[Footnote 4: _Dobbins v. Commissioner of Erie County_, 16 Pet., 435.]

[Footnote 5: _Collector v. Day_, 11 Wall., 113.]

[Footnote 6: _Van Brocklin v. Tennessee_, 117 U.S., 151.]

[Footnote 7: _United States v. Railroad Co._, 17 Wall., 322.]

The Supreme Court has said (and many times reiterated in substance) that
the National Government "cannot exercise its power of taxation so as to
destroy the state governments, or embarrass their lawful action."[1] One
of the most distinguished writers on American Constitutional law
(Thomas M. Cooley, Chief Justice of the Supreme Court of Michigan and
afterward Chairman of the federal Interstate Commerce Commission) has
said:

There is nothing in the Constitution which can be made to
admit of any interference by Congress with the secure
existence of any state authority within its lawful bounds. And
any such interference by the indirect means of taxation is
quite as much beyond the power of the national legislature as
if the interference were direct and extreme.[2]

[Footnote 1: _Railroad Co. v. Peniston_, 18 Wall., 5, 30.]

[Footnote 2: _Cooley's Constitutional Limitations_, 7th Ed., 684.]

The question as to the right of Congress to levy an income tax on
municipal securities came up squarely in the famous Income Tax Cases[1]
involving the constitutionality of the Income Tax Law of 1804. While the