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August 12, 2004

New Haven Taxing Yale-- Takings Clause

The Takings Clause of the US Constitution has the idea that the government is not supposed to seize the property of individual people or organizations without compensation. Taxes are OK, but a tax is a siezing of the property of a group of people, without singling out any one of them, and, of course, the tax must go through the legislature.

It is common for tax bills to be written to give tax breaks to individual companies, but always in at last mild disguise--"Companies more than 23 years old producing raspberry but not blueberry jam shall be given accelerated depreciation deductions," and such.

What is less common is a tax law written to target a particular person or company and seize their property. This is more threatening to civil liberties, since sticks against critics are more dangerous than carrots to friends. (Of course, bribes to critics are somewhere in between!)

A recent example of an attempt, though, is mentioned in the May-June 2004 Yale Alumni Magazine. For the 5th time since 1990, legislation has been introduced introduced in the Connecticut General Assembly to put a special tax on Yale that wouldn't apply to other universities. This time round it would have imposed property taxes on revenue-producing properties-- that is, the football stadium and the university hospital.

Apparently this attempt was not really concealed. I wonder if it would have been constitutional if it had passed?

Posted by erasmuse at August 12, 2004 06:52 PM

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Tracked on August 17, 2004 11:18 PM


I think it is constitutional as far as the Federal
Constitution is concerned as there is no exemption for any group or occupation. ...tax income from any source without regard to population.

If I remember correctly, the states have always been upset about and avaricious about taxing universities that own profitable commercial enterprises. NYU did own a commercial profit producing spaghetti(?) company that NY wanted to tax. There was a big bouhaha and I do not remember the final result.

Posted by: Jim at August 13, 2004 12:37 AM

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