In the United States v. Sacks case of 1921, the Supreme Court examined whether a federal law that imposed taxes on opium and coca leaves was constitutional. The defendant, Mr. Sacks, had been convicted for selling derivatives of these substances without paying the required tax and argued that this law was essentially a prohibition in disguise and thus exceeded Congress's power to regulate commerce under the Constitution. However, the court rejected this argument stating that it is within Congress' authority to impose such taxes as part of its broad powers over taxation and regulation of commerce among states. Therefore, even if such laws effectively prohibit certain activities by making them economically unfeasible due to high taxation levels or other regulatory burdens they are still constitutionally valid exercises of congressional power.

In the dissenting opinion for United States v. Sacks, Justice McReynolds disagreed with the majority's decision to uphold a tax on opium and coca leaves. He argued that this was not truly an excise tax but rather a penalty imposed by Congress in an attempt to regulate behavior, which he believed was beyond its constitutional power under the guise of taxation. According to him, if such penalties could be disguised as taxes then there would be no limit to Congress' ability to control individual conduct through financial means - something he saw as fundamentally at odds with personal liberty and freedom from government intrusion into private life. Furthermore, he pointed out inconsistencies between this case and previous rulings where similar "taxes" had been struck down when they were deemed punitive rather than revenue-raising measures.