United States v. Butler
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| United States v. Butler | |
| Reference: 297 U.S. 1 | |
| Term: 1936 | |
| Important Dates | |
| Argued: December 9-10, 1935 Decided: January 6, 1936 | |
| Outcome | |
| United States Court of Appeals for the First Circuit affirmed | |
| Majority | |
| Chief Justice Charles Hughes • Willis Van Devanter • James C. McReynolds • George Sutherland • Pierce Butler • Owen Roberts | |
| Dissenting | |
| Louis Brandeis • Harlan F. Stone • Benjamin Cardozo | |
United States v. Butler is a case decided on January 6, 1936, by the United States Supreme Court, which determined Congress had a broad power to raise taxes for the general welfare of the United States. The court held 6-3 that taxation and spending for the general welfare were separate powers that did not need to relate to powers delegated to Congress later in the Constitution, such as regulating interstate or foreign commerce or providing for the military.[1][2]
The case concerned the constitutionality of the 1933 Agricultural Adjustment Act and whether Congress could tax farm product processors to subsidize farmers who agreed to reduce their cultivation and crop yields for certain products. The Supreme Court affirmed the ruling of the United States Court of Appeals for the First Circuit, holding that, despite the court's interpretation of the General Welfare Clause, Congress could not use the tax-and-spend power to regulate areas reserved to the states under the Tenth Amendment.[1][2]
Why it matters: The Supreme Court's decision formulated a broad power for Congress to tax and spend "limited only by the requirement that it shall be exercised to provide for the general welfare of the United States." Writing for the court, Justice Owen Roberts argued that the Agricultural Adjustment Act, in seeking to regulate agricultural production and prices, exceeded Congress' broad authority to tax and spend.[1]
Background
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Congress passed the Agricultural Adjustment Act of 1933 to tax the processing of certain agricultural commodities. The tax revenues were used to subsidize farmers who agreed to reduce cultivation and crop yields for certain products. Congress hoped the law would raise the falling prices of agricultural commodities to support struggling farmers.[1][2]
The Secretary of Agriculture had the power to determine what products to tax and subsidize under the act and chose cotton as one of the taxable crops. The federal government claimed the taxes were constitutional under the General Welfare Clause found in Article 1, Section 8.[1]
William M. Butler and other receivers for the Hoosac Mills Corporation filed suit against the United States after processing and floor taxes on cotton were assessed on the company. Butler claimed the taxes encroached on the reserved powers of states under the Tenth Amendment.[1]
Oral argument
Oral argument was held on December 9-10, 1935. The case was decided on January 6, 1936.[1]
Decision
The Supreme Court decided 6-3 that, despite broad taxing authority granted under the General Welfare Clause, Congress could not use the tax-and-spend power to regulate areas reserved to the states under the Tenth Amendment.[1][2]
Opinions
Opinion of the court
Writing for the court, Justice Owen Roberts formulated a broad tax-and-spend power for Congress limited only by the requirement that such policies promote the general welfare of the United States. Roberts said the power to tax and spend was not limited to powers enumerated later in the Constitution.
| “ | Since the foundation of the Nation, sharp differences of opinion have persisted as to the true interpretation of the phrase. Madison asserted it amounted to no more than a reference to the other powers enumerated in the subsequent clauses of the same section; that, as the United States is a government of limited and enumerated powers, the grant of power to tax and spend for the general national welfare must be confined to the enumerated legislative fields committed to the Congress. In this view, the phrase is mere tautology, for taxation and appropriation are, or may be, necessary incidents of the exercise of any of the enumerated legislative powers. Hamilton, on the other hand, maintained the clause confers a power separate and distinct from those later enumerated, is not restricted in meaning by the grant of them, and Congress consequently has a substantive power to tax and to appropriate, limited only by the requirement that it shall be exercised to provide for the general welfare of the United States. Each contention has had the support of those whose views are entitled to weight. This court has noticed the question, but has never found it necessary to decide which is the true construction. Mr. Justice Story, in his Commentaries, espouses the Hamiltonian position. [Footnote 12] We shall not review the writings of public men and commentators or discuss the legislative practice. Study of all these leads us to conclude that the reading advocated by Mr. Justice Story is the correct one. While, therefore, the power to tax is not unlimited, its confines are set in the clause which confers it, and not in those of § 8 which bestow and define the legislative powers of the Congress. It results that the power of Congress to authorize expenditure of public moneys for public purposes is not limited by the direct grants of legislative power found in the Constitution.[1][3] | ” |
Roberts argued that, despite Congress' broad power to tax and spend, the Agricultural Adjustment Act, in seeking to regulate agricultural production and prices, exceeded Congress' authority and encroached on state power.[1]
| “ | The act invades the reserved rights of the states. It is a statutory plan to regulate and control agricultural production, a matter beyond the powers delegated to the federal government. The tax, the appropriation of the funds raised, and the direction for their disbursement are but parts of the plan. They are but means to an unconstitutional end. From the accepted doctrine that the United States is a government of delegated powers, it follows that those not expressly granted, or reasonably to be implied from such as are conferred, are reserved to the states, or to the people. To forestall any suggestion to the contrary, the Tenth Amendment was adopted.[1][3] | ” |
Dissent
Justice Harlan F. Stone, joined in dissent by Justices Louis Brandeis and Benjamin Cardozo, agreed with the majority regarding the broad taxing power of Congress under the General Welfare Clause but argued the Agricultural Adjustment Act of 1933 provided for the general welfare of the United States and was therefore constitutional.
| “ | It is with these preliminary and hardly controverted matters in mind that we should direct our attention to the pivot on which the decision of the Court is made to turn. It is that a levy unquestionably within the taxing power of Congress may be treated as invalid because it is a step in a plan to regulate agricultural production, and is thus a forbidden infringement of state power. The levy is not any the less an exercise of taxing power because it is intended to defray an expenditure for the general welfare, rather than for some other support of government. Nor is the levy and collection of the tax pointed to as effecting the regulation. While all federal taxes inevitably have some influence on the internal economy of the states, it is not contended that the levy of a processing tax upon manufacturers using agricultural products as raw material has any perceptible regulatory effect upon either their production or manufacture.[1][3] | ” |
Impact
Butler has been cited in a number of Supreme Court cases upholding the power of Congress under the Spending Clause to tax and spend to enact policies for the general welfare of the United States.
In cases like Steward Machine Company v. Davis (1937) and Helvering v. Davis (1937), the court cited Butler in holding various provisions of the Social Security Act of 1935 to be constitutional. The majority in both cases ruled that even though the Constitution did not explicitly delegate Congress authority to set up programs like unemployment insurance or Social Security, Congress acted constitutionally in establishing the act under its power to tax and spend for the general welfare of the United States.[4]
In South Dakota v. Dole, the court referenced the holding in Butler that "the power of Congress to authorize expenditure of public moneys for public purposes is not limited by the direct grants of legislative power found in the Constitution." The court construed the spending power to uphold a law that withheld a percentage of federal highway funds from states with drinking ages below 21.[5]
See also
External links
- Full text of case syllabus and opinions (Justia)
- Supreme Court of the United States
- Search Google News for this topic
Footnotes
- ↑ 1.00 1.01 1.02 1.03 1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 Justia, "United States v. Butler, 297 U.S. 1 (1936)," accessed June 14, 2022
- ↑ 2.0 2.1 2.2 2.3 Oyez, "United States v. Butler," accessed June 14, 2022
- ↑ 3.0 3.1 3.2 Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
- ↑ Justia, "Steward Mach. Co. v. Collector, 301 U.S. 548 (1937)," accessed August 27, 2021
- ↑ Justia, "South Dakota v. Dole, 483 U.S. 203 (1987)," accessed June 15, 2022
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