Eisner V. Macomber - Prior Cases

Prior Cases

In 1895, the Supreme Court had held in Pollock that a tax from income on property (unlike a tax on income from employment or vocations) needed to be proportionate to state population. In 1913, the United States ratified the Sixteenth Amendment to the United States Constitution, which allowed taxation of income without regard to source (i.e., whether income from property or income from vocations and employment), and without regard to a state's population.

In 1918, the Court in Towne v. Eisner 245 U.S. 418 (1918) had addressed a nearly identical situation to one in Eisner v. Macomber. (Eisner was the person responsible for Internal Revenue Collection in both cases). However, in the aftermath of Towne v. Eisner, the U.S. Congress passed a revenue collection statute that specifically stated that stock dividends were to be counted as income.