Court Opinion

ID: 118038
Source: CourtListenerOpinion
Date Created: 2010-04-28 17:20:21+00
Date Added: 2024-06-11T12:51:08.346419
License: Public Domain

517 U.S. 843116 S.Ct. 1793135 L.Ed.2d 124
UNITED STATESv.INTERNATIONAL BUSINESS MACHINES CORP.Certiorari to the United States Court of Appeals for the Federal Circuit.
No. 95-591.
Supreme Court of the United States
Argued March 18, 1996
Decided June 10, 1996

Syllabus*
Pursuant to Section(s) 4371 of the Internal Revenue Code, respondent  International Business Machines Corporation (IBM) paid a tax on  insurance premiums remitted to foreign insurers to cover shipments of  goods to its foreign subsidiaries.  When its refund claims were denied,  IBM filed suit in the Court of Federal Claims, contending that  Section(s) 4371's application to policies insuring export shipments  violated the Export Clause, which states that "[n]o Tax or Duty shall be  laid on Articles exported from any State."  The court agreed, rejecting  the Government's argument that Thames & Mersey Marine Ins. Co. v. United  States, 237 U. S. 19--in which this Court held that a federal stamp tax on policies insuring marine risks could not, under the Export Clause, be  constitutionally applied to policies covering export shipments--had been  superseded by subsequent decisions interpreting the Import-Export  Clause, which states in relevant part, "No State shall . . . lay any  Imposts or Duties on Imports or Exports."  The Court of Appeals  affirmed.
Held:  The Export Clause prohibits assessment of nondiscriminatory  federal taxes on goods in export transit.  Pp. 2-20.
(a) While this Court has strictly enforced the Export Clause's  prohibition against federal taxation of goods in export transit and  certain closely related services and activities, see, e.g., Thames &  Mersey, supra, it has not exempted pre-export goods and services from  ordinary tax burdens or exempted from federal taxation various services  and activities only tangentially related to the export process, see,  e.g., Cornell v. Coyne, 192 U. S. 418.  Conceding that the tax assessed  here violates the Export Clause under Thames & Mersey, the Government asks that the case be overruled because its underlying theory has been  rejected in the context of the Commerce and Import-Export Clauses and  those Clauses have historically been interpreted in harmony with the  Export Clause.  Pp. 2-7.
(b) When this Court expressly disavowed its early view that the dormant  Commerce Clause required a strict ban on state taxation of interstate  commerce, Complete Auto Transit, Inc. v. Brady, 430 U. S. 274, 288-289,  it resolved a long struggle over the meaning of the nontextual negative  command of that Clause. The Export Clause, on the other hand, expressly  prohibits Congress from laying any tax or duty on exports.  These  textual disparities strongly suggest that shifts in the Court's view of the dormant Commerce Clause's scope cannot govern Export Clause interpretation.  Cf. Richfield Oil Corp. v. State Bd. of Equalization,  329 U. S. 69, 75-76.  Pp. 7-9.
(c) While one may question Thames & Mersey's finding that a tax on policies insuring exports is functionally the same as a tax on  exportation itself, the Government apparently has chosen not to do so  here.  Under the principles that animate the policy of stare decisis,  the Court declines to overrule Thames & Mersey's longstanding precedent,  which has caused no uncertainty in commercial export transactions, on a  theory not argued by the parties.  Pp. 11-13.
(d) This Court's recent Import-Export Clause cases do not require that  Thames & Mersey be overruled.  Meaningful textual differences that  should not be overlooked exist between the Export Clause and the  Import-Export Clause.  In finding the assessments in Michelin Tire Corp.  v. Wages, 423 U. S. 276, and Department of Revenue of Wash. v.  Association of Wash. Stevedoring Cos., 435 U. S. 734, valid, the Court  recognized that the Import-Export Clause's absolute ban on ``Imposts or  Duties'' is not a ban on every tax.  Because impost and duty are thus narrower terms than tax, a particular state assessment might be beyond  the Import-Export Clause's reach, while an identical federal assessment  might be subject to the Export Clause.  The word ``Tax'' has a common,  and usually expansive, meaning that should not be ignored.  The Clauses  were also intended to serve different goals.  The Government's policy  argument--that the Framers intended the Export Clause to narrowly  alleviate the fear of northern repression through taxation of southern  exports by prohibiting only discriminatory taxes--cannot be squared with  the Clause's broad language.  The better reading is that the Framers sought to alleviate their concerns by completely denying to Congress the  power to tax exports at all.  See Fairbank v. United States, 181 U. S.  283.  Pp. 13-18.
(e) Even assuming that Michelin and Washington Stevedoring govern the  Export Clause inquiry here, those holdings do not interpret the  Import-Export Clause to permit assessment of nondiscriminatory taxes on  imports and exports in transit.  Pp. 18-20.  59 F. 3d 1234, affirmed.
Thomas, J., delivered the opinion of the Court, in which Rehnquist, C.  J., and O'Connor, Scalia, Souter, and Breyer, JJ., joined.  Kennedy, J.,  filed a dissenting opinion, in which Ginsburg, J., joined.  Stevens, J.,  took no part in the consideration or decision of the case.
Justice Thomas delivered the opinion of the Court.

1
We resolve in this case whether the Export Clause of the Constitution permits the imposition of a generally applicable, nondiscriminatory federal tax on goods in export transit.  We hold that  it does not.

I.

2
Section 4371 of the Internal Revenue Code imposes a tax on insurance premiums paid to foreign insurers that are not subject to the  federal income tax.1  26 U. S. C. Section(s) 4371 (1982 ed.).  International Business Machines Corporation (IBM) ships products that it  manufactures in the United States to numerous foreign subsidiaries and  insures those shipments against loss. When the foreign subsidiary makes  the shipping arrangements, the subsidiary often places the insurance  with a foreign carrier. When it does, both IBM and the subsidiary are  listed as beneficiaries in the policy.

3
IBM filed federal excise tax returns for the years 1975 through  1984, but reported no liability under Section(s) 4371. The IRS audited  IBM and determined that the premiums paid to foreign insurers were  taxable under Section(s) 4371 and that IBM--as a named beneficiary of  the insurance policies--was liable for the tax.  The IRS assessed a tax  against IBM for each of those years.

4
IBM paid the assessments and filed refund claims, which the IRS  denied.  IBM then commenced suit in the Court of Federal Claims,  contending that application of Section(s) 4371 to policies insuring its  export shipments violated the Export Clause.  The focus of the suit was  this Court's decision in Thames & Mersey Marine Ins. Co. v. United  States, 237 U. S. 19 (1915), in which we held that a federal stamp tax  on policies insuring marine risks could not, under the Export Clause, be constitutionally applied to policies covering export shipments. The  United States argued that the analysis of Thames & Mersey is no longer  valid, having been superseded by subsequent decisions interpreting the  Import-Export Clause--specifically, Michelin Tire Corp. v. Wages, 423 U.  S. 276 (1976), and Department of Revenue of Wash. v. Association of  Wash. Stevedoring Cos., 435 U. S. 734 (1978).  The Court of Federal  Claims noted that this Court has never overruled Thames & Mersey and  ruled that application of Section(s) 4371 to policies insuring goods in  export transit violates the Export Clause.  31 Fed. Cl. 500 (1994).  The  Court of Appeals for the Federal Circuit affirmed. 59 F. 3d 1234   (1995).  We agreed to hear this case to decide whether we should  overrule Thames & Mersey.  516 U. S. __ (1995).

II.

5
The Export Clause states simply and directly: "No Tax or Duty shall be laid on Articles exported from any State."  U. S. Const., Art.  I, Section(s) 9, cl. 5.  We have had few occasions to interpret the  language of the Export Clause, but our cases have broadly exempted from  federal taxation not only export goods, but also services and activities  closely related to the export process.  At the same time, we have  attempted to limit the term "Articles exported" to permit federal  taxation of pre-export goods and services.

6
Our early cases upheld federal assessments on the manufacture of  particular products ultimately intended for export by finding that  pre-export products are not "Articles exported."  See Pace v. Burgess,  92 U. S. 372 (1876); Turpin v. Burgess, 117 U. S. 504 (1886); Cornell v.  Coyne, 192 U. S. 418 (1904).  Pace and Turpin both involved a federal  excise tax on tobacco products.  In Pace, though tobacco intended for  export was exempted from the tax, the exemption itself was subject to a  per-package stamp charge of 25 cents.  When a tobacco manufacturer  challenged the stamp charge, we upheld the charge on the basis that the  stamps were designed to prevent fraud in the export exemption from the  excise tax and did not, therefore, represent a tax on exports.  92 U.  S., at 375.  When Congress later repealed the 25-cent charge for the exemption stamp in a statute that referred to the stamp as an "export  tax," another manufacturer sued to recover the money it had paid for the  exemption stamps.  See Turpin, supra.  Without disturbing the prior  ruling in Pace that the stamp charge was not a tax on exports, 117 U.  S., at 505, we explained that the prohibition of the Export Clause "has  reference to the imposition of duties on goods by reason or because of  their exportation or intended exportation, or whilst they are being  exported," id., at 507.  We said that the plaintiffs would have had no  Export Clause claim even if there had been no exemption from the excise  because the goods were not in the course of exportation and might never be exported.  Ibid.  Turpin broadly suggested that the Export Clause  prohibits both taxes levied on goods in the course of exportation and  taxes directed specifically at exports.

7
In Cornell, the Court addressed whether the Export Clause prohibited application of a federal excise tax on filled cheese manufactured under contract for export.  Looking to the analysis set out  in Turpin, we rejected the contention that the Export Clause bars  application of a nondiscriminatory tax imposed before the product  entered the course of exportation.  "The true construction of the  constitutional provision is that no burden by way of tax or duty can be  cast upon the exportation of articles, and does not mean that articles  exported are relieved from the prior ordinary burdens of taxation which  rest upon all property similarly situated."  Cornell, supra, at 427.  Pace, Turpin, and Cornell made clear that nondiscriminatory  pre-exportation assessments do not violate the Export Clause, even if  the goods are eventually exported.

8
At the same time we were defining a domain within which nondiscriminatory taxes could permissibly be imposed on goods intended  for export, we were also making clear that the Export Clause strictly  prohibits any tax or duty, discriminatory or not, that falls on exports  during the course of exportation.  See Fairbank v. United States, 181 U.  S. 283 (1901); United States v. Hvoslef, 237 U. S. 1 (1915); Thames &  Mersey Marine Ins. Co. v. United States, supra.  In Fairbank, for  example, we addressed a federal stamp tax on bills of lading for export  shipments imposed by the War Revenue Act of 1898.  The Court found that  the tax was facially discriminatory, Fairbank, supra, at 290, and, though not directly imposed on the goods being exported, the tax was  nevertheless "in effect a duty on the article transported," 181 U. S.,  at 294.  Consequently, the tax fell directly into the category of  forbidden taxes on exports defined in Turpin.  In striking down the tax,  we said:

9
"The requirement of the Constitution is that exports should be  free from any governmental burden.  The language is `no tax or duty.'  Whether such provision is or is not wise is a question of policy with  which the courts have nothing to do.  We know historically that it was  one of the compromises which entered into and made possible the adoption  of the Constitution.  It is a restriction on the power of Congress  . . ."  181 U. S., at 290.

10
Hvoslef and Thames & Mersey differed from Fairbank in that the  taxes imposed in those cases--on ship charters and marine insurance,  respectively--did not facially discriminate against exports.  The Court  nonetheless prohibited the application of those generally applicable,  nondiscriminatory taxes to the transactions at issue because each tax  was, in effect, a tax on exports.  The type of charter contract at issue  in Hvoslef was "in contemplation of law a mere contract of  affreightment," 237 U. S., at 16, and we found that the tax, as applied  to charters for exportation, "was in substance a tax on the exportation;  and a tax on the exportation is a tax on the exports," id., at 17. Likewise, in Thames & Mersey, we found that "proper insurance during the  voyage is one of the necessities of exportation" and that "the taxation  of policies insuring cargoes during their transit to foreign ports is as  much a burden on exporting as if it were laid on the charter parties,  the bills of lading, or the goods themselves."  237 U. S., at 27.

11
Shortly after Hvoslef and Thames & Mersey, the Court rejected an  attempt to shield from taxation the net income of a company engaged in  the export business.  William E. Peck & Co. v. Lowe, 247 U. S. 165   (1918).  In accordance with the analysis set out in Turpin, we found  both that the tax was nondiscriminatory and that "[i]t is not laid on  articles in course of exportation or on anything which inherently or by  the usages of commerce is embraced in exportation or any of its  processes."  247 U. S., at 174.

12
Only a few years later the Court struck down the application of  a tax on the export sale of certain baseball equipment.  See A. G.  Spalding & Bros. v. Edwards, 262 U. S. 66 (1923). Although the tax was  clearly nondiscriminatory, we explained that the goods being taxed had  entered the course of exportation when they were delivered to the export  carrier.  Id., at 70.  Because the taxable event, the transfer of title,  occurred at the same moment the goods entered the course of exportation,  we held that the tax could not constitutionally be applied to the export  sale. Id., at 69-70.

13
The Court has strictly enforced the Export Clause's prohibition  against federal taxation of goods in export transit, and we have  extended that protection to certain services and activities closely  related to the export process.  We have not, however, exempted  pre-export goods and services from ordinary tax burdens; nor have we  exempted from federal taxation various services and activities only  tangentially related to the export process.

III.

14
The Government concedes, as it did below, that this case is largely indistinguishable from Thames & Mersey and that, if Thames & Mersey is still good law, the tax assessed against IBM under Section(s)  4371 violates the Export Clause.  See Tr. of Oral Arg. 5; 59 F. 3d, at  1237.  The parties apparently agree that there is no legally significant  distinction between the insurance policies at issue in this case and  those at issue in , and, accordingly, the Government asks  that we overrule Thames & Mersey.

15
The Government asserts that the Export Clause permits the imposition of generally applicable, nondiscriminatory taxes, even on  goods in export transit.  The Government urges that we have historically  interpreted the Commerce, Import-Export, and Export Clauses in harmony  and that we have rejected the theory underlying Thames & Mersey in the  context of the Commerce and Import-Export Clauses.  Accordingly, the  Government contends that our Export Clause jurisprudence, symbolized by  Thames & Mersey, has become an anachronism in need of modernization. The Government asks us to reinterpret the Export Clause to permit the imposition of generally applicable, nondiscriminatory taxes as we have  under the Commerce Clause and, it argues, under the Import-Export  Clause.

A.

16
The Government contends that our dormant Commerce Clause jurisprudence has shifted dramatically and that our traditional understanding of the Export Clause, which is based partly on an outmoded  view of the Commerce Clause, can no longer be justified. It is true  that some of our early Export Clause cases relied on an interpretation  of the Commerce Clause that we have since rejected.  In Fairbank, 181 U.  S., at 298-300, for example, we analogized to Robbins v. Shelby County  Taxing Dist., 120 U. S. 489, 497 (1887), in which we held that  "[i]nterstate commerce cannot be taxed at all [by the States], even  though the same amount of tax should be laid on domestic commerce, or  that which is carried on solely within the state."  Referring to the categorical ban on taxation of interstate commerce declared in Robbins,  we likened the scope of the Commerce Clause's ban on state taxation of  interstate commerce to the Export Clause's ban on federal taxation of  exports.  Fairbank, supra, at 300; see also Hvoslef, 237 U. S., at 15   ("The court [in Fairbank] found an analogy in the construction which had  been given to the commerce clause in protecting interstate commerce from  state legislation imposing direct burdens").  After Thames & Mersey, the Commerce Clause construction espoused in Robbins fell out of favor, see  Western Live Stock v. Bureau of Revenue, 303 U. S. 250, 254 (1938) ("It  was not the purpose of the commerce clause to relieve those engaged in  interstate commerce from their just share of state tax burden even  though it increases the cost of doing the business"), and we expressly  disavowed that view in Complete Auto Transit, Inc. v. Brady, 430 U. S.  274, 288-289 (1977).

17
Our rejection in Complete Auto of much of our early dormant Commerce Clause jurisprudence did not, however, signal a similar rejection of our Export Clause cases.  Our decades-long struggle over  the meaning of the nontextual negative command of the dormant Commerce  Clause does not lead to the conclusion that our interpretation of the  textual command of the Export Clause is equally fluid.  At one time, the  Court may have thought that the dormant Commerce Clause required a  strict ban on state taxation of interstate commerce, but the text did  not require that view.2 The text of the Export Clause, on the other  hand, expressly prohibits Congress from laying any tax or duty on  exports.  These textual disparities strongly suggest that shifts in the  Court's view of the scope of the dormant Commerce Clause should not, and indeed cannot, govern our interpretation of the Export Clause. Cf.  Richfield Oil Corp. v. State Bd. of Equalization, 329 U. S. 69, 75-76   (1946) (distinguishing accommodations made under the Commerce Clause  from the express textual prohibition of the Import-Export Clause).

B.

18
The Government's primary assertion is that modifications in our  Import-Export Clause jurisprudence require parallel modifications in the  Export Clause context.  More specifically, the Government argues that  our decisions in Michelin Tire Corp. v. Wages, 423 U. S. 276 (1976), and  Department of Revenue of Wash. v. Association of Wash. Stevedoring Cos.,  435 U. S. 734 (1978), establish that States may impose generally  applicable, nondiscriminatory taxes even if those taxes fall on imports  or exports.  The Export Clause, the Government contends, is no more restrictive.

19
The Import-Export Clause, which is textually similar to the Export Clause, says in relevant part, "No State shall . . . lay any  Imposts or Duties on Imports or Exports."   U. S. Const., Art. I,  Section(s) 10, cl. 2. Though minor textual differences exist and the  Clauses are directed at different sovereigns, historically both have  been treated as broad bans on taxation of exports, and in several cases  the Court has interpreted the provisions of the two Clauses in tandem.  For instance, in the Court's first decision interpreting the  Import-Export Clause, Chief Justice Marshall said:

20
"The States are forbidden to lay a duty on exports, and the United States are forbidden to lay a tax or duty on articles exported  from any State.  There is some diversity in language, but none is  perceivable in the act which is prohibited."  Brown v. Maryland, 12  Wheat. 419, 445 (1827).

21
See also Kosydar v. National Cash Register Co., 417 U. S. 62, 67, n. 5 (1974); Hvoslef, supra, at 13-14; Cornell, 192 U. S., at 427-428; Turpin, 117 U. S., at 506-507.  The Government argues that our  longstanding parallel interpretations of the two Clauses require  judgment in its favor.  We disagree.

22
In Michelin, we addressed whether a State could impose a nondiscriminatory ad valorem property tax on imported goods that were no  longer in import transit.  Michelin, which imported tires from Canada  and France and stored them in a warehouse, argued that Georgia could not  constitutionally assess ad valorem property taxes against its imported  tires.  We explained that "[t]he Framers of the Constitution . . .  sought to alleviate three main concerns": (i) ensuring that the Federal  Government speaks with one voice when regulating foreign commerce; (ii) preserving import revenues as a major source of federal revenue; and   (iii) preventing disharmony likely to be caused if seaboard States taxed  goods coming through their ports.  Michelin, supra, at 285-286. The  Court found that nondiscriminatory ad valorem taxes violate none of  these policies.  A century earlier, however, the Court had ruled that,  under the "original package doctrine," a State could not impose such a  tax until the goods had lost their character as imports and had been  incorporated into the mass of property in the State.  Low v. Austin, 13  Wall. 29, 34 (1872).  The Michelin Court overruled Low and held that the nondiscriminatory property tax levied on Michelin's inventory of imported tires did not violate the Import-Export Clause because it was  not an impost or duty on imports.  423 U. S., at 301.  See also Limbach  v. Hooven & Allison Co., 466 U. S. 353 (1984) (reaffirming that Michelin  expressly overruled the original package doctrine altogether and not  merely Low on its facts).

23
Two years later, in Washington Stevedoring, we upheld against an  Import-Export Clause challenge a nondiscriminatory state tax assessed  against the compensation received by stevedoring companies for services  performed within the State.  The Court found that Washington's  stevedoring tax did not violate the policies underlying the  Import-Export Clause.  Unlike the property tax at issue in Michelin, the  activity taxed by Washington occurred while imports and exports were in  transit. That fact was not dispositive, however, because the tax did  not fall on the goods themselves:

24
"The levy reaches only the business of loading and unloading ships or, in other words, the business of transporting cargo within the  State of Washington.  Despite the existence of the first distinction,  the presence of the second leads to the conclusion that the Washington  tax is not a prohibited `Impost or Duty' when it violates none of the  policies [that animate the Import-Export Clause]."  Washington  Stevedoring, supra, at 755.

25
Relying on Canton R. Co. v. Rogan, 340 U. S. 511 (1951), which  upheld a tax on the gross receipts of a railroad that operated a marine  terminal and transported imports and exports, we ruled in Washington  Stevedoring that taxation of transportation services, whether by  railroad on the docks or by stevedores loading and unloading ships, did  not relate to the value of the goods and could not be considered imposts  or duties on the goods themselves.  435 U. S., at 757.

1.

26
A tax on policies insuring exports is not, precisely speaking,  the same as a tax on exports, but Thames & Mersey held that they were  functionally the same under the Export Clause.  We noted in Washington  Stevedoring that one may question the finding in Thames & Mersey that  the tax was essentially a tax upon the exportation itself.  435 U. S.,  at 756, n. 21.  We expressed concern that "[t]he basis for  distinguishing Thames & Mersey is less clear" than for Fairbank or  Richfield Oil, because the marine insurance policies in Thames & Mersey  arguably "had a value apart from the value of the goods."  435 U. S., at  756, n. 21.  Nevertheless, the Government apparently has chosen not to challenge that aspect of Thames & Mersey in this case.  Tr. of Oral Arg.  5, 8-9, 40.  When questioned on that implicit concession at oral  argument, the Government admitted that it "chose not to" argue that  Section(s) 4371 does not impose a tax on the goods themselves.  Id., at  9.  It would be inappropriate for us to reexamine in this case, without  the benefit of the parties' briefing, whether the policies on which  Section(s) 4371 is assessed are so closely connected to the goods that  the tax is, in essence, a tax on exports.3  See, e. g., id., at 27-28 ("[T]he record doesn't reveal the sort of statistical information Justice Breyer was suggesting might be relevant" to determine"whether  this is sufficiently indirect that it's not a tax on exports, . . .  because the Government has conceded throughout that they are not  disputing that this tax, if discriminatory, is in violation of the  Constitution").

27
Stare decisis is a "principle of policy," Helvering v. Hallock,  309 U. S. 106, 119 (1940), and not "an inexorable command," Payne v.  Tennessee, 501 U. S. 808, 828 (1991). Applying that policy, we  frequently have declined to overrule cases in appropriate circumstances  because stare decisis "promotes the evenhanded, predictable, and  consistent development of legal principles, fosters reliance on judicial  decisions, and contributes to the actual and perceived integrity of the  judicial process."  Id., at 827.  "[E]ven in constitutional cases, the doctrine carries such persuasive force that we have always required a  departure from precedent to be supported by some `special  justification.' Id., at 842 (Souter, J., concurring) (quoting Arizona v.  Rumsey, 467 U. S. 203, 212 (1984)).

28
Though from time to time we have overruled governing decisions  that are "unworkable or are badly reasoned," Payne, supra, at 827; see  Smith v. Allwright, 321 U. S. 649, 665 (1944), we have rarely done so on  grounds not advanced by the parties.  Thames & Mersey has been  controlling precedent for over 80 years, and the Government does not,  indeed could not, argue that the rule established there is "unworkable."  Despite the dissent's speculative protestations to the contrary, post,  at 9-11, there is simply no evidence that Thames & Mersey has caused or  will cause uncertainty in commercial export transactions.  The principles that animate our policy of stare decisis caution against  overruling a longstanding precedent on a theory not argued by the  parties, and we decline to do so in this case.4

2.

29
What the Government does argue is that our Import-Export Clause  cases require us to overrule Thames & Mersey.5  We have good reason  to hesitate before adopting the analysis of our recent Import-Export  Clause cases into our Export Clause jurisprudence.  Though we have  frequently interpreted the Clauses together, see supra, at 9-10, our  more recent Import-Export Clause cases, on which the Government relies,  caution that meaningful textual differences exist and should not be overlooked.  The Export Clause prohibits Congress from laying any "Tax  or Duty" on exports, while the Import-Export Clause prevents the States  from laying any "Imposts or Duties" on imports or exports.  In both  Michelin and Washington Stevedoring, we left open the possibility that a  particular state assessment might not properly be called an impost or  duty, and thus would be beyond the reach of the Import-Export Clause,  while an identical federal assessment might properly be called a tax and  would be subject to the Export Clause.  Though we found in Michelin that  a nondiscriminatory state property tax does not transgress the policy  dictates of the Import-Export Clause, we also recognized that the  Import-Export Clause is "not written in terms of a broad prohibition of  every `tax,'" and that impost and duty are narrower terms than tax. 423  U. S., at 290-293.  In Washington Stevedoring, we likewise rejected the  assertion that the Import-Export Clause absolutely prohibits all  taxation of imports and exports.  435 U. S., at 759.  We said that "the  term `Impost or Duty' is not self-defining and does not necessarily encompass all taxes" and that the respondents' argument to the contrary  ignored "the central holding of Michelin that the absolute ban is only  of `Imposts or Duties' and not of all taxes."  Ibid.

30
The distinction between imposts or duties and taxes is especially pertinent in light of the peculiar definitional analysis we  chose in Michelin.  Finding substantial ambiguity in the phrase "Imposts  or Duties," we "decline[d] to presume it was intended to embrace  taxation that does not create the evils the Clause was specifically  intended to eliminate."  Michelin, supra, at 293-294.  We entirely  bypassed the etymological inquiry into the proper meaning of the terms  "impost" and "duty," and instead created a regime in which those terms  are conclusions to be drawn from an examination into whether a  particular assessment "was the type of exaction that was regarded as  objectionable by the Framers of the Constitution."  423 U. S., at 286.  We are not prepared to say that the word "Tax" is "sufficiently  ambiguous," id., at 293, that we may ignore its common, and usually expansive,6 meaning in favor of an Export Clause decisional rule in  which a tax is not a "Tax" unless it discriminates against exports.  Consequently, Michelin and Washington Stevedoring, which held that the  assessments in question were not "Imposts or Duties" at all, do not  logically validate the assessment at issue in this case, which, by all  accounts, remains a "Tax."

31
It is not intuitively obvious that Michelin's three-pronged analysis of the Framers' concerns is really just another way of stating  a nondiscrimination principle.  But even if it were, the Government  cannot reasonably rely on Michelin to govern the Export Clause because  Michelin drew its analysis around the phrase "Imposts or Duties" and  expressly excluded the broader term "Tax" that appears in the Export  Clause. Michelin marked a more permissive approach to state taxation  under the Import-Export Clause only by distinguishing the presumptively stricter language of the Export Clause.  We agree with the Government  that Michelin informs our decision in this case, but not in a way that  supports the Government's position.  It is simply no longer true that  the Court perceives no substantive difference between the two Clauses.

32
We are similarly hesitant to adopt the Import-Export Clause's policy-based analysis without some indication that the Export Clause was  intended to alleviate the same "evils" to which the Import-Export Clause  was directed.  Unlike the Import-Export Clause, which was intended to  protect federal supremacy in international commerce, to preserve federal  revenue from import duties and imposts, and to prevent coastal States  with ports from taking unfair advantage of inland States, see Michelin,  supra, at 285-286, the Export Clause serves none of those goals. Indeed, textually, the Export Clause does quite the opposite.  It specifically  prohibits Congress from regulating international commerce through export  taxes, disallows any attempt to raise federal revenue from exports, and  has no direct effect on the way the States treat imports and exports.

33
As a purely historical matter, the Export Clause was originally  proposed by delegates to the Federal Convention from the Southern  States, who feared that the Northern States would control Congress and  would use taxes and duties on exports to raise a disproportionate share  of federal revenues from the South.  See 2 M. Farrand, The Records of  the Federal Convention of 1787, pp. 95, 305-308, 359-363 (rev. ed.  1966).  The Government argues that this "narrow historical purpose"  justifies a narrow interpretation of the text and that application of Section(s) 4371 to policies insuring exports does not conflict with the  policies embodied in the Clause.  Brief for United States 32-34.  While  the original impetus may have had a narrow focus, the remedial provision  that ultimately became the Export Clause does not, and there is  substantial evidence from the Debates that proponents of the Clause  fully intended the breadth of scope that is evident in the language.  See, e. g., 2 Farrand, Records of the Federal Convention, at 220 (Mr.  King: "In two great points the hands of the Legislature were absolutely  tied. The importation of slaves could not be prohibited-exports could not be taxed"); id., at 305 ("Mr. Mason urged the necessity of connecting with the power of levying taxes . . . that no tax should be  laid on exports"); id., at 360 (Mr. Elseworth [sic]: "There are solid  reasons agst. Congs taxing exports"); ibid. ("Mr. Butler was strenuously  opposed to a power over exports"); id., at 361 (Mr. Sherman: "It is best  to prohibit the National legislature in all cases"); id., at 362 ("Mr.  Gerry was strenuously opposed to the power over exports").

34
The Government argued for a different narrow interpretation of  the Export Clause in Fairbank.  See 181 U. S., at 292-293. Arguing that  the Debates expressed a primary interest in diffusing sectional  conflicts, the Government urged the Fairbank Court to interpret the  Export Clause to permit taxation of "the act of exportation or the  document evidencing the receipt of goods for export, for these exist  with substantial uniformity throughout the country."  Id., at 292.  We  rejected that argument:

35
"If mere discrimination between the States was all that was contemplated, it would seem to follow that an ad valorem tax upon all  exports would not be obnoxious to this constitutional prohibition.  But  surely under this limitation Congress can impose an export tax neither  on one article of export, nor on all articles of export."  Ibid.

36
As in Fairbank, we think the text of the constitutional provision provides a better decisional guide than that offered by the  Government. The Government's policy argument--that the Framers intended  the Export Clause to narrowly alleviate the fear of northern repression  through taxation of southern exports by prohibiting only discriminatory  taxes--cannot be squared with the broad language of the Clause.  The  better reading, that adopted by our earlier cases, is that the Framers  sought to alleviate their concerns by completely denying to Congress the  power to tax exports at all.

3.

37
Even assuming that Michelin and Washington Stevedoring govern our Export Clause inquiry in this case, the Government's argument falls  short of its goal.  Our holdings in Michelin and Washington Stevedoring  do not reach the facts of this case and, more importantly, do not  interpret the Import-Export Clause to permit assessment of  nondiscriminatory taxes on imports and exports in transit.  Michelin  involved a tax on goods, but the goods were no longer in transit.  The  tax in Washington Stevedoring burdened imports and exports while they  were still in transit, but it did not fall directly on the goods  themselves.  This case, as it comes to us, is a hybrid in which the tax  both burdens exports during transit and--as the Government concedes and  our earlier cases held--is essentially a tax on the goods themselves.  The Government argues that Michelin and Washington Stevedoring by analogy permit Congress to impose generally applicable, nondiscriminatory taxes that fall directly on exports in transit. Brief  for United States 32 (Michelin and Washington Stevedoring "demonstrate  that, when a generally applicable, nondiscriminatory tax is at issue,  the mere fact that the tax applies also to goods that are in the export  or import process does not provide a constitutional immunity from taxation").  If this contention is to succeed, the Government at the  very least must show that our Import-Export Clause jurisprudence now  permits a State to impose a nondiscriminatory tax directly on goods in  import or export transit.  We think the Government has failed to make  that showing.

38
The Court has never upheld a state tax assessed directly on goods in import or export transit.  In Michelin, we suggested that the  Import-Export Clause would invalidate application of a nondiscriminatory  property tax to goods still in import or export transit.  423 U. S., at  290 (compliance with the Import-Export Clause may be secured "by  prohibiting the assessment of even nondiscriminatory property taxes on   [import or export] goods which are merely in transit through the State  when the tax is assessed").  See also Virginia Indonesia Co. v. Harris  County Appraisal Dist., 910 S. W. 2d 905, 915 (Tex. 1995) (invalidating application of a nondiscriminatory ad valorem property tax to goods in  export transit).

39
We also declined to endorse the Government's theory in Washington Stevedoring.  After reciting that the Court in Canton R. Co.  had distinguished Thames & Mersey, Fairbank, and Richfield Oil, we  pointed out that in those cases "the State [or Federal Government] had  taxed either the goods or activity so connected with the goods that the  levy amounted to a tax on the goods themselves."  Washington  Stevedoring, 435 U. S., at 756, n. 21. We expressly declined to "reach  the question of the applicability of the Michelin approach when a State  directly taxes imports or exports in transit," id., at 757, n. 23,  because, although the goods in that case were in transit, the tax fell  on "a service distinct from the goods and their value," id., at 757.  Thus, contrary to the Government's contention, this Court's Import-Export Clause cases have not upheld the validity of generally  applicable, nondiscriminatory taxes that fall on imports or exports in  transit.  We think those cases leave us free to follow the express  textual command of the Export Clause to prohibit the application of any  tax "laid on Articles exported from any State."

40
We conclude that the Export Clause does not permit assessment of  nondiscriminatory federal taxes on goods in export transit. Reexamination of the question whether a particular assessment on an  activity or service is so closely connected to the goods as to amount to  a tax on the goods themselves must await another day. We decline to  overrule Thames & Mersey.  The judgment of the Court of Appeals for the  Federal Circuit is affirmed.

41
It is so ordered.

42
djq  Justice Stevens took no part in the consideration or decision in  this case.

43
djq  Justice Kennedy, with whom Justice Ginsburg joins, dissenting.

44
The Court today holds a federal statute unconstitutional without  giving heed to the simplest reason for sustaining it.  We granted  certiorari on the question "[w]hether, as applied to casualty insurance  for losses incurred during the shipment of goods from locations within  the United States to purchasers abroad, the tax imposed by Section 4371  of the Internal Revenue Code violates the Export Clause of the  Constitution of the United States (U. S. Const. Art. I, Section(s) 9,  Cl. 5)," Pet. for Cert. I.  A straightforward answer to the question  presented requires us to address the narrow issue of the continuing validity of our holding in Thames & Mersey Marine Ins. Co. v. United  States, 237 U. S. 19 (1915), that a general tax on certain insurance  premiums, as applied to exporters, is a prohibited tax on export goods.

45
Rejecting this course, the Court ventures upon a broad constitutional inquiry not even implicated by the statute.  To do so, it  rewrites the question presented.  In the first sentence of the opinion,  the Court says, "We resolve in this case whether the Export Clause of  the Constitution permits the imposition of a generally applicable,  nondiscriminatory federal tax on goods in export transit," ante, at 1.  In so reformulating the question, the Court makes the assumption that  Section(s) 4371's insurance tax is a tax on export goods, thereby  adopting the premise of Thames & Mersey that I had thought we were to  address.  In the end the Court assumes the statute to be invalid rather  than deciding it to be so.  I find no precedent for setting aside an Act  of Congress in this peremptory way.  Worse yet, the Court's assumption  is wrong; because Section(s) 4371 taxes a service distinct from the  goods and is not a proxy for taxing the goods, it does not fall within  the prohibition of the Export Clause. The Court thus carves out an  undeserved exemption from Section(s) 4371 for exporters, adding  significant complexity to its administration. Moreover, in a case in  which the Export Clause should not even apply, the Court tackles the  great problem of reconciling our Export Clause jurisprudence with modern  decisions interpreting the Commerce and Import-Export Clauses, U. S. Const., Art. I, Section(s) 8, cl. 2, and Art. I, Section(s) 10, cl. 2.  This is unwise and unnecessary.  I would limit the inquiry to a  reconsideration of Thames & Mersey, and uphold the statute as applied to  respondent.  With respect, I dissent.

I.

46
We consider a rather simple federal tax.  Section 4371 of the Internal Revenue Code imposes a tax of "4 cents on each dollar, or fractional part thereof, of the premium paid on the policy of casualty  insurance or the indemnity bond, if issued to or for, or in the name of,  an insured. . . ."  26 U. S. C. Section(s) 4371(1) (1982 ed.).  The term  "insured" is defined to include any "domestic corporation or  partnership, or an individual resident of the United States, against, or  with respect to, hazards, risks, losses, or liabilities wholly or partly  within the United States. . . ." Section(s) 4372(d)(1).  The statute  does not discriminate against exports.  Indeed, it does not even mention them.  The tax must be paid not only by domestic traders but also by any  insured, even an individual, who is covered in whole or in part for  domestic casualty risks.  The purpose of the tax is to "eliminate an  unwarranted competitive advantage now favoring foreign insurers," H. R.  Rep. No. 2333, 77th Cong., 2d Sess., 61 (1942), who do not pay federal  income tax.  Cf. 26 U. S. C. Section(s) 4373(1) (1982 ed.) (exempting  from Section(s) 4371 any policy issued by a foreign insurer that is  "signed or countersigned by an officer or agent of the insurer in a  State, or in the District of Columbia, within which such insurer is authorized to do business" and is therefore subject to the income tax).

47
Resolution of the case requires us to determine whether the Export Clause has any bearing on taxes on services like insurance provided to exporters, where the service itself is not exported. The  plain text of the Clause casts much doubt on the proposition. It  states, "No Tax or Duty shall be laid on Articles exported from any  State," U. S. Const., Art. I, Section(s) 9, cl. 5.  The majority avoids  this necessary question by asserting that the Government failed to argue  the point and so abandoned it.  Ante, at 12, and n. 4.  True, the  Government defends Section(s) 4371 on the ground that it does not  discriminate between exports and other forms of trade, but this is not a  concession that there is no distinction between a tax on insurance  premiums and a tax on goods.  In fact, the Government makes repeated  references to the distinction in its briefs, albeit in the context of  discussing the nondiscriminatory character of Section(s) 4371. See,  e.g., Brief for United States 12-13 (The tax "does not apply specifically to export transactions; to the contrary, it applies only to  insurance risks that are either `wholly' or `partly' domestic."); id.,  at 15 ("The tax imposed by Section 4371 of the Internal Revenue Code is  not specifically directed to nor directly `laid on Articles exported'   (U. S. Const. Art. I, Section(s) 9, Cl. 5).  Instead, it applies to  insurance premiums paid to foreign insurers for many forms of insurance,  including any casualty risk that is `wholly or partly within the United  States' (26 U. S. C. Section(s) 4372(d)(1))"); id., at 34 ("Even as  applied to casualty insurance, the tax unquestionably has only an  incidental and remote relationship to exports and the export process  . . .").

48
At oral argument, the Solicitor General acknowledged that he had  not made a separate argument based on the distinction between export  goods and services related to the exporting process.  He explained that  the nondiscrimination theory had greater utility, sparing courts the  nettlesome inquiry into what is an export. Tr. of Oral Arg. 9.  When  asked why the Government was avoiding the simpler and clearer argument  that Section(s) 4371 was just a tax on foreign insurers to offset the  tax burdens borne by domestic insurers, he responded, "We do not mean to  avoid that argument.  That's part of our argument of why this is a tax  of general application."  Id., at 12.  Later in oral argument, the Solicitor General stated that "it's problematic to describe a tax on  insurance as a tax on the good," and cited that problem as a reason for  calling into question our decision in Thames & Mersey. Tr. of Oral Arg.  40.  When asked if his position had foreclosed us from deciding the case  on that basis, he responded, "I don't believe you're foreclosed . . . by  our concession from addressing that issue as you see fit."  Ibid.  We  have relied on statements more equivocal than this to reconsider and  overrule a bad precedent even when the parties in their briefs had  argued that the precedent should be upheld.  See Blonder-Tongue  Laboratories, Inc. v. University of Ill. Foundation, 402 U. S. 313,  319-320 (1971).

49
The Court's faulty characterization of the Government's argument  leads it down some odd byways.  For example, in Part III-B-3, the Court  rejects the Government's attempt to rely upon Department of Revenue of  Wash. v. Association of Wash. Stevedoring Cos., 435 U. S. 734 (1978),  where we held that a state tax of general applicability imposed upon a  stevedoring firm did not violate the Import-Export Clause even though it  may have added to the cost of importing and exporting.  The Court points  out that the tax in Washington Stevedoring did not fall directly on the  goods, ante, at 18-19, and that we reserved the question whether States  could tax goods in import or export transit, ante, at 19-20 (citing 435  U. S., at 757, n. 23).  So, in the Court's view, Washington Stevedoring  does not support the Government's argument that "Congress [may] impose  generally applicable, nondiscriminatory taxes that fall directly on  exports in transit," ante, at 19.  The Government never argues that Section(s) 4371 imposes a tax on goods in transit, however.  See, e.g.,  Brief for United States 15 (the tax imposed by Section(s) 4371 "does not  fall specifically on articles of export or export transactions").  If  the Government can be faulted, it is for urging us to uphold Section(s)  4371 on a broad theory (a tax that does not discriminate against exports  is valid) rather than the narrow theory subsumed within it (this  particular tax does not fall on export goods at all).  Nothing in the  Government's argument prevents us from deciding the case on the narrower ground.

50
Even were we to suppose that the Government did not argue the goods and services distinction, the prudential rule against deciding a  case on an unargued theory is in any event not absolute.  See Arcadia v.  Ohio Power Co., 498 U. S. 73, 77 (1990); Erie R. Co. v. Tompkins, 304 U.  S. 64, 77-78 (1938) (overturning Swift v. Tyson, 16 Pet. 1 (1842), as unconstitutional); see also 304 U. S., at 82 (Butler, J.) (pointing out  that no constitutional question was argued or briefed either in this  Court or the court below).  Cf. Evans v. United States, 504 U. S. 255,  269 (1992) (addressing a theory not argued by the parties but advanced  by Justice Thomas in dissent); United States v. Burke, 504 U. S. 229,  246 (1992) (Scalia, J., concurring in judgment).  This rule has less  force when the issue before us is whether it is constitutional to apply the statute where Congress intended it to apply.  The predicate question  of whether the Export Clause prohibits taxes on distinct services like  insurance is "essential to the analysis" of the question presented,  Procunier v. Navarette, 434 U. S. 555, 559-560, n. 6 (1978), and  necessary to "an intelligent resolution of the constitutionality" of the  statute, Vance v. Terrazas, 444 U. S. 252, 258, n. 5 (1980).  It is  before us and should be decided.  See this Court's Rule 14.1(a) ("The  statement of any question presented will be deemed to comprise every  subsidiary question fairly included therein").

51
To give Congress the respect it is owed, we must decide whether  the statute is in fact unconstitutional as applied, not make the  borderline call that the Government's litigation position bars us from  reaching a question which, as the Court seems to agree, is presented by  the case. In interpreting statutes, for example, we have long observed  "[t]he elementary rule . . . that every reasonable construction must be  resorted to, in order to save a statute from unconstitutionality."  Hooper v. California, 155 U. S. 648, 657 (1895).  See also United States ex rel. Attorney General v. Delaware & Hudson Co., 213 U. S. 366, 408   (1909) ("where a statute is susceptible of two constructions, by one of  which grave and doubtful constitutional questions arise and by the other  of which such questions are avoided, our duty is to adopt the latter");  Murray v. Schooner Charming Betsy, 2 Cranch 64, 118 (1804).

52
"This approach not only reflects the prudential concern that constitutional issues not be needlessly confronted, but also recognizes  that Congress, like this Court, is bound by and swears an oath to uphold  the Constitution.  The courts will therefore not lightly assume that  Congress intended to infringe constitutionally protected liberties or  usurp power constitutionally forbidden it."  Edward J. DeBartolo Corp.  v. Florida Gulf Coast Building & Constr. Trades Council, 485 U. S. 568,  575 (1988).

53
We have not considered ourselves foreclosed from adopting saving  constructions the parties failed to suggest.  See, e.g., Panama R. Co.  v. Johnson, 264 U. S. 375, 389-391 (1924) (interpreting Jones Act to  allow action to be brought in admiralty); cf. Brief for  Plaintiff-in-Error 9-22 and Brief for Defendant-in-Error 3-12, in Panama  R. Co., O. T. 1923, No. 369. We cannot here avoid a constitutional  question by statutory construction, but we should take all measures to  avoid declaring that Congress "usurp[ed] power constitutionally  forbidden it," DeBartolo, supra, at 575.  The majority cites no case in  which we have declared a federal statute unconstitutional by disregarding an unargued theory that would save the statute, and I am  not aware of any.  We should at least consider a construction of the  Export Clause that would render it inapplicable to the statute, rather  than assuming the issue away and reaching the unnecessary judgment that  a coordinate branch violated the Constitution.

54
There may be instances, even in constitutional cases, when we should eschew alternative theories for sustaining a statute.  For example, we might do so if the theories depend upon different provisions  of law or require factual development and legal analysis far afield from  that done by the parties or the courts below.  That is not this case.  The question whether the Export Clause applies to taxes on distinct  export-related services requires most of the same inquiries the majority  undertakes: construing the text of the Export Clause, considering its  history and purpose, and reviewing our precedents.  It also requires explicit reexamination of the reasoning of Thames & Mersey, supra, which  the Government has asked us to overrule, in particular the idea that a  tax on insurance premiums is a tax on the goods.  The last is the only  step the Court refuses to take.

55
There is not, as the Court intimates, ante, at 12, a need for statistical development of the relative incidence of this tax on exporters, unless the Court (as appears unlikely) is interested in the  statistics from 1942 to determine if the statute was a pretext when it  was enacted.  The current incidence of the tax on exporters, whatever it  is, will reflect market conditions in light of the operation of this tax  over more than 50 years, including the strength of foreign insurers in  certain lines exporters purchase, cf. R. Holtom, Underwriting Principles  & Practices 451 (3d ed. 1987) (ocean marine insurance dominated by foreign companies).  There is no law prohibiting persons from being  insured under policies of foreign insurers issued abroad, and nothing in  the statute exempts nonexporters from its operation.  The Court has all  the information it needs to decide this case on the proper basis, and it  should not rest its decision that Section(s) 4371 is unconstitutional  upon a dubious assumption that a general tax on insurance premiums is a  tax on export goods.

56
In Massachusetts v. United States, 333 U. S. 611 (1948), the Government had conceded certain matters of statutory construction which,  we felt, undermined its entire position.  Id., at 624.  We refused to  accept those concessions, and, giving the statute its proper  interpretation, ruled in the Government's favor.  Id., at 625.  It  mystifies me that in a constitutional case, where our decision is not  subject to congressional revision, the Court here accepts the  Government's purported concession of the meaning of the Export Clause  without any independent examination of the question, and then invokes  the Clause to strike down a statute. See Torres v. Puerto Rico, 442 U.  S. 465, 471, n. 3 (1979) ("even an explicit concession" by the  Commonwealth of Puerto Rico that it was subject to the requirements of  the Fourth Amendment would not "relieve this Court of the per-formance  of the judicial function of deciding the issue") (internal quotation  marks omitted).

57
Quite apart from the unnecessary judgment that an Act of Congress is unconstitutional as applied, today's decision adds significant complexity to the administration of Section(s) 4371. Under  the thumb of the Court's holding that all premiums paid to insure export  goods are exempt from Section(s) 4371, but also under the statutory  mandate to collect the tax in all other instances, the Internal Revenue  Service (IRS) henceforth finds itself faced with an array of new  problems unexplained and unmentioned by the Court.  Insurance is one of  the most complex of businesses, with a multitude of coverage and policy  options in different product lines, all generated and still evolving in pursuit of the profitable and efficient underwriting of risks. Not  every case will fit the simple model here: a policy written for a single  shipment; coverage beginning only with a common carrier picking up the  goods from the warehouse or manufacturing plant; simple ascertainment of  point of entry into the export stream.  Stipulation of Facts Para(s) 13,  16, App. to Pet. for Cert. 37a, 39a; cf. A. G. Spalding & Bros. v.  Edwards, 262 U. S. 66, 68-69 (1923) (delivery to common carrier signals  commencement of export).

58
Commercial inland marine transit insurance, the form of casualty  insurance which covers domestic transportation of goods, "is usually  written on an open basis, under which all shipments of the kind of  merchandise described in the policy are covered." Holtom, supra, at  435.  It would appear, from today's decision, that if a company has an  open policy from a foreign insurer covering the domestic leg of the  journey for all shipments, the IRS must untangle what portion of the  insurance covered goods that had commenced the process of exportation,  and then prorate the tax.  So too would proration (or some other  accommodation) appear necessary if the policy is taken out on a single  shipment but part of the shipment is delivered within the country and  part abroad.

59
In addition, the Court's decision draws the IRS into the factual  morass of determining when exportation has begun.  That will often be  less clear than it is here.  For example, a company may have its own  trucks carry goods to a freight forwarder or port, or a hiatus in the  journey might be extensive enough to remove the goods from the export  stream, see Joy Oil Co. v. State Tax Comm'n, 337 U. S. 286, 288-289   (1949); since "not every preliminary movement of goods toward eventual  exportation" triggers the constitutional immunity, Kosydar v. National  Cash Register Co., 417 U. S. 62, 69, n. 6 (1974), the determination of the commencement of exportation is another layer of complexity added to  the administration of Section(s) 4371.  Finally, the IRS now must  determine which of the many, ever evolving types of insurance fall  within the broad prohibition of Thames & Mersey against any tax that  burdens the exporting process.  See 237 U. S., at 27.  Truckers, for  example, often take insurance out to cover liability for the loss or  damage to merchandise that they are carrying.  Holtom, supra, at 435.  The cost of that insurance, which may be specific to an export shipment  and related to the value of the goods, is likely passed through in some  measure to the exporter and therefore "falls upon the exporting  process," Thames & Mersey, supra, at 27.  Questions will also arise  whether it violates the Export Clause to tax insurance taken out by an  export freight-forwarder to cover a warehouse storing goods in transit,  or to tax ocean marine protection and indemnity insurance taken out by a  vessel owner to protect against damage to export cargo, cf. Holtom, supra, at 452, if part of the risk covered is domestic.

60
The severity of these administrative burdens will depend in part  upon the penetration of the domestic market by foreign insurers in  certain lines.  We can anticipate increased burdens with the 4% price  cut in foreign insurance for exporters that results from today's  decision.  The Court is wrong to frustrate the will of Congress by  giving exporters an undeserved exemption from Section(s) 4371 and by  adding needless complexity to the administration of the statute, all  upon the incorrect, unexamined assumption that the tax is on exported  goods.

II.

61
Turning to the question that I take to be dispositive, I would  hold that the Export Clause does not apply to Section(s) 4371.  The text  and history of the Clause, and its interpretation by the Fifth Congress,  suggest that taxes on insurance do not fall within its prohibitions.  Because Section(s) 4371 taxes a service distinct from the actual export  of the goods, and does not function as a proxy for taxing their value, I  would uphold its application to IBM.

62
In my view, the Framers understood the Export Clause to prohibit  what its text says: any federal tax "laid on Articles exported," U. S.  Const., Art. I, Section(s) 9, cl. 5, not taxes on services like  insurance that may have indirect effect on the cost of exporting.  There  was a history of nations' imposing onerous taxes on exported goods, even  in England until the rise of mercantilist trade policy resulted in the  repeal of most export taxes by the end of the seventeenth century, see  W. Kennedy, English Taxation 1640-1799, p. 35 (1913).  And specific taxes on exported goods were the only taxes mentioned in the debate at  the Constitutional Convention over the Export Clause. For example,  Gouverneur Morris of Pennsylvania, opposing the Clause, favored taxing  exports as an alternative to direct taxes on individuals.

63
"He considered the taxing of exports to be in many cases highly  politic. Virginia has found her account in taxing Tobacco. All  Countries having peculiar articles tax the exportation of them; as  France her wines and brandies.  A tax here on lumber, would fall on the  W. Indies & punish their restrictions on our trade.  The same is true of  live-stock and in some degree of flour.  In case of a dearth in the West  Indies, we may export what we please.  Taxes on exports are a necessary source of revenue.  For a long time the people of America will not have  money to pay direct taxes.  Seize and sell their effects and you push  them into Revolts." 2 M. Farrand, Records of the Federal Convention of  1787, p. 307 (rev. ed. 1966).

64
See also id., at 306 (Mr. Madison: taxes on exported goods, like  tobacco, in which Americans were unrivalled would shift the tax burden  to foreigners), id., at 360 (Gouverneur Morris: taxes on goods are  essential to embargoes, while taxes on ginseng and ship masts would  shift the tax burden abroad, and taxes on skins, beavers, and other raw  materials might encourage American manufactures), id., at 361 (Mr.  Dickenson [sic]: suggesting exemption of certain articles from the  Export Clause), id., at 362 (Mr. Fitzimmons: discussing duties imposed  on wool by Great Britain).  Proponents of the Export Clause also focused  on taxes on goods.  Id., at 307 (Mr. Mercer: a tax on exported goods encourages the raising of articles not meant for exportation), id., at  360 (Mr. Williamson: discussing taxation of North Carolina tobacco by  Virginia), id., at 361 (Mr. Sherman: general prohibition on power to tax  exports necessary because "[a]n enumeration of particular articles would  be difficult invidious and improper"), id., at 363 (Colonel Mason:  discussing Virginia tax on tobacco; Mr. Clymer: discussing middle  States' apprehensions of taxes on products like wheat flour and provisions that, unlike tobacco and rice, were sold in competitive markets).  Oliver Ellsworth of Connecticut even contended that he opposed export taxes in part because "there are indeed but a few articles that could be taxed at all; as Tobo. rice & indigo, and a tax  on these alone would be partial & unjust."  Id., at 360.

65
In interpreting constitutional restrictions on the taxing power,  we must recall that the want of this power in the national government  was one of the great weaknesses of the Articles of Confederation.  With  its expenses outpacing revenues from requisitions from the States, the  central government had emptied its vaults by 1782 and soon defaulted on  its substantial debt. R. Paul, Taxation in the United States 4-5   (1954).  As the Convention records indicate, depriving the federal  government of the power to tax even export goods was a contentious  issue, given the concern that it would cut off a needed source of  revenue as well as disable Congress from using export taxes as an  instrument of policy.  Madison's last-minute proposal that the Export Clause's total prohibition on taxing exports be replaced with a  provision requiring a two-thirds vote of each House failed by the vote  of only one State.  2 Farrand, supra, at 363.  There is no cause for  extending the Export Clause beyond the bargain struck at the Convention  and embodied in its text.

66
There is other compelling historical evidence weighing against  Thames & Mersey's view of the Export Clause as a prohibition extending  even to taxes on services that have the indirect effect of raising  exportation costs.  In 1797 the Fifth Congress passed "An Act laying  Duties on stamped Vellum, Parchment and Paper."  Among its provisions  was a stamp duty upon

67
"any policy of insurance or instrument in nature thereof, whereby any ships, vessels or goods going from one district to another  in the United States, or from the United States to any foreign port or  place, shall be insured, to wit, if going from one district to another  in the United States, twenty-five cents; if going from the United States  to any foreign port or place, when the sum for which insurance is made  shall not exceed five hundred dollars, twenty-five cents; and when the  sum insured shall exceed five hundred dollars, one dollar. . . ."  Act  of July 6, 1797, ch. 11, Section(s) 1, 1 Stat. 527.

68
The duties survived until the unpopular Federalist tax system,  which was felt to bear too heavily upon those least able to pay, was  abolished soon after Jefferson took office.  See Paul, supra, at 6.

69
We have always been reluctant to say a statute of this early origin offends the Constitution, absent clear inconsistency.  See Knowlton v. Moore, 178 U. S. 41, 56 (1900) (imposition of legacy taxes  in the same 1797 statute casts doubt on claim that Congress lacks such  power); see Ludecke v. Watkins, 335 U. S. 160, 171 (1948) ("The [Alien  Enemy Act of 1798] is almost as old as the Constitution, and it would  savor of doctrinaire audacity now to find the statute offensive to some  emanation of the Bill of Rights").  The 1797 statute should dispel any  doubt on the issue. Taxes on insurance do not offend the Export Clause.  It is not likely, moreover, that the Act was passed to circumvent the Export Clause.  The early Congresses were scrupulous in honoring the  Export Clause by making specific exemptions for exports in laws imposing  general taxes on goods.  See, e.g., Act of Mar. 3, 1791, ch. 15,  Section(s) 51, 1 Stat. 199, 210-211 (tax on distilled spirits); Act of  June 5, 1794, ch. 51, Section(s) 14, 1 Stat. 384, 387 (tax on snuff and  refined sugar).  Their refusal to grant exporters similar exemptions from insurance taxes indicates that those taxes were not viewed as equivalent to taxes on goods.

70
In Fairbank v. United States, 181 U. S. 283 (1901), the Court struck down an 1898 statute imposing a stamp tax on an export bill of  lading despite a similar tax in the 1797 statute.  The decision in  Fairbank was 5-4, with a strong dissent from the first Justice Harlan  urging deference to the implicit exposition of the Export Clause by the  Fifth Congress.  The Court, though, reserved the  contemporaneous-exposition rule for " `doubtful cases,' " id., at 311,  and had no doubt that the "discriminating and excessive tax" imposed on  export bills of lading in the 1898 Act (10 times that imposed on  internal bills of lading, id., at 290) was unconstitutional.

71
There is no need to reconsider Fairbank, nor to distinguish it  by sole reliance upon the interpretation offered in Washington Stevedoring, which observed that the stamp duty at issue in Fairbank  "effectively taxed the goods because the bills represented the goods,"  435 U. S., at 756, n. 21.  The tax here, unlike the stamp duty in  Fairbank, does not discriminate against exports; it taxes a service  distinct from the act of exporting; and it has the clear regulatory  purpose of eliminating a perceived competitive advantage of foreign  insurers.  Viewed in this light, the conclusion of the Fifth Congress  that the Export Clause did not bar any tax on export insurance should  have great weight in assessing the constitutionality of Section(s) 4371,  and Fairbank is not to the contrary.

72
Turning once more to Thames & Mersey, I note the 1797 statute was neither briefed to the Court there nor discussed in its opinion.  The Court, furthermore, did not examine the text or history of the  Export Clause, relying instead on the broad theory of the Clause  espoused in the companion case, United States v. Hvoslef, 237 U. S. 1   (1915): namely, that it meant the "process of exporting . . .  should  not be obstructed or hindered by any burden of taxation," id., at 13   (internal quotation marks and citation omitted).  See Thames & Mersey,  237 U. S., at 25. (Hvoslef's holding that a nondiscriminatory tax on  charter parties was unconstitutional as applied to export shipments, by the way, is also called into question by the 1797 Act, which imposed a  similar tax.)

73
Besides failing to consider the evidence just cited, the Thames  & Mersey Court relied in part on the theory that insurance is not  commerce and so, by implication, the regulatory aspect of the tax could  not be justified as an exercise of Congress' Commerce Clause power.  See  Thames & Mersey, supra, at 25, citing Paul v. Virginia, 8 Wall. 168   (1869).  As a result, the Court reasoned, an insurance policy was simply  a personal contract and a document which, by custom, was a necessary  part of every export transaction.  237 U. S., at 25-26.  A tax on the premiums of such a policy, which fell upon the exporting process and  increased its costs, was thought to be the equivalent to a tax laid on  charter parties, bills of lading, or the goods themselves.  Id., at 27.  We abandoned long ago the notion that insurance is not commerce and so  beyond the power of Congress to regulate.  See United States v.  South-Eastern Underwriters Assn., 322 U. S. 533, 543-545 (1944).  Congress enacted Section(s) 4371 to regulate competition within the  insurance field, and its authority to do so ought not to be impaired by  a strained reading of the Export Clause or reliance on the outmoded  reasoning of Thames & Mersey.

74
We have discarded, in Import-Export Clause cases, the idea afoot  in Hvoslef and Thames & Mersey that a tax on services necessary to the  export process is equivalent to a tax on goods. In Canton R. Co. v.  Rogan, 340 U. S. 511 (1951), the Court upheld a state gross-receipts tax  on a steam railroad, even as applied to the railroad's handling of  exports and imports from its marine terminal in the port of Baltimore.  The tax was "not on the goods but on the handling of them at the port,"  we said, and "when the tax is on activities connected with the export or  import the range of immunity cannot be so wide."  Id., at 514-515.  Following Canton, the Court in Washington Stevedoring decided that taxes  on services may be permissible even if levied upon an activity, such as  stevedoring, which occurs while imports and exports are in transit.  We  remarked, "The transportation services in both settings are necessary to  the import-export process.  Taxation in neither setting relates to the  value of the goods, and therefore in neither can it be considered  taxation upon the goods themselves."  435 U. S., at 757.  The  distinctions drawn between services and goods in those cases did not  depend on the differences between the text of the Export and  Import-Export Clauses, and should be observed here.

75
The Court's effort to justify its decision on the grounds of stare decisis, ante, at 13, is unconvincing.  Stare decisis does not  protect a constitutional decision where the reasoning is as poor as it  is in Thames & Mersey, see Smith v. Allwright, 321 U. S. 649, 665   (1944), nor when the precedent, even if not yet proven unworkable, is at  odds with more recent cases, see Fulton Corp. v. Faulkner, 516 U. S. __,  __-__ (1996) (slip. op. at 20-21).  It is, moreover, just a matter of  time before Thames & Mersey proves itself unworkable; prior to today, it  had not been given the chance to work its mischief on Section(s) 4371.

76
As we move to a more service-intensive and export-oriented economy, and as policymakers and experts debate the wisdom of shifting  from income to excise taxes, see Lugar, The National Sales Tax: Avoiding  the Zero-Sum Scenario, 48 Tax Executive 26 (1996); Bartlett, Replacing  Federal Taxes with a Sales Tax, 68 Tax Notes 997 (1995), we should not  use shaky precedent to deprive Congress of important regulatory and  revenue-raising options.  As respondent conceded at oral argument, Tr.  of Oral Arg. 31, the reasoning of Thames & Mersey invites claims by export service providers for exemptions from any number of federal excise taxes, for example, a challenge to the diesel-fuel tax, 26 U. S.  C. Section(s) 4041, by truckers carrying export shipments. The Export  Clause cannot bear this reading.

77
The protections of the Export Clause must extend, perhaps, somewhat beyond specific taxes on goods, for "[i]f it meant no more than  that, the obstructions to exportation which it was the purpose to  prevent could readily be set up by legislation nominally conforming to  the constitutional restriction but in effect overriding it."  Hvoslef,  supra, at 13.  As a result, the Court has found certain taxes to be  proxies for taxes on the goods.  See Wash. Stevedoring, supra, at 756,  n. 21 (discussing sales tax struck down in Richfield Oil Corp. v. State  Bd. of Equalization, 329 U. S. 69 (1946) and the tax on a bill of lading struck down in Fairbank, supra). In Washington Stevedoring, we expressed  some doubt that the tax on insurance in Thames & Mersey fell in this  forbidden category, but, to avoid overruling the case, "note[d] that the  value of goods bears a much closer relation to the value of insurance  policies on them than to the value of loading and unloading ships."  435  U. S., at 756, n. 21.

78
The insurance premiums taxed here, like those taxed in Thames &  Mersey, bear some relation to the value of the goods, but this does not  make them a proxy for a tax on the goods.  Premiums, i.e., the price of  insurance, depend on risk of loss, and value of the goods is only one  component factor of risk.  So much is made clear by Stipulation 16 in  this case.  Before the premiums for a shipment of IBM goods of a certain  value could be fixed, a premium rate had to be determined.  The rate was  a function of the risk factors specific to a particular shipment: "the  place of origin and destination of the goods, the type of goods involved and how they were packaged, the time and distance of the trip, the route  and mode(s) of transportation, and the amount of material handling  expected during the trip."  Premiums were then determined by multiplying  the value of the goods by the shipment-specific premium rate.  Stipulation of Facts Para(s) 16, App. to Pet. for Cert. 39a.  Cf.  Holtom, Underwriting Principles & Practices, at 453-457 (discussing  various factors taken into account in underwriting ocean marine  insurance, such as nationality of the crew, vessel management,  seaworthiness of vessel, suitability of the vessel for specific cargo,  packaging, season of travel, perishability, pilferage risks at ports of call, and risks of damage from accompanying cargo).  The premium charged  to insure a million dollars of goods for the short overland journey from  IBM's computer factory in Richfield, Minnesota to a customer in Quebec  would be trifling in comparison to the premium charged to insure  transport of goods of equivalent value from its factory in San Jose,  California across the continent east to New York and then by sea to  Russia.  Cf. Stipulation of Facts, App. to Pet. for Cert. 36a-37a; Brief  for Respondent 3, n. 2. Given the stipulated, undeniable premise that premiums are graded by risk of loss, they are not a predictable proxy  for a Congress intent upon taxing export value.  Premiums are a rough  proxy, however, for the income of foreign insurers, which is why a  Congress intent on eliminating the income tax advantages of those  insurers would structure Section(s) 4371 as it did.

79
Section 4371's requirement that the insurance cover domestic risks in whole or in part is further evidence that Congress did not  intend it to operate as a proxy for taxing exports.  A statute that  exempts all exporters who use a domestic insurer for the inland leg of a  shipment is not an effective instrument for taxing export goods.

80
I would uphold Section(s) 4371 as applied to IBM because the statute imposes a tax on a distinct export-related service and is not a  proxy for a tax on the exports themselves.  The Court, in my view, makes  a serious mistake in assuming the opposite and reaching the question  whether a nondiscriminatory tax on goods violates the Export Clause.  I  would reverse the judgment of the Court of Appeals for the Federal  Circuit.

*
 The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience  of the reader.  See United States v. Detroit Lumber Co., 200 U. S. 321,  337.

1
 The tax does not apply if a policy issued by a foreign  insurer is "signed or countersigned by an officer or agent of the  insurer in a State, or in the District of Columbia, within which such insurer is authorized to do business."  26 U. S. C. Section(s) 4373(1)  (1982 ed.).

2
 The Commerce Clause is an express grant of power to  Congress to "regulate Commerce . . . among the several States."   U. S. Const., Art. I, Section(s) 8, cl. 3.  It does not expressly prohibit the  States from doing anything, though we have long recognized negative  implications of the Clause that prevent certain state taxation even when  Congress has failed to legislate.  See Fulton Corp. v. Faulkner, 516 U.  S. __, __ (1996) (slip op., at 4-5); Quill Corp. v. North Dakota, 504 U.  S. 298, 309 (1992).

3
 The Court has never held that the Export Clause prohibits  only direct taxation of goods in export transit.  In Brown v. Maryland, 12 Wheat. 419 (1827), Chief Justice Marshall expressed in dicta his  skepticism that a federal occupational tax on exporters could pass  scrutiny under the Export Clause.  Id., at 445 ("[W]ould government be  permitted to shield itself from the just censure to which this attempt  to evade the prohibitions of the constitution would expose it, by saying  that this was a tax on the person, not on the article, and that the  legislature had a right to tax occupations?").  In Fairbank, Hvoslef,  and Thames & Mersey, we struck down taxes that were not assessed  directly on goods in export transit, but which the Court found to be so  closely related as to be effectively a tax on the goods themselves.  We have never repudiated that principle, but neither have we ever carefully  defined how we decide whether a particular federal tax is sufficiently  related to the goods or their value to violate the Export Clause.  To  the extent the issue was raised in the petition for certiorari, the  Government failed to address the issue in its brief on the merits and  therefore has abandoned it. See Posters `N' Things, Ltd. v. United  States, 511 U. S. ___, ___ (1994) (slip op., at 15); Russell v. United  States, 369 U. S. 749, 754, n. 7 (1962).

4
 The dissent suggests that "the Court assumes the statute to  be invalid rather than deciding it to be so."  Post, at 2.  We make no  such assumptions.  Rather, we begin with a longstanding decision that,  by all accounts, controls this case.  Even the Government agrees that  Congress enacted a law whose application in this case directly  contravenes our holding in Thames & Mersey. We sit not to condemn  Section(s) 4371, but rather to determine whether it is to be saved by  overruling binding precedent.

5
 The dissent suggests that we make a "serious mistake" in deciding whether a nondiscriminatory tax on goods violates the Export  Clause, post, at 19.  We do not agree that it is a mistake to address  the arguments actually advanced by the parties.

6
 Though Michelin discusses "taxes" in terms of "every exaction," 423 U. S., at 290, it also suggests that at the time of the  Founding "probably only capitation, land, and general property exactions  were known by the term `tax' rather than the term `duty,'" id., at 291.  In any event, the Michelin Court understood that the terms used in the  Export Clause were broader than those used in the Import-Export Clause.