department revenue kentucky et al davis et argued november decided may kentucky exempts state income taxes interest bonds issued political subdivisions bonds issued subdivisions paying state income tax municipal bonds respondents sued petitioners hereinafter kentucky refund claiming kentucky differential tax impermissibly discriminated interstate commerce trial ruled kentucky relying part exception dormant commerce clause limit state regulation state appeals reversed finding kentucky scheme ran afoul commerce clause held judgment reversed case remanded reversed remanded justice souter delivered opinion except part concluding kentucky differential tax scheme offend commerce clause pp modern dormant commerce clause law driven concern economic protectionism regulatory measures designed benefit economic interests burdening competitors new energy ind limbach concern limited federalism favoring degree local autonomy resulting analysis discriminatory law virtually per se invalid oregon waste systems department environmental quality exception covers go beyond regulation participat market exercis right favor citizens others hughes alexandria scrap reflecting basic distinction market participants market regulators reeves stake last term case decided independently market participant exception upheld ordinance requiring trash haulers deliver solid waste public authority processing plant finding addressed typically traditionally local government function discriminate interstate commerce purposes dormant commerce clause haulers solid waste management authority pp haulers provides firm basis reversal logic government function susceptible standard dormant commerce clause scrutiny likely motivated legitimate objectives distinct simple economic protectionism applies even greater force laws favoring state municipal bonds since issuing debt securities pay public projects quintessentially public function venerable history bond proceeds way shoulder cardinal civic responsibilities listed haulers protecting citizens health safety welfare haulers apprehension unprecedented interference traditional government function warranted respondents invalidate taxing practice presently employed supported fact emphasizing enterprise public character one step addressing fundamental element dormant commerce clause jurisprudence notion discrimination assumes comparison substantially similar entities viewed lens bonaparte tax forbidden discrimination kentucky public entity treat substantially similar bond issuers market pp look specific markets exemption effects felt confirms traditionally forbidden discrimination underway points tax policy distinctive character interstate market broadly conceived issuers holders securities specialized market commerce solely federally municipal bonds often conducted interstate municipal bond funds nearly every taxing state believes public interests served feature supported every state facts suggest state perceives local advantage disadvantage beyond permissible ones open government deal government enters market equally significant perception emerges examining market municipal bonds within issuing state large proportion market managed one funds important feature markets intrastate funds absorb securities issued smaller lesser known municipalities interstate markets tend ignore many funds likely disappear current differential tax schemes upset suggestion interstate markets welcome weaker municipal issues lose local market homes davis victory financing municipal improvements thus change radically differential tax feature disappeared fact differential tax scheme critical operation identifiable segment current municipal financial market demonstrates unanimous desire preserve scheme far cry private protectionism driven dormant commerce clause development pp generally applies rule pike bruce church even nondiscriminatory burdens commerce may struck showing clearly outweigh benefits state local practice current record scholarly material show judicial branch institutionally suited draw reliable conclusions kind necessary davises satisfy pike burden particular case pp souter announced judgment delivered opinion except part stevens breyer joined opinion full roberts ginsburg joined part scalia joined parts iv stevens filed concurring opinion roberts scalia filed opinions concurring part thomas filed opinion concurring judgment kennedy filed dissenting opinion alito joined alito filed dissenting opinion department revenue kentucky et petitioners george davis et ux writ certiorari appeals kentucky may justice souter delivered opinion except part better part two centuries political subdivisions issued bonds public purposes nearly half time exempted interest bonds state income taxes imposed bond interest question whether kentucky version differential tax scheme offends commerce clause hold like commonwealth kentucky taxes residents income see rev stat ann west tax assessed net income see calculated reference gross income defined internal revenue code see west supp excludes interest state local bond municipal bond kentucky piggybacks exclusion point adds interest income derived obligations sister political subdivisions thereof back taxable net rev stat ann interest bonds issued kentucky political subdivisions thus entirely whereas interest municipal bonds subdivisions taxable interest bonds issued private entities taxed kentucky regardless private issuer home ostensible reason regime attractiveness bonds lower rates interest paid taxable bonds comparable risk graetz schenk federal income taxation ed hereinafter graetz schenk internal revenue code example see market rate interest percent comparable corporate bond municipality pay percent debt purchaser percent marginal tax bracket indifferent municipal corporate bond since interest rate corporate bond percent graetz schenk differential tax scheme kentucky works way commonwealth tax benefit residents buy bonds makes lower interest rates limiting exception kentucky bonds raises demand without also subsidizing issuers significance scheme immense kentucky subdivisions issued billion bonds pay spending transportation public safety education utilities environmental protection among things irs statistics income bulletin belmonte bonds pp http visited available clerk case file across nation period issued billion bonds nearly third money going education followed transportation utilities see ibid municipal bonds currently finance roughly capital expenditures state local governments thomas money banking financial markets funding work government way follows tradition going back far century see johnson rubin municipal bond market structure changes handbook public finance thompson green eds massachusetts issued bills credit pay soldiers participated unsuccessful raid city quebec municipal bonds first appeared early century new york city began float debt securities hillhouse municipal bonds century experience hereinafter hillhouse boston bonded debt municipal bond market swelled aggregate debt american cities exceeded million total debt nearly times amount see ibid bonds funded great public works day including new york city first water system see erie canal see amdursky gillette municipal debt finance law hereinafter amdursky gillette turn century total state municipal debt closing billion see hillhouse turn millennium trillion municipal bonds outstanding temel fundamentals municipal bonds ix ed differential tax schemes like kentucky long pedigree state income taxation became widespread early century see comstock state taxation personal incomes reprinted hereinafter comstock along new tax regimes came exemptions deductions see induce sorts economic behavior including lending state local governments favorable rates untaxed interest new york enacted first statutes see laws pp year imposed income tax see comstock followed see sess laws laws acts ch pp kentucky joining pack see acts today laws like one petitioners brevity kentucky commonwealth collect kentucky income tax respondents george catherine davis kentucky residents paid state income tax interest municipal bonds sued tax collectors state refund claim kentucky differential taxation municipal bond income impermissibly discriminates interstate commerce violation commerce clause national constitution trial granted judgment commonwealth relying part cases recognizing exception dormant commerce clause limit state regulation see app pet cert citing reeves stake hughes alexandria scrap appeals kentucky reversed see brief discussion rejected reasoning ohio case upholding similar tax scheme challenged commerce clause see discussing shaper tracy ohio app distinguished market participant cases see well decision century commonwealth relied see discussing bonaparte tax appeals thought choice find kentucky system taxing extraterritorial bonds runs afoul commerce clause kentucky denied commonwealth motion discretionary review see app pet cert granted certiorari owing conflict raised important question constitutional law result reached casts constitutional doubt tax regime adopted majority reverse ii commerce clause empowers congress regulate commerce among several art cl although terms expressly restrain several way sensed negative implication provision since early days see cooley board wardens port philadelphia ex rel soc relief distressed pilots cf gibbons ogden wheat marshall dictum modern law come called dormant commerce clause driven concern economic protectionism regulatory measures designed benefit economic interests burdening competitors new energy ind limbach point effectuat framers purpose state retreating economic isolation fulton faulkner quoting oklahoma tax jefferson lines brackets omitted plagued relations among colonies later among articles confederation hughes oklahoma law respect cross purpose well framers distrust economic balkanization limited federalism favoring degree local autonomy compare federalist nos hamilton hamilton madison federalist madison see also garcia san antonio metropolitan transit authority essence federal system within realm authority left open constitution must equally free engage activity citizens choose common weal resulting protocol dormant commerce clause analysis ask whether challenged law discriminates interstate commerce see oregon waste systems department environmental quality discriminatory law virtually per se invalid ibid see also philadelphia new jersey survive advances legitimate local purpose adequately served reasonable nondiscriminatory alternatives oregon waste systems supra internal quotation marks omitted see also maine taylor absent discrimination forbidden purpose however law upheld unless burden imposed interstate commerce clearly excessive relation putative local benefits pike bruce church state laws frequently survive pike scrutiny see haulers solid waste management authority slip plurality opinion northwest central pipeline state corporation minnesota clover leaf creamery though always pike cases run different course however exception covers go beyond regulation participat market exercis right favor citizens others alexandria scrap exception reflects basic distinction market participants market regulators reeves indication constitutional plan limit ability operate freely free market see also white massachusetts council constr employers hen state local government enters market participant subject restraints commerce clause thus alexandria scrap found state law authorizing state payments processors automobile hulks validly burdened processors onerous documentation requirements counterparts likewise reeves accepted south dakota policy giving customers first dibs cement produced plant white held boston executive order requiring half workers construction projects city residents passed muster recent look reach dormant commerce clause came last term case decided independently market participation precedents haulers supra upheld flow control ordinance requiring trash haulers deliver solid waste processing plant owned operated public authority new york state found ompelling reasons treating ordinance differently laws favoring particular private businesses competitors slip state local governments provide public goods services unlike private businesses vested responsibility protecting health safety welfare citizens laws favoring subdivisions may directed toward number legitimate goals unrelated protectionism slip true haulers ordinance addressed waste disposal typically traditionally local government function slip quoting haulers solid waste management authority calabresi concurring internal quotation marks omitted needed show new york object consequently different forbidden protectionism pointed palpable harm imposed ordinances expensive trash removal likely fall upon people voted laws rather interests haulers slip concerned contrary approach lead unprecedented unbounded interference courts state local government slip held ordinance discriminate interstate commerce purposes dormant commerce clause slip iii follows fortiori haulers kentucky must prevail haulers explained government function susceptible standard dormant commerce clause scrutiny owing likely motivation legitimate objectives distinct simple economic protectionism clause abhors see slip laws favoring local government may directed toward number legitimate goals unrelated protectionism see also slip noting particularly hesitant interfere guise commerce clause local government engages traditional government function logic applies even greater force laws favoring state municipal bonds given issuance debt securities pay public projects quintessentially public function venerable history already sketched see supra issuing bonds state local governments sprea costs public projects time amdursky gillette much one might buy house loan subject monthly payments bonds place cost project citizens benefit years see allow public work beyond current revenues support see bond proceeds thus way shoulder cardinal civic responsibilities listed haulers protecting citizens go without saying apprehension haulers unprecedented interference traditional government function warranted davises us invalidate taxing practice see supra presently employed see supra affirmatively supported see brief amici curiae fact emphasis public character enterprise supported tax preference step addressing fundamental element dormant commerce clause jurisprudence principle notion discrimination assumes comparison substantially similar entities haulers slip internal quotation marks omitted quoting general motors tracy bonaparte tax case involving full faith credit clause held foreign state properly treated private entity respect bonds traveled outside borders see beyond borders debtor state compelled go market borrower subject disabilities particular individuals none attributes sovereignty debt owes viewed lens kentucky tax scheme parallels ordinance upheld haulers benefit clearly public issuer kentucky treating private issuers exactly slip forbidden discrimination kentucky public entity treat substantially similar bond issuers thus haulers provides firm basis reversal like ordinances upheld kentucky tax exemption favors traditional government function without differential treatment favoring local entities substantially similar interests type law interstate commerce purposes dormant commerce clause slip case like haulers may also seen broader rubric market participation doctrine although davises say market participant cases inapposite view may characterize state action kentucky statutes market activity public purposes ignore fact absent haulers central case differential taxation difference amounts heavier tax burden interstate activity forbidden see camps town harrison invalidating statute exempting charities real estate personal property taxes unless conducted operated principally benefit residents fulton striking tax corporate stock held state residents rate tax inversely proportional corporation exposure state income tax bacchus imports dias holding excise tax sale liquor wholesale unconstitutional exempted locally produced alcoholic beverages davises make fair point extent argue kentucky acts two roles issuing bonds setting taxes looked taxing authority seems invite dormant commerce clause scrutiny regulatory activity see walling michigan discriminating tax imposed state operating disadvantage products introduced first mentioned state effect regulation restraint commerce among usurpation power conferred constitution upon congress see also camps newfound supra clear discriminatory burdens interstate commerce imposed regulation taxation may violate commerce clause tracy supra negative dormant implication commerce clause prohibits state taxation discriminates unduly burdens interstate commerce ignoring fact imposing differential tax scheme makes sense kentucky also bond issuer commonwealth entered market debt securities maryland entered market automobile hulks see alexandria scrap south dakota entered cement market see reeves simply blinks reality disaggregate commonwealth two roles pretend exempting income securities kentucky independently regulating regulating garden variety way made state vulnerable dormant commerce clause regulated price milk see west lynn creamery healy baldwin seelig keep herds cows compete dairy producers dollars milk drinkers kentucky exempts bond interest competing market limited investment dollars alongside private bond issuers sister tax structure one tools failure appreciate regulation taxation goes hand hand market participation selling bonds allows davises advocate error focusing exclusively commonwealth regulator ignoring commonwealth bond seller see brief respondents state saying state chooses tax citizens acting market regulator market participant quoting shaper ohio app indulge single vision however require overruling cases point decided since alexandria scrap white example also scrutinized government acting dual roles mayor boston promulgated executive order bore hallmarks regulation applied every construction project funded wholly partially city funds funds administered city imposed general restrictions hiring practices private contractors mandating work forces bona fide boston residents setting thresholds minorities women well see see also blackmun concurring part dissenting part executive order case direct attempt govern private economic relationships essence regulation time city took part market expend ing funds entering construction contracts public projects opinion speaking basic distinction market participants market regulators quoting reeves supra white dissect boston conduct ignore former instead treated regulatory activity favor local minority labor terms conditions government efforts market role treated dispositive similarly alexandria scrap maryland employed tools regulation invigorate participation market automobile hulks specific controversy documentation requirements included comprehensive statute designed speed scrap cycle superficially scheme regulatory nature decision premised view practical terms maryland regulated also entered market bid price automobile hulks see haulers though placed market participant umbrella may seen another example public authority acting case process trash governmental superiors forbade trash haulers deal processors latter fact determine outcome however dispositive fact government activity processing trash upheld government decision shut old market trash processing created new one thereby became participant market one supplier necessary service instead government created monopoly favor private hauler struck law carbone clarkstown haulers accordingly turned decision give paramount consideration public function actively dealing trash market davises way haulers overruled market participation doctrine describe null set maybe set one see reeves supra cases commercial activities governments regulatory efforts complemented way fact tying regulation public object foray market understood give regulation civic objective different discrimination traditionally held unlawful paradigm unconstitutional discrimination law chills interstate activity creating commercial advantage goods services marketed local private actors governments employ fulfill civic objectives see fulton higher tax stock corporations little presence state new energy tax credit sellers ethanol available ethanol produced state bacchus imports tax exemption applied sales certain locally produced liquors lewis bt investment managers prohibition banks owning businesses provided investment advisory services boston stock exchange state tax higher tax sale securities nonresidents securities sold exchange sum cases market regulation without market participation prescribe standard dormant commerce clause analysis cases market participation joined regulation usual situation prescribe exceptional treatment direct governmental activity commercial markets public kentucky tax scheme falls outside forbidden paradigm commonwealth direct participation favors local private entrepreneurs commonwealth local governments commonwealth enacted tax code eye toward making bonds marketable issues sale bond market relies tax code seller purchaser treat bonds tax rate joined intimately say work force requirements city construction contracts boston issuing bonds must therefore significance dormant commerce clause government trash processing junk car disposal construction haulers alexandria scrap white followed rejecting davises argument kentucky regulatory activity viewed isolation commerce clause look specific markets exemption effects felt confirms conclusion traditionally forbidden discrimination underway points distinctive character tax policy market broadly conceived one issuers holders securities whatever source ultimate destination interstate market kentucky treats income municipal bonds like income bonds privately issued kentucky elsewhere preference given local issuer none local holder beyond entailed preference kentucky grants engages activities serving public objectives specialized market understood commerce solely federally municipal bonds much conducted interstate municipal bond course distinction taxing state bonds holders issuers holders counterparts stark remarkable issuers broader interstate market nearly every taxing state believes public interests served feature supported every one without income tax despite ranges relative wealth tax rates among see brief amici curiae facts suggest state perceives local advantage disadvantage beyond permissible ones open government deal government enters market see supra equally significant perception emerges examining third type market municipal bonds one bonds within state issue large proportion market state managed one funds definition discrimination interstate activity within market one features reveals important benefit intrastate bond markets operate funds intrastate funds absorb securities issued smaller lesser known municipalities interstate markets tend ignore see national federation brief compared funds ational mutual funds less likely dedicate time necessary evaluate small obscure infrequent municipal bond issuer purchase bonds issued public entities ational mutual funds place higher premium liquidity holdings single state funds willing purchase less liquid municipal bonds smaller less familiar issuers state tax advantage fund mandate purchase bonds issued within specific state little doubt many funds disappear current differential tax schemes upset see ne predictable impact elimination tax incentives purchase municipal bonds issued specific state disappearance consolidation national mutual funds single state mutual funds ibid although handful single state funds might continue exist small number florida high populations high affinity local bond issuers current state tax system raison tre virtually single state funds cease financially viable absence tax advantage outweighed relative lack diversification national funds reduced asset base accord brief respondents tax exemptions fostered growth funds hold municipal bonds single state compared national bonds funds tend higher risk higher cost kiplinger retirement report win muni bond funds noting without differential taxation scheme little incentive create muni bond funds suggestion interstate markets discover new reason welcome weaker municipal issues lose local market homes victory davises see national federation brief main adverse impact disappearance single state funds felt small municipal issuers stand lose much intrastate market bonds developed currently prevailing state tax system without gaining much interstate market elimination financing municipal improvements thus change radically differential tax feature probable indispensability current scheme maintaining markets serving smaller municipal borrowers underscores far objectives probably lie forbidden protectionism local business also tends explain committed taxing practice much scholarship says often produces net burden tax revenues lost interest expense saved see brief alan viard et al amici curiae tates routinely fail recoup cost tax subsidy form lower financing rates citing chalmers default risk explain muni puzzle evidence municipal bonds secured treasury obligations rev financial studies sum differential tax scheme critical operation identifiable segment municipal financial market currently functions fact alone demonstrates unanimous desire preserve tax feature far cry private protectionism driven development dormant commerce clause also fatal davises backup argument case remanded analysis rule pike iv concluding state law amount forbidden discrimination interstate commerce death knell dormant commerce clause challenges generally leave courtroom door open plaintiffs invoking rule pike even nondiscriminatory burdens commerce may struck showing burdens clearly outweigh benefits state local practice see kentucky courts made pike enquiry davises ask us remand one see brief respondents davises request pike balancing assumes answer open question whether pike even applies case sort haulers included pike analysis see slip plurality opinion cases applying market participant exception see white alexandria scrap need decide question today however kentucky argued pike irrelevant see reply brief petitioners even assumption pike examination might generally order type case current record scholarly material convince us judicial branch institutionally suited draw reliable conclusions kind necessary davises satisfy pike burden particular case institutional difficulty manifest train disadvantages davises counsel attributes current differential tax scheme first harms issuers subdivisions blocking access investment dollars kentucky second similarly harms private sellers underwriters individuals investment funds wish sell bonds kentucky third harms national municipal bond market participants distorting impeding free flow capital fourth harms kentucky investors promoting risky investment vehicles fifth harms compelling enact competing discriminatory laws decrease net revenues brief respondents even drawbacks degree eventuate system must apparent anyone weighing quantifying analysis subtle exercise striking harms allegedly flowing directly indirectly kentucky sister citizens failed dissuade even single state supporting current system every one including income tax lined kentucky case prospect reliable pike comparison dims even turn benign function current system flagged moment ago position evaluate advantage current market bonds issued smaller municipalities ones ready access bond market funds consider attempt place definite value feature existing system confront questions termination differential tax scheme jeopardized eliminated funds cited authorities predict new source capital take place interstate markets accommodate small issuers cited authorities predict financing question replaced current local taxation projects unlikely considering financially weaker borrowers involved state governments assume responsibility bonds state taxation capital degree simply dry eliminating class municipal improvements new source sources capital became available improvements given state likely new scheme produce measurable net benefits seeking capital perceptibly produce freer flow funds money spent front increased local state taxation available investment money invested local bonds sinking funds obviated effect interstate capital flows significant questions even difficulty answering inevitable uncertainty predictions might made trying come answers unsuitability judicial process judicial forums making whatever predictions reaching whatever answers possible see tracy institutionally unsuited gather facts upon economic predictions made professionally untrained make cf fulton ourts institutions poorly equipped evaluate precision relative burdens various methods taxation complexities factual economic proof always present certain potential error courts little familiarity process evaluating relative economic burden quoting minneapolis star tribune minnesota revenue business suggest current system reconsidered placed question congressional forum two advantages congress hope acquiring complete information adversary trials may produce elected legislature preferable institution incurring economic risks alteration way things traditionally done risk essence davises urging miss mark think kentucky courts ultimately invited merely tinker details tax scheme asked apply federal rule throw system financing municipal improvements throughout rule pike never intended authorize expose uncertainties economic experimentation davises request dissent rightly praises virtues free market warns decision uphold kentucky tax scheme result untoward consequences market see post warning alarmism going back state regimes differential bond taxation elements national commerce without wilting commerce clause threat come instead dissent approach certainty upset market bonds settled expectations issuers based experience nearly century predecessors responded earlier invitation adventurism overturning traditional local taxing practice justice holmes answered mode taxation long standing upon questions constitutional law long settled habits community play part fact system force long time strong reason leaving improvement may desired legislature paddell city new york judgment appeals kentucky reversed case remanded proceedings inconsistent opinion ordered department revenue kentucky et petitioners george davis et ux writ certiorari appeals kentucky may justice stevens concurring dissented reeves stake haulers solid waste management authority seems appropriate state briefly join opinion even cases decided differently reeves haulers involved state participation commercial markets market cement reeves market waste disposal haulers state entities cases imposed burdens private market commercial goods services case kentucky local governmental units engage private trade business merely borrowers funds needed finance public improvements putting one side cases state may create market previously exist see hughes alexandria scrap stevens concurring agree justice powell view state enters private market operates commercial enterprise advantage private citizens may evade constitutional policy economic balkanization reeves dissenting opinion hand state merely borrows money pay spending transportation public safety education utilities environmental protection ante operat commercial enterprise purposes dormant commerce clause majority stressed carbone clarkstown justice alito reiterated dissent haulers instead enacting flow control waste disposal ordinances local governments free course ir program general taxes municipal bonds elected use open market earn revenues waste management program employ discriminatory regulation give program advantage rival businesses state slip quoting carbone citation omitted state reliance general taxes municipal bonds finance public projects merit commerce clause scrutiny operating business enterprise area established interstate market slip alito dissenting persuaded commerce clause analysis change kentucky chooses make interest pays municipal bonds already tax exempt federal law also tax exempt kentucky law citizens kentucky provide natural market purchase kentucky bonds also beneficiaries programs financed moreover tax payments enable kentucky pay interest bonds discharge indebtedness tax exemption kentucky citizens enhances marketability kentucky bonds kentucky market motivating local support local public improvements instead issuing bonds kentucky borrowed funds kentucky bank issued notes syndicate kentucky lenders without implicating commerce clause even though fundraising preclude equal amount money kentucky entering interstate market bonds free tickets kentucky derby purchasers bonds comparable though presumably lesser effect judgment state action motivates state taxpayers lend money state simply sort burden interstate commerce implicated dormant commerce clause jurisprudence department revenue kentucky et petitioners george davis et ux writ certiorari appeals kentucky may chief justice roberts concurring part join part opinion view case readily resolved last term decision haulers solid waste management authority majority shares view case see need proceed alternative analysis part department revenue kentucky et petitioners george davis et ux writ certiorari appeals kentucky may justice scalia concurring part join part part iv opinion apply negative commerce clause doctrine stare decisis compels view unjustified judicial invention expanded beyond existing domain general motors tracy scalia concurring stare decisis compel invalidation kentucky statute explains small leap invalidating state discrimination favor private entities invalidating state discrimination favor state subdivisions performing traditional governmental function apply negative commerce clause area broaden doctrine existing scope intrude regulatory sphere traditionally occupied haulers solid waste management authority slip scalia concurring part omission original enough join part opinion think part adequately resolves issue also join part iv describes question whether pike balancing applies laws like open one ante declines engage pike balancing courts ill suited determining whether law imposes burdens interstate commerce clearly outweigh law local benefits balancing therefore left congress see ante problem courts less well suited congress perform kind balancing every case burdens benefits always incommensurate placed opposite balances scale without assigning weight matter weighing apples apples deciding whether three apples better six tangerines one end scale burden side rests certain degree suppression interstate competition borrowing benefits side certain degree facilitation municipal borrowing course decide interest outweighs without deciding interest important always case abandon enterprise altogether leave quintessentially legislative judgments branch constitution assigns see bendix autolite midwesco enterprises scalia concurring judgment department revenue kentucky et petitioners george davis et ux writ certiorari appeals kentucky may justice thomas concurring judgment agree kentucky differential tax scheme constitutional rather apply body doctrine basis constitution proved unworkable practice entirely discard negative commerce clause jurisprudence haulers solid waste management authority slip thomas concurring judgment see also american trucking michigan pub serv negative commerce clause basis text constitution makes little sense proved virtually unworkable quoting camps town harrison thomas dissenting congress authority regulate commerce among several art cl necessarily includes power prevent state regulation interstate commerce haulers supra slip thomas concurring judgment text constitution makes clear legislature judiciary bears responsibility curbing perceives state regulatory burdens interstate commerce acknowledges kentucky differential tax scheme far unique ante nearly century treated income derived bonds differently derived counterparts ibid present vast majority ante practice thus longstanding widespread yet congress refrained preempting cf new jersey realty title ins division tax appeals holding federal statute exempting obligations state local taxation conflicting state statute face congressional silence haulers supra slip thomas concurring judgment authority invalidate kentucky differential tax scheme reverse judgment basis department revenue kentucky et petitioners george davis et ux writ certiorari appeals kentucky may justice kennedy justice alito joins dissenting thinkers even prescient foresee technological economic interdependence yet understood foundation free trade unobstructed state local barriers indispensable unite ensure liberty progress whole nation people vision primary objective framers constitution history know vindicates judgment national free market within borders singular force shaping consciousness creating reality one purpose destiny commerce clause doctrine emerged decisions appropriate necessary implement constitution purpose design general observations offered outset underscore imprudent risk creates misinterpreting precedents decide case true majority opinion wrong threaten whole economy national unity facts alone explicit local discrimination ratifies today likely result extra though manageable accommodation costs welcomed existing interests ready profit market perhaps absorb costs discrimination jurisprudence unless decision stands alone anomaly reactive institutions adjusting forces instance mutual funds state municipal bonds issued within single state already place response local protectionist laws issue vogue mechanisms may allow market though necessarily distorted deviation essential constitutional principles continue cope less efficient manner damage likely limited discrete distorted market state municipal bonds many economists likely find unfortunate inefficient specialized business emerged profit departure constitutional principles even today decision welcomed profit discrimination system whole benefit return market proper form freed artificial restraints seem necessary however point systemic consequences today decision confine discourage new experiments local laws discriminate interstate commerce trade incorrect result majority reaches treatment commerce clause cases predecessors reached delicate sensible implementation framers original purpose unsatisfactory brief circular reasoning contained part opinion commands majority inconsistent precedents require respectful dissent protectionist trade laws policies pursued favor local interests within larger trading area invite prompt retaliatory response dynamic one framers understood theory saw fact see west lynn creamery healy articles confederation enacted protectionist laws proved difficult costly even terms political energies remove trade barriers negotiated agreements resulting compacts seemed destined favor powerful immediate prospect escalating trade barriers real national power regulate national trade remove local barriers soon deemed urgent open markets elimination trade barriers concerns led annapolis convention see morgan birth republic frustrations meeting built strong consensus necessity larger compact led call philadelphia convention see morison commager leuchtenburg growth american republic rev ed object creating free trade throughout single nation without protectionist state laws dominant theme convention philadelphia ratification debates followed see federalist rossiter ed hamilton indeed evident superficial view object either respects interest trade finance strongly demands federal superintendence dissent repeat earlier brief account commerce clause jurisprudence see lopez kennedy concurring cases gibbons ogden wheat willson black bird creek marsh pet cooley board wardens port philadelphia ex rel soc relief distressed pilots began elaboration rule respectful local laws local expertise preserving theory fact free trade throughout nation though oversimplification suffices note commerce cases invalidated two types local barriers laws impose unreasonable burdens upon interstate commerce laws discriminate doctrine invalidating laws impose unreasonable burdens upon interstate commerce doubt deterrent local enactments attempting regulate ways restrict free national market corollary rule nondiscriminatory laws imposing reasonable burden valid allows exercise powers based information expertise readily available national government result eliminate demand necessity sweeping national legislation line cases found occasional detractors see cts dynamics america scalia concurring part concurring judgment southern pacific arizona ex rel sullivan black dissenting undue burden rule however remains essential safeguard restrictive laws might otherwise force decades congress act cases background formulation used pike bruce church essence ignored decision today case see ante precedents discussing undue burden principle pike need addressed however law question invalid second line precedents cases instruct laws either purpose effect discriminating interstate commerce protect local trade void authorities relevant part opinion commands majority see ante necessary address reasons advances seeking disregard defends kentucky law explaining serves traditional government function concerns cardinal civic responsibilities protecting health safety welfare see ante nn reformulation phrase police power long abandoned mere tautology difficult identify state law come us meet description unfortunate recent exception haulers solid waste management authority ceased view concept saying anything instructive law may contravene provision constitution even enacted beneficial purpose police power concept simply shorthand way saying state empowered enact laws absence constitutional constraints course restates question law police power label laws exempt commerce clause analysis said case striking order based upon local flood control needs directing railroad remove certain bridges raise others supported rail lines involved interstate commerce state avoid operation commerce clause simply invoking convenient apologetics police power kansas city southern kaw valley drainage opinion holmes holds kentucky law valid bond issuance fulfills governmental function raising revenue public projects see ante aside point extension police power good law argument premise wrong law question operates hold bonds trade issue bonds issued covenant promising tax exemption tax relief holder bonds contain provision security issued formal obligation repay word terms conditions securities promises favored tax treatment certain holders indeed done without impairing marketability simply commercial investment practice make payment obligations turn upon either residence holder state issuer issuer intends use interstate market bonds encumber conditions giving premiums penalties depending upon residence holders even correct say relevant legal framework bond issuance taxation bonds already issued conclusion incorrect discrimination commerce still plain prejudicial sustained see haulers supra slip alito dissenting extent majority holding rests distinction governmental functions nontraditional counterparts reconciled prior precedent citation omitted insufficiency reasoning even apparent however premise incorrect challenged state activity differential taxation bond issuance state tax provision issue repealed tomorrow without altering impairing single obligation bonds tax matters kentucky gives favored tax treatment securities others depending solely upon state issuance disadvantage bonds cases establish rule state authority use taxing power erect local barriers products commodities see west lynn paradigmatic example law discriminating interstate commerce protective tariff customs duty taxes goods imported tax similar products produced state nothing cases even begins suggest rule inapplicable simply state uses discriminatory tax favor enterprise tax imposed explicit discrimination issuances admitted protectionist purposes sustained unless disavows discrimination principle one important protections elaborated nation interstate markets ruled protectionist differential taxation respect securities sales invalid boston stock exchange state tax case considered validity new york transfer tax securities transactions new york taxed sales heavily sales transactions question concluded stock exchanges boston stock exchange located outside new york state conceded transactions sufficient contacts new york impose tax question validity higher rate transactions closed exchanges located unanimous opinion held discriminatory tax designed favor new york invalid process competition state may discriminatorily tax products manufactured business operations performed state true discriminatory tax exemption bacchus imports dias invalidated observing long competition locally produced exempt products nonexempt products outside state discriminatory effect principle refutes majority contention see ante kentucky bonds compete state local government bonds relevant inquiry purpose bond whether bond product competes majority establish investor standpoint kentucky bonds compete bonds state municipal governments indeed competition bonds need advantages exemptions give nothing bacchus suggested holding dependent upon private nature favored competitors instead rejecting argument discriminatory taxation justified goal promote local industry explained determination constitutionality depend upon benefited burdened party reasoning permit different outcome state benefited party little difficulty holding invalid discriminatory tax fulton faulkner north carolina devised tax intangibles employed deduction scheme favoring owned stock local companies effect taxing higher rate owned stock companies fulton scheme favored domestic corporations foreign competitors raising capital among north carolina residents tend ed least discourage domestic corporations plying trades interstate commerce held scheme invalid contrary commerce clause see differential taxation favoring local trade interstate commerce poses serious threats national free market taxing power flexible potent differential tax cases mentioned outset taxation issue discriminatory tax schemes relatively rare resemble tariffs paradigmatic law discriminating interstate commerce west lynn see ibid ariffs products patently unconstitutional cases reveal single attempt state enact one instead cases filled state laws aspire reap benefits tariffs means precedents forbidding discriminatory taxes subset larger class cases invalidate regulations favor local interests cases inconsistent holding today bonds commodities interstate commerce respect consumers entitled choose local products milk dean milk madison apples hunt washington state apple advertising solid waste landfill fort gratiot sanitary landfill michigan dept natural resources solid waste transfer carbone clarkstown waste philadelphia new jersey ethanol new energy ind limbach differential tax case cases export controls though less relevance provide instruction simple proposition national market isolated protectionist local purposes see hughes oklahoma striking state law prohibiting shipment minnows state new england power new hampshire striking state law requiring state utility commission permission utility convey electricity state part opinion commands majority main point validation kentucky tax exemption follows opinion last term haulers overlooks argument central entire holding haulers concluded ordinance applied equally interstate commerce applied without differentiation commerce government monopolized waste processing industry see haulers slip nondiscrimination state involvement central rationale justification invoked discrimination bonds whole purpose law question kentucky monopolized bond market municipal bond market kentucky entered competitive nonmonopolized market give bonds market advantage taxed municipal bonds higher rate explicit rationale law differentiate local interstate commodities case extension haulers rejection principal rationale monopolizing local market ordinance applied equally interstate local commerce next argument police power argument returning idea important state essential projects see ante argument two major flaws first replay circularity inherent police powers health safety welfare rhetoric difficult think law meeting general approval assuming validity respects fall outside description health safety welfare citizens second argument ignores fact protectionist laws definition justified local interest case important parallels one considered whether property tax exemption available charitable benevolent organizations maine differential application order advantage camps served primarily maine residents distinct camps served primarily residents see camps town harrison explicit rejecting argument profit organizations treated differently respect commerce clause protection despite state special historic concern charitable assistance within borders camps newfound analysis applicable reason nonprofit character enterprise exclude coverage either affirmative negative aspect commerce clause ibid reason governmental character enterprise exclude coverage commerce clause majority concludes central framework saying market kentucky bonds similar market private issuers commonwealth discrete market says kentucky discriminate chooses quite apart principle discrimination explicit terms purpose effect invalidate law argument proceeds wrong circular premise argument kentucky bonds discrete market basis record kentucky state local bonds compete bonds investor knows within national bond market discrete submarket state municipal bonds tax exempt internal revenue code see ante citing however goes suggest within separate market discrete markets bonds separate laws like one ante wrong defines market based upon sellers purposes rather upon investors purposes latter touchstone market definition definition odds commerce clause jurisprudence question never beneficiary discriminatory law benefit question relates ends sought discriminatory means see bacchus see also haulers supra slip alito dissenting issue case resolved determining issuer proceeds extent says consumer preference state bonds within borders makes mistake defining market first assuming validity discriminatory law issue precedent permits define market terms law challenge protectionist purposes effects double counting work discriminatory barrier exist national market state municipal bonds operate like free nationwide markets fact national market state municipal bonds discrete one serves reinforce point operate without local restriction people joined brief support kentucky alleged want law irrelevant see ante protectionist interests always want laws pass even fellow citizens bear burden positioned profit barrier circumstance residents choose bear costs protectionist measure assuming even though entrenched interests usual source law found quite irrelevant argument accepted undermine almost every discriminatory tax case state taxes ordinarily paid businesses consumers yet discriminate products unconstitutional west lynn see also bacchus supra local protectionist laws similar one proves necessity allowing settled principles discrimination operate important national market seems proud say new york first enact protectionist exemption see ante simply underscores importance adhering rules state trade discrimination new york great financial capital likely trouble raising money bonds exemption might thought advantage respects exemption benefits wealthy allowing hoard capital otherwise might travel issuers offer competitive deal pretax dollars see blumstein intersections negative commerce clause new federalism case discriminatory state income tax treatment bonds vand rev wake one trade barrier retaliatory measures follow framers well knew widespread nature particular trade barriers illustrates standard dynamics politics economics demonstrating need avoid validating law somehow interests misapplying rationales controlling precedents invites erosion commerce clause must remain deterrent experiments designed serve local interests expense national system categorical approach seem allow discriminate government bonds ways nothing rationale justifying scheme stop kentucky taxing interest bonds high rate say simply give bonds advantage high tax rates designed make interests less attractive unheard cases see fulton today upholds scheme different kind patently unconstitutional schemes furthermore approach permit state condition treatment bonds reciprocal treatment another state see ante citing example utah reciprocal treatment tax utah bonds leading discrete market blocs constitution designed eliminate examples underscore objections already noted ii part opinion joined plurality analysis concludes differential taxation scheme sufficiently diluted regulatory scheme exception applies see ante needs little comment suffices note tax exemption sort direct state involvement market falls within doctrine camps newfound expansion exception unleashed majority open invitation enact kinds discriminatory laws laws today upheld even single instance taxation quintessential act regulation market participation see new energy clear ohio assessment computation fuel sales tax regardless whether produces subsidy plausibly analogized activity private purchaser even case state paradigmatic market participant owns asset downstream restrictions discriminate interstate commerce permitted see timber development wunnicke plurality opinion lthough state may participant timber market using leverage market exert regulatory effect processing market participant iii throughout argument concern law invalidated national market bonds disrupted see ante concern legitimate controlling rationale cast decision terms say needs sui generis exception noting interstate discrimination entrenched many considerable time rationale prompt statement disagreement matter principle economic consequences preferable decision misinterprets precedents instead today weakens preventative force commerce clause invites protectionist laws thus risking dislocations market inefficiencies based origin products commodities traded nationwide without local trade barriers reasons view judgment appeals kentucky affirmed department revenue kentucky et petitioners george davis et ux writ certiorari appeals kentucky may justice alito dissenting proceed case haulers solid waste management authority dissenting opinion assumption established dormant commerce clause precedents followed assumption entirely agree join justice kennedy dissent footnotes justice ginsburg joins part opinion specifically kentucky defines net income noncorporate taxpayers adjusted gross income minus certain deductions see rev stat ann adjusted gross income turn defined gross income minus deductions spelled internal revenue code elsewhere kentucky statutes see finally gross income meaning set internal revenue code see see also municipal bond commonly defined debt obligation state local government entity downes goodman dictionary finance investment terms ed use definition references municipal bonds thus include bonds issued political subdivisions argument raised one davises amici focuses conduit bonds subset municipal bonds used finance projects private entities bonds often always exempt kentucky scheme amici contend kentucky exemption bonds least plainly violates commerce clause see brief alan viard et al amici curiae argument however considered never pressed davises barely developed amici moreover tell certainty consequences holding kentucky violates commerce clause exempting bonds must assume disrupt important projects deemed public purposes accordingly best set argument aside leave another day claim differential treatment interest bonds evaluated differently treatment municipal bond interest generally exceptions derive federal exclusion see matter amount benefit municipal issuers approximated comparing interest rates municipal bonds treasury bonds also exempt state taxation subject federal taxation end borrowing costs municipal bonds average percent comparable federally taxable treasury securities end borrowing costs municipal bonds percent comparable treasury bonds brief national federation municipal analysts amicus curiae precise reduction interest rates depends federal state income tax rates credit rating issuer term bond market factors see reduction interest rates generally greater higher state income tax rates see federal government got game even earlier municipal bonds exempted every federal income tax act enacted since passage sixteenth amendment amdursky gillette figure includes kentucky schemes nearly identical kentucky see code rev stat ann west supp ark code ann supp cal rev tax code ann west rev stat ann stat del code tit code ann haw rev stat idaho code lexis stat ann cum supp la stat ann west supp rev stat tit supp md code ann lexis supp mass laws ch west comp laws ann west supp stat subd miss code ann supp mo rev stat supp mont code ann neb rev stat supp rev stat ann supp stat ann west stat ann tax law ann west stat ann lexis cent code ann lexis supp ohio rev code ann lexis supp rev stat stat tit purdon laws supp code ann code ann stat tit ii code ann lexis supp code ann lexis supp also includes four tax municipal bonds exempt municipal bonds see iowa code okla tit west supp stat compare comp ch west ch remaining utah exempts bonds extends reciprocal treatment bonds tax utah bonds see utah code ann lexis supp indiana exempts municipal bonds see ind code west balance personal income tax holding distinguished decision carbone clarkstown struck similar ordinance commerce clause grounds carbone ordinance however benefited private processing facility found difference constitutionally significant reasons adverted main text see haulers slip although carbone dissent argued private facility essentially municipal facility opinion souter haulers relied apparent view carbone majority facility properly characterized private see slip justice kennedy dissent hereinafter dissent says circular rationalization haulers acceptance governmental preference support public health safety welfare equivalent justifying law exercise police power thus exercise tautology since almost state law justified see post misunderstands said haulers point asking whether challenged governmental preference operated support traditional public function draw fine distinctions among governmental functions find whether preference benefit government fulfilling governmental obligations benefit private interests favored local haulers governmental public preference constitutionally different commercial private preference make governmental responsibility enquiry identify beneficiary one see supra haulers supra slip distinction enquiry traditional governmental activity aimed entails neither tautology hopeless effort pick choose among legitimate governmental activity led garcia san antonio metropolitan transit authority one two fundamental points difference dissenters rejection constitutional distinction public private preference see post dissenters thus carry battle fought haulers second fundamental difference goes realism legitimacy treating bond issuance tax provisions aggregated features single scheme public finance compare infra post see bond buyer apr describing bond issue grayson county public hospital district corporation see june describing bond issue todd county detention facility project see apr cols describing bond issue johnson county school district finance corporation contrary dissent see post suggest market issue discrete market kentucky bonds fact recognize relevant market conceived broadly see infra point goes contours market proper characterization various entities acting market dissent overlooks discussion claims contend kentucky compete municipal bond issuers see post dissent see post significantly market participant cases limited cases government supplies uniquely public product much manifest reeves stake nothing remarkable inherently governmental cement south dakota produced yet recognized state may engage clear discrimination buyers regular dormant commerce clause analysis undoubtedly held unconstitutional dissent criticizes analysis basis statement camps town harrison tax exemption sort direct state involvement market falls within doctrine see post misses point leaves language camps newfound shorn context camps newfound tax exemption unaccompanied market activity state favored private charitable institutions correctly rejected argument tax exemption without constitutes market participation occasion consider scheme state employs tax exemption facilitate participation market noted one dissent critical premises disaggregation bond issuance tax treatment see post strikes us denial economic reality dissent also suggests reasoning conflicts timber development wunnicke see post conflict alaska conditioned sale state timber private purchasers requiring timber processed within state prior export plurality struck condition commerce clause case turned plurality conclusion processing requirement constituted restrictio dispositions subsequent goods coming rest private hands see alaska requirement choice made purchaser buys timber state free take timber state prior processing kentucky imposes restrictions disposition kentucky bonds bond holders free sell bonds whomever please thus type downstream regulation found objectionable simply present note also expressly applied rigorous commerce clause scrutiny case involved foreign commerce restrictions resale natural resource neither elements appears see brief national federation municipal analysts amicus curiae hereinafter national federation brief mutual funds held approximately billion municipal bonds approximately billion held funds approximately billion national funds march approximately billion municipal bonds held national money market funds approximately billion single state money market funds citing investment company institute investment company fact book lipper analytical services fixed income fund performance analysis quarter report national federation brief pproximately municipal bonds owned mutual funds approximately municipal securities purchased without regard match state bond issuer state fund shareholders davises opposition petition explain tax exemptions removed open investment sales entire national market debt instruments brief opposition result davises say nce compete financial markets without protective benefit coercive tax schemes selective projects choose fund market provide incentives governments careful selecting funding projects bond sales history bears concern poorer places may harder time taking least types local investments see goldin katz shaping higher education formative years econ perspectives winter per capita spending public universities depended local wealth goldin america graduation high school evolution spread secondary schooling twentieth century econ hist likewise public high schools dissent thinks need preserve existing financing practices true controlling rationale holding post acknowledged justice holmes opinion shows practical consequences always relevant deciding constitutionality local tax laws practical considerations discussed support traditional distinction permissible public preferences forbidden discriminations benefit local private interests footnotes indeed kentucky increased taxes issuing bonds lieu increasing taxes kentucky enlarged interstate market securities well increased money available kentucky citizens partake market