The Fuller Court (1888–1910)
In what decision did the Court uphold broad use of the taxing power as a regulatory measure?
The Fuller Court ruled 6–3 in McCray v. United States that Congress could impose taxes on the production of oleomargarine, a butter substitute, without invading the authority of the state’s police powers. Licensed retail dealer Leo McCray challenged the federal law that imposed such a tax on the butter substitute after he was fined $50 for violating the law. He contended that the law was unconstitutional because Congress imposed the tax not to raise revenue but to regulate the manufacture of oleomargarine to favor the production of butter.
Writing for the Court, Justice Edward White found no constitutional problem with the statute. He reasoned that Congress has the constitutional power to issue excise taxes and to pass laws designed to prevent consumer fraud. It was common knowledge that oleomargarine was made to look just like butter. Justice White reasoned that if the states could prohibit the manufacture of oleomargarine because it deceived the public into buying it for butter, then surely the federal government had the power to tax the product. Chief Justice Fuller and Justices Brown and Peckham dissented without an opinion.