Earmarked Funds.

The appropriation of the proceeds of a tax to a specific use does not affect the validity of the exaction, if the general welfare is advanced and no other constitutional provision is violated. Thus a processing tax on coconut oil was sustained despite the fact that the tax collected upon oil of Philippine production was segregated and paid into the Philippine Treasury.653 In Helvering v. Davis,654 the excise tax on employers—the proceeds of which were not earmarked in any way, although intended to provide funds for payments to retired workers—was upheld under the “general welfare” clause, the Tenth Amendment’s being found inapplicable.

Footnotes

653
Cincinnati Soap Co. v. United States, 301 U.S. 308 (1937). [Back to text]
654
301 U.S. 619 (1937). [Back to text]