Davis v. Edison Electric Illuminating Co. of Boston

BINGHAM, Circuit Judge

(dissenting).

The constitutionality of section 801, title VIII (42 U.S.C.A. § 1001), levying an income tax on employees, is not open to question by the plaintiff, a stockholder in the defendant corporation.

The defendant corporation has no interest in the tax. It merely withholds it from the employee’s wages. It does not pay the tax, and certainly the plaintiff stockholder does not. As neither one pays or has any interest to protect, neither can question its validity. Massachusetts v. Mellon, 262 U.S. 447, 43 S.Ct. 597, 67 L.Ed. 1078.

The only question in this case, therefore, is the constitutionality of section 804 of title VIII (42 U.S.C.A. § 1004), laying an excise tax on the employer. The contention of the appellant is that it does not lay a valid excise tax.

Under this section, the subject of the tax is any employer of labor in a trade or business, except farm labor, domestic service in a private home, casual labor not in the course of the 'employer’s trade or business, services of an individual of the age of sixty-five, of an officer or member of a crew, of one in the employ of the United States government or of its instru-mentalities, or in the employ of a state, or political subdivision thereof, or an instrumentality of one or more states or political subdivisions, services in the employ of a corporation or organizations organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals, no part of the earnings of which inures to the benefit of any private shareholder or individual. The object of the tax is the act of having individuals in the employer’s trade or business during a given calendar year. And the measure of the tax is the wages earned and paid employees over and above $3,000 in that year.

The tax is to be collected by the Bureau of Internal Revenue and paid into the Treasury of the United States as internal revenue collections.

I regard the tax as an excise, lawfully laid, for the collection and payment of general revenue into the Treasury of the United States. _ See my dissent in Davis v. Boston & Maine Railroad Co., 89 F.(2d) 368, filed April 14, 1937.