Court Opinion

ID: 9419157
Source: CourtListenerOpinion
Date Created: 2023-08-02 22:47:05.206863+00
Date Added: 2024-06-11T17:22:15.943686
License: Public Domain

Mb. Justice Black,
dissenting:
I agree with the Court’s judgment that the Collector of. Internal Revenue did not have power to release.a taxpayer from his obligation to pay, but I am unable to agree with the Court’s conclusions on the question of interest. The contract on which the Government’s suit rests contained no provision for interest. The state’s interest law, according to the holding of the Court, is not controlling. Congress has enacted no law requiring payment of interest and fixing an interest rate on contracts guaranteeing tax payments. Nevertheless, this Court now requires that interest be paid — a judicial requirement which under similar circumstances has been frankly described as “judicial law-making.” Board of County Commissioners v. United States, 308 U. S. 343, 350.
Were,the question, an open one,,I would be reluctant .to acquiesce in holding that federal courts, in the absence of statutes, could or should assume the power to fix interest in such a case. But, granting that we have the power to take this step, the rate of interest to be charged *298is from necessity an element of the legislative and policy power thus exercised, and that rate must therefore be determined by the Court. The rate, fixed in this casé is 6%.. Resolution as to the amount is rested in part at leást on New York’s legislative rate. The inference is that a different rate might apply to contracts guaranteeing tax payments made in other states. For it is well known, that interest rates fixed by state legislatures are not uniform but vary in amount. .
Since in prescribing interest and fixing an interest rate we are passing upon questions of public ' policy, not marked at all by definite legislative boundaries, I find it difficult to agree to the result here for two reasons: (1) .Unless the rate fixed is to be considered in the nature of a penalty, 6% seems very high. A smaller rate would appear to come nearer to harmonizing with fair and equitable interest exactions. (2) I am of opinion that since our “judicial law-making” is and must be national in its scope, the law which we adopt fixing a rate of interest for transactions such as that here involved should operate with uniformity throughout the nation.- Federal taxpayers or their sureties should not be required to pay 6% in one state, 4% in a second, and 10% in a third. Such, varying rates are not subject to criticism by federal courts if they govern local intrastate transactions subject to state law. But it seems to me that federal taxpayers and their sureties should be subject to the same interest rate without regard to the state rates governing purely local transactions within a particular area'in which federal taxpayers happen to reside. To the extent that the Court’s opinion indicates the possibility of such a variance among the states, I am compelled to disagree.
Me. Justice Douglas and Me. Justice Mukphy concur in this opinion.