Court opinions for Helvering v. Davis:
[Note to MT: Sit down on law library steps. Take off walking shoes. Put on fishing boots. Prepare to wade into the law library basement legal muck.]
301 U.S. 619 (1937)
HELVERING, COMMISSIONER OF INTERNAL REVENUE, ET AL. v. DAVIS. No. 910.
Supreme Court of United States.
Argued May 5, 1937. Decided May 24, 1937.
CERTIORARI TO THE CIRCUIT COURT OF APPEALS FOR THE FIRST CIRCUIT. 620
Mr. Edward F. McClennen, with whom Mr. Jacob J. Kaplan was on the brief, for respondent.
634 MR. JUSTICE CARDOZO delivered the opinion of the Court.
The Social Security Act (Act of August 14, 1935, c. 531, 49 Stat. 620, 42 U.S.C., c. 7, (Supp.)) is challenged once again.
In Steward Machine Co. v. Davis, decided this day, ante, p. 548, we have upheld the validity of Title IX of the act, imposing an excise upon employers of eight or more. In this case Titles VIII and II are the subject of attack. Title VIII lays another excise upon employers in addition to the one imposed by Title IX (though with different exemptions). It lays a special income tax upon employees to be deducted from their wages and paid by the employers. Title II provides for the payment of Old Age Benefits, and supplies the motive and occasion, in the view of the assailants of the statute, for 635*635 the levy of the taxes imposed by Title VIII. The plan of the two titles will now be summarized more fully.
Title VIII, as we have said, lays two different types of tax, an "income tax on employees," and "an excise tax on employers." The income tax on employees is measured by wages paid during the calendar year. § 801. The excise tax on the employer is to be paid "with respect to having individuals in his employ," and, like the tax on employees, is measured by wages. § 804. Neither tax is applicable to certain types of employment, such as agricultural labor, domestic service, service for the national or state governments, and service performed by persons who have attained the age of 65 years. § 811 (b). The two taxes are at the same rate. §§ 801, 804. For the years 1937 to 1939, inclusive, the rate for each tax is fixed at one per cent. Thereafter the rate increases 1/2 of 1 per cent every three years, until after December 31, 1948, the rate for each tax reaches 3 per cent. Ibid. In the computation of wages all remuneration is to be included except so much as is in excess of $3,000 during the calendar year affected. § 811 (a). The income tax on employees is to be collected by the employer, who is to deduct the amount from the wages "as and when paid." § 802 (a). He is indemnified against claims and demands of any person by reason of such payment. Ibid. The proceeds of both taxes are to be paid into the Treasury like internal-revenue taxes generally, and are not earmarked in any way. § 807 (a). There are penalties for non-payment. § 807 (c).
Title II has the caption "Federal Old-Age Benefits." The benefits are of two types, first, monthly pensions, and second, lump sum payments, the payments of the second class being relatively few and unimportant.
The first section of this title creates an account in the United States Treasury to be known as the "Old-Age 636*636 Reserve Account." § 201. No present appropriation, however, is made to that account. All that the statute does is to authorize appropriations annually thereafter, beginning with the fiscal year which ends June 30, 1937. How large they shall be is not known in advance. The "amount sufficient as an annual premium" to provide for the required payments is "to be determined on a reserve basis in accordance with accepted actuarial principles, and based upon such tables of mortality as the Secretary of the Treasury shall from time to time adopt, and upon an interest rate of 3 per centum per annum compounded annually." § 201 (a). Not a dollar goes into the Account by force of the challenged act alone, unaided by acts to follow.
[Editor note: Voluntary... But there are penalties for non-payment.]
Disclaimer: Mark Twain (1835-1910-To be continued) is unlicensed. His river pilot's license went delinquent in 1862. Caution advised. Daily Paul ☑
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