Sept. 7, 2021 3:05 pm ET
I’m sympathetic to the argument of David B. Rivkin Jr. and Andrew M. Grossman that Congress can’t avoid constitutional problems with a wealth tax by calling it an income tax (“Can Congress Tax Wealth by ‘Deeming’ It Income?” op-ed, Sept. 2), but the authors overstate their case in one respect.
To define income under the 16th Amendment, they point to language from the Supreme Court’s 1955 decision in Commissioner v. Glenshaw Glass: “undeniable accessions to wealth, clearly realized, and over which the taxpayers have complete dominion.” But Glenshaw Glass was a statutory interpretation case, not a constitutional one, and Congress can change statutory meaning. Furthermore, the high court didn’t say it was providing a definition. It concluded only that awards such as punitive damages, with those three characteristics, easily fall within the Internal Revenue Code’s meaning of income. The Supreme Court didn’t say that all three factors must be present for something to be reached by the income tax.