Monday, July 18, 2005

Tax Foundation Case

No. 04-1704
Supreme Court of the United States

DAIMLERCHRYSLER CORPORATION,
v.
CHARLOTTE CUNO, ET AL.
On Petition for a Writ of Certiorari to the
United States Court of Appeals
for the Sixth Circuit
http://www.taxfoundation.org/publications/show/955.html

The Tax Foundation filed this BRIEF OF AMICUS CURIAE in a mistaken interpretation of the dormant Commerce Clause of the Constitution. This again is one of those times where Precedent serves only to confuse, using previous decisions to forestall discrimination against Out-of-State taxpayers as attack on In-State taxpayers, the Later attempting only to stop a positional discrimination against themselves and their property. Said Tax incentive in question would have unquestionably penalized them by maintaining the exact Tax burden upon themselves, while allowing new entrants to avoid taxation in total.

The dormant Commerce Clause does not grant apriori right to Tax competition, if such entails adverse, differing Tax applications against segments of the total polity taxed. The intent of the Commerce Clause defines simply that no government entity will by its action artificially diminish the role of interstate commerce. The existence of Tax incentives to lure business into a State discriminates against established Business to compete within and without the State. The Cuno decision should stand without writ of certiorari, as not to falsely restrict lower Court powers of determination. lgl

1 comment:

Chris said...

"Said Tax incentive in question would have unquestionably penalized them by maintaining the exact Tax burden upon themselves, while allowing new entrants to avoid taxation in total."

But DaimlerChrysler was already a resident of Ohio, and so should be counted among the resident taxpayers. Thus, they were part of the "established business" and therefore taking the credit could not possible discriminate against resident businesses since they were a resident business.

In fact, the court's ruling would require just the opposite. The Sixth Circuit said that the tax discriminates because it is more valuable to companies with pre-existing liabilities...i.e. those already located in Ohio. Thus, following the Sixth Circuit's rule, the credit would only be constitutional if given to those without pre-existing liability...i.e. those coming from outside the state.

So, instead of being a victory for the taxpayers of Ohio, it's actually a stunning defeat for them.