Steward Machine Co. v. Davis, 301 U.S. 548 (1937)
LINK TO CASE: https://scholar.google.com/scholar_case?case=11777818167992631527
SIGNIFICANCE: Declared compelled participation in Social Security by artificial entities BUT NOT HUMAN BEINGS constitutional. Opinion written by Justice Brandeis, a jew.
The Findlaw version of this case has some rather compelling admissions in it:
‘I shall not discuss at length the question of power sometimes claimed for the General Government under the clause of the eighth section of the Constitution, which gives Congress the power ‘to lay and collect taxes, duties, imposts, and excises, to pay debts and provide for the common defense and general welfare of the United States,’ because if it has not already been settled upon sound reason and authority it never will be. I take the received and just construction of that article, as if written to lay and collect taxes, duties, imposts, and excises in order to pay the debts and in order to provide for the common defense and general welfare. It is not a substantive general power to provide for the welfare of the United States, but is a limitation on the grant of power to raise money by taxes, duties, and imposts. If it were otherwise, all the rest of the Constitution, consisting of carefully enumerated and cautiously guarded grants of specific powers, would have been useless, if not delusive. It would be impossible in that view to escape from the conclusion that these were inserted only to mislead for the present, and, instead of enlightening and defining the pathway of the future, in involve its action in the mazes of doubtful construction. Such a conclusion the character of the men who framed that sacred instrument will never permit us to form. Indeed, to suppose it susceptible of any other construction would be to consign all the rights of the States and of the people of the States to the mere discre- [301 U.S. 548, 606] tion of Congress, and thus to clothe the Federal Government with authority to control the sovereign States, by which they would have been dwarfed into provinces or departments and all sovereignty vested in an absolute consolidated central power, against which the spirit of liberty has so often and in so many countries struggled in vain.
‘In my judgment you can not by tributes to humanity make any adequate compensation for the wrong you would inflict by removing the sources of power and political action from those who are to be thereby affected. If the time shall ever arrive when, for an object appealing, however strongly, to our sympathies, the dignity of the States shall bow to the dictation of Congress by conforming their legislation thereto, when the power and majesty and honor of those who created shall become subordinate to the thing of their creation, I but feebly utter my apprehensions when I express my firm conviction that we shall see ‘the beginning of the end.’
‘Fortunately, we are not left in doubt as to the purpose of the Constitution any more than as to its express language, for although the history of its formation, as recorded in the Madison Papers, shows that the Federal Government in its present form emerged from the conflict of opposing influences which have continued to divide statesmen from that day to this, yet the rule of clearly defined powers and of strict construction presided over the actual conclusion and subsequent adoption of the Constitution. President Madison, in the Federalist, says:
“The powers delegated to the proposed Constitution are few and defined. Those which are to remain in the State governments are numerous and indefinite. … Its (the General Government’s) jurisdiction extends to certain enumerated objects only, and leaves to the several States a residuary and inviolable sovereignty over all other objects.’ [301 U.S. 548, 607] ‘In the same spirit President Jefferson invokes ‘the support of the State governments in all their rights as the most competent administrations for our domestic concerns and the surest bulwarks against anti-republican tendencies;’ and President Jackson said that our true strength and wisdom are not promoted by invasions of the rights and powers of the several States, but that, on the contrary, they consist ‘not in binding the States more closely to the center, but in leaving each more unobstructed in its proper orbit.’
‘The framers of the Constitution, in refusing to confer on the Federal Government any jurisdiction over these purely local objects, in my judgment manifested a wise forecast and broad comprehension of the true interests of these objects themselves. It is clear that public charities Within the States can be efficiently administered only by their authority. The bill before me concedes this, for it does not commit the funds it provides to the administration of any other authority.
‘I can not but repeat what I have before expressed, that if the several States, many of which have already laid the foundation of munificent establishments of local beneficence, and nearly all of which are proceeding to establish them, shall be led to suppose, as, should this bill become a law, they will be, that Congress is to make provision for such objects the fountains of charity will be dried up at home and the several States instead of bestowing their own means on the social wants of their own people may themselves, through the strong temptation which appeals to states as to individuals, become humble suppliants for the bounty of the Federal Government, reversing their true relations to this Union. …
[Steward Machine Co. v. Davis, 301 U.S. 548 (1937)]
The following quotes claim that the Constitution never intended to provide “benefits” or “privileges” such as Social Security to the general public, and admit of the disastrous consequences of doing so:
“With respect to the words general welfare, I have always regarded them as qualified by the detail of powers connected with them. To take them in a literal and unlimited sense would be a metamorphosis of the Constitution into a character which there is a host of proofs was not contemplated by its creator.”
“If Congress can employ money indefinitely to the general welfare, and are the sole and supreme judges of the general welfare, they may take the care of religion into their own hands; they may appoint teachers in every State, county and parish and pay them out of their public treasury; they may take into their own hands the education of children, establishing in like manner schools throughout the Union; they may assume the provision of the poor; they may undertake the regulation of all roads other than post-roads; in short, every thing, from the highest object of state legislation down to the most minute object of police, would be thrown under the power of Congress…. Were the power of Congress to be established in the latitude contended for, it would subvert the very foundations, and transmute the very nature of the limited Government established by the people of America.”
“If Congress can do whatever in their discretion can be done by money, and will promote the general welfare, the government is no longer a limited one possessing enumerated powers, but an indefinite one subject to particular exceptions.”
[James Madison. House of Representatives, February 7, 1792, On the Cod Fishery Bill, granting Bounties]
“A tax, in the general understanding of the term and as used in the constitution, signifies an exaction for the support of the government. The word has never thought to connote the expropriation of money from one group for the benefit of another.”
[U.S. v. Butler, 297 U.S. 1 (1936)]
“To lay with one hand the power of government on the property of the citizen, and with the other to bestow it on favored individuals.. is none the less robbery because it is done under the forms of law and is called taxation. This is not legislation. It is a decree under legislative forms.“
[Loan Association v. Topeka, 20 Wall. 655 (1874)]
It has been urged and echoed, that the power “to lay and collect taxes, duties, imposts, and excises, to pay the debts, and provide for the common defense and general welfare of the United States,” amounts to an unlimited commission to exercise every power which may be alleged to be necessary for the common defense or general welfare. No stronger proof could be given of the distress under which these writers labor for objections, than their stooping to such a misconstruction. Had no other enumeration or definition of the powers of the Congress been found in the Constitution, than the general expressions just cited, the authors of the objection might have had some color for it… For what purpose could the enumeration of particular powers be inserted, if these and all others were meant to be included in the preceding general power? Nothing is more natural nor common than first to use a general phrase, and then to explain and qualify it by a recital of particulars… But what would have been thought of that assembly, if, attaching themselves to these general expressions, and disregarding the specifications which ascertain and limit their import, they had exercised an unlimited power of providing for the common defense and general welfare? (Federalists #41)
[Federalist #41. Saturday, January 19, 1788, James Madison]
Congress has not unlimited powers to provide for the general welfare, but only those specifically enumerated.
They are not to do anything they please to provide for the general welfare, but only to lay taxes for that purpose. To consider the latter phrase not as describing the purpose of the first, but as giving a distinct and independent power to do any act they please which may be good for the Union, would render all the preceding and subsequent enumerations of power completely useless. It would reduce the whole instrument to a single phrase, that of instituting a Congress with power to do whatever would be for the good of the United States; and as they would be the sole judges of the good or evil, it would be also a power to do whatever evil they please…. Certainly no such universal power was meant to be given them. It was intended to lace them up straightly within the enumerated powers and those without which, as means, these powers could not be carried into effect.
That of instituting a Congress with power to do whatever would be for the good of the United States; and, as they would be the sole judges of the good or evil, it would be also a power to do whatever evil they please.
[Thomas Jefferson: Opinion on National Bank, 1791. ME 3:148; SOURCE: http://famguardian.org/Subjects/Politics/ThomasJefferson/jeff1020.htm and
http://thefederalistpapers.org/founders/jefferson/thomas-jefferson-opinion-on-national-bank-1791]
Below is the section of the case declaring social security taxes on companies lawful.
“We learn that employment for lawful gain is a ‘natural’ or ‘inherent’ or ‘inalienable’ right, and not a ‘privilege’ at all. But natural rights, so called, are as much subject to taxation as rights of less importance. 6 An excise is not limited to vocations or activities [301 U.S. 548, 581] that may be prohibited altogether. It is not limited to those that are the outcome of a franchise. It extends to vocations or activities pursued as of common right. What the individual does in the operation of a business is amenable to taxation just as much as what he owns, at all events if the classification is not tyrannical or arbitrary. ‘Business is as legitimate an object of the taxing power as property.’ City of Newton v. Atchison, 31 Kan. 151, 154, 1 P. 288, 290, 47 Am.Rep. 486 (per Brewer, J.). Indeed, ownership itself, as we had occasion to point out the other day, is only a bundle of rights and privileges invested with a single name. Henneford v. Silas Mason Co., Inc. (March 29, 1937) 300 U.S. 577 , 57 S.Ct. 524, 527. ‘A state is at liberty, if it pleases, to tax them all collectively, or to separate the faggots and lay the charge distributively.’ Id. Employment is a business relation, if not itself a business. It is a relation without which business could seldom be carried on effectively. The power to tax the activities and relations that constitute a calling considered as a unit is the power to tax any of them. The whole includes the parts. Nashville, C. & St. L. Ry. Co. v. Wallace, 288 U.S. 249, 267 , 268 S., 53 S.Ct. 345, 349, 350, 87 A.L.R. 1191
“The subject-matter of taxation open to the power of the Congress is as comprehensive as that open to the power of the states, though the method of apportionment may at times be different. ‘The Congress shall have Power to lay and collect Taxes, Duties, Imposts and Excises.’ Article 1, 8. If the tax is a direct one, it shall be apportioned according to the census or enumeration. If it is a duty, impost, or excise, it shall be uniform throughout the United States. Together, these classes include every form of tax appropriate to sovereignty. Cf. Burnet v. Brooks, 288 U.S. 378, 403 , 405 S., 53 S.Ct. 457, 464, 465, 86 A.L.R. 747; Brushaber v. Union Pacific R.R. Co., 240 U.S. 1, 12 , 36 S.Ct. 236, L.R.A.1917D, 414, Ann.Cas.1917B, 713. Whether the tax is to be [301 U.S. 548, 582] classified as an ‘excise’ is in truth not of critical importance. If not that, it is an ‘impost’ (Pollock v. Farmers’ Loan & Trust Co., 158 U.S. 601, 622 , 625 S., 15 S.Ct. 912; Pacific Insurance Co. v. Soule, 7 Wall. 433, 445), or a ‘duty’ (Veazie Bank v. Fenno, 8 Wall. 533, 546, 547; Pollock v. Farmers’ Loan & Trust Co., 157 U.S. 429, 570 , 15 S.Ct. 673; Knowlton v. Moore, 178 U.S. 41, 46 , 20 S.Ct. 747). A capitation or other ‘direct’ tax it certainly is not. ‘Although there have been, from time to time, intimations that there might be some tax which was not a direct tax, nor included under the words ‘duties, imposts, and excises,’ such a tax, for more than 100 years of national existence, has as yet remained undiscovered, notwithstanding the stress of particular circumstances has invited thorough investigation into sources of revenue.’ Pollock v. Farmers’ Loan & Trust Co., 157 U.S. 429, 557 , 15 S.Ct. 673, 680. There is no departure from that thought in later cases, but rather a new emphasis of it. Thus, in Thomas v. United States, 192 U.S. 363, 370 , 24 S.Ct. 305, 306, it was said of the words ‘duties, imposts, and excises’ that ‘they were used comprehensively to cover customs and excise duties imposed on importation, consumption, manufacture, and sale of certain commodities, privileges, particular business transactions, vocations, occupations, and the like.’ At times taxpayers have contended that the Congress is without power to lay an excise on the enjoyment of a privilege created by state law. The contention has been put aside as baseless. Congress may tax the transmission of property by inheritance or will, though the states and not Congress have created the privilege of succession. Knowlton v. Moore, supra, 178 U.S. 41 , at page 58, 20 S.Ct. 747. Congress may tax the enjoyment of a corporate franchise, though a state and not Congress has brought the franchise into being. Flint v. Stone Tracy Co., 220 U.S. 107, 108 , 155 S., 31 S.Ct. 342, Ann.Cas.1912B, 1312. The statute books of the states are strewn with illustrations of taxes laid on [301 U.S. 548, 583] occupations pursued of common right. 7 We find no basis for a holding that the power in that regard which belongs by accepted practice to the Legislatures of the states, has been denied by the Constitution to the Congress of the nation.”
[Chas. C. Steward Machine Co. v. Davis, 301 U.S. 548 (1937)]