# Graves v. New York Ex Rel. O'Keefe

> Supreme Court of the United States · March 27, 1939 · 306 U.S. 466

URL: https://www.frixlaw.com/law-library/cases/9419021

## Case

- **Full name:** GRAVES Et Al., COMMISSIONERS CONSTITUTING THE STATE TAX COMMISSION OF NEW YORK, v. NEW YORK Ex Rel. O’KEEFE
- **Court:** Supreme Court of the United States
- **Decided:** March 27, 1939
- **Citations:** 306 U.S. 466; 120 A.L.R. 1466; 1 C.B. 129; 22 A.F.T.R. (P-H) 290; 59 S. Ct. 595; 83 L. Ed. 927; 1939 U.S. LEXIS 980
- **Precedential status:** Published
- **Opinion:** Concurrence by Frankfurter
- **Judges:** Stone', Frankfurter, Butler, Hughes
- **Cited by:** 355 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/9419021

## How later opinions describe it (automated extraction)

- holding that states may not “impose a burden on the national govern- ment tantamount to an interference … with the … performance 11 of its functions”
- holding such income taxes nondiscriminatory and permissible

## Opinion text

Me. Justice Frankfurter,
concurring:
I join in the Court’s opinion but deem it appropriate to add a few remarks. The volume of the Court’s business has long since made impossible the early healthy practice whereby the Justices gave expression to individual opinions. 1 But the old tradition still has relevance when an important shift in constitutional doctrine is announced after a reconstruction in the membership of the Court. Such shifts of opinion should not derive from mere private judgment. They must be duly mindful of the necessary demands of continuity in civilized society. *488 A reversal of a long current of decisions can be justified only if rooted in the Constitution itself as an historic document designed for a developing nation.
For one hundred and twenty years this Court has been concerned .with claims of immunity from taxes imposed by one authority in our dual system of government because of the taxpayer’s relation to the other. The basis for the Court’s intervention in this field has not been any explicit provision of the Constitution. The States, after they formed the Union, continued to have the same range of taxing power which they had before, barring only duties affecting exports, imports,’ and on tonnage. 2 Congress, on the Other hand, to lay taxes in order “to pay the Debts and provide for the common Defense and general Welfare, of the United States,” Art. I, § 8, can reach every person and every dollar in the land with due regard to Constitutional limitations as to the method of laying taxes. But, as is true of other great activities'of thé state and national governments, the fact that we are a "federalism rais.es problems regarding.these vital powers of taxation. Since tw.o governments have authority within the same territory, neither through its power to’ tax can be allowed to cripple the operations of the other. Therefore state and federal governments must avoid exactions which discriminate against each other or obviously interfere with one another’s operations. These were the'-determining considerations that led the great Chief Justice to strike down the Maryland statute as an unambiguous measure of discrimination against the use by the United States of the Bank of the United States as one of its instruments of government.
The arguments upon which McCulloch v. Maryland, 4 Wheat. 316 , rested had their roots in actuality. But they have been distorted by sterile refinements unrelated *489 to affairs. These refinements derived authority from ah unfortunate remark in the opinion in McCulloch v. Maryland . Partly as a flourish of rhetoric and partly because the intellectual fashion of the times indulged a free use of absolutes,. Chief Justice Marshall gave currency to the phrase that “the power to tax involves, the power to destroy.” Id., at p. 431. •' This dictum was treated as though it were a constitutional mandate: Blit not without protest. One of the most trenchant minds on the Marshall court, Justice William Johnson, early analyzed the dangerous inroads upon the political freedom of the States and- the Union within their respective orbits resulting from a doctrinaire application of the generalities uttered in the course of the opinion in McCulloch v. Maryland . 3 The seductive cliché that the power to tax involves the power to destroy waslfused with another assumption, likewise not to be found in the Constitution itself, namely the doctrine that'the immunities are correlative — because the existence of the national government implies immunities from state taxation, the existence- of state governments implies equivalent immunities from federal taxation. When this doctrine was first applied Mr. Justice Bradley registered a powerful dissent, 4 the force of whiph gathered rather than lost strength with time. Collector v. Day, 11 Wall. 113, 128 .
*490 All these doctrines of intergovernmental immunity have until recently been moving in the realm of what Lincoln called “pernicious abstractions.”1 The web of unreality spun from Marshall’s famous dictum was brushed away by one stroke of Mr. Justice Holmes’s pen: “The power to tax is not the power to destroy while this Court sits.” Panhandle Oil Co. v. Mississippi, 277 U. S. 218, 223 (dissent). Failure to exempt public functionaries from the universal duties of citizenship to pay for the costs of government was hypothetically transmuted into hostile action of one government against the other. A succession of decisions thereby withdrew from the taxing power of the States-and Nation a very considerable range of wealth without regard to the actual workings of our federalism, 5 and this, too, when the financial needs of all governments began steadily to- mount. These decisions have encountered increasing dissent. 6 In view of the powerful pull of our decisions upon the courts charged with maintaining the constitutional equilibrium of the two other great English federalisms, the Canadian and the. Australian courts were at first inclined to follow the earlier doctrines of this Court regarding intergovernmental immunity. 7 *491 Both the Supreme Court of Canada and the High Court of Australia on fuller consideration — and for present purposes the British North America Act, 30 & 31 Viet., c. 3, and the Commonwealth of Australia Constitution Act, 63 & 64 Viet., c. 12, raise the same legal issues as does our Constitution 8 — have completely rejected the doctrine of intergovernmental immunity. 9 In this Court dissents have gradually become majority opinions, and even before the present decision the rationale of the doctrine had been undermined. 10
The judicial history of this doctrine of immunity is a striking illustration of an occasional tendency to encrust 'unwarranted interpretations upon the Constitution and thereafter to consider merely what has been judicially said about the Constitution, rather than to be primarily controlled by a fair conception of the Constitution. Judicial exegesis is unavoidable with reference to an organic act like our Constitution, drawn in many particulars with purposed vagueness so as to leave room for the unfolding future. But the ultimate touchstone of constitutionality is the Constitution itself and not what we *492 have said about it. 11 Neither Dobbins v. Commissioners, 16 Pet. 435 , and its offspring, nor Collector v. Day, supra, and its, can stand appeal to the Constitution and its historic purposes. Since both are the starting points of an interdependent doctrine, both should be, as I assume them to be, overruled this day. Whether Congress may, by express legislation, relieve its functionaries from their civic obligations to pay for the benefits of the State governments under which they live is matter for another day.
The state of the docket of the High Court of Australia and that of the Supreme Court of Canada still permits them to continue the classic practice of seriatim opinions.
Article 1, § 10, U. S. Constitution'.
Weston v. City Council of Charleston, 2 Pet. 449, 472-73 .
“I dissent from the opinion of the court in this case, because, it seems to me that the general government has the same power of taxing the income -of officers of the State governments as it has of taxing that of its own officers. , . . In my judgment, the limitation of the power of taxation in the general government, which the present decision establishes, will be found very difficult of control. Where' are we to stop in enumerating -the functions of the State governments which will be interfered with by Federal taxation? . . . How can we now tell what the effect of this decision will be?' I cannot but regard it as founded on a fallacy, and that it will lead to mischievous consequences.” ( 11 Wall. 113, 128-29 .)
E. g., Gillespie v. Oklahoma, 257 U. S. 501 ; Panhandle Oil Co. v. Mississippi, 277 U. S. 218 ; Macallen Co. v. Massachusetts, 279 U. S. 620 ; Indian Motocycle Co. v. United States, 283 U. S. 570 ; Burnet v. Coronado Oil & Gas Co., 285 U. S. 393 ; N. Y. ex rel. Rogers v. Graves, 299 U. S. 401 ; Brush v. Commissioner, 300 U. S. 352 .
E. g., Mr. Justice Brandéis, dissenting, in Jaybird Mining Co. v. Weir, 271 U. S. 609, 615 ; Mr. Justice Holmfes, dissenting, in Panhandle Oil Co. v. Mississippi, 277 U. S. 218, 222 ; Mr. Justice Stone, dissenting, in Indian Motocycle Co. v. United States, 283 U. S. 570, 580 ; Mr. Justice Roberts, dissenting, in Brush v. Commissioner, 300 U. S. 352, 374 . See, also, Mr. Justice Black, concurring, in Helvering v. Gerhardt, 304 U. S. 405, 424 .
Bank of Toronto v. Lambe, 12 App. Cas. 575; D’Emden v. Pedder, 1 C. L. R. 91.
Especially is this true of the Australian Constitution. One of its framers, who afterwards became one of the most distinguished of Australian judges, Mr. Justice Higgins, characterized it as having followed our Constitution with “pe.dantic imitation.” Australasian Temperance & G. M. Life Assurance Society v. Howe, 31 C. L. R. 290, 330.
Abbott v. City of St. John, 40 Can. Sup. Ct. 597; Caron v. The King, (1924) A. C. 999; Amalgamated Society of Engineers v. Adelaide Steamship Co., 28 C. L. R. 129; West v. Commissioner of Taxation, 56 C. L. R. 657.
E. g., James v. Dravo Contracting Co., 302 U. S. 134 ; Helvering v. Mountain Producers Corp., 303 U. S. 376 ; Helvering v. Gerhardt, 304 U. S. 405 .
Compare Taney, C. J., in Passenger Cases, 7 How. 283, 470: “I . : . am quite willing that it be regarded as the law of this eourt,-that its opinion upon the construction of the Constitution is always open to. discussion when it is supposed to have been founded in error, and.that its judicial authority should hereafter depend altogether on’the force of the reasoning by which it is supported.”

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9419021. Public record. Not legal advice.