Bailey v. Drexel Furniture Co. (Child Labor Tax Case) 259 U.S. 20 (1922)

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BAILEY v. DREXEL FURNITURE CO. (Child Labor Tax Case) 259 U.S. 20 (1922)

Following the decision invalidating the keatingowen child labor act in hammer v. dagenhart (1918), Congress passed a new law in 1919, this time based on its taxing power. The statute levied a ten percent tax on the net profits of mines or factories that employed underage children. Congress had previously used the tax power for social and economic purposes, and the Supreme Court consistently had upheld such enactments, notably in veaziebankv. fenno (1869) and mccray v. united states (1904). When the Child Labor Tax Case was decided in 1922, only Justice john h. clarke dissented, without opinion, from Chief Justice william howard taft's opinion for the Court. Taft concluded that the obvious regulatory effect of the law infringed on state jurisdiction over production and that Hammer v. Dagenhart was controlling. Congress, he said, had imposed a tax that was really a penalty for the purpose of reaching a local subject. Like the Justices in Hammer, Taft feared the destruction of federalism. "To give such magic to the word "tax," he said, would remove all constitutional limitations upon Congress and abolish "the sovereignty of the States." He distinguished the Court's earlier rulings upholding federal taxes on state bank notes, oleomargarine, and narcotics by insisting that they had involved regulations or prohibitions that were "reasonably adapted to the collection of the tax." Taft, in fact, advanced the unhistorical proposition that the regulatory purposes of the taxes in those cases were only "incidental" to a primary motive of raising revenue.

The Child Labor Tax Case was favorably cited in united states v. butler (1936), but a year later, in sonzinsky v. united states, the Court upheld a federal licensing tax on firearms dealers. Justice harlan fiske stone's opinion sharply repudiated Taft's, contending that the incidental effect of regulation was irrelevant. Courts, he said, were incompetent to question congressional motives; specifically, they should not measure a tax's regulatory effect and use it to argue that Congress had exercised another power denied by the Constitution. Similar arguments were registered in united states v. kahriger (1953) when the Court sustained a federal tax on gambling businesses.

Stanley I. Kutler


Wood, Stephen 1968 Constitutional Politics in the Progressive Era: Child Labor and the Law. Chicago: University of Chicago Press.

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Bailey v. Drexel Furniture Co. (Child Labor Tax Case) 259 U.S. 20 (1922)

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