Articles

Economic inequality in the United States is now approaching historic levels last seen in the years leading up to the Great Depression. Scholars have long argued that the federal income tax alone cannot curtail rising inequality and that we should look beyond the income tax to a wealth tax. Taxing wealth also faces two central and resilient objections in the literature: A wealth tax penalizes savings and overlaps with a tax on capital income.

This Article moves beyond this stalemate to redefine the role of wealth in a progressive tax system. The Article first introduces a generalized framework for justifying a wealth tax centered in the relative economic power theory which explains how inequality of economic outcomes generates social and political harm. This theory formalizes the problem of inequality and has specific implications for how economic inequality should be measured and constrained.

The Article then describes design problems in coordinating taxes on labor income, capital income, and wealth as factors in inequality, and the limitations of each of these factors as a base for taxation. From this Article’s outcomes-based perspective, a capital income tax favors wealth holders relative to labor-income earners. A wealth tax, in contrast, disfavors wealth holders relative to labor-income earners and cannot account for taxpayers’ varying needs to save their wealth for different numbers of future periods. Finally, proposals in the literature for separate taxes on both income and wealth do not account for the relationship between the two as factors in economic well-being.

This Article tackles a question that has vexed the administrative state for the last half century: how to seriously take account of the distributional consequences of regulation. The academic literature has largely accepted the view that distributional concerns should be moved out of the regulatory domain and into Congress’s tax policy portfolio. In doing so, it has overlooked the fact that tax policy is ill suited to provide compensation for significant environmental, health, and safety harms. And the congressional gridlock that has bedeviled us for several decades makes this enterprise even more of a nonstarter.

The focus on negative distributional consequences has become particularly salient recently, playing a significant role in the 2016 presidential election and threatening important, socially beneficial regulatory measures. For example, on opposite sides of the political spectrum, environmental justice groups and coal miner interests have forcefully opposed the regulation of greenhouse gases through flexible regulatory tools in California and at the federal level, respectively.

The time has come to make distributional consequences a core concern of the regulatory state; otherwise, future socially beneficial regulations could well encounter significant roadblocks. The success of this enterprise requires significant institutional changes in the way in which distributional issues are handled within the executive branch. Every president from Ronald Reagan to Barack Obama has made cost-benefit analysis a key feature of the regulatory state as a result of the role played by the Office of Information and Regulatory Affairs, and the Trump administration has kept that structure in place. In contrast, executive orders addressing distributional concerns have languished because of the lack of a similar enforcement structure within the executive branch. This Article provides the blueprint for the establishment of a standing, broadly constituted interagency body charged with addressing serious negative consequences of regulatory measures on particular groups. Poor or minority communities already disproportionally burdened by environmental harms and communities that lose a significant portion of their employment base are paradigmatic candidates for such action.

This Article is the first to develop a problem-solving theory for the civil justice system. Drug courts pioneered the problem-solving model in the 1990s to pursue therapeutic goals as an alternative to “assembly line” jail-based sentencing. This Article explores the potential for migration of the drug court framework into the two most commonly adjudicated private law cases: rental housing and consumer debt.

Three structural conditions in the civil courts—systemic lack of counsel, high-volume dockets, and corporate capture of the small claims process—routinely position vulnerable classes of individuals on the losing end of litigation. In the aggregate, these conditions have rendered the civil justice system predictably ineffective in combatting recurring social issues such as substandard housing and unscrupulous debt collection. The heart of the problem-solving theory in drug courts is the availability of an alternative remedy: treatment over prison. In civil courts, the remedy itself is not necessarily deficient; it is access to the remedy that is compromised. Relying on two years of field research in an experimental court, this Article demonstrates how core drug court principles, such as naming the purpose of the court as solving a social problem, interdisciplinary collaboration, and a strong judicial role, can be manipulated to address process failures in the civil justice system and reimagine the courts as proactive institutions responsible for the pursuit of socially beneficial outcomes.

The Article also argues that a civil problem-solving theory survives many of the valid critiques levied against drug courts. In particular, drug courts have come under fire for playing a moralizing role and using compulsory treatment as a form of social control. A civil problem-solving court, however, would not exacerbate the negative impact of state power on already over-burdened groups. Instead, the targets of monitoring and behavior modification are the more powerful private actors to the litigation, such as property owners and debt buyers, who otherwise have been known to manipulate the courts—an instrument of the state—to evade their legal obligations and suppress individual rights.

With increasing frequency, courts are issuing nationwide injunctions barring the executive from enforcing federal laws and policies against anyone, not just the plaintiffs in the case before them. Nationwide injunctions halted President Obama’s initiative granting deferred action to undocumented immigrants and his Department of Education’s interpretive guidance on the treatment of transgender students in public schools. More recently, district courts enjoined President Trump’s travel ban, as well as his administration’s policy of withholding federal funds from “sanctuary cities.” Legal scholars have criticized the practice, Congress is considering legislation to prohibit it, and commentators are calling for the Supreme Court to address it. A consensus is forming that courts should never issue nationwide injunctions, period. Indeed, some scholars contend that federal courts lack the constitutional authority to do so under any circumstances.

This Article provides the first sustained academic defense of nationwide injunctions. In some cases, nationwide injunctions are the only means to provide plaintiffs with complete relief, or to prevent harm to thousands of individuals who cannot quickly bring their own cases before the courts. And sometimes anything short of a nationwide injunction would be impossible to administer. When a district court is asked to pass on the validity of certain types of federal policies with nationwide effects—such as policies affecting the air or water, or the nation’s immigration system—it would be extremely difficult to enjoin application of the policy to some plaintiffs but not others. Furthermore, nothing in the Constitution’s text or structure bars federal courts from issuing a remedy that extends beyond the parties. To the contrary, such injunctions enable federal courts to play their essential role as a check on the political branches.

The United States has reached a point of economic inequality that has not been seen since the 1920s. According to the median voter theorem of redistribution, democracy is supposed to act as a check on growing economic inequality. The intuition behind this theorem is simple: If a majority of the population sees their incomes stagnate while a wealthy minority gets richer, the majority will demand redistributive policies, and representatives will respond by addressing inequality. But in the United States, very little redistribution has accompanied rising economic inequality.

Why has democracy failed to check economic inequality in the United States? Political scientists and legal scholars have pointed to political inequality as the culprit. Political scientists have shown that elected representatives are much more responsive to the wealthy than any other income group. Legal scholars have argued in favor of equalizing campaign finance and regulating lobbying as ways to reduce political inequality. Empirical studies, however, have raised doubts about the effectiveness of any reform efforts aimed at those areas, and constitutional law disfavors solutions aimed at diminishing the political voice of the wealthy.

In this Article, I argue that reducing the income class imbalance of the electorate— i.e. the tendency of wealthier voters to vote at higher rates than less affluent ones— will be a more constitutionally viable and effective means of ameliorating political inequality. I base this argument on the median voter theorem, which suggests that elected officials decide whether or not to adopt redistributive policies based on whether they believe the median voter desires such policies. Because the poor vote less and have less access to their elected representatives, representatives perceive the electorate to be better off than the population as a whole actually is, diminishing the pressure to redistribute in contexts of rising economic inequality.

The ideal solution to this form of political inequality is to induce the participation of the poor and enhance their engagement with elected officials through campaign mobilization. Mobilizing the poor would not only increase the proportion of the poor in the electorate, but more importantly, would change how representatives perceive the electorate and its demands for redistribution. Achieving these goals will require looking to new legal strategies aimed at incentivizing mobilization. I examine three legal strategies that could increase the incentives for political campaigns to mobilize the poor: campaign finance vouchers, earmarking campaign contributions, and a mobilization-matching fund. I conclude by suggesting a path to advancing these strategies in the current political climate.