New Frontiers in Wealth Redistribution


George Will urges the U.S. Supreme Court to strike down an Illinois law that may be the next step in post-bailout, post-Kelo America: direct transfer of the profits of successful industries to the accounts of those that are failing. The Illinois law attempts to prop up the state's sagging horse racing industry by requiring the state's four most profitable casinos to simply hand over 3 percent of gross receipts to Illinois' horse racing tracks. The bill was recently upheld by the state's supreme court.

Will writes:

What is to prevent legislators from taking revenue from Wal-Mart and giving it to local retailers? Or from chain drugstores to local pharmacies? Not the tattered remnant of the Constitution's takings clause.

The Fifth Amendment says that private property shall not "be taken for public use without just compensation" (emphasis added). Fifty state constitutions also stipulate taking only for public uses. But the Illinois Supreme Court ignored the public-use question. Instead, the court said it is "well settled" that the takings clause applies only to government's exercise of its eminent domain power regarding land, buildings and other tangible or intellectual property -- but not money…

Suppose Congress, eager to aid newspapers hurt by competition from new information technologies, decides to take a percentage of the assets of Bill Gates and half a dozen other beneficiaries of those technologies and give the money to newspapers. Would not this "take and transfer" scheme be unconstitutional? Targeting specific, identifiable persons or entities for unfavorable treatment, and transferring their assets to equally identifiable persons or entities, surely also raises equal protection issues. Unquestionably a legislature can impose a levy on casinos if the revenue becomes subject to what the state legislators' brief calls "allocation via the familiar push and pull of political decision-making." But Illinois' confiscation of riverboat revenue is a private-pockets-to-private-pockets transfer, without even laundering the money through the state treasury.

So how many months before we see one or more items from Will's parade of horribles turn up in actual legislation?