United States v. Kaiser

PETITIONER: United States
LOCATION: United States District Court for the District of Columbia

DECIDED BY: Warren Court (1958-1962)
LOWER COURT: United States Court of Appeals for the Seventh Circuit

CITATION: 363 US 299 (1960)
ARGUED: Mar 23, 1960
DECIDED: Jun 13, 1960

Facts of the case


Media for United States v. Kaiser

Audio Transcription for Oral Argument - March 23, 1960 in United States v. Kaiser

Earl Warren:

Number 55, United States, Petitioner, versus Allen Kaiser.

Mr. Barnett, you may proceed.

Wayne G. Barnett:

Mr. Chief Justice, may it please the Court.

This case and two that follow it, the Duberstein case and the Stanton case are income tax cases all involving the exclusion from income, a property acquired by gift.

The facts of the three cases are very different.

This case involves strike benefits, Duberstein, a Cadillac given as -- in return for business favor and Stanton, a $20,000 gratuity given by a corporation to a resigning officer.

We believe, however, that ultimately the cases turn on a common problem of defining what a gift is.

In Stanton and Duberstein, the problem is almost solely that i.e the problem of definition.

And once that question is resolved, the results there follow almost automatically.

In this case, however, there are additional problems, the problem of applying the definition to the facts once the definition is arrived at and also an entirely independent problem of whether strike benefits are income from the definition of income even if they're not gifts.

For that reason, I will, in this case, try to focus on the problems that are peculiar to this case and leave to my colleague, Mr. Edelman the development of the basic definition of gifts.

The facts in this case are relatively simple.

In April of 1954, the United Automobile Workers and their Local 833 representing the employees of the Kohler Company, in Kohler, Wisconsin called a strike of those employees in support of a contract demand.

Shortly after the strike began, the international established a strike aid program under which the strikers were given financial assistance in the form of food vouchers redeemable at the local stores and the direct payment of rent and utility.

The conditions upon which strike benefits were given were two - First of all, of course, the applicant had to be a striker, though it did not matter whether he was a member of the union as long as he was a striker.

The second was that he established his need that he had no other sources of income and he is not otherwise employed and so forth.

By November 1957, the day of the trial, the international expended over $ 9 million in strike aid to the Kohler employees.

The money, so far as relevant here came from the regular strike fund of the International.

That fund had been created by a provision of the Constitution requiring 25 cents of the regular monthly dues of every member to be set aside in a special fund to be used exclusively for the purpose of aiding local unions engaged in authorized strikes; that is strikes that the International Executive Board had approved.

This case is essentially a test case to establish whether or not those benefits are taxable.

The respondent here did participate in the strike.

He was not member of the union at the time the strike began, nor when he first began seeking strike benefits.

He later in the year in August, he did join the union, though he was not required to pay initiation fees or dues because he was on strike.

The benefits that he received amounted to $16.50 a week.

This was the rate established for single men, he had no dependents and over the balance of the year, he received a total of $565 in strike benefits.

Earl Warren:

Was this after he became a member?

Wayne G. Barnett:

No, that isn't at all.

He started receiving the benefits in May and joined the union in August, I think it is, and it would be a pro rata part of the total.

Earl Warren:

Do you make any distinction between the real tax payments?

Wayne G. Barnett:

We do not sir.