McCulloch has been described as "the most important Supreme Court decision in American history defining the scope of Congress's powers and delineating the relationship between the federal government and the states.

Almost immediately after the ratification of the U.S. Constitution in 1788, a major public debate arose over whether to establish a national bank for the United States.

However, national economic problems in the aftermath of the War of 1812 prompted Congress to pass similar legislation in 1816 to create the Second Bank of the United States.

It was Maryland's contention that without specific constitutional authorization for the federal government to create a bank, any such creation would be rendered unconstitutional.

Chief Justice Marshall supported his conclusion with four main arguments:[11] Firstly, he argued that historical practice established Congress's power to create the bank.

[11] The first Congress had enacted the bank after great debate, and it was approved by an executive "with as much persevering talent as any measure has ever experienced, and being supported by arguments which convinced minds as pure and as intelligent as this country can boast.

"[15] That principle had been established many years earlier by Alexander Hamilton:[16] [A] criterion of what is constitutional, and of what is not so ... is the end, to which the measure relates as a mean.

There is also this further criterion which may materially assist the decision: Does the proposed measure abridge a pre-existing right of any State, or of any individual?

The Court thus struck down the tax as an unconstitutional attempt by a state to interfere with a federal institution, in violation of the Supremacy Clause.

Unlike Marshall, his successor, Roger B. Taney, established dual federalism by which separate-but-equal branches of government are believed to be a better option.

[19] McCulloch v. Maryland was cited in the first substantial constitutional case presented before the High Court of Australia in D'Emden v Pedder (1904), which dealt with similar issues in the Australian Federation.