Gemara

R. Chiya and R. Yonasan were walking in a cemetery. R. Yonasan's Tzitzis were showing.

R. Chiya: Lift them up (so they will not show), lest the dead say "today they mock us, and tomorrow they will join us!"

Gitin 56a: Ben Tztzis ha'Keses was called so because the fringes of his Talis dragged on pillows and blankets.

Rishonim

Rosh (3:5, citing R. Yonah 11a DH Lo): Tzitzis is an obligation on the garment. One cannot remove his garment when walking through a cemetery! R. Chiya objected only because R. Yonasan's Techeiles was on the graves. (This is unlike our text.)

Ha'Agur (10, cited in Beis Yosef OC 21 DH Kasav): Hagahos Mordechai says that it says about one who drags his Tzitziyos "v'Tatasiha b'Mat'ata ha'Shemad."

Rashi (Gitin 56a DH Nigreres): Ben Tztzis ha'Keses walked only on silk.

Tosfos (18a DH l'Machar): The Ritzva would not remove the Tzitzis (from the Talis of a Mes). Rather, he would tie them into the corner, to fulfill both opinions. If they must have Tzitzis, they have. If they should not have Tzitzis, they are covered.

Poskim

Shulchan Aruch (OC 21:4): When one wears a Talis, he must be careful not to drag the Tzitziyos.

Levush (4): One must be careful not that the Tzitziyos not drag on the ground, for this is disgraceful. It says about such a person "v'Tatasiha b'Mat'ata ha'Shemad."

Eliyahu Rabah (6): Matzos Shemurim brings that Edei Zahav argues with the Levush (who says that there is a punishment for this). It is not Asur due to disgrace. We find that Ben Tztzis ha'Keses' Tzitziyos dragged. Rather, it is because he will step on them and disqualify them and he will not be able to fix them immediately. He did not see the Beis Yosef in the name of the Agur (who says like the Levush). I say that since Ben Tztzis ha'Keses's Tzitziyos dragged on pillows and blankets, this is not such a disgrace.

Machazik Berachah (21:2): Maharam Di Lunzano authored Adei Zahav. Surely he saw the Agur, but he rejected it, for we infer from Ben Tztzis ha'Keses that other people's Tzitziyos dragged.

Magen Avraham (3): In Siman 23 (brought below), we forbid if the Tzitziyos drag on graves. This connotes that normally, there is no Isur if it drags! Also, it seems that Ben Tztzis ha'Keses' Tzitziyos dragged on pillows, but other people's Tzitziyos dragged on the ground. Also Siman 10:12 (brought below) supports this. It seems that their graves were high above the ground, and R. Yochanan's Tzitziyos dragged on them, therefore it was Lo'eg la'Rash. It was not Asur due to the Tzitzis dragging, for they did not drag on the ground. Perhaps Ben Tztzis ha'Keses' Tzitziyos dragged on pillows, but other people's Tzitziyos did not drag at all on the ground. Alternatively, it disgraces the Mitzvah only if they drag while he wears the garment, for it looks like he sweeps the house with them, but they may drag while he walks.

Sha'arei Teshuvah (5): Shalmei Tzibur brings from Asarah Ma'amaros that the ideal Mitzvah is for the Tzitziyos to hang below the bottom half of his body, but not to drag.

Birkei Yosef (5): If a Talis is long, one may insert the Tzitziyos into his belt, so they will not drag. My Rebbi says that it is better to insert them in his belt in back of him.

Kaf ha'Chayim (19): Kaf ha'Chayim (Palagi) says that it is better to lift the Talis on one's shoulder so the Tzitziyos will not drag on the ground. This is obvious.

Mishnah Berurah (18): Some say that they may not drag because it disgraces the Mitzvah. Also, they are likely to become Pasul. Therefore, he lifts them and inserts them in his belt.

Eliyahu Zuta (10:11): Even though it is not a disgrace if the Tzitziyos drag on pillows and blankets, we do not permit this to commoners, for the Torah's ways are pleasant, and if the Tzitziyos drag, one must constantly fix them. Ben Tztzis ha'Keses had countless garments. He did not need to constantly fix garments that became Pasul, for he had others to wear! Lechem (Divrei) Chamudos asked why we do not put Tzitzis on our short garments (even though they would not drag on the ground).

Rebuttal (Yad Efrayim Sof Siman 10): The Torah did not distinguish between rich and poor. If an Oni's garment is exempt, also an Ashir's garment is exempt. It is difficult to say that Ben Tztzis ha'Keses put Tzitzis on a garment that was exempt.

Kaf ha'Chayim (18): The Shulchan Aruch did not cite the Agur because he rules that it is not a real Isur. It is merely proper to be careful. This was due to the Magen Avraham's question from Berachos. Nehar Shalom says that perhaps the Agur forbids only if they drag constantly when he walks. If it is possible to lift the garment so they will not drag, even if sometimes it falls and drags, we are not concerned. We forbid only in a cemetery.

Shulchan Aruch (OC 23:1, YD 367:4): If one's Tzitzis drag on a grave, this is Lo'eg la'Rash.

Rema (OC 10:12): Garments that people wear in Ashkenaz and Sefard, since the corners are not made to be two in front and two in back opposite each other, they are exempt from Tzitzis.

Beis Yosef (DH Yesh): Our garments have two corners near the neck, and two below. Why don't we put Tzitzis on them? One reason is that if we would obligate them in Tzitzis, the lower Tzitziyos would constantly snap through being trampled, and one would need to constantly fix them. The Torah did not obligate in such a case - "Deracheha Darchei No'am."

Rebuttal (Darchei Moshe 6, brought in Magen Avraham 13): Ben Tzitzis ha'Keses' Tzitziyos used to drag on the ground (Gitin 56a), and there was no concern because he needed to constantly fix them. Rather, it is because the Mitzvah (l'Chatchilah) is with two corners in front and two in back.

Magen Avraham (8:13): Kesavim (based on the Ari Zal) says that the Talis Katan should be under his garments. I say that the Tzitziyos must be outside, unlike those who tuck them into the corners. Tosfos (18a) connotes that one is Yotzei b'Di'eved this way. However, perhaps this is because even if the dead are obligated, they cannot see the Tzitziyos (so there is no concern if they are covered). However, if a living person were not Yotzei this way, there would be Lo'eg la'Rash. Therefore, one who goes among Nochrim are Yotzei (even though the Tzitziyos are covered), but when he blesses on it they must be uncovered at least the time to walk four Amos (about two seconds).

Yad Efrayim: The Beis Yosef supports the Magen Avraham (who says that one should not tuck the Tzitzis into the corners. If not, one could put Tzitzis on long garments without concern for dragging!) The Darchei Moshe brought Ben Tztzis ha'Keses to reject the Beis Yosef. I say that the primary concern is for the Tzitziyos in front. One steps on them and they are disqualified constantly. We are not concerned if they drag in back of him. Others will not step on them, for they see them. Also, Ben Tztzis ha'Keses' Tzitziyos dragged on blankets! Rashi says that he walked on silk. Presumably, only he stepped on it. (There was no concern lest others trample on his Tzitziyos.) Further, there is no question from him. Presumably, he wore a standard garment, and he could lift it up like everyone else did, and the Tzitziyos would not drag. The Beis Yosef discusses long garments for honor. (If they had Tzitzis, surely they would drag.)