McCulloch v Maryland

Constitutional Provision

Article 4 Section 1 dealing with the relationship between states and the federal government.

Legal Question

Do the states have the right or is it constitutional for states to tax banks that are inside of the states borders and are national banks?

Potential Counterargument

Maryland could counter argue that the states are sovereign, in the state governing itself and can tax any bank that operates within the state.

Holding

The Court answers the question with the idea the Maryland taxing the national banks as being unconstitutional, with the suggestion being: "The power tax is the power to destroy".

Legal Reasoning

The result of this case favoring McCulloch instead of Maryland, its reasoning being that states do not have the power to tax federal institutions that were created by Congress. Expressing the power to tax leads to the power to destroy, which is a highly important belief and understanding for the government. Questioning how people could really trust the power of another to control the operations of the federal government.

Case Facts

Within the case of McCulloch v Maryland it is a conflict between James McCulloh, the cashier of the Baltimore branch of the U.S. Bank, and the state of Maryland. The conflict occurring due to McCulloch refusing to pay the tax requested by Maryland. The state of Maryland had previously created a law that imposed tax on all banks that operated in Maryland that did not operate directly for the state. The state of Maryland took legal action in the want to enforce their laws dealing with tax.