My colleague Peter Wiedenbeck (WashU Law) and I have a new-ish paper on the original function of tax apportionment—i.e., the revenue-raising strategy of assigning revenue quotas to local jurisdictions. The paper is our short-to-medium-length attempt to theorize about the role that tax apportionment played before it was incorporated into the U.S. Constitution, which I think of as a somewhat understudied subject. (After all, apportionment was used for hundreds of years in Britain and elsewhere before we imported it.) Here is the abstract, which explains our modern interest in the subject and sketches our basic view on the function:
The Constitution’s requirement that direct taxes be apportioned by state population is both confounding and important. At best, tax apportionment is regarded as reflecting the unique federalism concerns of the Founding; at worst, it is viewed as a tainted product of the constitutional compromise over slavery. And, in light of the Supreme Court’s decision in Moore v. United States (2024)—which refused to rule out that apportionment might be required for taxes on unrealized gains—tax apportionment is the subject of renewed legal and scholarly interest.
We consider one historical dimension of tax apportionment that has not been developed elsewhere: its original function. Today, apportionment can feel puzzling. But it emerged and persisted across hundreds of years of English, British, and American colonial practice because it was useful. We argue that the original function of tax apportionment was to solve a set of incentive problems that emerges when a central authority (like the crown) must rely on local authorities (like town and county officials) for tax gathering. In the context of this principal-agent problem, apportionment preserves the benefits of local flexibility—the local community can raise its allotment however it sees fit—but imposes a quota that limits flexibility and protects the central fisc. But we do not offer this theory to rationalize apportionment today. Indeed, understanding the original function of tax apportionment helps us understand exactly how far the Constitution’s use of tax apportionment strayed from its original purpose.
Peter is working on a longer paper about this history and theory, and my forthcoming paper with Ari Glogower takes up some related issues of apportionment in the post-ratification United States. So feedback is still timely—we are not yet burned out on writing about tax apportionment!
