Difficulties of Fighting Discriminatory Taxation
Discriminatory taxes are exacerbated by the extreme difficulties faced by taxpayers in challenging an unconstitutional tax. In fact, the difficulties are so immense that state and local governments can and do impose unconstitutional taxes for decades before they are successfully challenged. Among the factors making it difficult to challenge a state or local tax are:
- pay-to-play rules, which require the taxpayer to first pay the tax and penalties and interest before challenging it.
- a federal law that prohibits federal courts from issuing injunctions on the collection of taxes by the states.
- state legislatures that replace taxes ruled unconstitutionally discriminatory with new tax schemes that are just as unconstitutional but which must then be relitigated all the way to the U.S. Supreme Court.