Constitutional Law I, Pages 231–232

United States v. Kahriger

Supreme Court of the United States, 1953


Congress imposed a 10% excise tax on bookies.


Given the narrow margin bookies had, this was practically a 100% tax.


Was the tax a constitutional tax or an invalid penalty?


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[A] federal excise tax does not cease to be valid merely because it discourages or deters the activities taxed. Nor is the tax invalid because the revenue obtained is negligible. . . . [T]he instant tax has a regulatory effect. But regardless of its regulatory effect, the wagering tax produces revenue. As such it surpasses both the narcotics and firearms taxes which we have found valid.

It is axiomatic that the power of Congress to tax is extensive and sometimes falls with crushing effect on businesses deemed unessential or inimical to the public welfare . . . . The remedy for excessive taxation is in the hands of Congress, not the courts.


The tax was a valid tax, not a penalty.

Dissenting Opinion:

Frankfurter: Congress can make an indirect use of taxes in relation to activities it has the power to regulate directly, but not when the object is outside of its powers. This is just an attempt to control conduct the Constitution left to the states by wrapping it up in a revenue measure. In addition, it is designed to get criminal confessions so states can prosecute them.


If a tax has the prospect of raising money, it is a valid tax.