Time: Tue May 27 07:23:05 1997 by primenet.com (8.8.5/8.8.5) with ESMTP id GAA06138; Tue, 27 May 1997 06:42:53 -0700 (MST) by usr10.primenet.com (8.8.5/8.8.5) with SMTP id GAA26104; Tue, 27 May 1997 06:42:46 -0700 (MST) Date: Tue, 27 May 1997 07:17:03 -0700 To: (Recipient list suppressed) From: Paul Andrew Mitchell [address in tool bar] Subject: SLS: U.S. v. Constantine, 296 U.S. 287, 294 (1935) Cc: <harold@halcyon.com>, <freedomh@spectra.net>, <libnw@dmi.net> This is an excerpt from a document entitled "Second Amendment Related Court Cases" at http://www.nysrpa.org/e&tcourt.htm: [begin excerpt] This issue was again resolved adverse to the government in United States v. Constantine, 296 U.S. 287, 294, 56 S.Ct. 223, <--- 226, 80 L.Ed. 233 (1935). A statute provided for a federal assessment for one who violated a state liquor law. The Court held that it would be invalid "if, in fact, its purpose is to punish rather than to tax." Id. No federal jurisdiction existed to enforce alcohol Prohibition, because the Eighteenth Amendment had been repealed. Id. Similarly, no federal jurisdiction exists to ban mere possession of machine guns, and the NFA provisions at issue are not supported by the tax power to the extent they enforce a prohibition rather than taxation. As Constantine held, "a penalty cannot be converted into a tax by so naming it ...[W]e hold that it is a penalty for the violation of State law, and as such beyond the limits of federal power." Id. The Court explained: The condition of the imposition is the commission of a crime. This, together with the amount of the tax, is again significant of penal and prohibitory intent rather than the gathering of revenue. Where, in addition to the normal and ordinary tax fixed by law, an additional sum is to be collected by reason of conduct of the taxpayer violative of the law, and this additional sum is grossly disproportionate to the amount of the normal tax, the conclusion must be that the purpose is to impose a penalty as a deterrent and punishment of unlawful conduct. We conclude that the indicia which the section exhibits of an intent to prohibit and to punish violations of State law as such are too strong to be disregarded, remove all semblance of a revenue act and stamp the sum it exacts as a penalty. In this view the statute is a clear invasion of the police power, inherent in the States, reserved from the grant of powers to the federal government by the Constitution. Id. at 295-96, 56 S.Ct. at 227. It is well established that Congress may tax both legal and illegal activities. Marchetti v. United States, 390 U.S. 39, 44, 88 S.Ct. 697, 700, 19 L.Ed.2d 889 (1968).4 Gambling and other acts which may be illegal under state law may be taxed, and registration may be required to assist in collection of the tax as long as registration information is not shared with the police, since such sharing would violate the privilege against self-incrimination. Id. Registration is among the "ancillary provisions calculated to assure their [i.e., the taxes] collection."5 Id. at 42, 88 S.Ct. at 699. In contrast with the federal taxation and registration of conduct made illegal under state law, which the courts have upheld, the case at bar involves federal taxation and registration requirements which the government interprets as repealed by a federal statute making post-1986 machine guns illegal. In short, the government registers gamblers and accepts their tax payments; it refuses to accept registrations and tax payments for the making of machine guns. The prosecution also asserts that "machine guns may still be manufactured, and therefore taxed, under 18 U.S.C. s922(o)(2)(A)." Response at 6. Yet, the government has successfully argued that that provision allows manufacture only for official government use. Farmer v. Higgins, 907 F.2d at 1042- 44. Manufacture for government use is exempt from any tax. 26 U.S.C. ss5852, 5953. Also, this argument fails to address the fact that the United States refuses to register any post-1986 machine guns, thereby severing any tax nexus for this registration requirement, with which compliance is impossible. In its motion to reconsider, the prosecution reiterates that the government can tax an item or activity which is illegal. Yet, the very framing of this proposition presupposes that the activity can and will be taxed. By contrast, in the case at bar, the government interprets 18 U.S.C. s922(o) to prevent the registration and taxation of post-1986 machine guns made for private purposes under the National Firearms Act, 26 U.S.C. s5801 et seq. The prosecution relies on Marchetti v. United States, supra, 390 U.S. at 44, 88 S.Ct. at 700, which held that reporting requirements for taxation of illegal gambling may not violate the privilege against self-incrimination. Yet, implicit in Marchetti, is the rationale that registration provisions are Constitutional if and only if they assist in collection of revenue. As Marchetti states: The taxes are supplemented by ancillary provisions calculated to assure their collection. In particular, s4412 requires those liable for the occupational tax to register each year with the director of the local internal revenue district. Id. at 42, 88 S.Ct. at 699. Illegal gamblers are allowed to register and pay the tax. Alleged makers of machine guns after 1986 are not. The prosecution also relies on dictum in a footnote in Minor v. United States, 396 U.S. 87, 90 S.Ct. 284, 24 L.Ed.2d 283 (1969), which held that a reporting requirement by drug buyers does not violate a drug seller's privilege against self- incrimination. The prosecution, relying on a statement in the dissenting opinion (396 U.S. at 100, 90 S.Ct. at 290), claims that it was impossible to pay the drug tax in that case. The Act in question required dealers to register with the Internal Revenue Service and pay a special occupational tax, and required producers or importers to purchase stamps and affix them to the package. Registered dealers could secure order forms to transfer drugs. Id. at 94, 90 S.Ct. at 287. While the Court focused on the self-incrimination issue, it noted that "there were some 400,000 registered dealers under the Harrison Narcotics Act in 1967 and that registered dealers can readily get order forms issued in blank." Id. at 97, 90 S.Ct. at 289. As the Court noted, a tax measure is valid even though it may deter an activity, revenue is negligible, or the activity may be illegal. 396 U.S. at 98 n. 13, 90 S.Ct. at 289 n. 13.6 Indeed, since being passed in 1934, the National Firearms Act has imposed occupational taxes, making and transfer taxes of $200 per firearm, and stringent registration requirements. Yet, these taxation requirements did not amount to a prohibition, and registration retained a tax nexus. In any event, the interpretation of the Constitutional basis of the specific statute in this case is governed by Sonzinsky v. United States, supra, 300 U.S. 506, 57 S.Ct. 554 and its progeny, not by dictum in a footnote in an unrelated narcotics case. Sonzinsky held that "the mere registration provisions ... are obviously supportable as in aid of revenue purpose." Id. at 513, 57 S.Ct. at 555. Haynes v. United States, supra, 390 U.S. at 87, 88 S.Ct. at 725, repeated that the National Firearms Act is a tax measure, and that registration is "calculated to assure [tax] collection." Id. at 88-89, 88 S.Ct. at 725-26. The Act was described as a tax measure again in United States v. Freed, 401 U.S. 601, 602-03, 91 S.Ct. 1112, 1114-15, 28 L.Ed.2d 356 (1971). The enactment of 18 U.S.C. s922(o) in 1986 removed the Constitutional legitimacy of registration as an aid to tax collection. This is because the government interprets and enforces s922(o) to disallow registration, and refuses to collect the tax. Farmer v. Higgins, 907 F.2d 1041, 1042-44 (11th Cir.1990), cert. denied, ---U.S.---, 111 S.Ct. 753, 112 L.Ed.2d 773 (1991). Thus, s922(o) undercut the Constitutional basis of registration which had been the rule since Sonzinsky. Finally, the prosecution quotes an enactment passed in 1968 that the provisions of Title I of the Gun Control Act shall not modify or affect the National Firearms Act.7 However, the 1968 Congress cannot bind the Congress of 1986, which decided to ban transfer and possession of machine guns. P.L. 99-308, 100 Stat. 453 (May 19, 1986).8 Further, a congressional declaration in 1968 does not solve a Constitutional problem which arose in 1986. The ban enacted in 1986, and the government's refusal to accept registrations and tax payments, simply left the registration requirements with no Constitutional basis. It is the duty of the judiciary to declare such laws unConstitutional. Marbury v. Madison, 1 Cranch. 137, 176-77, 2 L.Ed. 60 (1803). In sum, since enactment of 18 U.S.C. s922(o), the Secretary has refused to accept any tax payments to make or transfer a machine gun made after May 19, 1986, to approve any such making or transfer, or to register any such machine gun. As applied to machine guns made and possessed after May 19, 1986, the registration and other requirements of the National Firearms Act, Chapter 53 of the Internal Revenue Code, no longer serve any revenue purpose, and are impliedly repealed or are unConstitutional. Accordingly, Counts 1(a) and (b), 2, and 3 of the superseding indictment are DISMISSED. [end excerpt] # # #
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