The federal government is permitted to impose a tax even if the goal of the tax is not just the collection of revenue. Decided May 24, 1937 (argued 1937). Opinion of the Court: Benjamin N. Cardozo → go there Dissenting: McReynolds, Sutherland, Butler. Topic: Federalism. Steward Machine Company v. Davis, 301 U.S. 548 (1937), was a case in which the United States Supreme Court upheld the unemployment compensation provisions of the Social Security Act of 1935, which established the federal taxing structure that was designed to induce states to adopt laws for funding and payment of unemployment compensation. The decision signaled the Court's acceptance of a broad interpretation of Congressional power to influence state laws. Wiki link