It’s constitutionally valid AND there’s zero checks.

The U.S. government framework is characterized by separate sovereignty of the federal government and each of the 50 states. Congress has only the authority provided to it in the Constitution, which includes the powers to regulate interstate commerce and tax and spend for the public welfare. States, as the original sovereigns, retained all powers not exclusively delegated to the federal government, including the power to tax and the “police power” to safeguard the health, safety, and welfare of the population. Nonetheless, the Constitution elevates federal law as the “supreme law of the land,” permitting Congress to preempt state law while exercising its other powers. Although states can preempt local law as the sole purpose of the law, Congress cannot treat the Supremacy Clause as an enumerated power, so it can only preempt state law while acting pursuant to another constitutional authority.

Although preemption is a key concern for all public health policies, federal preemption of taxes is a distinct issue because governments need revenue to function. In the 1819 case, McCulloch v. Maryland, the Supreme Court analyzed Maryland’s tax on a federal bank and resolved the question of whether the federal government can preempt state taxes. First, the Court explained that because the power to tax “is essential to the very existence of government,” it is to be “concurrently exercised” by the federal and state governments. Nonetheless, the Court confirmed that the Supremacy Clause of the Constitution means that the federal government can preempt states’ ability to tax.

The Court continues to uphold federal preemption of state taxes but has not issued an opinion to elucidate the boundaries of Congress’s power to do so.