Separate Administrative and Judicial Systems of Nation and States.—Throughout the territory of each State two Govern ments operate—the Nation with its administrative and judicial organizations for the enforcement of National law, and the State with its administrative and judicial organizations for the enforce ment of State law. Federal revenues are collected through officers controlled from Washington ; State revenues are collected by independent State and local officers. Taxes levied by the two are in some cases similar in character. The Nation and a number of States impose income taxes, but their administration is indepen dent. Violations of State law are tried and punished in State Courts, violations of National law in separate Federal Courts. In some cases the laws of the two are directed to the same purpose, and are substantially identical. The Constitutions of both forbid that a person be twice put in jeopardy for the same offence, but in legal theory the two Governments are so distinct that one act, forbidden by substantially identical laws of each, may be punished by each as a separate offence.
The reasons for this sharp distinction between the two Govern ments are historical. The Articles of Confederation (1781-1789) sought to act through the Governments of the several States, and not directly upon the citizens of the States. Government under
these Articles failed, because each State finally determined for itself whether it would enforce the policies of the Congress. The National Government, organized under the Constitution of 1787, had it thought proper, might have sought to use the States as agencies for the enforcement of National law, as is largely done under the Federal system of Switzerland. But under the circum stances it was natural to build up an independent administrative and judicial system. This system has steadily grown with the ex pansion of National activities.
Taxation of Employees and Securities of One Govern ment by the Other.—For many years it was the established prin ciple in the United States that the exercise of independent powers by the Nation and the State forbad either Government to tax the employees or securities of the other. This principle, which was based on the theory that "the power to tax is the power to de stroy," is now in large part replaced by the principle that each Government may without discrimination tax the income of em ployees of the other; and the same principle will probably be ap plied to the taxation of securities issued by the National, State and Local Governments.