''United States v. Butler'', 297 U.S. 1 (1936), is a

U.S. Supreme Court The Supreme Court of the United States (SCOTUS) is the highest court in the federal judiciary of the United States. It has ultimate appellate jurisdiction over all U.S. federal court cases, and over state court cases that involve a point o ...

case that held that the

U.S. Congress The United States Congress is the legislature of the federal government of the United States. It is bicameral, composed of a lower body, the House of Representatives, and an upper body, the Senate. It meets in the U.S. Capitol in Washin ...

has not only the power to lay taxes to the level necessary to carry out its other powers enumerated in Article I of the

U.S. Constitution The Constitution of the United States is the supreme law of the United States of America. It superseded the Articles of Confederation, the nation's first constitution, in 1789. Originally comprising seven articles, it delineates the nation ...

, but also a broad authority to tax and spend for the "general welfare" of the

United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territori ...

. The decision itself concerned whether the processing taxes instituted by the 1933

Agricultural Adjustment Act The Agricultural Adjustment Act (AAA) was a United States federal law of the New Deal era designed to boost agricultural prices by reducing surpluses. The government bought livestock for slaughter and paid farmers subsidies not to plant on par ...

were constitutional.

Tax for impermissible regulatory purpose

The main issue of the case was whether certain provisions of the Agricultural Adjustment Act of 1933 conflicted with the

. The Act imposed a tax on processors of farm products, the proceeds of which to be paid to farmers who would reduce their area under cultivation and consequently their crops yields. The Act was intended to increase the prices of certain farm products by decreasing the supply of quantities produced. This increased the cotton price paid for Hoosac Mills in

North Adams, Massachusetts North Adams is a city in Berkshire County, Massachusetts, United States. It is part of the Pittsfield, Massachusetts Metropolitan Statistical Area. Its population was 12,961 as of the 2020 census. Best known as the home of the largest contemporary ...

who brought the case. The Court held that the so-called tax was not a true tax since the payments to farmers were coupled with unlawful and oppressively-coercive contracts, and the proceeds were earmarked for the benefit of farmers complying with the prescribed conditions. The Court also held that making the payment of a government subsidy to a farmer conditional on the reduction of the planned crops went beyond the powers of the national government. Specifically, Justice Roberts said:

The act invades the reserved rights of the states. It is a statutory plan to regulate and control agricultural production, a matter beyond the powers delegated to the federal government. The tax, the appropriation of the funds raised, and the direction for their disbursement, are but parts of the plan. They are but means to an unconstitutional end.

Taxing and spending for general welfare

The Court struck down the Act but dealt positively with taxation and the expenditure of funds to advance the general welfare as specified in Article 1, Section 8, of the Constitution. The Court stated that the issue "presents the great and the controlling question in the case." After comparing expansive and restrictive interpretations of the

Spending Clause The Taxing and Spending Clause (which contains provisions known as the General Welfare Clause and the Uniformity Clause), Article I, Section 8, Clause 1 of the United States Constitution, grants the federal government of the United States its ...

, the Court adopted this philosophy:

The clause confers a power separate and distinct from those later enumerated is not restricted in meaning by the grant of them, and Congress consequently has a substantive power to tax and to appropriate, limited only by the requirement that it shall be exercised to provide for the general welfare of the United States.... It results that the power of Congress to authorize expenditure of public moneys for public purposes is not limited by the direct grants of legislative power found in the Constitution.

The fact that the Court struck down the Act despite an expansive interpretation of the Spending Clause reflected the turmoil in the Court at the critical time. It was accepted that Chief Justice Hughes did not agree with the majority opinion's argument that the law's government subsidy regulations went beyond the powers of national government and was about to write a separate opinion to uphold the Act's subsidy provision and to strike down the Act's tax provision on the grounds that it was a coercive regulation, rather than a tax measure, until Roberts convinced Hughes that he would side with him and the court's three liberal justices in future cases on agriculture that involved the Constitution's

General Welfare Clause A general welfare clause is a section that appears in many constitutions and in some charters and statutes that allows that the governing body empowered by the document to enact laws to promote the general welfare of the people, which is sometimes ...

if he agreed to join his opinion. An indication that turmoil and the fact that ''Butler'' was a turning point in the Court's thinking is that in later jurisprudence, the case has been referenced to support expansion of authority under the Spending Clause (such as ''

Steward Machine Company v. Davis ''Steward Machine Company v. Davis'', 301 U.S. 548 (1937), was a case in which the U.S. Supreme Court upheld the unemployment compensation provisions of the Social Security Act of 1935, which established the federal taxing structure that was des ...

'', , and ''

Helvering v. Davis ''Helvering v. Davis'', 301 U.S. 619 (1937), was a decision by the U.S. Supreme Court that held that Social Security was constitutionally permissible as an exercise of the federal power to spend for the general welfare and so did not contravene th ...

'' ) and to dissent from such expansion (such as in ''

South Dakota v. Dole ''South Dakota v. Dole'', 483 U.S. 203 (1987), was a case in which the United States Supreme Court considered the limitations that the Constitution places on the authority of the United States Congress when Congress uses its authority to influence ...

'', ), O’Connor dissenting. In her dissent, Justice O’Connor noted that ''Butler'' had been the last case in which the Supreme Court struck down an Act of Congress as an overextension of its spending power. That was part of a series of cases decided by the conservative Supreme Court of the time, which struck down as

unconstitutional Constitutionality is said to be the condition of acting in accordance with an applicable constitution; "Webster On Line" the status of a law, a procedure, or an act's accordance with the laws or set forth in the applicable constitution. When l ...

parts of U.S. President

Franklin D. Roosevelt Franklin Delano Roosevelt (; ; January 30, 1882April 12, 1945), often referred to by his initials FDR, was an American politician and attorney who served as the 32nd president of the United States from 1933 until his death in 1945. As the ...

New Deal The New Deal was a series of programs, public work projects, financial reforms, and regulations enacted by President Franklin D. Roosevelt in the United States between 1933 and 1939. Major federal programs agencies included the Civilian Cons ...

legislation.

References

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Works cited

External links