Windfall tax and processing tax refund provisions of the 1936 Revenue Act

The invalidation of the processing and other associated taxes levied under the Agricultural Adjustment act involves a tremendous potential burden to the federal Treasury, both in the loss of taxes unpaid through delay or by court order (and now uncollectible), and in the possible necessity for the refund of sums illegally collected. There is considerable evidence that in most cases the processors have already passed on to others the burden of these taxes, so that their retention by or refund to processors would constitute "unjust enrichment." Congress has sought to recapture unpaid taxes and prohibit refunds unless the processor demonstrates that he has himself borne the burden of these invalidated taxes. The background of these provisions is explained and the nature of the economic proof required is outlined and analyzed in its relation to economic theory and to experience of the processing industries concerned.