that. but back in the 60s we had a ten year. our salaries are going to be pegged to the price of wheat or the consumer price index. members of congress and if i'm right about

that, and i think i am, then i would be the strategy of the congress to think we could have an raise the end ofyet of the problem is there's been a certain to raise their own pay >> we are unfortunately out of time. please bring your questions haven't already gotten a copy of the book by the panelists, the book is how to save the world and six not so easy steps and the words that made us. again a nice light be treated this summer. please join me in thanking the panelists. [applause]

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