Time: Tue May 27 07:23:05 1997
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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had been repealed.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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