Rebecca Kysar (Brooklyn) presented On the Constitutionality of Tax Treaties at Notre Dame on Friday as part of its Faculty Colloquium series:

Taxes, as we learned in grade school, kindled the American Revolution. Revolt against collecting revenues without representation caused a tea party, propelling the colonies towards convening the First Continental Congress. The rest is history. Forgotten, though, is the role of taxes in shaping our fledgling nation immediately after the Revolution. Control over which governmental body could impose taxes inflamed the delegates to the Constitutional Convention. So important was the issue that the decision to originate revenue bills in the lower house of Congress constituted a cornerstone of the Great Compromise, thus birthing the representational structure of our country. This principle became embodied in the Constitution as the Origination Clause, ensuring that the power to tax would begin with the house that was directly elected and proportionate to the population. The Framers perceived the Origination Clause as the counterweight to important privileges of the upper house; it engendered agreement between the large and small states as to the architecture of the government.

Tax treaties (generally, bilateral instruments that mitigate or eliminate double taxation of income across jurisdictions) upset the intracongressional balance that was carefully constructed by the Framers. Because tax treaties are generally considered to be self-executing, meaning that they need no implementing legislation to take legal effect, the ratification of a tax treaty cuts the House of Representatives wholly out of the process oflegislating in the area of taxation. This outcome, I argue, lies in derogation with the Origination Clause and also runs counter to the important policies embodied in the Clause. Contrary to current treatment, substantial constitutional and policy considerations mandate that tax treaties be implemented through legislation passed by both houses of Congress. Abiding by this condition has the practical effect of significantly reducing statutory overrides of tax treaties, a phenomenon partially resulting from the House’s jealous, albeit well-founded, guardianship over tax matters. It thus allows our nation not only to honor our Constitution but to better uphold our obligations under international law and our commitments to our treaty partners, creating more certainty for public and private actors alike.