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Op-Ed: The latest assault on our
Constitution and the states
By Sarah Curry, DBA and John Hendrickson | Iowans for Tax Relief
Foundation
For decades, federal policymakers have forgotten or simply ignored
the limits placed on them by the Constitution. |
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 Once again it appears that policymakers in
Washington, D.C. are trying to further centralize power and squeeze the
sovereignty of the states. Federalism, which refers to the division of power
between the federal government and the states, is a pillar of American
constitutionalism. The United States House of Representatives Judiciary
Committee has a bill before them that would set a dangerous precedent regarding
tax policy if enacted. It’s called the STAMP Act, which stands for ‘Stop Taxes
Against Menstrual Products Act of 2022’. It would tell states and local
governments that they cannot levy a sales tax on the retail sale of menstrual
products.
This is not the first time in recent memory Beltway Democrats have tried to
interfere with state tax policy. The American Rescue Plan Act (ARPA) provided
stimulus funds to states and localities for the purposes of pandemic relief. The
Biden administration attempted to prevent states from cutting taxes with any of
those dollars. Fortunately, numerous states, including Iowa, challenged this
stipulation and multiple federal courts have ruled that President Joe Biden’s
overreach was unconstitutional.
For decades, federal policymakers have forgotten or simply ignored the limits
placed on them by the Constitution. With regards to taxation specifically, the
federal government levies an income tax, but sales and property taxes have been
left to the states since our nation’s creation. Founding Father James Madison
wrote that the Constitution had few and defined powers:
The powers delegated by the proposed Constitution to the federal government are
few and defined. Those which are to remain in the State governments are numerous
and indefinite. The former will be exercised principally on external objects, as
war, peace, negotiation, and foreign commerce; with which last the power of
taxation will, for the most part, be connected. The powers reserved to the
several States will extend to all the objects which, in the ordinary course of
affairs, concern the lives, liberties, and properties of the people, and the
internal order, improvement, and prosperity of the State.
Further, the Tenth Amendment to the Constitution affirms Madison’s perspective:
“The powers not delegated to the United States by the Constitution, nor
prohibited by it to the States, are reserved to the States respectively, or to
the people.” In this case, the federal government has chosen to let the states
levy sales taxes, thus they need to also respect the states when it comes to
their exemptions, or lack thereof.
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The Bill of Rights itself was passed to reassure those Americans who worried the
federal government would assume powers that would directly interfere with the
sovereignty of the states, including taxation. The STAMP Act is just another
example of Washington inserting itself into a policy area that should be a
concern for state legislatures and not the Congress. Unfortunately, it appears
the fears of a federal power grab are still justified over 200 years later.
The federal government has no right to tell Iowa what it can and cannot tax.
These are decisions that should be made in Des Moines, not Washington, D.C.
Interestingly enough, Iowa arrived at its own conclusion on feminine products
earlier this year. In June, the Iowa Legislature enacted SF 2367, which included
the creation of an exemption for feminine hygiene products and child and adult
diapers.
From an ideal tax policy perspective, sales taxes should be applied to all final
consumer purchases, without any regard to whether the items are classified as
luxuries or necessities. Having a broad sales tax base does not distort
preferences across goods or services, it allows for the lowest possible rate,
and it means a consumer does not have to choose between one item that is taxed
versus another item that isn’t. Exempting items from taxation chips away at the
stability of the sales tax base and in the long run contributes to higher
overall rates.
Exempting those hygiene products may not fit our definition of ideal tax policy,
but it was correctly left up to the state of Iowa and its elected officials to
make that decision. Whether you share our view of exemptions or not, federally
mandated exemptions seemingly violate the Tenth Amendment. In the case of the
STAMP Act, the federal government should not pretend that it’s OK for them to
tell the states what to tax unless they want more lawsuits like the ones brought
against them when they went too far with ARPA guidelines.
The STAMP Act is another assault upon constitutional government and bad policy.
Sarah Curry is research director and John Hendrickson is policy
director at Iowans for Tax Relief Foundation
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