Bailey v. Drexel Furniture Co., 259 U.S. 20 (1922), was a United States Supreme Court case in which the Court ruled the 1919 Child Labor Tax Law unconstitutional as an improper attempt by Congress to penalize employers using child labor. The Court indicated that the tax imposed by the statute was actually a penalty in disguise. The Court later abandoned the philosophy underlying the Bailey case. For example, see United States v. Kahriger, 345 U.S. 22 (1953), overruled on other grounds, Marchetti v. United States, 390 U.S. 39 (1968). Background On February 24, 1919, Congress passed the Child Labor Tax Law which imposed an excise tax of 10 percent on the net profits of a company that employed children. The law defined child labor as “under the age of sixteen in any mine or quarry, and under the age of fourteen in any mill, cannery, workshop, factory, or manufacturing establishment.” The definition also included the use of children between the ages of fourteen and sixteen who worked more than eight hours a day or more than six days a week, or who worked between the hours of 7:00 p.m. and 6:00 a.m. Drexel was a furniture manufacturing company in North Carolina. On September 21, 1921, a collector from the Bureau of Internal Revenue (now the Internal Revenue Service) assessed $6,312.79 in excise taxes for employing a child under fourteen during the 1919 tax year. Drexel paid the tax under protest and sued for a refund. Procedural history Drexel's main argument was that the tax was an unconstitutional attempt to regulate manufacturing. The United States argued that, the statute, as an indirect tax, did not need to meet a standard as long as it was geographically uniform. In addition, the government contended that the tax was merely an excise tax levied by Congress under its broad power of taxation under Article One of the Constitution. The lower court ruled in favor of the company. Holding Chief Justice Taft's Court declared the tax on child labor was unconstitutional because it was a disguised criminal penalty, not a tax, on employment of children. In addition, the Child Labor Tax Law is a regulation on businesses instead of a tax. Taft argued the law describes a set course for businesses and when they deviate from that course, a payment is enacted. Taft said, “Scienters are associated with penalties, not with taxes.” “[A] court must