BAILEY v. DREXEL FURNITURE CO. 1922
Background: The Drexel Furniture company was taxed in 1921 $6,312.79 for having in their employment a boy under 14 years old. The tax was collected by Bailey, a United States collector of internal revenue for the Western district of North Carolina. After the company was denied a refund, they filed a suit claiming the Child Labor Tax Law regulated the employment of children in states, a right reserved exclusively for states under the Constitution and guaranteed by the 10th amendment.
Issue: Was the Child Labor Tax Law of 1919 constitutional?
Ruling/Impact: The court concluded that the Child Labor Tax Law was in violation of the Constitution as it infringed upon the jurisdiction of states to adopt and enforce child labor codes, arguing it imposed regulatory and prohibitory effect Congress had no right to do. However, Justice Taft feared that by upholding this ruling he could unintentionally devastate "all constitutional limitation of the powers of Congress" by allowing it to place future regulatory legislation under the guise of taxes.
Issue: Was the Child Labor Tax Law of 1919 constitutional?
Ruling/Impact: The court concluded that the Child Labor Tax Law was in violation of the Constitution as it infringed upon the jurisdiction of states to adopt and enforce child labor codes, arguing it imposed regulatory and prohibitory effect Congress had no right to do. However, Justice Taft feared that by upholding this ruling he could unintentionally devastate "all constitutional limitation of the powers of Congress" by allowing it to place future regulatory legislation under the guise of taxes.