delivered the opinion of the Court.†

South Carolina invokes the Court’s original jurisdiction1 and asks leave to file a complaint against Donald T. Regan, the Secretary of the Treasury of the United States. The State seeks an injunction and other relief, on the ground that § 103(j)(l) of the Internal Revenue Code of 1954, 26 U. S. C. §103(j)(l) (1982 ed.), as added by § 310(b)(1) of the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA), Pub. L. 97-248, 96 Stat. 596, is constitutionally invalid as violative of the Tenth Amendment and the doctrine of intergovernmental tax immunity.

The Secretary objects to the motion on the ground that the Anti-Injunction Act, 26 U. S. C. § 7421(a), bars this action2 and, alternatively, that the Court should exercise its discretion to deny leave to file. We are not persuaded that either is a ground for denying the motion, and therefore grant the motion for leave to file the complaint.

I — I

Section 103(a) of the Internal Revenue Code (IRC) exempts from a taxpayer’s gross income the interest earned on the obligations of any State.3 In 1982, however, as part of *371TEFRA, Congress amended § 103 to restrict the types of bonds that qualify for the tax exemption granted by that section. Specifically, § 310(b)(1) of TEFRA added a new provision, §103(j)(l), to the Code. Section 103(j)(l) requires that certain obligations, termed “registration-required obligation^],” be issued in registered,4 rather than bearer, form to qualify for the § 103(a) exemption.5 For purposes of § 103 (j)(l), registration-required obligations are defined broadly to include most publicly issued obligations with maturities greater than one year.6 If an obligation that is registration-required is issued in bearer, rather than registered, form, then § 103(j)(l) provides that the interest on that obligation is taxable.

Because the imposition of a tax on bearer bonds would require a State to pay its bondholders a higher rate of interest on such bonds, South Carolina argues that the practical effect of § 103(j)(l) is to require it to issue its obligations in registered form. For that reason, South Carolina argues that the *372section destroys its freedom to issue obligations in the form that it chooses. Viewing its borrowing power as essential to the maintenance of its separate and independent existence, South Carolina contends that the condition imposed by § 103 (j)(l) on the exercise of that power violates the Tenth Amendment. In addition, relying on Pollock v. Farmers’ Loan & Trust Co., 157 U. S. 429 (1895), South Carolina argues that Congress may not tax the interest earned on the obligations of a State. Because § 103(j)(l) imposes a tax on the interest earned on state obligations issued in bearer form, the State argues that the section is unconstitutional. Accordingly, South Carolina asks that its motion to file the complaint be granted and that this Court award declaratory, injunctive, and other appropriate relief.7

The Secretary does not address the merits of the State’s constitutional claims. Rather, he argues that we may not grant the motion to file because this action is barred by the Anti-Injunction Act. The Act provides, in pertinent part, that “no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person, whether or not such person is the person against whom such tax was assessed.”8 Characterizing this action as a suit to “restrain] the assessment or collection of” a tax, the Secretary contends that this suit is barred by the statute. The Secretary argues that Enochs v. Williams Packing & Navigation Co., 370 U. S. 1 (1962), establishes the single judicially created exception to the Act and that this action does not fall within that exception. We need not address *373whether this case falls within the Williams Packing exception for we hold that the Act was not intended to bar an action where, as here, Congress has not provided the plaintiff with an alternative legal way to challenge the validity of a tax.9

II

When enacted in 1867, the forerunner of the current Anti-Injunction Act provided that “no suit for the purpose of restraining the assessment or collection of tax shall be maintained in any court.” Act of Mar. 2,1867, § 10,14 Stat. 475.10 Although the Act apparently has no recorded legislative history, Bob Jones University v. Simon, 416 U. S. 725, 736 (1974), the circumstances of its enactment strongly suggest that Congress intended the Act to bar a suit only in situations in which Congress had provided the aggrieved party with an alternative legal avenue by which to contest the legality of a particular tax.

The Act originated as an amendment to a statute that provided that

“[n]o suit shall be maintained in any court for the recovery of any tax alleged to have been erroneously or illegally assessed or collected, until appeal shall have been duly made to the commissioner of internal revenue . . . and a decision of said commissioner shall be had thereon, unless such suit shall be brought within six months from the time of said decision . . . .” Internal Revenue Act of July 13, 1866, § 19, 14 Stat. 152.

The Anti-Injunction Act amended this statute by adding the prohibition against injunctions. Act of Mar. 2, 1867, § 10, 14 *374Stat. 475. The Act, therefore, prohibited injunctions in the context of a statutory scheme that provided an alternative remedy. As we explained in Snyder v. Marks, 109 U. S. 189, 193 (1883), “[t]he remedy of a suit to recover back the tax after it is paid is provided by statute, and a suit to restrain its collection is forbidden.” This is cogent evidence that the 1867 amendment was merely intended to require taxpayers to litigate their claims in a designated proceeding.

The Secretary argues that, regardless of whether other remedies are available, a plaintiff may only sue to restrain the collection of taxes if it satisfies the narrow exception to the Act enunciated in Williams Packing, supra. Williams Packing did not, however, ever address, let alone decide, the question whether the Act applies when Congress has provided no alternative remedy. Indeed, as we shall see, a careful reading of Williams Packing and its progeny supports our conclusion that the Act was not intended to apply in the absence of such a remedy.

Williams Packing was a taxpayer’s suit to enjoin the District Director of the Internal Revenue Service from collecting allegedly past-due social security and unemployment taxes. The Court concluded that the Anti-Injunction Act would not apply if the taxpayer (1) was certain to succeed on the merits, and (2) could demonstrate that collection would cause him irreparable harm. 370 U. S., at 6-7. Finding that the first condition had not been met, the Court concluded that the Act barred the suit. Significantly, however, Congress had provided the plaintiff in Williams Packing with the alternative remedy of a suit for a refund. Id., at 7.

In each of this Court’s subsequent cases that have applied the Williams Packing rule, the plaintiff had the option of paying the tax and bringing a suit for a refund. Moreover, these cases make clear that the Court in Williams Packing and its progeny did not intend to decide whether the Act would apply to an aggrieved party who could not bring a suit for a refund.

*375For example, in Bob Jones, supra, the taxpayer sought to prevent the Service from revoking its tax-exempt status under IRC § 501(c)(3). Because the suit would have restrained the collection of income taxes from the taxpayer and its contributors, as well as the collection of federal social security and unemployment taxes from the taxpayer, the Court concluded that the suit was an action to restrain “the assessment or collection of any tax” within the meaning of the Anti-Injunction Act. 416 U. S., at 738-739. Applying the Williams Packing test, the Court found that the Act barred the suit because the taxpayer failed to demonstrate that it was certain to succeed on the merits. 416 U. S., at 749. In rejecting the taxpayer’s challenge to the Act on due process grounds, however, the Court relied on the availability of a refund suit, noting that “our conclusion might well be different” if the aggrieved party had no access to judicial review. Id., at 746. Similarly, the Court left open the question whether the Due Process Clause would be satisfied if an organization had to rely on a “friendly donor” to obtain judicial review of the Service’s revocation of its tax exemption. Id., at 747, n. 21.11

In addition, in Alexander v. “Americans United” Inc., 416 U. S. 752 (1974), decided the same day as Bob Jones, the Court considered a taxpayer’s action to require the Service to reinstate its tax-exempt status.12 The Court applied the Williams Packing test and held that the action was barred *376by the Act. Finally, in United States v. American Friends Service Committee, 419 U. S. 7 (1974) (per curiam), the taxpayers sought to enjoin the Government from requiring that a portion of their wages be withheld. The taxpayers argued that the withholding provisions violated their First Amendment right to bear witness to their religious beliefs. The Court again applied the Williams Packing rule and found that the suit was barred by the Anti-Injunction Act. In both of these cases, the taxpayers argued that the Williams Packing test was irrelevant and the Act inapplicable because they did not have adequate alternative remedies. In rejecting this argument, the Court expressly relied on the availability of refund suits. 416 U. S., at 761; 419 U. S., at 11. This emphasis on alternative remedies would have been irrelevant had the Court meant to decide that the Act applied in the absence of such remedies. We therefore turn to that question.

The analysis in Williams Packing and its progeny of the purposes of the Act provides significant support for our holding today. Williams Packing expressly stated that the Act was intended to protect tax revenues from judicial interference “and to require that the legal right to the disputed sums be determined in a suit for refund.” 370 U. S., at 7 (emphasis added). Similarly, the Court concluded that the Act was also designed as “protection of the collector from litigation pending a suit for refund,” id., at 7-8 (emphasis added). The Court’s concerns with protecting the expeditious collection of revenue and protecting the collector from litigation were expressed in the context of a procedure that afforded the taxpayer the remedy of a refund suit.13

Nor is our conclusion inconsistent with the 1966 amendment to the Anti-Injunction Act. In 1966, in § 110(c) of the Federal Tax Lien Act, Pub. L. 89-719, 80 Stat. 1144, Congress amended the Anti-Injunction Act to read, in pertinent *377part, that “no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person, whether or not such person is the person against whom such tax was assessed.” Ibid. The central focus of the added phrase, “by any person, whether or not such person is the person against whom such tax was assessed,” was on third parties whose property rights competed with federal tax liens. Bob Jones, 416 U. S., at 732, n. 6. Prior to the adoption of the Tax Lien Act, such parties were often unable to protect their property interests. Ibid.; H. R. Rep. No. 1884, 89th Cong., 2d Sess., 27-28 (1966).14 Section 110(a) of the Tax Lien Act gave such third parties a right of action against the United States.15 The amendment to the Anti-Injunction Act was primarily designed to insure that the right of action granted by § 110(a) of the Federal Tax Lien Act was exclusive. 416 U. S., at 732, n. 6. The language added to the Anti-Injunction Act by the 1966 amendment is, therefore, largely irrelevant to the issue before us today.16

*378In sum, the Anti-Injunction Act’s purpose and the circumstances of its enactment indicate that Congress did not intend the Act to apply to actions brought by aggrieved parties for whom it has not provided an alternative remedy.17 In this *379case, if the plaintiff South Carolina issues bearer bonds, its bondholders will, by virtue of § 103(j)(l), be liable for the tax on the interest earned on those bonds. South Carolina will *380incur no tax liability. Under these circumstances, the State will be unable to utilize any statutory procedure to contest the constitutionality of § 103(j)(l). Accordingly, the Act cannot bar this action.

The Secretary suggests that the State may obtain judicial review of its claims by issuing bearer bonds and urging a purchaser of those bonds to bring a suit contesting the legality of § 103(j)(l). But the nature of this proposed remedy only buttresses our conclusion that the Act was not intended to apply to this kind of action. First, instances in which a third party may raise the constitutional rights of another are the exception rather than the rule. Singleton v. Wulff, 428 U. S. 106, 114 (1976). More important, to make use of this remedy the State “must first be able to find [an individual] willing to subject himself to the rigors of litigation against the Service, and then must rely on [him] to present the relevant arguments on [its] behalf.” Bob Jones, 416 U. S., at 747, n. 21. Because it is by no means certain that the State would be able to convince a taxpayer to raise its claims,18 reliance on the remedy suggested by the Secretary would create *381the risk that the Anti-Injunction Act would entirely deprive the State of any opportunity to obtain review of its claims. For these reasons, we should not lightly attribute to Congress an intent to require plaintiff to find a third party to contest its claims. Here, the indicia of congressional intent — the Act’s purposes and the circumstances of its enactment — demonstrate that Congress did not intend the Act to apply where an aggrieved party would be required to depend on the mere possibility of persuading a third party to assert his claims. Rather, the Act was intended to apply only when Congress has provided an alternative avenue for an aggrieved party to litigate its claims on its own behalf.19 Because Congress did not prescribe an alternative remedy for the plaintiff in this case, the Act does not bar this suit.

I — I HH 1 — I

The Secretary argues that if we conclude that the Anti-Injunction Act is not a bar to this suit, we should in any event exercise our discretion to deny leave to file. He notes that the Court’s jurisdiction over this suit is not exclusive and that the Court exercises its “original jurisdiction sparingly and [is] particularly reluctant to take jurisdiction of a suit where the *382plaintiff has another adequate forum in which to settle his claim.” United States v. Nevada, 412 U. S. 534, 538 (1973) (per curiam). The State has, however, alleged that the application of § 103(j)(1) will “materially interfere with and infringe upon the authority of South Carolina to borrow funds.” Motion for Leave to File Complaint 16; see supra, at 371-372. Additionally, 24 States have jointly submitted an amicus ' brief urging this Court to grant the motion to file. Unquestionably, the manner in which a State may exercise its borrowing power is a question that is of vital importance to all 50 States. Under these circumstances, we believe that it is appropriate for us to exercise our discretion in favor of hearing this case. At present, however, the record is not sufficiently developed to permit us to address the merits. We shall therefore appoint a Special Master to develop the record.

Accordingly, plaintiff’s motion for leave to file a complaint is granted and a Special Master will be appointed.

It is so ordered.

concurring in the judgment.

I, too, agree with all those who have written opinions in this case that the Anti-Injunction Act, 26 U. S. C. § 7421(a), is no bar to the ability of the State of South Carolina to invoke the original jurisdiction of this Court in order to challenge the validity of a federal tax statute. Like Justice O’Connor, I have reservations about the breadth of the approach taken by Justice Brennan in determining that Congress did not intend the Act to apply in any case in which the aggrieved party has no alternative avenue by which to contest the legality of a particular tax.

In Bob Jones University v. Simon, 416 U. S. 725 (1974), the Court stressed the broad sweep of the Anti-Injunction Act. The Court noted that the language added in 1966, prohibiting any suit for the purpose of restraining the assessment or collection of any tax “by any person, whether or not such person is the person against whom such tax was assessed,” see § 110(c) of the Federal Tax Lien Act of 1966, *383Pub. L. 89-719, 80 Stat. 1144, was intended as a “reaffirmation of the plain meaning” of the Act as it had stood since 1867. See 416 U. S., at 731-732, n. 6. See also Alexander v. “Americans United” Inc., 416 U. S. 752, 760, n. 11 (1974). The Court in Bob Jones rejected the petitioner’s efforts to rely on exceptions to the reach of the Act suggested in the 1930’s for situations in which there is no adequate remedy short of a suit to enjoin the challenged tax. See 416 U. S., at 744. Because it concluded that the plaintiffs in Bob Jones and “Americans United” had access to judicial forums in which to challenge the alleged deprivations of their property, the Court did not need to decide whether and under what circumstances its broad reading of the Anti-Injunction Act might deny an aggrieved party due process of law. 416 U. S., at 746.

Unlike Justice O’Connor, I see no need to decide whether Congress intended the Anti-Injunction Act to apply to suits invoking this Court’s original jurisdiction. I would decide this case on the narrower ground set forth in my dissenting opinion in “Americans United,” 416 U. S., at 763. I there expressed concern that the Court was overlooking a necessary first step in applying the Anti-Injunction Act, that is, the determination whether the litigation is a “ ‘suit for the purpose of restraining’” any tax. Id., at 767, quoting 26 U. S. C. § 7421(a). Here, as in “Americans United,” there can be no serious argument that the disposition of South Carolina’s claim will have much effect, if any at all, upon federal tax revenues. If South Carolina loses, it will register its securities.* If it wins, it will continue to issue unregistered *384securities. In either event, the Federal Government will receive no more tax revenues from purchasers of such securities than it has enjoyed since Pollock v. Farmers’ Loan & Trust Co., 157 U. S. 429, was decided in 1895.

The acknowledged purpose of Congress in enacting §310 (b)(1) of TEFRA ip 1982 so as to add a new § 103(j) to the Internal Revenue Code of 1954 was to encourage the States to issue securities in registered form. See Staff of Joint Committee on Taxation, General Explanation of the Revenue Provisions of the Tax Equity and Fiscal Responsibility Act of 1982, 97th Cong., 2d Sess., 190 (Comm. Print 1982). In a case such as this, where it is evident that the challenged governmental action is one to “accomplish a broad-based policy objective” rather than to produce revenue, see “Americans United,” 416 U. S., at 771 (dissenting opinion), and the disposition of the challenge will have no effect on federal revenues, I conclude that the suit is not one “for the purpose of restraining the assessment or collection of any tax,” within the words of § 7421(a).

Although I would not hold the Anti-Injunction Act to be a bar to South Carolina’s ability to bring this suit in another court, I agree that we should hear this case. Exercise of our original jurisdiction is discretionary and, though the Court has exercised it sparingly, we are not prohibited from doing so by the fact that the original party may have an alternative forum. See Georgia v. Pennsylvania R. Co., 324 U. S. 439, 465 (1945). The issue presented is a substantial one, and is of concern to a number of States. I am satisfied that prompt resolution of the issue here will benefit all concerned and that the decision to grant leave to file is a proper exercise of our discretion.

with whom Justice Powell, and Justice Rehnquist join, concurring in the judgment.

The motion of South Carolina for leave to file a complaint in our original jurisdiction raises three questions. First, the Court must decide whether Congress intended by the *385Tax Anti-Injunction Act, 26 U. S. C. § 7421(a), to bar non-taxpayers like the State of South Carolina from challenging the validity of federal tax statutes in the courts. Second, if the Act generally does bar such nontaxpayer suits, the Court must decide whether Congress intended, and if so whether the Constitution permits it, to bar us from considering South Carolina’s complaint in our original jurisdiction. Third, if Congress either did not intend or constitutionally is not permitted to withdraw this case from our original jurisdiction, the Court must decide whether South Carolina’s challenge to the constitutionality of §103(j)(l) of the Internal Revenue Code of 1954, 26 U. S. C. § 103(j)(l) (1982 ed.), as added by § 310(b)(1) of the Tax Equity and Fiscal Responsibility Act of 1982, Pub. L. 97-248, 96 Stat. 596, raises issues appropriate for original adjudication.

In answering the first question, the Court reaches the unwarranted conclusion that the Tax Anti-Injunction Act proscribes only those suits in which the complaining party, usually a taxpayer, can challenge the validity of a taxing measure in an alternative forum. The Court holds that suits by nontaxpayers generally are not barred. In my opinion, the Court’s interpretation fundamentally misconstrues the congressional anti-injunction policy. Accordingly, I cannot join its opinion.

I

A

The Tax Anti-Injunction Act provides, in pertinent part, that “no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person, whether or not such person is the person against whom such tax was assessed.” 26 U. S. C. § 7421(a). The Act’s language “could scarcely be more explicit” in prohibiting nontaxpayer suits like this one, Bob Jones University v. Simon, 416 U. S. 725, 736 (1974), since the suit indisputably would have the purpose and effect of restraining taxes. See id., at 738-742. The Act plainly bars not only “a taxpayer’s *386attempt to enjoin the collection of his own taxes, ...” but also “a suit to enjoin the assessment or collection of anyon[e] [else’s] taxes . . . .” Alexander v. “Americans United” Inc., 416 U. S. 752, 760 (1974). Though the Internal Revenue Code (Code) contains a few exceptions to this nearly complete ban,1 for the most part Congress has restricted the judicial role to resolution of concrete disputes over specific sums of money, either by way of a deficiency proceeding in the Tax Court, see 26 U. S. C. §§6212, 6213, or by way of a taxpayer’s suit for refund, see 26 U. S. C. §§6532, 7422.

In depriving courts of jurisdiction to resolve abstract tax controversies, Congress has determined that the United States must be able “to assess and collect taxes alleged to be due without judicial intervention . . . .” Enochs v. Williams Packing & Navigation Co., 370. U. S. 1, 7 (1962). “[T]axes are the life-blood of government,” Bull v. United States, 295 U. S. 247, 259 (1935), and the anti-injunction prohibition is Congress’ recognition that “the tenacity of the American taxpayer” constantly threatens to drain the Nation of a life-sustaining infusion of revenues. See Gorovitz, Federal Tax Injunctions and the Standard Nut Cases, 10 Taxes 446, 446 (1932). The Act’s proscription literally extends to nontaxpayer as well as taxpayer suits, if only to prevent taxpayers from sidestepping the anti-injunction policy by bringing suit through nontaxpaying associations of taxpayers.2 *387Moreover, by broadly precluding both taxpayer and nontax-payer suits, the Act serves a collateral objective of protecting “the collector from litigation pending a suit for refund.” Enochs v. Williams Packing & Navigation Co., supra, at 7-8. The tax collector is an attractive target for all kinds of litigation, see, e. g., Simon v. Eastern Kentucky Welfare Rights Organization, 426 U. S. 26 (1976), and the Act ensures that only Congress and the Treasury, not a host of private plaintiffs, will determine the focus of the collector’s energies.

B

The Act’s history expressly reflects the congressional desire that all injunctive suits against the tax collector be prohibited. First enacted in 1867,3 it apparently was designed to protect the federal tax system from being inundated with the same type of injunctive suits that were then sweeping over the state tax systems. See State Railroad Tax Cases, 92 U. S. 575, 613 (1876); Snyder v. Marks, 109 U. S. 189, 193-194 (1883). There is little contemporaneous documentation,4 but this Court’s decisions indicate that the 39th Congress acted with a

“. . . sense of. . . the evils to be feared if courts of justice could, in any case, interfere with the process of collect*388ing the taxes on which the government depends for its continued existence.” State Railroad Tax Cases, supra, at 613.

The experience in the States demonstrated the grave dangers which accompany intrusion of the injunctive power of the courts into the administration of the revenue:

“If there existed in the courts . . . any general power of impeding or controlling the collection of taxes, or relieving the hardship incident to taxation, the very existence of the government might be placed in the power of a hostile judiciary.” Cheatham v. United States, 92 U. S. 85, 89 (1876).

To avoid these evils and to safeguard the federal tax system, the 39th Congress committed administration of the Code to the discretion of the Secretary of the Treasury.5

This broad anti-injunction ban remained essentially untouched for almost a century.6 In 1966, however, Congress *389took steps to “reaffirm] the plain meaning of the original language of the Act.” Alexander v. “Americans United” Inc., 416 U. S., at 760, and n. 11. In § 110(c) of the Federal Tax Lien Act, Pub. L. 89-719, 80 Stat. 1144, Congress amended the Act to emphasize that no injunctive action “by any person, whether or not such person is the person against whom such tax was assessed” could be maintained in the courts. Ibid, (emphasis added). The Treasury Department proposed the 1966 amendment, and its principal spokesperson, Assistant Secretary Surrey, testified:

“Subsection (c) of section 110 of the bill amends section 7421(a) of the code. That section presently prohibits injunctions against the assessment or collection of tax. The cases decided under this provision raise a question as to whether this prohibition applies against actions by persons other than the taxpayer. New section 7426 will specifically allow actions by third parties to enjoin the enforcement of a levy or sale of property. The amendment to section 7421 makes clear that third parties may bring injunction suits only under the circumstances provided in new section 7426(b)(1) of the code.” Statement by the Hon. Stanley S. Surrey, Assistant Secretary of the Treasury, reprinted in Hearings on H. R. 11256 and H. R. 11290, before the House Committee on Ways and Means, 89th Cong., 2d Sess., 58 (1966).

The House Committee on Ways and Means and the Senate Committee on Finance apparently shared Mr. Surrey’s understanding of the rights of nontaxpayers under prior law, for their Reports both state:

“Under present law, . . . the United States cannot be sued by third persons where its collection activities interfere with their property rights. This includes cases where the Government wrongfully levies on one person’s property in attempting to collect from a taxpayer. However, some courts allow suits to be brought against *390district directors of Internal Revenue where this occurs.” H. R. Rep. No. 1884, 89th Cong., 2d Sess., 27 (1966); S. Rep. No. 1708, 89th Cong., 2d Sess., 29 (1966).

To accommodate these conflicting rights, both Committees recommended that Congress enact § 7426, allowing “persons other than taxpayers” to bring suits against the United States to protect pre-existing liens on property levied upon by the Treasury, and amend § 7421(a) to forbid suits by all third persons, excepting those within the ambit of new §7426. Congress followed the Committees’ recommendations, on the understanding that the new language in § 7421(a) was “declaratory, not innovative.” Bob Jones University v. Simon, 416 U. S., at 731-732, n. 6.7

Congress has since relaxed the statutory proscription against third-party suits on several occasions. For example, in 1974, it provided that certain designated persons could obtain declaratory judgments in the Tax Court with respect to the tax status of pension plans. See 26 U. S. C. §7476. Similarly, in 1976, because “[u]nder [prevailing] law no court review of [Internal Revenue Service] rulingfs] [was] available,” H. R. Conf. Rep. No. 94-1515, p. 463 (1976), Congress provided declaratory judgment procedures for determining the tax status of charitable organizations and of certain property transfers. See 26 U. S. C. §§ 7428, 7477; see also H. R. Conf. Rep. No. 94-1515, supra, at 523-524 (“Under present *391law, the Tax Court can hear declaratory judgment suits only on the tax status of employee retirement plans. In no other case may an individual or an organization seek a declaratory judgment as to an organization’s tax-exempt status”). Finally, in 1978, in 26 U. S. C. §7478 (1982 ed.), Congress provided a mechanism whereby state or local governments could seek declaratory judgments as to the tax status of proposed municipal bond issuances.8 The relevant Senate Report noted:

“As a practical matter, there is no effective appeal from a Service private letter ruling (or failure to issue a private letter ruling) that a proposed issue of municipal bonds is taxable. In those cases, although there may be a real controversy between a State or local government and the Service, present law does not allow the State or local government to go to court. The controversy can be resolved only if the bonds are issued, a bondholder excludes interest on the bonds from income, the exclusion is disallowed, and the Service asserts a deficiency in its statutory notice of deficiency. This uncertainty coupled with the threat of the ultimate loss of the exclusion, invariably makes it impossible to market the bonds. In addition, it is impossible for a State or local government to question the Service rulings and regulations directly.

“[Sjtate and local governments] should have a right to court adjudication in the situation described above. The bill deals with the problem by providing ... for a declaratory judgment as to the tax status of a pro*392posed issue of municipal bonds.” S. Rep. No. 95-1263, pp. 150-151 (1978).

The Conference Report reflects a similar view of prevailing law. See H. R. Conf. Rep. No. 95-1800, p. 240 (1978). Thus, in 1974, 1976, and again in 1978, Congress expressed its belief that the Tax Anti-Injunction Act generally bars nontaxpayers from bringing the kind of injunctive action the State of South Carolina asks leave to file today.9

These subsequently enacted provisions and the legislative understanding of them are entitled to “great weight” in construing earlier, related legislation. See, e. g., Red Lion Broadcasting Co. v. FCC, 395 U. S. 367, 380-381 (1969); FHA v. The Darlington, Inc., 358 U. S. 84, 90 (1958). Combined with the legislative purposes obviously motivating the 39th and 89th Congresses, these provisions conclusively demonstrate that, absent express exemption, the Act generally precludes judicial resolution of all abstract tax controversies, even if the complaining parties would have no other forum in which to bring their challenges.

C

The Court drew these same conclusions in Bob Jones University v. Simon. See 416 U. S., at 736-746. In that case, the Court rejected a private institution’s request that an additional exception beyond the one created in Enochs v. Williams Packing & Navigation Co., 370 U. S. 1 (1962) (equity court may issue injunction where it is clear that under no cir*393cumstances could the Government prevail), be carved out of the Act.10 The Court responded that Williams Packing

“was meant to be the capstone to judicial construction of the Act. It spells an end to a cyclical pattern of allegiance to the plain meaning of the Act, followed by periods of uncertainty caused by a judicial departure from that meaning, and followed in turn by the Court’s rediscovery of the Act’s purpose.” 416 U. S., at 742.

Bob Jones University then reaffirmed that, except where a litigant can show both that the Government would “under no circumstances . . . prevail” and that equity jurisdiction is otherwise present, the Act would be given its “literal effect.” Id., at 737, 742-745.

Because the plaintiffs in Bob Jones University were assured ultimately of having access to a judicial forum, the Court did not definitively resolve whether Congress could bar a tax suit in which the complaining party would be denied all access to judicial review. See id., at 746. But the Court’s reference to “a case in which an aggrieved party has no access at all to judicial review” came in the context of its discussion of the taxpayer’s claim that postponement of its challenge to the revocation of its tax-exempt status would violate due process. Bob Jones University’s dictum, therefore, should be interpreted only as reflecting the established rule that Congress cannot, consistently with due process, deny a taxpayer with property rights at stake all opportunity for an ultimate judicial determination of the legality of a tax assessment against him. See Phillips v. Commissioner, 283 U. S. 589, 596-597 (1931).

*394On this reading, Bob Jones University’s recognition that the complete inaccessability of judicial review might implicate due process concerns provides absolutely no basis for crafting an exception in this case. The State of South Carolina is not a “person” within the meaning of the Due Process Clause. See South Carolina v. Katzenbach, 383 U. S. 301, 323-324 (1966). Nor does the State assert a right cognizable as a “property” interest protected by that Clause. See generally Logan v. Zimmerman Brush Co., 456 U. S. 422, 430-433 (1982) (cataloging cases). Therefore, it has no due process right to review of its claim in a judicial forum.11

In holding that the Act does not bar suits by nontax-payers with no other remedies, the Court today has created a “breach in the general scheme of taxation [that] gives an opening for the disorganization of the whole plan . . . .” Allen v. Regents of University System of Ga., 304 U. S. 439, 454 (1938) (Reed, J., concurring in result). Non-taxpaying associations of taxpayers, and most other non-taxpayers, will now be allowed to sidestep Congress’ policy against judicial resolution of abstract tax controversies. They can now challenge both Congress’ tax statutes and the Internal Revenue Service’s regulations, Revenue Rulings, and private letter decisions. In doing so, they can impede *395the process of collecting federal revenues and require Treasury to focus its energies on questions deemed important not by it or Congress but by a host of private plaintiffs. The Court’s holding travels “a long way down the road to the emasculation of the Anti-Injunction Act, and down the companion pathway that leads to the blunting of the strict requirements of Williams Packing . . . .” Commissioner v. Shapiro, 424 U. S. 614, 635 (1976) (Blackmun, J., dissenting). I simply cannot join such a fundamental undermining of the congressional purpose.

I — I ( — I

The Act s language, purpose, and history should leave no doubt that Congress intended to preclude both taxpayer and nontaxpayer suits, regardless of the availability of an alternative forum. The Solicitor General agrees and contends that, since the anti-injunction prohibition extends to “any court,” it should be read to bar this Court from acting in its original jurisdiction as well. The Solicitor General’s contention raises a grave constitutional question: namely, whether Congress constitutionally can impose remedial limitations so jurisdictional in nature that they effectively withdraw the original jurisdiction of this Court.

A

Under the language used in Art. Ill of the Constitution, Congress relates to the courts of the United States in three textually different ways.12 In its broadest textual delegation, *396that Article authorizes Congress to establish the “inferior Courts” and places no express limits on the congressional power to regulate the courts so created. See U. S. Const., Art. Ill, § 1, cl. 1. By contrast, that Article itself creates the Supreme Court and textually differentiates between Congress’ relationship with the appellate and original jurisdictions of that Court. Article III expressly empowers Congress to make “Exceptions” and “Regulations” to the appellate jurisdiction. U. S. Const., Art. Ill, §2, cl. 2; Ex parte McCardle, 7 Wall. 506 (1869) (dismissing for want of appellate jurisdiction). But, in what is effectively its narrowest delegation, Art. Ill is silent regarding Congress’ authority to make exceptions to or regulations regarding cases in the original jurisdiction — those that affect “Ambassadors, other public Ministers and Consuls, and those in which a State shall be Party.” Ibid.

Though the original history of Art. Ill is sparse,13 what is available indicates that these textual differences were purposeful on the Framers’ part. The Framers obviously thought that the National Government should have a judicial system of its own and that that system should have a Supreme Court. However, because the Framers believed the state courts would be adequate for resolving most disputes, they generally left Congress the power of determining what cases, if any, should be channelled to the federal courts. The one textual exception to that rule concerned the original jurisdiction, where the Framers apparently mandated that Supreme Court review be available. “The evident purpose *397was to open and keep open the highest court of the nation for the determination, in the first instance, of suits involving a State or a diplomatic or commercial representative of a foreign government.” Ames v. Kansas, 111 U. S. 449, 464 (1884). The Framers apparently thought that “[s]o much was due . . . the rank and dignity of those for whom the provision was made . . . .” Ibid.; see also The Federalist No. 81, pp. 507-509 (H. Lodge ed. 1888) (A. Hamilton). Perhaps more importantly, the Framers also thought that the original jurisdiction was a necessary substitute for the powers of war and diplomacy that these sovereigns previously had relied upon. See Georgia v. Pennsylvania R. Co., 324 U. S. 439, 450 (1945); United States v. Texas, 143 U. S. 621, 641 (1892). “The Supreme Court [was] given higher standing than any known tribunal, both by the. nature of its rights and the categories subject to its jurisdiction,” A. de Tocqueville, Democracy in America 149 (J. Mayer ed. 1969) (emphasis in original), precisely to keep sovereign nations and States from using force “to rebuff the exaggerated pretensions of the Union . . . .” Id., at 150.

Our cases have long paid tribute to the foreign sovereignty and federalism concerns forming the basis of the original jurisdiction. See Ames v. Kansas, supra, at 464-465; Maryland v. Louisiana, 451 U. S. 725, 743 (1981). Out of respect for these concerns, the Court has held that Congress is without power to add parties not within the initial grant of original jurisdiction, see Marbury v. Madison, 1 Cranch 137, 174 (1803), and has indicated, in dicta, that Congress may not withdraw that jurisdiction either. See, e. g., California v. Arizona, 440 U. S. 59, 65-66 (1979); California v. Southern Pacific Co., 157 U. S. 229, 261 (1895); Wisconsin v. Pelican Insurance Co., 127 U. S. 265, 300 (1888); Ames v. Kansas, supra, at 464; Martin v. Hunter’s Lessee, 1 Wheat. 304, 332 (1816); Marbury v. Madison, supra, at 174. Enlarging the original jurisdiction would require the sovereigns for whom the provision was made to compete with other, less dignified, *398parties for the Court’s limited time and resources; diminishing the original jurisdiction possibly would leave those sovereigns without an acceptable alternative to diplomacy and war for settling disputes.

To be sure, the Tax Anti-Injunction Act does not expressly withdraw the original jurisdiction of this Court. Rather, it merely prohibits “any court” from “maintain[ing]” a suit that has “the purpose of restraining the assessment or collection” of federal taxes. See 26 U. S. C. § 7421(a). The effect of this prohibition, however, is to preclude this Court ever from assuming original jurisdiction to adjudicate a State qua State’s Tenth and Sixteenth Amendment tax claims, in apparent derogation of the grant’s constitutional purpose.14 While “Congress has broad powers over the jurisdiction of the federal courts and over the sovereign immunity of the United States[,] it is extremely doubtful that they include the power to limit in this manner the original jurisdiction conferred upon this Court by the Constitution.” California v. Arizona, 440 U. S., at 66.

B

Nevertheless, it is this Court’s longstanding practice to avoid resolution of constitutional questions except when absolutely necessary. Ibid. “When the validity of an act of the Congress is drawn in question, and even if a serious doubt of constitutionality is raised, it is a cardinal principle that this Court will first ascertain whether a construction of the statute is fairly possible by which the question may be *399avoided.” Crowell v. Benson, 285 U. S. 22, 62 (1932). Such a construction is possible in this case.

The manifest purpose of the Tax Anti-Injunction Act is simply to permit the United States to assess and collect taxes without undue judicial interference and to require that legal challenges be raised in certain designated forums. The language and history of the Act evidence a congressional desire generally to bar both taxpayer and nontaxpayer suits, since both can substantially interrupt “the process of collecting the taxes on which the government depends for its continued existence” if left uncontrolled. State Railroad Tax Cases, 92 U. S., at 613. Similarly, the language and history evidence a congressional desire to prohibit courts from restraining any aspect of the tax laws’ administration, since the prohibition against injunctions should not depend upon the alleged legality or character of a particular assessment. See Snyder v. Marks, 109 U. S., at 192-194. Yet the statute was enacted against a settled history in which foreign and state sovereigns had a unique right to seek refuge in the original jurisdiction of this Court. Nothing in the legislative history of the Act of 1867, of the later amendments, or of the related declaratory judgment provisions enacted in 1974, 1976, or 1978, mentions any intent to alter these sovereign parties’ unique right occasionally to seek injunctive relief by original action in this Court, even with regard to tax matters.

Admittedly, the Act precludes “any court” from maintaining a suit initiated for the purpose of restraining the assessment or collection of federal taxes. See 26 U. S. C. § 7421(a). That language clearly instructs all courts that Congress constitutionally controls not to prematurely interfere with the assessment and collection of federal taxes. That language does not, however, necessarily encompass this Court, which Congress did not create and which Congress is not expressly empowered to make “Exceptions” or “Regulations” as to its original jurisdiction. Moreover, since only a small number of pre-enforcement suits could conceivably involve a party for whom the original jurisdiction was created, *400there is no reason to believe that Congress would want to have the constitutionality of its anti-injunction policy placed into question.15 Given this de minimis effect and the absence of express congressional intent to the contrary, I would conclude that the Act’s reference to “any court” means to assure that all state, as well as federal, courts are subject to the anti-injunction prohibition. Such an interpretation gives meaning to the Act and avoids a grave constitutional question.16

Ill

Interpreting the Tax Anti-Injunction Act to bar both taxpayer and nontaxpayer claims in “any court” but this Court requires a determination whether this case is “appropriate” for the Court’s obligatory original jurisdiction. Illinois v. City of Milwaukee, 406 U. S. 91, 93 (1972). “[Although it may initially have been contemplated that this Court would always exercise its original jurisdiction when properly called upon to do so,” Ohio v. Wyandotte Chemicals Corp., 401 U. S. 493, 497 (1971), our cases recognize “the need [for] exercise of a sound discretion in order to protect this Court from an abuse of the opportunity to resort to its original jurisdiction . . . .” Massachusetts v. Missouri, 308 U. S. 1, 19 (1939). An original party establishes that a case is “appropriate” for obligatory jurisdiction by demonstrating, through “clear and convincing evidence,” that it has suffered an injury *401of “serious magnitude,” see New York v. New Jersey, 256 U. S. 296, 309 (1921); see also Alabama v. Arizona, 291 U. S. 286, 292 (1934), and that it otherwise will be without an alternative forum. Maryland v. Louisiana, 451 U. S., at 740; Illinois v. City of Milwaukee, supra, at 93. The State of South Carolina’s motion for leave to file satisfies, albeit by the barest of margins, both of these tests.17

The State has demonstrated injury of “serious magnitude.” It contends, and provides uncontroverted affidavits to support, that application of § 103(j)(l) will “materially interfere with and infringe upon the authority of South Carolina to borrow funds.” Complaint 16. The authority the State claims has significant historical basis, see Pollock v. Farmers’ Loan & Trust Co., 157 U. S. 429 (1895), and the injury the State alleges could deprive it of a meaningful political choice. See Colorado v. Kansas, 320 U. S. 383, 393, and n. 8 (1943). Twenty-four States have filed a joint brief amici curiae in support of South Carolina’s motion, which further attests to the “serious magnitude” of the federalism concerns at issue.

Similarly, the State qua State has demonstrated that it has no adequate alternative forum in which to raise its unique Tenth and Sixteenth Amendment claims. See Maryland v. Lousiana, supra, at 743, and n. 19. If the State issues bearer bonds and urges its purchasers to contest the legality of § 103(j)(l), it will suffer irremedial injury. The purchasers will inevitably demand higher interest rates as compensation for bearing the risk of future potential federal taxes. Conversely, if the State forsakes bearer bonds in favor of registered ones, it will bear the increased expense that issuers of registered bonds incur, and it will be unable ever to contest the constitutionality of § 103(j)(l). In short, the State will *402suffer irremedial injury if the Court does not assume original jurisdiction.

Therefore, although great deference is due the longstanding congressional policy against premature judicial interference with federal taxes, I believe it is proper to exercise the Court’s original jurisdiction under these unique circumstances. I emphasize both the unique circumstances of this case and the congressional policy against premature judicial interference because original litigants should not be misled into believing that this Court will become a haven for suits that cannot be entertained in lower courts with concurrent jurisdiction. The original jurisdiction is not a forum for litigating everyday tax concerns. Rather, it must be “sparingly” invoked. United States v. Nevada, 412 U. S. 534, 538 (1973). Moreover, the legislative policy against premature judicial interference embodied in the Act must be paid the highest deference by this Court. Thus, where the original party does not present a clear and convincing case that the tax at issue will impair its ability to structure integral operations of its government and that irremedial injury is likely to occur absent review in the original jurisdiction, I would defer to the legislative directive against premature judicial interference.18 But since South Carolina’s claims meet these stringent requirements, its motion for leave to file should be granted.

IV

I agree with the Court that the record is not sufficiently developed to permit us to address the merits and that a Special Master should be appointed. But I do not share its view *403that the Tax Anti-Injunction Act applies only when Congress has provided an alternative avenue for a complaining party— one with original status or not — to litigate claims on its own behalf. That view is not, in my opinion, based on any fair or even tenable canon of statutory construction, and cannot be reconciled with express statements of congressional intent and purpose. Accordingly, I can concur only in the Court’s judgment.

concurring in part and dissenting in part.

While I join Parts I and II of the Court’s opinion, I disagree with Part III. The Solicitor General has persuaded me that the Court should exercise its discretion to deny leave to file this complaint. We should do so not only because the proceeding can be conducted more expeditiously in another forum,1 but also because it is so plain that even if we read the complaint liberally in favor of the State of South Carolina, there is simply no merit to the claim the State has advanced. I do not believe the Court does a sovereign State a favor by giving it an opportunity to expend resources in litigation that has no chance of success. I would therefore deny leave to file.

South Carolina claims that § 103(j)(l) of the Internal Revenue Code of 1954, 26 U. S. C. § 103(j)(l) (1982 ed.), as added *404by § 310(b)(1) of the Tax Equity and Fiscal Responsibility Act of 1982, 96 Stat. 596, is unconstitutional because it abridges the State’s power to borrow money. Under the federal statute, the income that private citizens receive from state bonds is taxed unless the bonds are issued in registered form. As a practical matter, this requirement will force South Carolina to issue its bonds in registered form. Its complaint alleges that registered bonds are more costly to issue than bearer bonds and therefore that its future bond issues will generate smaller net revenues for the State.

Although the State’s constitutional arguments are not stated in precisely this form, in essence it claims that the statute is invalid because it violates: (1) the doctrine of intergovernmental tax immunity; (2) the Tenth Amendment; and (3) the doctrine of National League of Cities v. Usery, 426 U. S. 833 (1976). A long line of cases plainly forecloses the first claim; the other two are frivolous.

I — I

The origins of intergovernmental taxation immunity are found in McCulloch v. Maryland, 4 Wheat. 316 (1819). Of course, McCulloch dealt not with the immunity of the States, but rather with that of the United States. The Court held that the State of Maryland could not constitutionally tax the Bank of the United States because the power to tax the bank could be used to destroy it, thereby undermining the constitutionally guaranteed supremacy of the Federal Government. See id., at 425-437. The Court’s argument was premised explicitly upon the Supremacy Clause of the Constitution, and thus its holding did not require that any immunity from taxation be accorded the States.2

Therefore, the case upon which South Carolina relies is not McCulloch but Pollock v. Farmers’ Loan & Trust Co., 157 U. S. 429 (1895). There the Court specifically held that a *405provision of the federal income tax statute taxing income derived from municipal bonds was unconstitutional. It noted that the Court had previously held that the United States lacks the authority to tax the property or revenues of States or municipalities, since their independence from federal control is secured by the Tenth Amendment. Of the cases cited by the Court, most dealt with whether the Federal Government could lay a tax directly upon the property of States or localities, paid by them. In only one, Collector v. Day, 11 Wall. 113 (1871), did the Court address whether the United States could tax the income of an individual derived from his dealings with a State. ' There, the Court had held that the United States could not tax the salaries of judicial officers of a State. After reciting this case law, the Court continued:

“It is contended that although the property or revenues of the States or their instrumentalities cannot be taxed, nevertheless the income derived from state, county, and municipal securities can be taxed. But we think the same want of power to tax the property or revenues of the States or their instrumentalities exists in relation to a tax on the income from their securities, and for the same reason,, and that reason is given by Chief Justice Marshall in Weston v. Charleston, 2 Pet. 449, 468, where he said: ‘The right to tax the contract to any extent, when made, must operate upon the power to borrow before it is exercised, and have a sensible influence on the contract. The extent of this influence, depends on the will of a distinct government. To any extent, however inconsiderable, it is a burthen on the operations of government. It may be carried to an extent which shall arrest them entirely. . . . The tax on government stock is thought by this court to be a tax on the contract, a tax on the power to borrow money on the credit of the United States, and consequently to be repugnant to the Constitution.’ Applying this language to these municipal securities, it is obvious that taxation on the interest therefrom would operate on the power to borrow before *406it is exercised, and would have a sensible influence on the contract, and that the tax in question is a tax on the power of the States and their instrumentalities to borrow money, and consequently repugnant to the Constitution.” 157 U. S., at 585-586 (ellipsis in original).

The theory employed in Pollock is what I shall refer to as the “intergovernmental burden” theory: even though a tax is not laid directly upon another government, if it has a “sensible influence” on the costs incurred by that government, it must fall. This theory is the only rationale offered by the Pollock Court for its decision, and it is on this theory that Pollock must stand or fall.

The precedential weight of Pollock was doubtful almost from the start. Within a generation Pollock was seemingly overruled by constitutional amendment. The Sixteenth Amendment, ratified in 1913, states: “The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.” (Emphasis supplied.) This clear language makes the fact that income is derived from interest on state or local obligations constitutionally irrelevant.

Any doubt about the vitality of Pollock is dispelled by our subsequent cases. At every opportunity, this Court has rejected the intergovernmental burden theory.

In Metcalf & Eddy v. Mitchell, 269 U. S. 514 (1926), the Court first rejected the theory. It held that the United States could tax the income derived by an independent contractor from its contracts with a State. The Court recognized that the federal tax increased costs incurred by the State,3 but nevertheless upheld the tax:

*407“[H]ere the tax is imposed on the income of one who is neither an officer nor an employee of government and whose only relation to it is that of contract, under which there is an obligation to furnish service, for practical purposes not unlike a contract to sell and deliver a commodity. The tax is imposed without discrimination upon income whether derived from services rendered to the state or services rendered to private individuals. In such a situation it cannot be said that the tax is imposed upon an agency of government in any technical sense, and the tax cannot be deemed to be an interference with government, or an impairment of the efficiency of its agencies in any substantial way.” Id., at 524-525.4

Thus, the conceptual basis for Pollock had been undermined. A burden on the State imposed by taxing those who contract with it was no longer sufficient to invalidate a tax; the theory that a State’s contracts could not be taxed which the Court had relied upon in Pollock was no longer good law.5

*408In Helvering v. Gerhardt, 304 U. S. 405 (1938), the repudiation of Pollock was unmistakable. The Court there held that the United States could tax the salaries of state employees. The Court began its analysis by pointing out that the scope of McCulloch was limited to state taxation of federal instrumentalities.6 The Court read Weston v. Charleston, 2 Pet. 449 (1829), on which the Pollock Court had relied, as also limited in its application to state taxes, involving as it did an attempt whereby through state taxation “an impediment was laid upon the exercise of a power with respect to which the national government was supreme.” 304 U. S., at 413, n. 3. It concluded that state immunity against federal taxation must be narrowly construed since “the people of all the states have created the national government and are represented in Congress. Through that representation they exer*409cise the national taxing power. The very fact that when they are exercising it they are taxing themselves, serves to guard against its abuse . . . .” Id., at 416. Moreover,

“any allowance of a tax immunity for the protection of state sovereignty is at the expense of the sovereign power of the nation to tax. Enlargement of the one involves diminution of the other. When enlargement proceeds beyond the necessity of protecting the state, the burden of the immunity is thrown upon the national government with benefit only to a privileged class of taxpayers. . . . [I]f every federal tax which is laid on some new form of state activity, or whose economic burden reaches in some measure the state or those who serve it, were to be set aside as an infringement of state sovereignty, it is evident that a restriction on the national power, devised only as a shield to protect the states from curtailment of the essential operations of government which they have exercised from the beginning, would become a ready means for striking down the taxing power of the nation.” Id., at 416-417.

The Court concluded by explicitly rejecting the intergovernmental burden theory:

“The state and national governments must co-exist. Each must be supported by taxation of those who are citizens of both. The mere fact that the economic burden of such taxes may be passed on to a state government and thus increase to some extent, here wholly conjectural, the expense of its operation, infringes no constitutional immunity. Such burdens are but normal incidents of the organization within the same territory of two governments, each possessed of the taxing power.” Id., at 422.

In Graves v. New York ex rel. O’Keefe, 306 U. S. 466 (1939), the Court held that a State could tax the salary of a *410federal employee.7 After again observing that state taxation immunity is narrower than that of the United States, see id., at 477-478, and should be narrowly construed, see id., at 483-484, the Court followed Gerhardt in upholding the state tax, overruled Collector v. Day, which had been relied upon in Pollock, and noted, in a passage pertinent to the claim made here by South Carolina, that “we perceive no *411basis for a difference in result whether the taxed income be salary or some other form of compensation . . . 306 U. S., at 486. The Court concluded by again repudiating the intergovernmental burden theory.

“So much of the burden of a non-discriminatory general tax upon the incomes of employees of a government, state or national, as may be passed on economically to that government, through the effect of the tax on the price level of labor or materials, is but the normal incident of the organization within the same territory of two governments, each possessing the taxing power. The burden, so far as it can be said to exist or to affect the government in any indirect or incidental way, is one which the Constitution presupposes, and hence it cannot rightly be deemed to be within an implied restriction upon the taxing power of the national and state governments which the. Constitution has expressly granted to one and has confirmed to the other.” Id., at 487.8

The intergovernmental burden theory was rejected about as clearly as possible in Alabama v. King & Boozer, 314 U. S. 1 (1941), in which the Court upheld a state sales tax levied on the cost of material used by a federal contractor in performing a cost-plus contract, despite the fact that under the contract the economic burden of the tax fell exclusively on the United States.9 Subsequently, the Court has consistently adhered to its repudiation of the intergovernmental *412burden theory. See Washington v. United States, 460 U. S. 536, 540 (1983); Memphis Bank & Trust Co. v. Garner, 459 U. S. 392, 397 (1983); United States v. New Mexico, 455 U. S. 720, 734 (1982); United States v. County of Fresno, 429 U. S. 452, 460-462 (1977); Gurley v. Rhoden, 421 U. S. 200, 205 (1975). As the Court recently wrote, “an economic burden on traditional state functions without more is not a sufficient basis for sustaining a claim of immunity.” Massachusetts v. United States, 435 U. S. 444, 461 (1978).10

Perhaps the plainest explication of this Court’s position on state tax immunity is found in New York v. United States, 326 U. S. 572 (1946), a case holding that the United States could tax New York’s income from its sale of state-owned mineral waters. Justice Frankfurter, joined by Justice Rutledge, wrote that in his view any nondiscriminatory tax on *413state activities was constitutional. See id., at 581-584 (opinion of Frankfurter, J.); see also id., at 584-585 (Rutledge, J., concurring). Four additional Justices agreed that the tax was valid, stating: “Only when and because the subject of taxation is State property or a State activity must we consider whether such a non-discriminatory tax unduly interferes with the performance of the State’s functions of government.” Id., at 588 (Stone, C. J., joined by Reed, Murphy, and Burton, JJ., concurring in result).11

S. R. A., Inc. v. Minnesota, 327 U. S. 558 (1946), was decided during the same Term. There, land owned by the United States was occupied by S. R. A., which had bought the land under a conditional sales contract that left title in the United States pending full payment of the purchase price. Nevertheless, the Court held that state property taxes could be assessed against the land, since in reality the private *414party and not the United States was being taxed.12 Thus the Court recognized that where the property inures to the benefit of a private party, it has no immunity from taxation despite the fact that the taxation may increase the costs imposed on the governmental entity.13 The same approach was taken in United States v. City of Detroit, 355 U. S. 466 (1958), when the Court upheld a municipal tax on property owned by the United States but leased to a private party, observing that “it is well settled that the Government’s constitutional immunity does not shield private parties with whom it does business from state taxes imposed on them merely because part or all of the financial burden of the tax eventually falls on the Government.” Id., at 469.14 See also United States v. Township of Muskegon, 355 U. S. 484 (1958); City of Detroit v. Murray Corp., 355 U. S. 489 (1958); Wilmette Park Dist. v. Campbell, 338 U. S. 411, 419-420 (1949).

Our cases thus demonstrate the insubstantiality of South Carolina’s claim. Under § 103(j)(l), South Carolina is not required to pay any federal tax at all. The tax is imposed not upon state property or revenues, but only upon persons with whom it contracts. Under the test adopted by a majority of the Court in New York v. United States, and followed since, *415this alone defeats its claim. South Carolina is trying to shield private parties with whom it does business from taxation because part of the financial burden of the tax falls upon it. This Court has repeatedly rejected exactly that sort of claim.15 Moreover, the rationale on which Pollock is based— the intergovernmental burden theory — has been repudiated over and over again by this Court. There is simply nothing left of Pollock on which South Carolina can base a claim.

Even if there were enough left of Pollock to invalidate a federal tax that might cripple traditional state functions, the burden imposed on the State here is far from crushing. South Carolina estimates that if it must issue its bonds in registered form it will have to pay an additional one quarter of one percent interest on its bonds.16 It identifies in its offer of *416proof no disruption in its operation except for this slight increase in interest costs.17 Surely this cost is infinitesimal compared to the costs imposed on States and localities because their employees’ salaries are federally taxed — a burden that the Federal Government unquestionably has the constitutional power to impose. Moreover, the challenged statute still provides States and localities with the ability to offer debt instruments at substantially less than the market rates which must be paid by private enterprise — three to five points lower according to South Carolina’s estimate. It is hard to see how marginal increases in the interest they must pay can destroy the integrity of governmental entities when private entities are able not only to survive but generally to make a profit while obtaining financing at significantly higher rates of interest. As Professor Thomas Reed Powell observed:

“Public bonds will not be put in an unfavorable position relatively by being subjected to taxes on the income. They will merely be deprived of an artificial advantage heretofore enjoyed, which however is not strictly necessary in all probability in order to give them a practical success on the financial markets of the country when offered at the same rates of interest that have usually been offered in the past.” Powell, Intergovernmental Tax Immunities, 8 Geo. Wash. L. Rev. 1213, 1214-1215 (1940).

In contrast to the slight burden alleged by South Carolina, the Federal Government’s interest in encouraging bearer bonds to be issued in registered form is substantial, as the Senate Report on this provision makes clear.

*417“The Committee believes that a fair and efficient system of information reporting and withholding cannot be achieved with respect to interest-bearing obligations as long as a significant volume of long-term bearer instruments is issued. A system of book-entry registration will preserve the liquidity of obligations while requiring the creation of ownership records that can produce useful information reports with respect to both the payment of interest and the sale of obligations prior to maturity through brokers. Furthermore, registration -will reduce the ability of noncompliant taxpayers to conceal income and property from the reach of the income, estate, and gift taxes. Finally, the registration requirement may reduce the volume of readily negotiable substitutes for cash available to persons engaged in illegal activities.” S. Rep. No. 97-494, pt. 1, p. 242 (1982).

As this Court has previously held, the Constitution does not invalidate every burden on a State or locality created by federal taxation because such burdens are the “normal incident” of a system of dual sovereigns with dual taxing powers, which the Constitution envisions wall coexist. Surely it follows that the Constitution intended that the taxing power it gave the Federal Government not be undermined through the abuse engendered by bearer instruments. The burden imposed upon States and localities by efforts to eliminate such abuse is one necessary in a system committed to the efficacy of dual taxing authorities.

The fairness of this requirement is highlighted by the fact that § 103(j)(l) requires that federally issued bonds also be in registered form to be tax exempt. Even in the heyday of Pollock, the Court never held that the Federal Government impermissibly infringed state sovereignty by imposing a burden on the States that it also imposed on itself. If Congress has destroyed some protected concept of state sovereignty through § 103(j)(l), then it has destroyed the sovereignty of the United States as well.

*418hH J-H

South Carolina’s complaint alleges that § 103(j)(l) violates the Tenth Amendment. That Amendment provides:

“The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”

In order to bring its challenge within the terms of that Amendment, South Carolina alleges:

“The Congress of the United States has no power whatsoever to impose an income tax upon the interest paid by South Carolina to its lenders.” Complaint ¶ 9.

This allegation is inconsistent with the plain language of the Constitution itself. Article I, §8, specifically delegates to Congress the “Power To lay and collect Taxes,” and the Sixteenth Amendment removes any possible ambiguity concerning the scope of the power exercised by Congress in this case. The cases I have discussed above confirm this point.

Because the power to tax private income has been expressly delegated to Congress, the Tenth Amendment has no application to this case.

Ill

Finally, South Carolina relies on National League of Cities v. Usery, 426 U. S. 833 (1976). In that case the Court held that a federal statute extending the provisions of the Fair Labor Standards Act to certain public employees was “not within the authority granted Congress by Art. I, §8, cl. 3.” Id., at 852 (footnote omitted). The conclusion that the case merely involved an interpretation of the outer limits of the congressional power to regulate interstate commerce was then confirmed by the following footnote:

“We express no view as to whether different results might obtain if Congress seeks to affect integral operations of state governments by exercising authority granted it under other sections of the Constitution such *419as the spending power, Art. I, § 8, cl. 1, or § 5 of the Fourteenth Amendment.” Id., at 852, n. 17.

By its express terms, therefore, the National League of Cities case has no application to South Carolina’s challenge to an exercise of the federal taxing power.18

In sum, I can see no basis on which South Carolina could prevail in this case, even accepting its allegations and offers of proof for all they are worth. We do South Carolina no favor by permitting it to file and litigate a claim on which it has no chance of prevailing. At the same time, the Court’s decision to permit South Carolina to file this claim is an unwise use of its scarce resources. Accordingly, I respectfully dissent from the Court’s decision to grant South Carolina’s motion for leave to file its complaint.