Court Opinion

ID: 9698540
Source: CourtListenerOpinion
Date Created: 2023-08-25 19:52:54.121693+00
Date Added: 2024-06-11T18:20:41.775893
License: Public Domain

CARTER, Justice
(dissenting).
I dissent.
It is unfortunate that the court has squandered the opportunity to correct its prior decision in this case, which, for reasons pointed out by the Supreme Court, was completely outside the mainstream of equal-protection jurisprudence. That mainstream is accurately reflected in the following:
Although no precise formula has been developed, the Court has held that the Fourteenth Amendment permits the States a wide scope of discretion in enacting laws which affect some groups of citizens differently than others. The constitutional safeguard is offended only if the classification rests on grounds wholly irrelevant to the achievement of the State’s objective. State legislatures are presumed to have acted within their constitutional power despite the fact that, in practice, their laws result in some inequality. A statutory discrimination will not be set aside if any state of facts reasonably may be conceived to justify it.
McGowan v. Maryland, 366 U.S. 420, 425, 81 S.Ct. 1101, 1105, 6 L.Ed.2d 393, 399 (1961).
There are two very legitimate reasons why the legislature could justifiably tax the gross receipts of racetracks at a higher rate than those of the casinos. First, the legislature may have simply preferred casinos over racetracks as vehicles for public entertainment and sought to give them *17more assistance than the racetracks for that very simple reason. That would have been an entirely proper decision for the legislature to make. The second reason for the distinction that the legislature drew was the very distinct possibility that some of the casinos, particularly those along the Mississippi River, would view an increased tax burden as a reason to move their operations to a friendlier taxing venue. That was a risk not presented by the racetracks, which were firmly attached to the Iowa soil and several of which enjoyed the vestiges of local ownership.
Contrary to the majority’s assumption, casinos and racetracks are distinctly different types of gambling enterprise. The former provides a broad array of gaming activities in a place where gambling is the main event. The latter are places where horse races and dog races are run with pari-mutuel betting and slot machines as a side attraction. Based on these clear differences, the legislative decision to tax them differently may not be attacked on the grounds that, in fact, the taxing scheme adopted will not better promote economic development or state revenue enhancement than would be the ease if the two types of gambling facilities were taxed at the same rate. The legislature could properly elect which horse to ride in the context of gaming activity, and its decision may not be challenged on the ground that it was mistaken.
In Allied Stores of Ohio, Inc. v. Bowers, 358 U.S. 522, 528, 79 S.Ct. 437, 441, 3 L.Ed.2d 480, 485 (1959), the Supreme Court recognized that a state may tax certain corporations and not tax others in an effort to encourage the location of certain companies within the state. I see no reason why the same principle may not be applied in order to assure the retention of certain activities in this state. That is what the legislature was attempting to do in not increasing the taxes on the casinos while taxing the racetracks substantially more. This is the type of choice that legislators are elected to make and involves the type of policy-making that should be the province of the legislative branch of government. I would affirm the judgment of the district court upholding these tax statutes as enacted by the General Assembly.