The U.S. Supreme Court case Milheim et al. v. Moffat Tunnel Improvement District et al., 1922, revolved around a dispute over the constitutionality of an act by the Colorado General Assembly that created the Moffat Tunnel Improvement District for constructing a railway tunnel through the continental divide in Colorado. The plaintiffs, taxpayers within this district, challenged its legality on grounds that it violated their rights to equal protection and due process under both state and federal constitutions because they were being taxed without representation or consent for a project from which they would not directly benefit. However, the court upheld the validity of creating such special taxing districts for public improvements like transportation infrastructure projects as long as there was some reasonable basis to believe those within these districts would receive some sort of benefit - direct or indirect - from them; thus rejecting plaintiffs' claims about violation of constitutional rights. In essence, this ruling affirmed states' power to levy taxes on citizens via creation of special improvement districts even if benefits accruing to those paying might be indirect rather than immediate or tangible; thereby setting important precedent regarding taxation powers at local levels in America.

The dissenting opinion in the case of Milheim et al. v. Moffat Tunnel Improvement District et al., argued that the majority's decision to uphold a Colorado statute allowing for the creation of special improvement districts was incorrect. The dissent contended that this law violated both state and federal constitutions by permitting taxation without representation, as it allowed non-resident property owners to be taxed without giving them voting rights within these districts. They also asserted that such legislation unfairly burdened certain taxpayers while benefiting others, thus violating principles of equal protection under the law. Furthermore, they believed it was unconstitutional for a state legislature to delegate its taxing power to an unelected body like an improvement district board.