Steward Machine Company v. Collector of Internal Revenue

PETITIONER: Steward Machine Company
RESPONDENT: Collector of Internal Revenue
LOCATION:

DOCKET NO.: 837
DECIDED BY: Hughes Court (1932-1937)
LOWER COURT:

ARGUED: Apr 08, 1937 / Apr 09, 1937
DECIDED: May 24, 1937

Facts of the case

The Steward Machine Company challenged the validity of a tax imposed by the Social Security Act. The Act established a federal payroll tax on employers; however, if employers paid taxes to a state unemployment compensation fund (created by the states subject to federal standards), they were allowed to credit those payments toward the federal tax.

Question

Did the Act arbitrarily impose taxes in violation of the Fifth Amendment or subvert principles of federalism?