Evening star., 1935-11-26
Processing Taxes.


The temporary injunction granted by
the Supreme Court to eight Louisiana
rice nillers restraining the collection
from them of processing taxes does not
in any measure determine the constitu-
tionality of the agricultural adjustment
act. 1t may, however, be construed as
casting grave doubt on the legality of
the effort of Congress to compel proc
essors to pay taxes and to prevent them
from recovering these taxes in the event
the law is held unconstitutional. The
Government would have the processing
taxes paid in advance of the determina-
ton of the act, and then force the proc
essors to seek recovery through suits in
which they would be asked to prove that
the taxes had not been passed on to
others.
Under such a device it might be ex-
ceedingly difficult for the professors to
prove that the taxes had not been passed
on to the middlemen or to the consumers.
Wherever such proof was impossible the
Government would retain the processing
taxes, although obtained by it illegally.
OF course, some one must have paid the
taxes into the Government Golfers.
The effect of the ruling of the Su-
preme Court yesterday was to bring
before that court for argument on De-
cember 16 the question as to whether
injunctions should be granted generally,
holding up the payment of the process
ing taxes until the constitutionality OF
the law imposing these taxes shall have
been determined by the highest court.
The question is: Pay first and litigate
afterward, or litigate first and pay later
II the law is constitutional.
Fortunately, the Supreme Court Is
soon to have before it for argument and
later determination the constitutionality
of the A. A. A. and it's processing taxes
in the Hoosac Mills case. Argument is
set for December 8. 1t is possible that
the court may hand down in that case
an opinion so sweeping as to settle the
question of the constitutionality Of the
A. A. A. as amended by Congress shortly
before 1t adjourned last Summer. II 1t
does not, however, and the amended act
must then be tested for its constitution
ality, the use of injunctions to restrain
the collection of processing taxes may
become of very real importance.
Offcials of the Department OF Agrl-
culture have hastened to assure the
farmers who have contracts with the
Government that payment Of benefits Tor
not raising crops will be made no matter
what the court decides. This may be
reassuring to the farmers, but not quite
so much so to the American taxpayers.
If the processing taxes are ruled out
finally, then the hundreds OF millions OF
dollars that have been distributed to
the farmers for not producing wheat, cot
ton, corn, hogs and tobacco must be
found through general tax levies.
The Forthcoming decision of the su-
preme Court settling the constitutionality
Of the A. A. A. looms as one of the most
important regarding the entire New Deal
legislation, if not the most important.
A decision that holds the A. A. A. un-
constitutional so thoroughly that revision
by Congress would be waste of time
may well bring into the coming political
campaign the issue Of revision Of the
Constitution, or perhaps bring a drive
to prevent the Supreme Court from
passing on the constitutionality Of laws
enacted by Congress.