This one flew under my radar. Could have far reaching effects
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In short, McNutt vs. U.S. Department of Justice focused on a federal law that banned through the government's taxation power the private home distillation of alcohol. But the Fifth Circuit ruled that using the power to tax as a reason to ban something is an improper abuse of power. This line of constitutional thinking could have much larger implications.
Why? Because the ruling would erect new guardrails on how the government can use its authority to impose a tax in such a way that does not raise revenue but instead bans otherwise legal activity. When we consider all the ways the government has done this over the years, it's clear that the energy industry has been a prime target for just such an abuse of power especially in cases where the government used its taxing authority and "necessary and proper" constitutional reasoning to regulate activities.
Quote:
As a Liskow law blog summarized it, "The case originated when a group of hobby distillers challenged an 1868 federal law that effectively criminalized the distillation of spirits in or near a private residence, even for personal use. The plaintiffs, including members of the Hobby Distillers Association, argued that the prohibition exceeded Congress's constitutional powers, particularly where the activity was noncommercial and confined to the home."
The analysis added, "The case underscores that the federal government's broad federal taxing authority does have limits, particularly when it intersects with private, noncommercial conduct. As challenges to federal regulatory regimes continue, McNutt may serve as an important reference point in defining the boundary between taxation and regulation."
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