Taxpayer Standing

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Article III, Section 2, Clause 1:

The judicial Power shall extend to all Cases, in Law and Equity, arising under this Constitution, the Laws of the United States, and Treaties made, or which shall be made, under their Authority;—to all Cases affecting Ambassadors, other public Ministers and Consuls;—to all Cases of admiralty and maritime Jurisdiction; to Controversies to which the United States shall be a Party;—to Controversies between two or more States; between a State and Citizens of another State, between Citizens of different States,—between Citizens of the same State claiming Lands under Grants of different States, and between a State, or the Citizens thereof, and foreign States, Citizens or Subjects.

In general, a litigant may not rely solely upon his status as a federal taxpayer to maintain Article III standing to challenge government policy or spending decisions.1 Such taxpayer lawsuits, which are distinguishable from cases in which a litigant challenges the assessment of a tax as unconstitutional,2 often ask a court to decide abstract legal questions regarding the authority of the political branches of government—a task that potentially raises concerns regarding the proper role of the Judiciary.3 And as a practical matter, litigants arguing that their taxes have been spent unlawfully may simply fail to satisfy the elements of Article III standing, as their complaints may amount to generalized grievances about government spending or policy decisions shared with millions of other taxpayers.4 Moreover, it may be difficult for a taxpayer-litigant to demonstrate that his or her increased tax liability is traceable to the government spending or policy decision challenged and that judicial relief would effectively reduce the litigant’s tax liability.5 These concerns have led the Supreme Court to permit taxpayer lawsuits only in narrow circumstances.

One of the Supreme Court’s earliest decisions on Article III standing involved a taxpayer lawsuit. In the 1923 case Frothingham v. Mellon, the Court declined to reach the merits of an individual federal taxpayer’s Tenth Amendment and Due Process challenges to the disbursement of federal funds to states under a federal appropriations law, determining that the plaintiff lacked Article III standing.6 The Court wrote that deciding the case on the merits would not decide a judicial controversy but would rather “assume a position of authority over the governmental acts of another and co-equal department, an authority which we plainly do not possess.” 7

The Supreme Court further explained its justification for rejecting taxpayer lawsuits in the 1970s. In a case in which a federal taxpayer-plaintiff challenged a federal law allowing the Central Intelligence Agency (CIA) to withhold from the public detailed information about the Agency’s expenditures, alleging that it violated the Statement and Account Clause of the Constitution,8 the Supreme Court refused to reach the merits of the case.9 It determined that the plaintiff’s claims raised a generalized grievance, not about Congress’s exercise of its taxing and spending power, but rather Congress’s exercise of power to regulate the CIA through a statute governing disclosure of information.10 In another case, an association of officers and enlisted members of the military reserves, as well as individual members, argued that the Incompatibility Clause of Article I11 forbid certain Members of Congress from holding commissions in the Armed Forces Reserve. The Court held that they lacked standing to sue as taxpayers because they had brought generalized grievances against Executive Branch actions permitting Members of Congress to retain their status as members of the Reserves, and thus lacked the individualized injuries that might provide standing to challenge Congress’s exercise of its power under the Taxing and Spending Clause.12

For nearly a century since Frothingham, the Supreme Court has generally barred federal courts from entertaining cases in which a plaintiff relies solely upon his status as a taxpayer to establish standing.13 The principal exception to this rule, albeit a narrow exception,14 arises in the context of the First Amendment. The Court carved out a narrow exception to its general rule in the 1968 case Flast v. Cohen.15 In Flast, the taxpayer-plaintiff challenged federal spending under a federal statute, the Elementary and Secondary Education Act of 1965, on the grounds that it violated specific guarantees in the First Amendment’s Establishment Clause16 by subsidizing teaching at religious schools.17 In a departure from its earlier standing cases, the Court held that the plaintiffs possessed a genuine stake in the outcome of the case sufficient for standing.18 The Court applied a two-factor test that considered whether there was (1) a “logical link” between the plaintiff’s taxpayer status and “the type of legislative enactment attacked” ; and (2) “a nexus” between the status of the taxpayer-plaintiff and “the precise nature of the constitutional infringement alleged.” 19 The Court determined that, in contrast to the plaintiffs in Frothingham, the Flast plaintiffs had not alleged that Congress had exceeded its powers under the Taxing and Spending Clause in Article I, Section 8 of the Constitution, but rather that Congress, by exercising its taxing and spending powers under that Clause in authorizing the challenged federal expenditures, had exceeded a specific constitutional limitation on its taxing and spending power (i.e., the First Amendment’s Establishment Clause).20 The Court noted Establishment Clause drafter James Madison’s specific interest in preventing the federal government from collecting taxpayer money and spending it in favor of religion.21 Consequently, the Court found that the plaintiffs had standing to sue by distinguishing Flast from Frothingham on the grounds that the Flast plaintiffs sought to uphold a specific limit set forth in the Establishment Clause on how federal taxpayer money is used.22

Since Flast, the issue of taxpayer standing has periodically arisen in the context of Establishment Clause challenges to federal financial assistance for religious organizations.23 In subsequent cases, the Court has construed Flast's exception to the general rule barring taxpayer standing quite narrowly.24 Thus, when a federal agency disposed of surplus federal real property by conveying it to a private religious college without requiring the school to pay for it, the Court found that plaintiffs seeking to bring an Establishment Clause challenge to the transfer lacked standing to sue as taxpayers.25 The Court distinguished the case from Flast for two major reasons. First, unlike in Flast, the plaintiffs had challenged a federal agency’s decision to transfer property rather than Congress’s enactment of the law authorizing the transfer.26 Second, the property transfer implicated Congress’s power under the Property Clause27 rather than the Taxing and Spending Clause.28 By drawing these distinctions, the Court construed its precedent in Flast narrowly, determining that Flast's exception to the general bar on taxpayer standing was limited to congressional acts that relied upon the Taxing and Spending Clause.

The Court again refused to recognize taxpayer standing in a 2007 Establishment Clause challenge. In Hein v. Freedom From Religion Foundation, taxpayer plaintiffs challenged the Executive Branch’s funding of its officials’ religiously themed speeches promoting federal assistance to religious organizations and community groups.29 A three-Justice plurality suggested that taxpayer-plaintiffs lack standing to challenge Executive Branch funding of religious activities out of general Executive Branch appropriations because such cases do not involve Congress specifically authorizing, appropriating, or mandating the use of federal funds for religious purposes.30 Continuing to adhere to its narrow interpretation of the Flast exception, the Court held four years later that taxpayers lacked standing to challenge Arizona’s provision of tax credits to individuals who contributed to scholarship organizations that funded students’ attendance at private religious schools.31 Because the tax credits did not compel individual taxpayers to support sectarian activities in the way that government spending could, the Court held that no aid flowed directly from the government to religious organizations, and therefore the plaintiffs could not surmount the general bar on taxpayer standing.32

1: E.g., Hein v. Freedom from Religion Found., Inc., 551 U.S. 587, 599 (2007) (plurality opinion) ( “As a general matter, the interest of a federal taxpayer in seeing that Treasury funds are spent in accordance with the Constitution does not give rise to the kind of redressable ‘personal injury’ required for Article III standing.” ).
2: Id.
3: See, e.g., Frothingham v. Mellon, 262 U.S. 447, 486–87 (1923).
4: Id. ( “[A U.S. federal taxpayer’s] interest in the moneys of the Treasury—partly realized from taxation and partly from other sources—is shared with millions of others; is comparatively minute and indeterminable; and the effect upon future taxation, of any payment out of the funds, so remote, fluctuating and uncertain, that no basis is afforded for an appeal to the preventive powers of a court of equity.” ).
5: E.g., Ariz. Christian Sch. Tuition Org. v. Winn, 563 U.S. 125, 129, 136–38 (2011) ( “To find injury, a court must speculate that elected officials will increase a taxpayer-plaintiff’s bill to make up a deficit.” ) (citation and internal quotation marks omitted).
6: Frothingham, 262 U.S. at 486–87. See also ArtIII.S2.C1.6.4.3 Particularized Injury.
7: Id. at 489.
8: Article I, Section 9, Clause 7 of the Constitution, known as the Statement and Account Clause, provides that “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time.”
9: United States v. Richardson, 418 U.S. 166, 166–68, 175 (1974).
10: Richardson, 418 U.S. at 166–68 ( “Although the status [the plaintiff] rests on is that he is a taxpayer, his challenge is not addressed to the taxing or spending power, but to the statutes regulating the CIA.” ). See also DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 337–39, 343–47 (holding that Ohio taxpayers lacked standing to challenge state and local tax credits and exemptions for a vehicle manufacturer as violations of the Commerce Clause because they sought to advance a generalized grievance and failed to meet the standing requirements of causation and redressability). But see FEC v. Akins, 524 U.S. 11, 21 (1998) (holding that a litigant’s failure to obtain information that federal law requires to be disclosed can constitute a sufficiently concrete injury for Article III standing purposes).
11: The Incompatibility Clause in Article I, Section 6, Clause 2 of the Constitution, provides that “no Person holding any Office under the United States, shall be a Member of either House during his Continuance in Office.” For more on the Incompatibility Clause, see ArtI.S6.C2.3 Incompatibility Clause and Congress.
12: Schlesinger v. Reservists to Stop the War, 418 U.S. 208, 209–11, 228 (1974). See also Lance v. Coffman, 549 U.S. 437, 441–42 (2007) (per curiam) ( “The only injury plaintiffs allege is that the law—specifically the Elections Clause—has not been followed. This injury is precisely the kind of undifferentiated, generalized grievance about the conduct of government that we have refused to countenance in the past.” ); Ex parte Levitt, 302 U.S. 633, 633 (1937) (per curiam) ( “It is an established principle that to entitle a private individual to invoke the judicial power to determine the validity of executive or legislative action he must show that he has sustained or is immediately in danger of sustaining a direct injury as the result of that action and it is not sufficient that he has merely a general interest common to all members of the public.” ).
13: See Hein v. Freedom from Religion Found., Inc., 551 U.S. 587, 609 (2007) (plurality opinion).
14: See id. ( “It is significant that, in the four decades since its creation, the Flast exception has largely been confined to its facts. We have declined to lower the taxpayer standing bar in suits alleging violations of any constitutional provision apart from the Establishment Clause.” ).
15: 392 U.S. 83 (1968).
16: The Establishment Clause of the First Amendment provides that “Congress shall make no law respecting an establishment of religion . . . ” U.S. Const. amend. I.
17: Flast, 392 U.S. at 85.
18: Id. at 102–06.
19: Id. at 102. In so holding the Court distinguished Doremus v. Bd. of Educ., 342 U.S. 429 (1952). In Doremus, the Court held that a parent and student lacked standing to sue as state taxpayers to challenge a New Jersey statute providing for the reading of Bible verses at the beginning of each day of public school as a violation of the First Amendment Establishment Clause. Id. at 430. The Court characterized the plaintiffs’ alleged injury as a “religious difference” rather than a direct financial injury that resulted from the expenditure of taxpayer funds for a religious purpose. Id. at 433–35. In Flast, the Court distinguished Doremus on the grounds that the reading of Bible verses involved no ostensible expenditure of public funds, and thus the Doremus plaintiffs failed to establish a logical link between their taxpayer status and the challenged state law. See Flast, 392 U.S. at 102.
20: Flast, 392 U.S. at 102–06.
21: Id. at 103–04.
22: Id..
23: For further discussion on challenges to federal financial assistance to private religious organizations, see Amdt1.3.4.1 Overview of Financial Assistance to Religion.
24: Hein v. Freedom from Religion Found., Inc., 551 U.S. 587, 593 (2007) (plurality opinion) ( “In [Flast], we recognized a narrow exception to the general rule against federal taxpayer standing.” ).
25: Valley Forge Christian Coll. v. Ams. United for Separation of Church & State, Inc., 454 U.S. 464, 482 (1982).
26: Id. at 479–80.
27: Id. Article IV, Section 3, Clause 2 of the Constitution vests Congress with the “Power to dispose of and make all needful Rules and Regulations respecting the . . . Property belonging to the United States . . . ” U.S. Const. art. IV, § 3, cl. 2. For more on the Property Clause, see ArtIV.S3.C2.1 Property Clause Generally.
28: Valley Forge, 454 U.S. at 468, 479–80.
29: Hein, 551 U.S. at 592–96 (plurality opinion). Article I, Section 8, Clause 1 of the Constitution contains language that is known as the Taxing and Spending Clause, providing, “The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States . . . ” U.S. Const. art. I, § 8, cl. 1. For more on the Taxing and Spending Clause, see ArtI.S8.C1.1.1 Overview of Taxing Clause and ArtI.S8.C1.2.1 Overview of Spending Clause.
30: Hein, 551 U.S. at 592–96. Justices Antonin Scalia and Clarence Thomas concurred in the judgment but would have overruled Flast v. Cohen.
31: Ariz. Christian Sch. Tuition Org. v. Winn, 563 U.S. 125, 129 (2011).
32: Id. at 142 ( “[T]ax credits and governmental expenditures do not both implicate individual taxpayers in sectarian activities. A dissenter whose tax dollars are ‘extracted and spent’ knows that he has in some small measure been made to contribute to an establishment in violation of conscience. . . . When the government declines to impose a tax, by contrast, there is no such connection between dissenting taxpayer and alleged establishment.” ) (internal citations omitted). The Court also stated that the plaintiffs could not show causation and redressability because the alleged subsidization of religious activity was the result of private third-party action and not solely the result of government action. Id. at 143. But see Grand Rapids Sch. Dist. v. Ball, 473 U.S. 373, 380 n.5 (1985) (stating that the Court has found standing to sue in “numerous cases” involving “Establishment Clause challenges by state taxpayers to programs for aiding nonpublic schools” ).