Which case upheld broad federal powers under the Necessary and Proper Clause and rejected state taxation of federal institutions?

Which case upheld broad federal powers under the Necessary and Proper Clause and rejected state taxation of federal institutions?

• A. Marbury v. Madison (1803)
• B. Gibbons v. Ogden (1824)
• C. Wickard v. Filburn (1942)
• D. McCulloch v. Maryland (1819)

Answer: (D)

This question tests how the Constitution creates a strong federal government and limits state power to tax or impede federal actions. In this line of thinking, Congress can act beyond its explicit enumerated powers if a law is a legitimate means to execute those powers—what the Necessary and Proper Clause allows. The case holds that Congress could establish a national bank not because the bank is explicitly listed in the Constitution, but because it helps manage finances and regulate currency as part of carrying out its fiscal powers. That demonstrates an expansive view of federal authority through implied powers. At the same time, the state may not tax a federal institution. Allowing Maryland to tax the Bank of the United States would force the federal government to submit to state interference, effectively destroying federal operations. The Supreme Court described this as an impermissible encroachment on federal supremacy—the federal government must be able to function without being taxed out of existence. Thus, the decision reinforces a strong federal government with supremacy over states in constitutional matters, using the Necessary and Proper Clause to justify implied powers. The case that embodies this principle is the one where the Court upheld broad federal powers and rejected state taxation of federal institutions.

This question tests how the Constitution creates a strong federal government and limits state power to tax or impede federal actions. In this line of thinking, Congress can act beyond its explicit enumerated powers if a law is a legitimate means to execute those powers—what the Necessary and Proper Clause allows. The case holds that Congress could establish a national bank not because the bank is explicitly listed in the Constitution, but because it helps manage finances and regulate currency as part of carrying out its fiscal powers. That demonstrates an expansive view of federal authority through implied powers.

At the same time, the state may not tax a federal institution. Allowing Maryland to tax the Bank of the United States would force the federal government to submit to state interference, effectively destroying federal operations. The Supreme Court described this as an impermissible encroachment on federal supremacy—the federal government must be able to function without being taxed out of existence.

Thus, the decision reinforces a strong federal government with supremacy over states in constitutional matters, using the Necessary and Proper Clause to justify implied powers. The case that embodies this principle is the one where the Court upheld broad federal powers and rejected state taxation of federal institutions.