Taxation

Question 1

Source of Taxation Power

Answer 1

Article 1, Sec 8

Tax and spend for the general welfare
Source of independent power

Question 2

Two Questions when Analyzing Power to Tax

Answer 2

Some revenue, operates like a tax

1) Does the tax raise some revenue?
2) Does the tax still look incidental?
a) if incidental = okay
b) if extraneous = find another source of Art 1, Sec 8 power that authorizes Congress to regulate
c) if neither = penalty (not okay)

Question 3

Bailey v. Drexel Furniture Co.

Answer 3

Child Labor Tax

Structure of the tax program important - here it was more characteristic of a penal law because it had to be knowingly done rather than applicable to everyone regardless of motive

Question 4

U.S. v. Kahringer

Answer 4

Tax on bookies

Tax does not cease to be valid because it discourages activities or the revenue is negligible

Question 5

Sebelius Part II

Answer 5

Individual Mandate - requires person to purchase health insurance or pay

For constitutional purposes, it’s a tax (looks like a tax)
- no constitutional guarantee that person may avoid tax by inactivity

For Anti-Injunction purposes, it’s a penalty