Founding Principles – About “The Blue Slip”

The Origination Clause of the U.S. Constitution (Art. I, Sec. 7, clause 1) states that “All Bills for Raising revenue shall originate in the House of Representatives; but the Senate may propose or concur with Amendments as on other Bills.”  The clause grants the power to tax to the chamber directly elected by the people–part of the compromise that enabled our Founding Fathers to create a bicameral CoDngress.

Blue Slip” refers to a resolution formally returning a bill to the Senate that the House of Representatives has determined violates the Origination Cause.  The Senate may author tax provisions but only as amendments to House-originated measures that already contain revenue provisions.  The term comes from the color of paper on which the resolution is printed.  In the House, a Blue Slip is a highly privileged resolution that takes precedence over all other motions, except a motion to adjourn.

The Constitution’s Origination Clause and the privilege given to a Blue Slip resolution are two of the many meaningful checks on the power of Congress and the federal government to tax its citizens.

Perhaps no area of federal law is as far-reaching and economically consequential as the tax code (formally, the “Internal Revenue Code”).  Yet the process by which changes to the tax law are enacted (or not enacted — a la Blue Slip resolution) is remarkably complex and opaque.   In its own small way, The Blue Slip blog seeks to pierce through the complexity of both the tax policy-making process and the tax code itself by focusing on three apolitical objectives:

(1) reporting on current developments in tax policy, with a focus on legislative activity;

(2) identifying and reviewing noteworthy tax and economic research relevant to the analysis of current tax policy issues; and

(3) where novel insight can be offered (or gleaned from others), presenting practical insights regarding the real world application of newly enacted or proposed tax changes.

Substantively, The Blue Slip will concentrate on tax policies affecting partnerships and other business activities conducted in pass-through form.  Corporate and international tax policy is heavily reported and scrutinized in other fora.  Partnership and pass-through tax developments, in contrast, are not well-reported or well-understood, despite the growing importance of pass-through businesses to the U.S. economy.


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