| Helvering v. Davis | ||||||
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Supreme Court of the United States |
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| Argued May 5, 1937 Decided May 24, 1937 |
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| Full case name | Guy T. Helvering, Commissioner of Internal Revenue v. Davis | |||||
| Holding | ||||||
| The proceeds of both the employee and employer taxes are to be paid into the Treasury like any other internal revenue generally, and are not earmarked in any way. | ||||||
| Court membership | ||||||
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| Case opinions | ||||||
| Majority | Cardozo, joined by Hughes, Brandeis, Stone, and Roberts | |||||
| Dissent | McReynolds, joined by Butler | |||||
Helvering v. Davis, 301 U.S. 619 (1937), was a decision by the United States Supreme Court, which held that Social Security was not a contributory insurance program. The Court defended the constitutionality of the Social Security Act of 1935, requiring only that welfare spending be for the common benefit as distinguished from some mere local purpose. It affirmed a District Court decree that held that the tax upon employees was not properly at issue, and that the tax upon employers was constitutional.
Contents |
The Opinion of the Supreme Court in the case was written by Justice Benjamin N. Cardozo. This decision supported the right of the Congress to interpret the "general welfare" clause in the U.S. Constitution. Excerpts from the opinion include:
"Congress may spend money in aid of the 'general welfare'...There have been great statesmen in our history who have stood for other views...The line must still be drawn between one welfare and another, between particular and general. Where this shall be placed cannot be known through a formula in advance of the event...The discretion belongs to Congress, unless the choice is clearly wrong, a display of arbitrary power, not an exercise of judgment. This is now familiar law."
"Congress did not improvise a judgment when it found that the award of old age benefits would be conducive to the general welfare. The President's Committee on Economic Security made an investigation and report, aided by a research staff of Government officers and employees, and by an Advisory Council and seven other advisory groups. Extensive hearings followed before the House Committee on Ways and Means, and the Senate Committee on Finance. A great mass of evidence was brought together supporting the policy which finds expression in the act...The evidence is impressive that, among industrial workers, the younger men and women are preferred over the older. In times of retrenchment, the older are commonly the first to go, and even if retained, their wages are likely to be lowered. The plight of men and women at so low an age as 40 is hard, almost hopeless, when they are driven to seek for reemployment."
"The problem is plainly national in area and dimensions. Moreover, laws of the separate states cannot deal with it effectively. Congress, at least, had a basis for that belief. States and local governments are often lacking in the resources that are necessary to finance an adequate program of security for the aged. This is brought out with a wealth of illustration in recent studies of the problem. Apart from the failure of resources, states and local governments are at times reluctant to increase so heavily the burden of taxation to be borne by their residents for fear of placing themselves in a position of economic disadvantage as compared with neighbors or competitors. We have seen this in our study of the problem of unemployment compensation...A system of old age pensions has special dangers of its own if put in force in one state and rejected in another. The existence of such a system is a bait to the needy and dependent elsewhere, encouraging them to migrate and seek a haven of repose. Only a power that is national can serve the interests of all."[1]