In the case of First National Bank v. City Council of Estherville, the U.S Supreme Court in 1909 ruled on a dispute involving taxation. The First National Bank had property located within the city limits of Estherville, Iowa and was taxed by both state and local authorities. The bank argued that this double taxation was unconstitutional under federal law which stipulated that national banks could only be taxed by states where they were located, not additionally at a municipal level. The court disagreed with the bank's argument stating that municipalities are political subdivisions of states; therefore their power to tax comes from their respective state government. As such, taxing entities within its jurisdiction does not constitute an additional or separate tax but is part of its overall state taxation authority. Therefore, it concluded that there was no violation against double-taxation as claimed by First National Bank since all taxes imposed were under one sovereign entity -the State- even though collected through different arms (state and municipality). This decision upheld the principle allowing for multiple levels of government (state & local) to levy taxes without violating federal laws against double-taxation.

In the dissenting opinion for First National Bank v. City Council of Estherville, it was argued that the majority's decision to uphold a tax imposed by the city council on bank shares violated both state and federal law. The dissent contended that this taxation was discriminatory as it targeted only one type of property - bank shares - while exempting all others. This, they believed, constituted an unequal distribution of tax burden which contravened principles enshrined in Iowa State Law and also contradicted rulings from previous Supreme Court cases which held that taxes must be uniform across similar types of property. Furthermore, they disagreed with the majority's interpretation of national banking laws; arguing instead these laws were designed to prevent states from imposing higher taxes on out-of-state banks than those applied to their own domestic institutions rather than allowing municipalities free rein over taxing bank shares at will.