In the case of Thomas E. Raleigh, Chapter 7 Trustee for the Estate of William J. Stoecker v. Illinois Department of Revenue (1999), the U.S Supreme Court ruled in favor of Illinois Department Of Revenue. The issue at hand was whether a bankruptcy trustee could avoid paying tax claims that were given priority under federal law by using his "strong arm" powers to step into the shoes of a hypothetical lien creditor who would have been able to avoid such claims under state law before bankruptcy proceedings began. The court held that while trustees do possess strong-arm powers, these cannot be used to circumvent or undermine federal tax laws which give certain tax claims priority over other debts during bankruptcy proceedings. This decision reinforced both the supremacy and uniformity principles inherent in federal taxation and bankruptcy laws.

In the dissenting opinion for Thomas E. Raleigh v. Illinois Department of Revenue, Justice Scalia disagreed with the majority's interpretation of "fair and equitable" in Section 1129(b) of the Bankruptcy Code as it pertains to priority tax claims. He argued that this phrase should be interpreted according to its historical usage in bankruptcy law, which would allow a debtor’s plan to discriminate among unsecured creditors so long as each creditor receives at least what they would have received under Chapter 7 liquidation. In his view, there was no reason why Congress would want to treat tax claims differently from other unsecured claims when it comes to cramdowns (forcing a reorganization plan on dissenting creditors). Therefore, he believed that Illinois' claim could be crammed down despite receiving less than full payment over time because other unsecured creditors were also not being paid in full immediately.