statutory definition of “gift” as “any transfer for less than an adequate and full consideration in money or money’s worth” does not include political contributions
How later courts described this case
- statutory definition of “gift” as “any transfer for less than an adequate and full consideration in money or money’s worth” does not include political contributions
Written by the judges who cited it.
The opinion
Simpson, J., dissenting: I agree with the dissenting opinion of Judge Chabot in which he carefully develops and documents his reasons for holding that the political contributions at issue in this case should not be exempted from the gift tax. However, I wish to add and emphasize some additional reasons for dissenting in this case.
At the outset, I want to emphasize that we are not called upon to express our individual views as to whether political contributions should, or should not, be subject to the gift tax. As a court, it is our responsibility to take the law as enacted by the Congress, to ascertain the legislative purpose, and to apply the law so as to carry out such purpose. As Judge Chabot demonstrates, the terms of the gift tax statute are certainly broad enough to include gifts to political organizations, and there is no basis for this Court to conclude that the statute should not be applied as written. There is no legislative history indicating that contributions to political organizations were not to be subject to the gift tax, and as Judge Chabot’s opinion shows convincingly, the reasons given by the majority for its conclusion are totally inconsistent with the precedents of this and other courts. Indeed, to exempt gifts to a political organization from the gift tax is inconsistent with the legislative action in explicitly denying exemption of gifts to organizations which engage in lobbying or political activities.
'Moreover, when the “pins and needles Act” 1 was before the Senate, Senator Stevenson offered an amendment which would strike section 14, relating to contributions to political organizations, from the act. He urged the Senate to adopt his amendment because he believed that such contributions should not be exempted from the gift tax. Senator Long opposed the amendment for several reasons, including his belief that Congress never intended to make such gifts subject to the gift tax. Senator Stevenson’s amendment was rejected by a tie vote. 120 Cong. Rec. S21796-S21797 (daily ed. Dec. 17, 1974). Thus, there was not even a majority vote in the Senate in favor of the particular provision which prospectively exempted gifts to political parties subject to certain restrictions. In the light of this legislative history, there is surely no basis for saying that Congress clearly intended to exempt from the gift tax all contributions to political organizations.
Whether contributions to a political organization should be subject to the gift tax raises a question of policy to be decided by the Congress, not by this Court. Congress has decided that certain gifts made after May 7, 1974, are exempt but there are restrictions on the gifts that qualify for such exemption-restrictions that prevent the investment income of a political organization from avoiding tax, and restrictions to prevent the appreciation in value of contributed property from avoiding tax. If earlier gifts are to be exempt from the gift tax, then Congress should so provide, subject to such restrictions as it may decide are appropriate to carry out its tax policies. As a court, we cannot, and should not, make such policy decisions and decide under what conditions and limitations political contributions should be exempt from the gift tax.
Quealy and Chabot, JJ., agree with this dissenting opinion. For an explanation of this reference, see Judge Chabot’s dissenting opinion below.