Article 1, Section 9, Clause 4-6
4: No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or Enumeration herein before directed to be taken.7
5: No Tax or Duty shall be laid on Articles exported from any State.
6: No Preference shall be given by any Regulation of Commerce or Revenue to the Ports of one State over those of another: nor shall Vessels bound to, or from, one State, be obliged to enter, clear, or pay Duties in another.
Benjamin Franklin is credited with observing that nothing is certain except death and taxes. In clauses 4-6 of Article I, the Founders were attempting to assuage concerns Americans had over the ability of the national government to levy taxes. The power to raise revenue was essential – the national government would be moribund without finances. But the national government could come under the sway of parochial interests, and the taxing authority could unfairly burden certain regions.
With clause 4 “Congress might not have the power of imposing unequal burdens; that it might not be in their power to gratify one part of the Union by oppressing another” noted Hugh Williamson, a North Carolina delegate to the constitutional convention. Delegates from Southern colonies were especially sensitive to this issue.
Thus in Clause 4, the Constitution requires that direct taxes only be assessed in proportion to population, as determined by the census that apportions members of Congress. (Recall that the census apportioned representation according to the number of free persons and three/fifths of the slaves). A capitation tax, or “poll” tax, was nothing more than a tax on individuals. Poll taxes were most commonly assessed at the local level, for goods like roads and schools. Here, the Founders believed that commerce would ordinarily provide tax revenue, and that a direct tax would seldom be used at the national level. But the Founders also knew that urgent situations, like war, might exceed the nation’s capacity to raise revenue through tariffs and excise taxes.
As an aside, the poll tax roll was also a means to evaluate who lived in a jurisdiction, and so were also used to identify eligible voters. This is the context most people today think of when they hear the phrase “poll taxes” so the mistake is often made of thinking that “poll” means the place where votes are cast. The Founders would have ben using “poll” on the older sense, that is, a tax on individuals.
Southern delegates were also sensitive to the potential harm arising from Congress’s taxation of exports. in the debate over Clause 5, advocates argued that, were Congress given this power, it could unfairly burden the exports of some states and not others. Different states had vastly different export profiles – think of how an export tax on cotton would have applied in practice. Yet the solution incorporated in the Constitution remained controversial, given the economic advantages Northerners believed that the South derived from slavery. Thus, even as anodyne as this clause may appear today, it passed by only a vote of 7-4, with New Hampshire, Pennsylvania and Delaware voting no, and Massachusetts abstaining.
In Clause 6 the constitution yet again limits congressional power to favor one region over another. Under clause 6, Congress would lack the power to regulate a disfavored state’s maritime commerce out of existence. This issue was of special concern in Maryland, because Maryland-bound shipping would pass ports in Virginia. A few delegates believed this clause would impose inconveniences in some situations, but relented in favor of those states with strong interests in these limits.
The revenue profile of our nation today is quite different from what the Constitutional Convention anticipated. Indirect taxes, like excise taxes and tariffs, account today for only about 3% of the federal government’s revenue, while about half comes from individual income taxes – a direct tax that could only come into existence by amendment to the Constitution, in Amendment XVI, ratified in 1913. That change came quickly – by 1930, 60% of the federal government’s receipts were from the income tax.
Allison Hayward graduated from Stanford University with degrees in political science and economics, and received her law degree from the University of California, Davis. She clerked for Judge Danny J. Boggs of the United States Court of Appeals for the Sixth Circuit. Hayward is Chairman of the Federalist Society’s Free Speech and Election Law Practice Group. She also serves on the Board of the Office of Congressional Ethics. She is an active member of the California and Washington, D.C. bars, and she is a certified FINRA arbitrator.