United States v. Kahriger
345 U.S. 22 (1953)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
A federal excise tax is a valid exercise of Congress's taxing power even if it has a regulatory effect or a secondary motive to discourage the taxed activity, so long as the statute produces some revenue and its provisions are adapted to the collection of that revenue.
Facts:
- The Revenue Act of 1951 levied an occupational tax on persons engaged in the business of accepting wagers.
- The Act required such persons to register with the Collector of Internal Revenue, providing their name, place of residence, and each place of business.
- Joseph Kahriger was engaged in the business of accepting wagers in Pennsylvania.
- Under Pennsylvania state law at the time, Kahriger's wagering activities were illegal.
- Kahriger failed to register for the occupational tax as required by the federal law.
- Kahriger also did not pay the occupational tax.
Procedural Posture:
- The United States filed an information against Joseph Kahriger in the U.S. District Court for the Eastern District of Pennsylvania.
- The information charged Kahriger with willfully failing to register for and pay the federal occupational tax on wagering.
- Kahriger filed a motion to dismiss the information, arguing that the tax statute was unconstitutional.
- The District Court granted the motion to dismiss, finding the statute infringed upon the police powers reserved to the states by the Tenth Amendment.
- The United States filed a direct appeal of the dismissal to the Supreme Court of the United States.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does the federal occupational tax on wagering, which requires registration with the Collector of Internal Revenue, violate the Tenth Amendment by infringing on the police powers of the states and the Fifth Amendment by compelling self-incrimination?
Opinions:
Majority - Mr. Justice Reed
No. The federal occupational tax on wagering does not violate the Tenth or Fifth Amendments because it is a valid exercise of Congress's taxing power. A federal excise tax does not cease to be valid merely because it discourages or deters the activities taxed, so long as it produces revenue. Unlike the tax in United States v. Constantine, which penalized violations of state law, this tax applies uniformly to all persons engaged in wagering, regardless of state law. The registration provisions are constitutional because they are not extraneous to tax collection needs and are supportable as in aid of a revenue purpose. Furthermore, the Fifth Amendment privilege against self-incrimination relates to past acts, not future acts; the statute merely informs a person that to engage in wagering in the future, they must fulfill these registration conditions. Citing United States v. Sullivan, the Court reasoned that one cannot refuse to file a return entirely but must raise the privilege objection to specific incriminating questions on the return itself.
Concurring - Mr. Justice Jackson
While concurring with the Court's judgment, Justice Jackson expressed doubt, viewing the statute as a plan to 'tax out of existence the professional gambler' rather than a good-faith revenue measure. However, he feared that extending Fifth Amendment protections to excuse lawbreakers from reporting income would create vast immunities and impair the government's legitimate taxing power. He ultimately joined the majority because he believed the potential harm of a judicial decision weakening the taxing power would be more permanent and severe than any harm from this particular statute.
Dissenting - Mr. Justice Frankfurter
Justice Frankfurter argued that the Court should not ignore the clear intent of the legislation, which was not to raise revenue but to suppress professional gambling—a matter of local law enforcement reserved to the states. He contended that when Congress uses the taxing power as a guise to control conduct it cannot regulate directly, the measure is an unconstitutional intrusion into the states' domain. He asserted that the law's registration requirement was designed for the 'systematic confession of crimes' to aid state prosecutions, and Congress cannot compel self-incriminating disclosures for state law enforcement under the pretext of a revenue measure.
Dissenting - Mr. Justice Black
Justice Black, joined by Justice Douglas, dissented on the grounds that the Act squarely violates the Fifth Amendment's privilege against self-incrimination. He characterized the law as a 'squeezing device contrived to put a man in federal prison if he refuses to confess himself into a state prison as a violator of state gambling laws.' He viewed the registration requirement not as a procedural condition for future conduct but as a form of coerced confession, which is condemned by the Bill of Rights.
Analysis:
This decision represents a broad affirmation of Congress's taxing power, establishing that courts will generally not scrutinize the underlying motives of a tax law as long as it is facially a revenue-producing measure. It solidified the principle that a tax's regulatory or deterrent effect on activities traditionally governed by state police powers does not render it unconstitutional. However, the Fifth Amendment holding of this case proved less durable and was effectively overruled fifteen years later in Marchetti v. United States (1968), where the Court held that a similar registration requirement for gamblers did indeed create a 'real and appreciable' hazard of self-incrimination and was therefore unenforceable.
Unlock the full brief for United States v. Kahriger