New York v. United States

Me. Justice Rutledge,

concurring.

I join in the opinion of Me. Justice FRANKFURTER and in the result. I have no doubt upon the question of power. The shift from immunity to taxability has gone too far, and with too much reason to sustain it, as respects both state functionaries and state functions, for backtracking to doctrines founded in philosophies of sovereignty more current and perhaps more realistic in an earlier day. Too much is, or may be, at stake for the nation to permit relieving the states of their duty to support it, financially as otherwise, when they take over increasingly the things men have been accustomed to- carry on as private, and therefore taxable, enterprise. Competitive considerations unite with the necessity for securing the federal revenue, in a time when the federal burden grows heavier proportionately than that of the states, to forbid that they be free to undermine rather than obligated to sustain the nation’s financial requirements.

All agree that not all of the former immunity is gone. For the present I assent to the limitation against discrimination, which I take to mean that state functions *585may not be singled out for taxation when others performing them are not taxed or for special burdens when they are. What would happen if the state should take over a monopoly of traditionally private, income-producing business may be left for the future, in so far as this has not been settled by South Carolina v. United States, 199 U. S. 437. Perhaps there are other limitations also, apart from the practical one imposed by the state’s representation in Congress. If the way were open, I would add a further restricting factor, not of constitutional import, but of construction.

With the passing of the former broad immunity, I should think two considerations well might be taken to require that, before a federal tax can be applied to activities carried on directly by the states, the intention of Congress to tax them should be stated expressly and not drawn merely from general wording of the statute applicable ordinarily to private sources of revenue. One of these is simply a reflection of the old immunity, in the presence of which, of course, it would be inconceivable that general wording, such as the statute now in question contains, could be taken as intended to apply to the states.1 The other is that, quite apart from reflections of that immunity, I should expect that Congress would say so explicitly, were its purpose actually to include state functions, where the legal incidence of the tax falls upon the state.2 And the concurring opinion of Mr. Justice Bradley in United States v. Railroad Co., 17 Wall. 322, 333, indicates that he may have been of this general view.

*586Nevertheless, since South Carolina v. United States, supra, such a rule of construction seems not to have been thought required.3 Accordingly, although I gravely doubt that when Congress taxed every “person” it intended also to tax every state, the ruling has been made4 and I therefore acquiesce in this case.

To give removal of the immunity the effect of inverting the intention of Congress, in its later use of the same formula, is a leap in construction longer than seems reasonable to make.

Cf. 26 U. S. C. § 22 (a) where Congress has specifically provided that compensation for personal service, includible in gross income, includes compensation for personal service as an officer or employee of a state, or any political subdivision thereof, or any agency or instrumentality of any one or more of the foregoing.

University of Illinois v. United States, 289 U. S. 48; Ohio v. Helvering, 292 U. S. 360. See Manhattan Co. v. Blake, 148 U. S. 412. In Graves v. N. Y. ex rel. O’Keefe, 306 U. S. 466, 479, 480, the Court said, in another connection: “It is true that the silence of Congress, when it has authority to speak, may sometimes give rise to an implication as to the Congressional purpose. . . . But there is little scope for the application of that doctrine to the tax immunity of governmental instrumentalities.”

See Ohio v. Helvering, supra.