The Court's ruling extended the reciprocity to pensions, since they are a form of deferred compensation for services previously rendered by an employee.

The decision gave rise to the principle of intergovernmental immunity, which was gradually extended from government agencies to their employees.

[3] In 1938, President Franklin Delano Roosevelt asked Congress to remove the reciprocal tax exemption for federal and state employees.

Exempting state employees from federal taxation would intrude on the "national sovereign power to tax" and create "a privileged class of taxpayers."

[5] Paul S. Davis served the federal government as a lawyer for the Securities and Exchange Commission and an administrative law judge.

Although state attorneys general often argue their own cases when they are sued in an official capacity, it is unusual for private parties to appear pro se at oral arguments.

Davis divided his time with Michael K. Kellogg from the Solicitor General's office, who appeared for the United States as amicus curiae.

[1] In a lone dissenting opinion, Justice John Paul Stevens argued that the tax was not discriminatory because it treated federal employees the same as other Michigan taxpayers.