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McCray v. United States

Supreme Court of the United States · 1904 · Constitutional Law

Constitutional LawTaxing PowerExcise TaxesDue ProcessFederalismoleomargarineexcise taxtaxing power

Facts

Congress first taxed and regulated oleomargarine in 1886, and in 1902 amended the law to impose a tax of ten cents per pound on oleomargarine, with a reduced rate of one-fourth of one cent per pound when the oleomargarine was free from artificial coloration that caused it to look like butter of any shade of yellow. The defendant's product was admitted to be oleomargarine and was admitted to have a yellow color causing it to look like butter. That yellow color came from artificial coloring matter used in butter that was one of the ingredients in making the oleomargarine. The defendant argued both that the product qualified for the lower tax and that the taxing statutes were unconstitutional.

Issue

Whether oleomargarine that acquires a butter-like yellow color from an artificially colored butter ingredient is 'free from artificial coloration' under the 1902 proviso. If not, whether Congress exceeded its constitutional authority by imposing the ten-cent-per-pound tax on artificially colored oleomargarine because the tax was allegedly oppressive, destructive of the industry, and inconsistent with the Fifth and Tenth Amendments.

Rule

Where Congress imposes an excise tax on its face within the constitutional taxing power, courts do not invalidate the tax by inquiring into Congress's motive or purpose, nor merely because the tax is heavy, suppressive in effect, or indirectly affects subjects otherwise regulated by the states. Under the oleomargarine statute, the reduced tax applies only when the finished oleomargarine is in fact free from artificial coloration that causes it to look like butter, regardless of the method by which the coloration was imparted.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

Congress imposes a federal excise of $75 per barrel on a synthetic syrup used in candy manufacturing. Internal debate in Portland and Boise suggests many legislators wanted to wipe out the syrup market to benefit cane-sugar producers, but the statute on its face simply levies and collects an excise tax nationwide.

A candy maker prosecuted for nonpayment argues the excise is unconstitutional because Congress's true aim was suppression, not revenue. How should a court rule?

Explanation. The majority held that where Congress has imposed an excise tax on its face within a granted taxing power, courts do not test validity by probing legislative motive or purpose. A tax is not void merely because challengers claim Congress actually meant to suppress the taxed activity. The remedy for alleged abuse of a lawful taxing power is political, not judicial, absent conflict with an express constitutional limitation.