Taxing Others in the Age of Trump: Foreigners (And the Politically Weak) As Subjects
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Supporting a tax increase during the past couple of decades might sound the death knell for the career of a U.S. politician. Some attribute George H. W. Bush’s presidential reelection campaign loss to violation of his “no new taxes” pledge. Conflicting with the political toxicity of new taxes and tax increases is the relentless demand for revenue to operate government and fund the fulfillment of campaign promises. The fiscal discipline to eliminate the need for revenue increase rarely accompanies the political rhetoric committing to decrease taxes and never increase them again. For many politicians, the funding issue becomes a matter of decreasing funding for programs the politician disfavors and using the decreased funding for programs the politician favors.
These conflicting goals of funding spending programs while reducing (or at least not increasing) taxes have encouraged development of “non-tax” revenue sources. User fees for governmental services that previously had been free or low-cost have proliferated. Law enforcement agencies routinely use property forfeitures to supplement revenue from government tax allocations—a phenomenon observed in the numbers of forfeitures that are not accompanied by any prosecution. At the state and local level, revenue-based policing with aggressive enforcement of misdemeanors has become commonplace. Hotel and entertainment taxes capture revenue from nonresidents who do not vote locally. Automatic increases of property tax from periodic value reassessments are politically more acceptable than a legislative vote or a referendum in states requiring a vote to increase a tax rate because they do not attach specific political blame for the increase. When revenue falls short and tax increases seem better than spending cuts, income tax increases and steeper progressivity in income tax rates remains impractical. Regressive consumption taxes falling most heavily on the non-affluent and politically weak are the preferred choice for additional revenue.
In the ongoing anti-tax political climate, an ideal choice would be to impose and increase taxes on people who may not or do not vote, people who can be persuaded to vote against their economic interests, and people who lack the political influence to confront and alter facially neutral tax legislation that disproportionally burdens people with similar non-politically dominant characteristics. Critical tax research has exposed how many racial, gender, sexual orientation, economic, and other biases are embedded in facially neutral tax laws and how those biases generate systemic tax distribution inequities that overburden less affluent taxpayers and underburden more affluent and politically influential taxpayers. Further, lack of standing precludes taxpayers who lack political force from challenging discriminatory tax provisions and non-discriminatory provisions that become discriminatory in their application.
In the context of ambitious spending programs that President Trump promised during his presidential campaign, this Article seeks to identify revenue sources that may be least objectionable to the President’s political base because they impose taxes on people who differ in some material way from the membership in that base. As critical tax scholarship has documented the discriminatory taxation of those who are “other” because of their race, gender, or other characteristics, this Article identifies elements of tax structure that adversely impact those “others” who are or appear foreign. Part I considers taxing those who are neither citizens of nor residents in the United States. Part II identifies how existing tax structures burden immigrants and, in the case of unauthorized immigrants, and, to a lesser extent, temporary authorized residents, deny those same taxpayers participation in the full range of societal benefits. Part III reviews current tax provisions that capture revenue from those who wish to escape the reach of the worldwide income tax and concludes the Article.
*Henry Ordower, Professor of Law, Saint Louis University School of Law; J.D., M.A., The University of Chicago; A.B., Washington University.