their property, and as the exigencies of the government cannot be limited, they prescribe no limit to the exercise of this right, resting confidently on the interest of the legislator and on the influence of the constituents over their representatives to guard themselves against its abuse." "The power to tax," Marshall concludes, "involves the power to destroy."

§ 263. The Use of the Taxing Power, not for Revenue but for Regulation.

By definition and by primary purpose a tax is a means whereby a public governing power seeks to secure a revenue. It has been generally held, however, that a tax may be levied avowedly and exclusively not for revenue but as a means for regulating a matter which is within the legislature's power to control. Thus in Veazie Bank v. Fenno' the power of Congress to levy a tax as a means of regulating the currency is upheld, Chief Justice Chase rendering the opinion. The court say: "Having thus, in the exercise of undisputed constitutional powers, undertaken to provide a currency for the whole country, it cannot be questioned that Congress may, constitutionally, secure the benefit of it to the people by appropriate legislation. To this end, Congress has denied the quality of legal tender to foreign coins, and has provided by law against the imposition of counterfeit and base coin in the community. To the same end, Congress may restrain, by suitable enactments, the circulation as money of any notes not issued under its own authority. Without this power, indeed, its attempts to secure a sound and uniform currency for the country must be futile. Viewed in this light, as well as in the other light of a duty on contracts or property, we cannot doubt the constitutionality of the tax under consideration."

In the so-called Head Money Cases - Edye v. Robertsonwas contested an act of Congress of 1882 which, for the regulation of immigration, imposed upon the owners of steam or sailing vessels bringing passengers from a foreign port into the United

78 Wall. 533; 19 L. ed. 482.

8112 U. S. 580; 5 Sup. Ct. Rep. 247; 28 L. ed. 798.

States, a tax of fifty cents for every such passenger. To this law it was objected that it was not levied to provide for the common defense and general welfare of the United States and that it was not uniform throughout the United States as required by the Constitution. After disposing of the question of uniformity, the court say: "But the true answer to all these questions is, that the power exercised in this instance is not the taxing power. The burden imposed on the ship owner by this statute is the mere incident of the regulation of commerce, of that branch of foreign commerce which is involved in immigration. The title of the Act, 'An Act to Regulate Immigration,' is well chosen. It describes as well as any short sentence can describe it, the real purpose and effect of the statute. Its provisions, from beginning to end, relate to the subject of immigration, and they are aptly designed to mitigate the evils inherent in the business of bringing foreigners to this country, as those evils affect both the immigrant and the people among whom he is suddenly brought and left to his own resources. It is true not much is said about protecting the ship owner. But he is the man who reaps the profit from the transaction, who has the means to protect himself and knows well how to do it, and whose obligations in the premises need the aid of the statute for their enforcement. The sum demanded of him is not, therefore, strictly speaking, a tax or duty within the meaning of the Constitution. The money thus raised, though paid into the Treasury, is appropriated in advance to the uses of this statute, and does not go to the general support of the government. It constitutes a fund raised from those who are engaged in the transportation of these passengers, and who make a profit out of it, for the temporary care of the passengers whom they bring among us and for the protection of the citizens among whom they are landed. If this is an expedient regulation of commerce by Congress, and the end to be attained is one falling within that power, the Act is not void because, within a loose and more extended.sense than was used in the Constitution, it is called a tax."

In Packet Co. v. Keokuk, and Packet Co. v. St. Louis1o municipal ordinances imposing taxes for the use of wharves belonging to the cities, the amount of which was regulated by the tonnage of the vessels, were held not to be tonnage taxes within the meaning of the constitutional provision that "no State shall, without the consent of Congress, lay any duty of tonnage."

In these cases it is seen that the view taken is that though the laws levy a contribution to the State and thus result in a revenue to the State, they are not, correctly speaking, tax laws at all. Not being, in fact, tax laws, they are not subject to the constitutional limitations upon revenue measures as regards uniformity, apportionment, etc.

A different proposition from the one just discussed, is that a legislature, by a law framed as a tax measure, may, in effect, subject to regulation or even to destruction an enterprise over which it has no direct power of control. This point was squarely raised, with reference to the power of the Federal Government in the comparatively recent case of McGray v. United States," decided in 1904.

In this case was questioned the constitutionality of a law of Congress levying a tax of ten cents a pound upon oleomargarine, artificially colored to look like butter. The contention was that this rate was so high as to be surely prohibitive of the manufacture and sale of such oleomargarine, and that, therefore, it was to be presumed that the motive of those enacting the law was not that a revenue should be secured for the Federal Government, but that the manufacture should be prevented; and this, it was argued, rendered the law an unconstitutional effort upon the part of Congress to regulate the manufacture of a commodity within the States. The Supreme Court, however, held that the law being upon its face a revenue measure, its ultimate effect or the motives of its enactors might not be judicially inquired into. The scope and effect of a law may be inquired into, the court say, to determine whether the act is, in general character, within the legislative power of Congress, but, that determined in the affirma

995 U. S. 80; 24 L. ed. 377.

10 100 U. S. 423; 25 L. ed. 688.

11 195 U. S. 27; 24 Sup. Ct. Rep. 769; 49 L. ed. 78.

66

tive, the measure may not be invalidated because of consequences that may arise from its enforcement. Undoubtedly," the opinion declares, "in determining whether a particular act is within the granted power, its scope and effect is to be considered. Applying this rule to the acts assailed, it is self-evident that on their face they levy an excise tax. This being their necessary scope and operation, it follows that the acts are within the grant of power."

In Knowlton v. Moore12 it was argued that inheritance taxes levied by Congress were unconstitutional in that the effect of their extreme enforcement would or might be to destroy the right to succession to property on the occasion of death, a subject beyond the control of Congress. As to this the court say: "This principle is pertinent only when there is no power to tax a particular subject, and has no relation to a case where such right exists. In other words, the power to destroy, which may be the consequence of taxation, is a reason only that the right to tax should be confined to subjects which may be lawfully embraced therein, even athough it happens that in some particular instance no great harm may be caused by the exercise of the taxing authority as to a subject which is beyond its scope. But this reasoning has no application to a lawful tax, for if it had there would be an end of all taxation; that is to say, if a lawful tax can be defeated because the power which is manifested by its imposition may, when further exercised, be destructive it would follow that every lawful tax would become unlawful, and therefore no taxation whatever could be levied." 13

The McCray case is, it will be seen, in one respect the opposite of Veazie v. Fenno and the Head Money Cases, in that it holds the law in question to be a tax law and constitutional because it is such; whereas, in the earlier cases, the laws were justified as being, in real character, not revenue measures at all, and, therefore, not subject to the limitations constitutionally imposed upon. Congress when enacting revenue laws.

12 178 U. S. 41; 20 Sup. Ct. Rep. 747; 44 L. ed. 969.

13 For a criticism of McCray v. United States, see Michigan Law Review, VI, 277, article entitled "May Congress Levy Money Exactions, Designated 'Taxes,' Solely for the Purpose of Destruction?"

§ 264. Federal Powers of Taxation.

By section VIII of Article I of the Constitution, Congress is given the general power "to lay and collect taxes, duties, imposts and excises." 14

§ 265. "Tax," "Duty," "Impost," and "Excise" Defined.

Duty and impost have a broad signification which makes them practically synonymous with the general term tax; more generally, however, they are given a narrower meaning according to which they become equivalent to customs or customs dues, that is, to taxes levied upon goods imported from foreign countries.

An excise is an inland tax upon manufacture or retail sale of commodities. It is thus often termed a consumption tax. In the United States the excise taxes are more generally known as internal revenue duties. 15

The general power to levy taxes being given, the Constitution enumerates duties, imposts and excises as the classes of taxes which are to be levied uniformly throughout the United States.16

§ 266. Limitations Upon the Federal Taxing Power.

The power of taxation given to the Federal Government is comprehensive and complete, embracing all possible subjects and modes of taxation except in so far as the Constitution, in other clauses, expressly limits the power, or except in so far as limitations may be implied from the general character of the American constitutional system. The express limitations are: (1) That "all duties, imposts, and excises shall be uniform throughout the United States;"17 (2) that "no capitation or other direct tax

14 The clause continues: "to pay the debts and provide for the common defense and general welfare of the United States." That this is not a general grant of power to the United States to pay the debts and provide for the common defense and general welfare, but is merely a statement of the purpose for which the power to lay and collect taxes, etc., is granted. See ante, Section 22. Cf. Story, Commentaries, §§ 902-926; Tucker, Constitution, § 222; The License Tax Cases, 5 Wall. 462; 18 L. ed. 497; Knowlton v. Moore, 178 U. S. 41; 20 Sup. Ct. Rep. 747; 44 L. ed. 969.

15 For a discussion of the various definitions of excise, duty and impost, see Pacific Insurance Co. v. Soule, 7 Wall. 433; 19 L. ed. 95. 16 Hylton v. United States, 3 Dall. 171; 1 L. ed. 556.

17 Art. I, Sec. VIII, Cl. 1.