The Early Court: Part 2

Hylton v. United States


In Hylton v. United States, the Court considered the constitutionality of the federal tax on carriages—whether or not the tax was a “direct tax” under the Constitution. If it were a direct tax, then it would have to be apportioned among the states on the basis of population and, presumably, could not be directly levied on individuals on the basis of the number of carriages that they individually owned. To levy the tax directly, that is to make every individual owner of carriages pay a tax calculated at the same rate, would be to levy the tax uniformly. Hylton, the taxpayer, argued that the carriage tax was a direct tax, even though Congress had specifically called it a “duty” on carriages. Thus Hylton put into question the very nature of the tax: was it a direct tax, as Hylton claimed, or a duty, as Congress claimed. Since the tax was not apportioned among the states on the basis of their population, as direct taxes must be apportioned according to Art. I, Section 9, of the Constitution, Hylton argued that it was unconstitutional and that he did not have to pay it. The United States argued that the tax was not a direct tax, and the Court agreed. Thus, the United States won the case; Hylton lost. The carriage tax was deemed not to be a direct tax.


What was the Court’s rationale? The rationale was rendered in the multiple or seriatim opinions that the Court typically used before Marshall became Chief Justice. Marshall replaced the seriatim method with the method of one opinion of the court and perhaps a few concurring or dissenting opinions. The three written opinions by Chase, Paterson, and Iredell are not identical, but that share certain common reasoning and conclusions. None of the three opinions simply accepts Congress’s characterization of the carriage tax as a “duty.” All three opinions inquire into the nature of Congress’s taxing power under the Constitution. All three adduce the three clauses relating to federal taxation in Article I and conclude that Congress’s broad power to tax includes, but is not limited to, direct taxes and duties, imposts, and excises. At this point in their reasonings, their individual speculations in logic, constitutional construction, and common language interpretation take them on different paths, but they all seem to conclude that the carriage tax is not a “direct tax” under the Constitution.


Justices Chase and Iredell both note that direct taxes must be apportioned under the Constitution and thus must be apportionable in their nature. Justice Iredell considers the carriage tax one that simply cannot be apportioned among the states and therefore concludes it cannot be a direct tax. Justice Chase’s reasoning is quite similar, though his rule is that direct taxes must be “reasonably,” “equitably,” or “justly” apportionable. The carriage tax, he says, “cannot be laid by the rule of apportionment without very great inequality and injustice.” Therefore, it cannot be a direct tax. Justice Chase concludes with a comment on judicial review and his hesitancy to affirm the power of the Supreme Court to declare an act of Congress unconstitutional. Fortunately, since he and the other justices found the carriage tax not to be a direct tax, Chase and the other justices did not have to address the issue of constitutionality.


Justice Paterson’s opinion is not only much longer than the other two, but it is the only one that discusses the intent of the Framers of the Constitution. Paterson, you may recall, was one of the delegates to the Philadelphia convention and played a prominent role in the presentation of the New Jersey Plan to the convention. He suggests that the constitutional language about direct taxes was essentially compromise language to placate the southern states, which were large in territory and had many taxable slaves. But he seems to conclude that the language on direct taxes is empty language. It was generally thought to apply to capitation (a head tax or tax on each individual) and land, though he concludes that federal tax on land “is scarcely practicable.” He thought that direct taxes were a throwback to the days under the Articles of Confederation when Congress could only request or requisition the states, not individuals, to contribute money to the national government. Direct taxes are basically taxes on the state. When he finally focuses specifically on the question of the nature of the carriage tax, his argument is very brief: “All taxes on expenses or consumption are indirect taxes. A tax on carriages is of this kind, and of course not a direct tax.” He concludes by citing two paragraphs from Adam Smith’s Wealth of Nations on the theory of taxation.


Notice what the Court concluded. There is no clear agreement on exactly what kind of tax the carriage tax is. It is probably an excise or duty, but there is no clear, unconditional agreement among the three. What they do agree on is the answer to the original question or issue presented to the Court: Is the carriage tax a direct tax? Answer (or holding): No, it is not a direct tax. That is the only question that needed to be answered in order to decide the case in favor of the government and against Hylton. Seriatim opinions often leave room for reasonable differences of interpretation, and the Hylton case demonstrates that point.


A couple more points about the Hylton case:


Since the carriage tax was not a direct tax, as Hylton argued it was, the tax did not have to be apportioned among the states. Thus, there was no conflict with the direct tax-apportionment requirement of Article I, Section 9. The Court did not have to exercise judicial review.


The Judiciary Act at that time the case was decided called for a court of six justices. The Act allowed a quorum of four justices to decide a case, which was good because only four participated in this decision. The new Chief Justice, Oliver Ellsworth (note the varying spellings of proper names in these old opinions), was apparently sworn in on the morning of the arguments in the case, too late to hear the complete arguments in the case. He chose to recuse himself—that is, he chose not to participate in the review of the case. Justice Cushing tells us that he was unable, “by indisposition,” to attend the arguments and thus did not participate.


Justice Wilson’s short statement is notable for a couple of reasons. Wilson was one of the Circuit Court judges who decided the case below. Under the practices of the time, he was not required to recuse himself when the case came before the Supreme Court, but he was clearly, and properly, I think, hesitant to take an active role in the Supreme Court’s appellate review of his Circuit Court decision. Ironically, his absence through recusal, together with the absences of Ellsworth and Cushing, would have prevented the Court from having the necessary quorum of four justices to decide the case. The case probably would have been postponed until a quorum was available.


Another point is that on appellate review, a majority of the appeals judges must agree if the decision under review is to be reversed. If the appellate panel splits evenly, the opinion under review must be affirmed. Wilson wanted the Circuit Court opinion—his opinion—affirmed. As Wilson says, fortunately for him, the other three justices who decided the appeal in the Supreme Court also decided to affirm, so Wilson’s decision was not crucial, though it might have been if the other three justices had split in favor of finding the tax to be a direct tax.


Hylton v. United States is typical in some respects of the early Supreme Court decisions. The opinions were rendered seriatim. The justices recognized the issue of judicial review but were hesitant to consider the constitutionality of statutes if the legal issue could be otherwise resolved.  



©William S Miller