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Abstract

In a series of cases decided in the last three years, four delivered in 2024 alone, the U.S. Supreme Court has directed a withering gaze toward the federal administrative state. In West Virginia v. EPA, the Court both curtailed Executive Branch regulatory authority and mandated that Congress draft with greater statutory clarity and specificity under their recently developed major questions doctrine. Under Ohio v. EPA, the Court placed on administrative agencies the burden of extraordinary vigilance in addressing comments as part of the regulatory promulgation process. In Loper Bright v. Raimondo, the Court overturned Natural Resource Defense Council v. Chevron, a forty-year precedent, holding that instead of giving deference to executive branch expertise, the courts must follow the guidance set forth in the Administrative Procedure Act. In Board of Governors of the Federal Reserve System v. Corner Post, the Court effectively eliminated any time-bar for claims that an executive branch agency has exceeded its authority, and, possibly, other claims. In Securities and Exchange Commission v. Jarkesy, the Court held that, to impose fines or damages in a civil enforcement action, an agency must try the claims before a jury in an Article III court. As the U.S. Supreme Court has directed a withering gaze to regulatory authority, rulemaking and enforcement, the question arises “Whither, regulation?” This article argues that many of the cases themselves, grounded in a history of tax exceptionalism, yield an answer: “Hither to the tax system.” The article makes three contributions. First, it briefly outlines the recent U.S. Supreme Court cases culling administrative authority, describes their likely effects on the regulatory state, and identifies the tax exceptions that may permit certain types of regulatory action to pass scrutiny. Second, the article outlines the current constitutional framing for the taxing power and then discusses the kinds of administrative concerns for which tax may easily serve as a regulatory instrument, based on the economics of regulatory taxation. Finally, taking the carbon tax as a case study, it explains the process for cultivating regulatory taxes and subsidies in view of current legislative and judicial branch hazards.

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