I need help with my Con Law exam!!! ASAP! I will love you forever!?

Question

I am preparing one of the practice questions in the hopes it will be on the test - the situation is:
State X enacts a law which provides that unless the US Govt. determines otherwise, all sales in X of goods made elsewhere are subject to a Tax. The tax = the difference between the labor cost that would have been required to produce the item in question if it were manufactured in X and the labor cost actually incurred.

I need to set forth all plausible arguments to the effect that the tax is unconstitutional and evaluate those arguments.

HELP!!! I am going to be pulling an all nighter with this and any help would be appreciated!

Answer 1

Look at these rules: (1) whether the challenged statute regulates evenhandedly with only "incidental" effects on interstate commerce, or discriminates against interstate commerce either on its face or in practical effect; (2) whether the statute serves a legitimate local purpose; and, if so, (3) whether alternative means could promote this local purpose as well without discriminating against interstate commerce. The burden to show discrimination rests on the party challenging the validity of the statute, but "[w]hen discrimination against commerce . . . is demonstrated, the burden falls on the State to justify it both in terms of the local benefits flowing from the statute and the unavailability of non-discriminatory alternatives adequate to preserve the local interests at stake."

Your case sounds as though it would be against the CC. Good luck

Answer 2

States can and do levy "sales and use taxes" on goods brought in from other states and countries. The taxes are based on the value of the goods imported.

Despite the specific language of the constitution, these taxes are not illegal import tariffs. Rather, they are seen as allowable under the Compact Clause. So, your first problem is to distinguish State X's as unconstitutional under the Compact Clause. (Don't see congressional approval in your facts!)

Next, the Commerce Clause argument is a good one, as the tax could be seen as chilling the interstate movement of goods. Generally Commerce Clause arguments are the most powerful.

But don't forget the Due Process Clause as well. Does State X have jurisdiction over the producers?

Answer 3

The US Constitution states that the federal government has the power to regulate interstate commerce.

This problem was one of the many flaws with the Articles of Confederation. Also see Maubury Vs. Madison (or Maryland). This case also has to do with interstate commerce, but more with the banking aspect.

For what its worth do a quick search of Shay's rebellion. Best of luck.

Answer 4

What that tax would be is a tariff on imported goods, and only the federal government is allowed to set tariffs!