About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline

67 U.S. L. Rev. 448 (1933)
Does the Power to Tax Involve the Right to Destroy a Lawful Business - Part I

handle is hein.journals/amlr67 and id is 452 raw text is: Does the Power to Tax Involve the
Right to Destroy a Lawful Business?
By ABRAHAM J. LEVIN
PART I
r'HE power to tax involves the power to destroy, declared Chief
J- justice Marshall in the famous case of M'Culloch v. Maryland'
over one hundred years ago. The power to tax is not the power to
destroy while this court sits, wrote Justice Holmes, sitting on the
same bench, more than one hundred years later.2 But it was Justice
Holmes who had previously said in the Alaska Fish Co: case that
even if the tax should destroy a business, it would not be made in-
valid or require compensation upon that ground alone . . . those
who enter upon a business take that risk.,
What shall we make of these apparently conflicting statements?
Can the power of taxation really be exerted to destroy a legitimate
business; can it go to the extent of nullifying what have generally
been considered the fundamental rights of citizenship?
The right of the State to impose taxes is the most potent instru-
ment which the State possesses, either for good or for evil. In days of
economic stress when Congress and the States and the various munic-
ipalities throughout the Nation are seeking out means of raising

EDITORS' NOTE.- The author of the ac-
companying article, the first part of which
appears in this issue, is a member of the
Michigan Bar and of the firm of Butzel, Levin
& Winston, with offices in the First National
Building, Detroit, Mich. He has contributed
articles to the Michigan Law Review and
other legal periodicals.
14 Wheat. 316, 4 L. Ed. 579.
I Panhandle Oil Co. v. Mississippi, 277 U.
S. 218, 223; 72 L. Ed. 857, 859. This state-
ment appears in the dissenting opinion:
It seems to me that the state court was
right. I should say plainly right, but for the
effect of certain dicta of Chief Justice Mar-
shall which culminated in or rather were
founded upon his often quoted proposition
that the power to tax is the power to destroy.
In those days it was not recognized as it is to-
day that most of the distinctions of the law

are distinctions of degree. If the states had
any power it was assumed that they had all
power, and that the necessary, alternative
was to deny it altogether. But this court
which so often has defeated the attempt to
tax in certain ways can defeat an attempt to
discriminate or otherwise go too far without
wholly abolishing the power to tax. The
power to tax is not the power to destroy while
this court sits. The power to, fix rates is the
power to destroy if unlimited, but this court
while it endeavors to prevent confiscation
does not prevent the fixing of rates. A tax is
not an unconstitutional regulation in every
case where an absolute prohibition of sales
would be one. New York ex rel. Hatch v.
Reardon, 204 U. S. 152, 162; Si L. Ed. 415,
423; 27 Sup. Ct. Rep. j88.
8 Alaska Fish Co. v. Smith, 255 U. S. 44,
48; 65 L. Ed. 489, 495.

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Contact us for annual subscription options:

Already a HeinOnline Subscriber?

profiles profiles most