Sebelius.

It’s not a three-headed dog, it’s not a character from Harry Potter, it’s not a radio station. It’s the Supreme Court decision that gave us Obamacare, and it invoked this very case from 1796.

How did a 1796 case about a carriage tax (Hylton) find its way into a 2012 case about whether Americans can be required to keep a basic level of health insurance coverage (Sebelius)?

Well, Chief Justice John Roberts invoked Hylton in the Court’s majority opinion to justify characterizing Obamacare’s individual mandate as a tax.¹ Specifically, Chief Justice Roberts pointed to Hylton as the first case in a line of cases about the limits of Congress’s power to tax Americans.

Indeed, Hylton is the first Supreme Court case to contend with Congress’s Taxing Power.

Let’s talk about it.

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New Season, New Cast

Before we dive into Hylton, we should take a quick look at the bench. Who’s gone, and who’s new?

Before the Court’s first 1796 term began, Justice John Blair resigned from the Court, “citing the rigors of circuit riding and ill health.”² His replacement? Samuel Chase, a dead-ringer for Robert Plant and apparently the only Justice to ever be impeached.³ (We’ll get there.)

What about the Chief Justice’s seat? After Chief Justice John Rutledge threw himself into Charleston Harbor (we tell the story here), President Washington appointed Oliver Ellsworth.⁴ His mug reminds me of Man Ray, of SpongeBob fame. Anywho.

Here, then, is the updated Supreme Court roster:

• John Jay (Chief Justice)
  • John Rutledge (Chief Justice)
    • Oliver Ellsworth (Chief Justice)
• John Rutledge
  • Thomas Johnson
    • William Paterson
• William Cushing
• James Wilson
• John Blair Jr.
  • Samuel Chase
• James Iredell

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This is a tax case coming out of Virginia.

Petitioner: Daniel Hylton, a Virginian merchant and farmer who refused to pay taxes on his carriages.

Respondent: The United States of America, which was looking to shake down Hylton for taxes he owed under the Carriage Tax Act of 1794.

This case went to the Ellsworth Court during the Washington Presidency. The Court ultimately ruled in favor of the United States.

See the Court’s opinion here.

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It’s like this.

In 1794, Congress passed a law requiring anyone who owned a carriage to pay a yearly tax for each carriage he owned.⁵ We call it the Carriage Act of 1794.

While it was primarily the Pennsylvanians who were pissed about the whiskey tax from 1791 through 1794 (remember United States v. Hamilton?), the Virginians were particularly offended by this carriage tax. Plenty refused to pay it, including the chief justice of Virginia’s Court of Appeals.⁶

Another man who defied the tax was Daniel Hylton, a Virginian merchant and farmer.⁷ As a result, Virginia’s district attorney, “in the name of the United States,” went after him.⁸ In his defense, Hylton argued the tax was “unconstitutional and void.”⁹ A law is unconstitutional when it is violates the Constitution. If a law is unconstitutional, it cannot stand.

Passionate people on both sides of the argument wanted Hylton’s case to go to the Supreme Court so the Court could rule on the carriage tax once and for all.¹⁰

The thing is, the tax per carriage was about $10, and that’s not enough money to get in front of the Supreme Court.¹¹ Back then, the Supreme Court would only hear a case if over $2,000 was at stake.¹²

So in order to get in front of the Supreme Court, Hylton and Virginia’s district attorney stipulated to, or agreed to, to a fake set of facts.¹³ (We talked about fictitious stipulations, or feigned issues, in our article on Georgia v. Brailsford III.)

The lie? That Hylton owned 125 carriages, and he had refused to pay taxes on all of them.¹⁴ To be clear, Hylton did not own 125 carriages. Probably nobody did. But in order for the Court to look at the Carriage Act, Hylton needed to beef up the stakes of the case. And it worked.

After the judges sitting on Virginia’s Circuit Court issued split decisions as to whether the Carriage Act was valid, the case went to the Supreme Court.¹⁵

Although the suit was for an imaginary $2,000 in unpaid taxes, the D.A. agreed that if Hylton lost the case, Hylton would only owe $16 — his actual tax bill.¹⁶ At stake in this case, then, was the constitutionality of the Carriage Act, and $16.

The Law

Let’s look at the parts of the Constitution relevant to this case.

First, Article I, Section 8, Clause 1 of the Constitution says, “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…”¹⁷

We call this part of the Constitution the Taxation Clause.

This part of the Constitution says Congress can tax us. Yay!

Second, Article I, Section 2, Clause 3 says, “…direct Taxes shall be apportioned among the several States which may be included within this Union, according to their respective Numbers…”¹⁸

Some folks call this the Apportionment Clause, others the Direct Tax Clause.

This part of the Constitution says if Congress is going to impose a direct tax, that tax needs to be divided among the states, in proportion to the States’ populations. So, if Delaware has 5% of the population, Delaware would be responsible for paying 5% of the total tax, if the tax is a direct tax.

Third, Article I, Section 9, Clause 4 says, “No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or enumeration herein before directed to be taken.”¹⁹

This part of the Constitution reiterates the principle that a direct tax needs to be collected proportionately. I’ll be damned if Delawareans have to pay as much in direct taxes as Pennsylvanians!

So, back to the carriage tax. What’s the problem here?

Well, the carriage tax wasn’t imposed proportionally. Rather, it was imposed uniformly, meaning the tax applies equally to citizens of every state, regardless of the state’s population.

If the carriage tax isn’t direct tax, that’s fine, but if it is a direct tax, that’s a problem, because having a direct tax imposed in blanket fashion is unconstitutional.

You’re probably thinking, well, what the hell is a direct tax?

Yeah, you and me both. That is what this case is about.

The Issue

So, what is the issue of the case, the thing being decided?

The issue is whether the carriage tax was a direct tax.

There were two ways this case could go.

If the tax was a direct tax, then it was unconstitutional, because the Constitution says no direct tax is allowed, unless the total amount of tax collected from each state is proportional to the state’s population, relative to the U.S. population.

If the tax was not a direct tax, then it was constitutional, because the Constitution comfortably allows for taxes that are uniform throughout the United States.

For a more artful explanation, I turn to Justice Paterson. In his opinion, he writes, “The question is, whether a tax upon carriages be a direct tax? If it be a direct tax, it is unconstitutional, because it has been laid pursuant to the rule of uniformity, and not to the rule of apportionment.”²⁰

The Arguments

At oral argument, the United States came out swinging, bring Alexander Hamilton to Court to argue in favor of the carriage tax. Apparently he spoke for at least three hours, and the turnout was remarkable.²¹ In a letter to his wife, Justice Iredell wrote, “Mr. Hamilton spoke in our Court, attended by the most crowded audience I ever saw there, both Houses of Congress being almost deserted.”²²

Justice Iredell praised Hamilton’s performance, too, writing, “Though he was in very ill health, he spoke with astonishing ability, and in a most pleasing manner, and was listened to with the profoundest attention.”²³

So, how did it shake out?

The Opinions

The judges delivered their opinions seriatim, meaning each Justice wrote his own opinion explaining his own legal reasoning, even if they all agreed. That’s exactly what happened here.

Justices Chase, Paterson, and Iredell each decided in favor of the United States, holding the Carriage Act was not a direct tax, and was therefore constitutional.

Justice Samuel Chase

Okay, first impressions. What do we think of this Samuel Chase?

We’re off to a decent start, I think. He begins his opinion by clearly stating the issue of the case, asking whether the Carriage Act “is unconstitutional and void.”²⁴ Then, he puts forth a framework of sorts to reason through the facts, using the Constitution as his guide. He has a method!

Ultimately, Justice Chase was not persuaded by Hylton. He writes, “[I]t was incumbent on the plaintiff’s counsel…to prove that the tax on carriages was a direct tax; but they did not satisfy my mind.”²⁵

Justice Chase therefore held, “[A] tax on carriages is not a direct tax, within the letter or meaning of the constitution.”²⁶

By the letter of the Constitution, he means the text of the Constitution.

By the meaning of the Constitution, he means the interpretation of the Constitution.

Justice Chase declares, “the great object of the constitution” was to give Congress the power to impose taxes.²⁷ That’s true. A big reason why the Founders wrote the Constitution in the first place was because the last government was virtually powerless, in large part because it didn’t even have the power to raise money through taxes.

Even so, Justice Chase acknowledges there are two limits to Congress’s Taxing Power. First, when a tax is direct, the tax must be apportioned, meaning divided up according to population size.²⁸ Second, when the tax is a duty, impost, or excise, it must be uniform.²⁹

Justice Chase reasons, then, that if there is any other kind of tax that is not (1) a direct tax, (2) a duty, (3) an impost, or (4) an excise, Congress has the discretion to decide whether it’s imposed uniformly or not.³⁰

Justice Chase argues that this has to be true, otherwise the Constitution would have been written differently.³¹ (In view view, that’s a kind of textualist argument that puts a bit too much faith in writers, but that’s his argument.)

In addition to appealing to the text of the Constitution, Justice Chase also appeals to fairness. He looks at this carriage tax and says apportioning it like a direct tax would result in “very great inequality and injustice.”³² He reasons that if two states with the same population each have to pay $80,000 to the feds through carriage taxes, there’s going to be a big problem if one state has 100 carriages, but another has 1,000, because the owners of carriages in the state with less carriages will owe a lot more in tax than the owners of carriages in the other state.³³

Wait, we’re considering whether the carriage tax is constitutional. Can the Court even do that? Does the Supreme Court even have the power to declare a law unconstitutional and void?

Justice Chase says he doesn’t need to decide whether the Court has the power to strike down a law as unconstitutional, because the tax is constitutional. It’s a problem for another day! And yet, he has something to say about it. He writes, “If the court have such power, I am free to declare, that I will never exercise it, but in a very clear case.”³⁴

Justice Chase seems to pledge a conservative approach to judicial power. Let’s see if he abides by his own standard.

Justice William Paterson

Confused? Even Justice Paterson recognizes “the argument on both sides turns in a circle.”³⁵ He also concedes “it is not easy to ascertain” the definition of a duty or an excise. So if you’re confused, you’re in good company.

One thing Justice Paterson is sure of, though, is that the framers of the Constitution intended for Congress to be in charge of all kinds of taxes.³⁶

Ultimately, Justice Paterson really doesn’t want to extend this apportionment rule to the carriage tax. Why? Because the apportionment rule, he says, “is radically wrong; it cannot be supported by any solid reasoning.”³⁷

Why? Because that part of the Constitution was included to appease the South, who wanted to count slaves as persons under the Constitution. And that, Justice Paterson argues, is crazy. Not because slaves are counted as fractions of human beings, but because they are counted at all. He asks, “Why should slaves, who are a species of property, be represented more than any other property? The rule, therefore, ought not to be extended by construction.”³⁸

Woof. Sit with that for a minute. We’ll return to it in the Why I’m Fired Up section below.

The rule of uniformity is better, Justice Paterson says, because it “implies certainty, and leaves nothing to the will and pleasure of the assessor.”³⁹

Justice Paterson also echoes Justice Chase’s fairness concerns. He writes, “A tax on carriages, if apportioned, would be oppressive and pernicious. How would it work? In some states, there are many carriages, and in others, but few. Shall the whole sum fall on one or two individuals in a state, who may happen to own and possess carriages? The thing would be absurd and inequitable.”⁴⁰

What the hell is a carriage tax, then? It is an indirect tax, says Justice Paterson, as are all taxes on consumption. So the U.S. government is in the clear.

He defers to Adam Smith’s Wealth of Nations to explain why the carriage tax is an indirect tax, which I guess is a pretty solid place to start if you’re looking to define an economic concept.

Adam Smith wrote, “The impossibility of taxing people in proportion to their revenue, by any capitation, seems to have given occasion to the invention of taxes upon consumable commodities; the state, not knowing how to tax directly and proportionably the revenue of its subjects, endeavors to tax it indirectly, by taxing their expense, which it is supposed, in most cases, will be nearly in proportion to their revenue. Their expense is taxed, by taxing the consumable commodities upon which it is laid out.”⁴¹

Finally, Justice Paterson explains, “Indirect taxes are circuitous modes of reaching the revenue of individuals, who generally live according to their income. In many cases of this nature, the individual may be said to tax himself.”⁴² Umm…I’ll save my thoughts on this for the Why I’m Fired Up section.

Justice James Iredell

Justice Iredell gives us a pretty clear rule statement, similar to how Justice Chase did. He writes, “The congress possess the power of taxing all taxable objects, without limitation, with the particular exception of a duty on exports. There are two restrictions only on the exercise of this authority. 1. All direct taxes must be apportioned. 2. All duties, imposts and excises must be uniform.”⁴³ Therefore, “If the carriage-tax be a direct tax, within the meaning of the constitution, it must be apportioned. If it be a duty, impost or excise, within the meaning of the constitution, it must be uniform.”⁴⁴

Justice Iredell reasons that if the tax is not direct, but also not a duty, impost, or excise, it’s up to Congress to choose whether the tax is uniform or apportioned.⁴⁵ Justice Iredell, like the other Justices, believes the tax should be imposed uniformly.

This guy then goes on to write a math problem in his legal opinion, and shows his work while he’s at it.⁴⁶

Justice Iredell holds, “It is sufficient, on the present occasion, for the court to be satisfied, that this is not a direct tax contemplated by the constitution, in order to affirm the present judgment; since, if it cannot be apportioned, it must necessarily be uniform.”⁴⁸

The Other Justices

Justice Wilson refrained from giving an opinion because he heard this case in the lower court, where he ruled in favor of the U.S.⁴⁹ Chief Justice Ellsworth had yet to be sworn in, so he didn’t participate.⁵⁰ And Justice Cushing was sick.⁵¹

The Decision

The Carriage Act of 1794 remained constitutional.

As a result, the carriage industry stayed “almost at a standstill until 1830,” according to Charles P. Kimball.⁵²

Nice job, Congress.

Why I’m Fired Up

You’re telling me the only reason we have this stupid apportionment rule is slavery?

That’s what Justice Paterson is saying, right? Here’s what he writes in his opinion. A mini history lesson, if you will.

“The [apportionment] provision was made in favor of the southern states; they possessed a large number of slaves; they had extensive tracts of territory, thinly settled, and not very productive. A majority of the states had but few slaves, and several of them a limited territory, well settled, and in a high state of cultivation. The southern states, if no provision had been introduced in the constitution, would have been wholly at the mercy of the other states. Congress in such case, might tax slaves, at discretion or arbitrarily, and land in every part of the Union, after the same rate or measure: so much a head, in the first instance, and so much an acre, in the second. To guard them against imposition, in these particulars, was the reason of introducing the clause in the constitution, which directs that representatives and direct taxes shall be apportioned among the states, according to their respective numbers.”

Justice William Paterson, Hylton v. United States (1796)⁵³

So the Apportionment Clause was a way of appeasing the Southerners. And it’s already causing problems at the Supreme Court. What a mess!

I’m not done beating up on Justice Paterson. I have to include his full quote about slaves, which is so supremely ugly, I can’t look away. He writes, “The rule of apportionment…is radically wrong; it cannot be supported by any solid reasoning. Why should slaves, who are a species of property, be represented more than any other property? The rule, therefore, ought not to be extended by construction.” Damn!

This is obviously the most egregious part of Justice Paterson’s opinion, but I have to give a shoutout to the second-worst quote.

When explaining why a carriage tax is an indirect tax, he writes, “In many cases of this nature, the individual may be said to tax himself.” Right. It’s not the government, it’s the individual who taxes himself for daring to buy something.

The audacity of this guy.

I’m usually a fan of Justice Paterson’s writing and reasoning. Not today.

As for the case, I think the Justices appear to demonstrate sound logic, but truly…don’t. They fail to define direct tax versus indirect tax. Justice Paterson tosses the microphone to Adam Smith for one second, but otherwise, we don’t get even a tentative definition of direct tax in a case about determining whether a tax is a direct tax or not.

I’m disappointed!

Flashing forward to 2012, here is Chief Justice Roberts citing Hylton in Sebelius…

“Soon after the framing, Congress passed a tax on ownership of carriages, over James Madison’s objection that it was an unapportioned direct tax. This Court upheld the tax, in part reasoning that apportioning such a tax would make little sense, because it would have required taxing carriage owners at dramatically different rates depending on how many carriages were in their home State. See Hylton v. United States, 3 Dall. 171, 174 (1796) (opinion of Chase, J.). The Court was unanimous, and those Justices who wrote opinions either directly asserted or strongly suggested that only two forms of taxation were direct: capitations and land taxes. See id., at 175; id., at 177 (opinion of Paterson, J.); id., at 183 (opinion of Iredell, J.). That narrow view of what a direct tax might be persisted for a century.”⁵⁴

You Be The Judge

What do you think of this case? Leave a comment!

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Here’s a Bluebook cite for ya – Johnathan J. Azar, The Case Used to Justify Obamacare: Hylton v. United States (1796) (September 8, 2026)

FOOTNOTES

1. Nat’l Fed’n of Indep. Bus. v. Sebelius, 567 U.S. 519, 570–71 (2012). ↩︎
2. Supreme Ct. Hist. Soc’y, John Blair, Jr., 1790 1796, https://supremecourthistory.org/associate-justices/john-blair-jr-1790-1796/. ↩︎
3. Supreme Ct. Hist. Soc’y, Samuel Chase, 1796–1811, https://supremecourthistory.org/associate-justices/samuel-chase-1796-1811/. ↩︎
4. The Life and Times of Chief Justice Oliver Ellsworth, Supreme Ct. Hist. Soc’y (Feb. 24, 2025), https://supremecourthistory.org/supreme-court-historical-society-events/the-life-and-times-of-chief-justice-oliver-ellsworth ↩︎
5. An Act laying duties upon Carriages for the conveyance of Persons, ch. 45, 1 Stat. 373 (1794). ↩︎
6. St. George Tucker, Letter to James Monroe (Mar. 8, 1795) (on file with William & Mary Libraries). ↩︎
7. Hylton v. United States, 3 U.S. (3 Dall.) 171, 171 (1796). ↩︎
8. Id. ↩︎
9. Id. at 172 ↩︎
10. Robert P. Frankel, Jr., Before Marbury: Hylton v. United States and the Origins of Judicial Review, 28 J. Sup. Ct. Hist. 1 (2003). ↩︎
11. An Act laying duties upon Carriages for the conveyance of Persons, ch. 45, 1 Stat. 373 (1794). ↩︎
12. Judiciary Act of 1789, ch. 20, 1 Stat. 73 (1789). ↩︎
13. Joel Alicea & Donald L. Drakeman, The Limits of New Originalism, 15 U. Pa. J. Const. L. 1161, 1172 (2013). ↩︎
14. Id. ↩︎
15. Hylton v. United States, 3 U.S. (3 Dall.) 171, 172 (1796). ↩︎
16. Joel Alicea & Donald L. Drakeman, The Limits of New Originalism, 15 U. Pa. J. Const. L. 1161, 1173 (2013). ↩︎
17. U.S. Const. art. I, § 8, cl. 1. ↩︎
18. U.S. Const. art. I, § 2, cl. 3. ↩︎
19. U.S. Const. art. I, § 9, cl. 4. ↩︎
20. Hylton v. United States, 3 U.S. (3 Dall.) 171, 176 (1796). ↩︎
21. Robert P. Frankel, Jr., Before Marbury: Hylton v. United States and the Origins of Judicial Review, 28 J. Sup. Ct. Hist. 1, 9 (2003). ↩︎
22. Letter from James Iredell to Hannah Iredell (Feb. 26, 1796), in 2 Griffith J. McRee, Life and Correspondence of James Iredell 460, 461 (1857). ↩︎
23. Randolph Bias, Hamilton as a Lawyer, 13 A.B.A. J. 345, 350 (1927). ↩︎
24. Hylton v. United States, 3 U.S. (3 Dall.) 171, 172 (1796). ↩︎
25. Id. at 173 ↩︎
26. Id. ↩︎
27. Id. ↩︎
28. Id. ↩︎
29. Id. ↩︎
30. Id. ↩︎
31. Id. ↩︎
32. Id. ↩︎
33. Id. ↩︎
34. Id. ↩︎
35. Id. at 176 ↩︎
36. Id. ↩︎
37. Id. at 178 ↩︎
38. Id. (emphasis added) ↩︎
39. Id. at 180 ↩︎
40. Id. at 179 ↩︎
41. Id. at 180 ↩︎
42. Id. ↩︎
43. Id. at 181 ↩︎
44. Id. ↩︎
45. Id. ↩︎
46. Id. at 181-182 ↩︎
47. Id. ↩︎
48. Id. at 183 ↩︎
49. Robert P. Frankel, Jr., Before Marbury: Hylton v. United States and the Origins of Judicial Review, 28 J. Sup. Ct. Hist. 1, 10 (2003). ↩︎
50. Id. ↩︎
51. Id. ↩︎
52. Susan Koso, Blame Your Income Tax on Carriages and Alexander Hamilton, Amesbury Carriage Museum (Mar. 31, 2019), https://amesburycarriagemuseum.org/news/2019/3/27/blame-your-income-tax-on-carriages-and-alexander-hamilton ↩︎
53. Hylton v. United States, 3 U.S. (3 Dall.) 171, 177 (1796). ↩︎
54. Nat’l Fed’n of Indep. Bus. v. Sebelius, 567 U.S. 519, 570–71 (2012). ↩︎

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