enough or subtle enough in its appeal to obtain the co-operation desired. But I know of no constitutional provision or decision of the courts which condemns the policy for that reason.
IV. I have come, not without doubt, to the conclusion that the tax does not contravene the Fifth Amendment. The plaintiff argues that it is arbitrary and capricious because the rate of tax bears no reasonable relation to the subject taxed, and that it is confiscatory because the rate is variable, has reached a point where it is destructive and ruinous to the business of the taxpayer, and may, so far as any limitation in the act is concerned, go higher.
I do not think that it can quite be said that the rate of tax as actually imposed bears no rational relation to the article taxed. It is a flat rate per hundredweight slaughtered. It is true that the rate is set with reference to two factors neither of which have anything but the most remote connection with the subject of the tax. They are really the farmers' income to-day and what it was in an ideal period some 20 years ago. Nevertheless, the rate as set is directly upon and in direct proportion to the value of the thing taxed, and I do not think in such case that the courts can review the reasoning or method by which that rate was arrived at merely because it is set forth in the act, any more than they could inquire into the reasons moving the Congress in fixing the rate of any excise tax, where they are not expressed.
It is true that the formula sets no upward limit to the extent to which the tax may rise. The defendant argues that it is an economic impossibility for the prices of agricultural commodities to remain at a low point while the prices of things which farmers have to buy rises so high that the the tax would become confiscatory. This may be so, although it is to be noted that in November, 1933, when the tax upon hogs was put into effect the formula yielded a rate of $4.68 per hundredweight while the farmers' price for hogs was $4.17; a possible rate of over 100 per cent. upon the price to the processor of the raw material. In March, 1934, when the present rate of $2.25 was fixed, the price of hogs was $3.88; an actual rate of over 55 per cent.
But the principle is too firmly established to question that "the judicial cannot prescribe to the legislative departments of the government limitations upon the exercise of its acknowledged powers.The power to tax may be exercised oppressively upon persons, but the responsibility of the legislature is not to the courts, but to the people by whom its members are elected. So if a particular tax bears heavily upon a corporation, or a class of corporations, it cannot for that reason only, be pronounced contrary to the Constitution." Veazie Bank v. Fenno, 8 Wall. 533, 548, 19 L. Ed. 482.
It is true that a federal statute passed under the taxing power of Congress may be so arbitrary and capricious as to cause it to fall before the due process clause of the Fifth Amendment. Tyler v. United States, 281 U.S. 497, 50 S. Ct. 356, 74 L. Ed. 991, 69 A.L.R. 758. This does not mean that the Fifth Amendment limits the taxing power but merely that there are cases in which what purports to be an exercise of that power may in reality be a taking of property without due process. If the tax imposed is a genuine tax and does not conflict with any constitutional limit, the courts may not hold the tax void because it is too high or may become too high. McCray v. United States, 195 U.S. 27, 24 S. Ct. 769, 49 L. Ed. 78, 1 Ann. Cas. 561.
V. As to the remedy: The plaintiff may have a decree declaring the taxing provisions of the act unconstitutional in accordance with this opinion. I am entirely in accord with the views of Judge Dawson in Penn v. Glenn (C.C.) 10 F. Supp. 483, 487, to the effect that the Declaratory Judgment Act (Jud. Code § 279d, 28 USCA § 400), applies and that the occasion is a proper one for a decree under it. As to the effect of such decree, the following quotation from his opinion is in point: "If before the tax is collected, however, it is decided in a declaratory judgment proceeding that the tax cannot be legally collected, it is to be expected that the collector would respect the decision, although he would not be compelled to do so. If he did not bow to the decision, however, and later on it became necessary for the taxpayer to sue him for a refund, as is authorized by section 3226, Revised Statutes, as amended, 26 USCA § 156, the trial court would probably be justified in refusing him a certificate of probable cause, and thus he and his bond would be liable for the judgment obtained. If the declaratory judgment proceeding is decided in favor of the taxpayer after the payment of the tax, it would no doubt be accepted by the Commissioner of Internal Revenue as binding upon him on an application for a refund, thus saving the expense and delay of a suit for a refund."
The matter of injunctive relief, depending in part at least upon the effect of the threatened collection upon the business and property of the individual taxpayer, matters as to which a considerable amount of evidence was adduced, and the notes of testimony not having been transcribed, will not be disposed of at this time. Meanwhile, the temporary restraining order may be extended for a further period of 10 days.
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