• Last updated on November 11, 2022

In one of the most controversial decisions of the late nineteenth century, the Supreme Court ruled a peacetime federal income tax unconstitutional.

In the first decision, Justice Melville W. FullerFuller, Melville W.;Pollock v. Farmers’ Loan and Trust Co.[Pollock v. Farmers’ Loan and Trust Co.] wrote the opinion for the Supreme Court, which was unanimous 8-0 on one part, divided 6-2 on a second part, and tied 4-4 on a third part. Terminally ill Justice Howell E. Jackson did not participate in the first decision but traveled to Washington, D.C., to participate in the second decision. In the first decision, Justice Stephen J. Field concurred with Fuller, and Chief Justice Edward D. White and Justices John Marshall Harlan, Henry B. Brown, and George Shiras, Jr., dissented. In the second decision, Fuller again wrote the opinion for the 5-4 majority, facing dissents from White, Harlan, Brown, and Jackson. Jackson’s participation in the rehearing should have led to the upholding of the federal income tax, but apparently Shiras switched sides, and the Court struck down the tax.Income tax;Pollock v. Farmers’ Loan and Trust Co.[Pollock v. Farmers’ Loan and Trust Co.]

At issue was the constitutionality of the 1894 income tax law, a statute imposing the first income tax that was not a wartime measure. The Court could have avoided hearing the case on the grounds that it was not a true case and controversy because the plaintiff was suing his bank to keep it from paying an income tax that it had no desire to pay anyway. However, instead of ducking the issue, the Court expedited the hearing of the case. The plaintiff’s argument was more emotional and political than legal as the Court had already upheld a wartime income tax. The plaintiff argued that the income tax was a direct tax in contravention of the Constitution, but this position contradicted precedents because the Court had long held that a direct tax was very narrowly construed. Other arguments such as the contention that the income tax was a tax on the state and, therefore, a violation of state sovereignty were asserted by the Court in the first decision but abandoned in the second decision, which rested mainly on the argument that the income tax was a direct tax that could be constitutionally valid only if apportioned according to the states’ populations an obvious impossibility. For all the controversy, this decision was set aside by the Sixteenth Amendment, which explicitly authorized an income tax, but the case remains useful to show the laissez-faire point of view of the late nineteenth century Court regarding the Constitution.

Hylton v. United States

Income tax

Sixteenth Amendment

Springer v. United States

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