Source: https://supreme.justia.com/cases/federal/us/301/619/
Timestamp: 2019-04-19 10:28:06+00:00

Document:
1. The Court abstains from dismissing, sua sponte, as not properly within equity jurisdiction, a bill by a shareholder to restrain his corporation from making the tax payments and the deductions from wages required by Title VIII of the Social Security Act of August 14, 1935, the bill alleging that the exactions are void and that compliance will subject the corporation and its shareholders to irreparable damage. P. 301 U. S. 639.
2. The scheme of "Federal Old-Age Benefits" set up by Title II of the Social Security Act does not contravene the limitations of the Tenth Amendment. P. 301 U. S. 640.
3. Congress may spend money in aid of the "general welfare." P. 301 U. S. 640.
4. In drawing the line between what is "general" welfare, and what is particular, the determination of Congress must be respected by the courts, unless it be plainly arbitrary. P. 301 U. S. 640.
5. The concept of "general welfare" is not static, but adapts itself to the crises and necessities of the times. P. 301 U. S. 641.
6. The problem of security for the aged, like the general problem of unemployment, is national, as well as local. Cf. Steward Machine Co. v. Davis, ante, p. 301 U. S. 548. P. 301 U. S. 644.
There is ground to believe that laws and resources of the separate States, unaided, cannot deal with this problem effectively. State governments are reluctant to place such heavy burdens upon their residents lest they incur economic disadvantages as compared with neighbors or competitors, and a system of old age pensions established in one State encourages immigration of needy persons from other States which have rejected such systems. P. 301 U. S. 644.
7. When money is spent to promote the general welfare, the concept of welfare or the opposite is shaped by Congress, not the States. P. 301 U. S. 645.
(1) Title II being valid, there is no occasion to inquire whether Title VIII must fall if Title II were void. P. 301 U. S. 645.
(2) The tax upon employers is a valid excise or duty upon the relation of employment. Steward Machine Co. v. Davis, ante, p. 301 U. S. 548. P. 301 U. S. 645.
(3) The tax is not invalid as a result of its exemptions. Steward Machine Co. v. Davis, ante, p. 301 U. S. 548. P. 301 U. S. 646.
Congress may spend money in aid of the "general welfare." Constitution, Art. I, section 8; United States v. Butler, 297 U. S. 1, 297 U. S. 65; Steward Machine Co. v. Davis, supra. There have been great statesmen in our history who have stood for other views. We will not resurrect the contest. It is now settled by decision. United States v. Butler, supra. The conception of the spending power advocated by Hamilton and strongly reinforced by Story has prevailed over that of Madison, which has not been lacking in adherents. Yet difficulties are left when the power is conceded. 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. There is a middle ground, or certainly a penumbra, in which discretion is at large. The discretion, however, is not confided to the courts. 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.
United States v. Butler, supra, p. 297 U. S. 67. Cf. Cincinnati Soap Co. v. United States, ante, p. 301 U. S. 308; United States v. Realty Co., 163 U. S. 427, 163 U. S. 440; Head Money Cases, 112 U. S. 580, 112 U. S. 595. Nor is the concept of the general welfare static. Needs that were narrow or parochial a century ago may be interwoven in our day with the wellbeing of the Nation. What is critical or urgent changes with the times.
The purge of nationwide calamity that began in 1929 has taught us many lessons. Not the least is the solidarity of interests that may once have seemed to be divided. Unemployment spreads from State to State, the hinterland now settled that, in pioneer days gave an avenue of escape. Home Building & Loan Assn. v. Blaisdell, 290 U. S. 398, 290 U. S. 442. Spreading from State to State, unemployment is an ill not particular, but general, which may be checked, if Congress so determines, by the resources of the Nation. If this can have been doubtful until now, our ruling today in the case of the Steward Machine Co., supra, has set the doubt at rest. But the ill is all one, or at least not greatly different, whether men are thrown out of work because there is no longer work to do or because the disabilities of age make them incapable of doing it. Rescue becomes necessary irrespective of the cause. The hope behind this statute is to save men and women from the rigors of the poor house, as well as from the haunting fear that such a lot awaits them when journey's end is near.
"one-fifth of the aged in the United States were receiving old-age assistance, emergency relief, institutional care, employment under the works program, or some other form of aid from public or private funds; two-fifths to one-half were dependent on friends and relatives, one-eighth had some income from earnings, and possibly one-sixth had some savings or property. Approximately three out of four persons 65 or over were probably dependent wholly or partially on others for support. [Footnote 7]"
We summarize in the margin the results of other studies by state and national commissions. [Footnote 8] They point the same way.
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. [Footnote 9] 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. Steward Machine Co. v. Davis, supra. 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.
may sap those sturdy virtues and breed a race of weaklings. If Massachusetts so believes and shapes her laws in that conviction, must her breed of sons be changed, he asks, because some other philosophy of government finds favor in the halls of Congress? But the answer is not doubtful. One might ask with equal reason whether the system of protective tariffs is to be set aside at will in one state or another whenever local policy prefers the rule of laissez faire. The issue is a closed one. It was fought out long ago. [Footnote 10] When money is spent to promote the general welfare, the concept of welfare or the opposite is shaped by Congress, not the states. So the concept be not arbitrary, the locality must yield. Constitution, Art. VI, Par. 2.

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