Freaking Taxes

Okay.

We’ve firmly established that the Commerce Clause does not give Congress carte blanche. In this post we will look at the taxing power, another avenue for Congressional regulation of behavior.

The Constitution (16th amendment) gives Congress the power to tax and spend for the general welfare of the country. There are two general interpretations of this power. The Madisonian view is that both the taxes and the spending should be used for the general welfare of the country. The Hammer felt that Congress should be able to tax whatever they want, so long as the spending goes towards general welfare/realization of enumerated powers. Debate over this issue is ongoing.

The important thing to remember is that SCOTUS decides which taxes are constitutional and which taxes are struck. Although decisions are accompanied by much flowery writing, it appears to boil down to a simple gut-check by the justices. The lesson: Supreme Court appointments are REALLY important.

United States v. Doremus (1919)

Facts
Congress implemented a moral policy by placing a federal tax on the sale of narcotics.

Question
Is this allowable behavior under the taxing power?

Holding
Yes

Reasoning
It’s cool. SCOTUS doesn’t care if Congress legislates morality in this way. Besides, Congress is made up of elected officials. If they pass bad taxes, the people will surely take note and vote them out of office.

Note
The reasoning for this case could apply to any decision in which SCOTUS allows a federal tax.

Bailey v. Drexel Furniture (1922)

Facts
Congress passed a tax on businesses that used child labor.

Question
Can Congress regulate this practice through taxation?

Holding
No

Reasoning
Let the states regulate child labor.

Notes
-Similarly, the reasoning for this case applies to any case where SCOTUS strikes a tax.

-Remember Hammer v. Dagenhart? Congress already tried to regulate child labor through the Commerce Clause. SCOTUS struck that act, and now Congress is taking a stab with the taxing power. Standard operating procedure for the legislative branch. But we already know that the best way to get policy through is to simply appoint new justices.

summarized from Life of a Law Student