Bailey v. Drexel Furniture Co.
259 U.S 20 (1922)
Author: Joe

Facts: After the Court invalidated Congress’ attempt to prohibit child labor under Commerce Clause in Hammer v. Dagenhart, Congress passed a Child Labor Tax Law.  This law required all employers who employed children to pay tax in the amount of 10% of their net profit for the full year.  ? argued that this law attempts to regulate child labor and that is an issue under the powers of the States under the Constitution and reversed for the states under the 10th Amendment. D argued that the Congress is just practicing its taxing power under the Constitution.

Procedure: District court ruled for ?.

Issue: Did the Congress exceed its taxing powers by passing the Child Labor Tax Law?

Holding: Yes

Rationale:  The court will be blind not to see that the real purpose of this tax is to regulate child labor, an issue that is under the powers of the states.  The Court has allowed tax laws in the past even though they were goals of Congress to go beyond mere taxation power.  But the law in this case is clearly a violation of Congress’ Constitutional powers.  Congress does have power to tax but there is difference between taxing and punishing.  “To give such magic to the word tax would be to break down all constitutional limitation of the powers of Congress and completely wipe out the sovereignty of the States.” Affirmed.