In the case of United States et al. v. City of Detroit in 1957, the Supreme Court ruled on a dispute over property tax assessments between the federal government and the city of Detroit, Michigan. The U.S., as a lessee for properties used by Veterans' Administration (VA) facilities, was assessed for taxes by Detroit based on its leasehold interests in these properties. The U.S argued that it should not be taxed because it is immune from state and local taxation under Supremacy Clause of Constitution; however, Detroit countered that this immunity did not extend to private parties who leased property to federal agencies. The Supreme Court sided with the City of Detroit holding that while states cannot directly tax federal government or its instrumentalities without consent from Congress, they can impose non-discriminatory ad valorem property taxes upon private parties who possess valuable leasehold interests created by such governmental bodies even though those leases may contain clauses passing legal incidence of any such tax onto lessor-governmental body.

In the dissenting opinion for United States et al. v. City of Detroit, Justice Harlan argued that the majority's decision to allow federal property to be taxed by local governments was a departure from established precedent and could have significant implications for federal operations nationwide. He contended that this ruling would open up all federally-owned properties across the country to taxation by state and local authorities, potentially leading to financial burdens on the federal government and disruptions in its activities. Furthermore, he expressed concern about potential conflicts between different levels of government over tax issues if such practices were allowed without clear constitutional or statutory authorization. In his view, it was not appropriate for courts to make such decisions based on policy considerations rather than legal principles.