In the case of Pennsylvania v. Williams et al., Receiver, the Supreme Court was asked to determine whether a state could tax national banks on their shares at higher rates than other moneyed capital in the hands of individual citizens. The Commonwealth of Pennsylvania had imposed such a tax, which was challenged by several national banking associations and their shareholders who argued that it violated federal law prohibiting discriminatory taxation against national banks. In its decision, the Supreme Court sided with the plaintiffs and ruled that Pennsylvania's tax did indeed violate federal law because it subjected national bank shares to a higher rate than other forms of moneyed capital in private hands. Therefore, this ruling reaffirmed previous decisions protecting nationally chartered financial institutions from discriminatory state taxation.

In the dissenting opinion for Pennsylvania v. Williams et al., Receiver, Justice Cardozo argued that the majority's decision was a departure from established principles of federalism and comity between states. He contended that it was not within the jurisdiction of federal courts to interfere with state tax collection efforts unless there were clear constitutional violations involved, which he did not believe existed in this case. Furthermore, he expressed concern about potential negative impacts on state finances if taxpayers could easily seek refuge in federal court to avoid paying their taxes. In his view, such matters should be left to state courts unless there is an overriding reason for federal intervention.