Imposing an otherwise constitutional federal income tax on an improperly measured amount of Sixteenth Amendment “incomes” can result in a tax that is or includes an unconstitutional, improperly apportioned federal tax (and potential claims for tax refunds)

Majority opinion of justices as to matters relating to the application of the intergovernmental tax immunities doctrine as a bar to the Federal government’s taxation of income derived from the ownership of State and municipal securities (until developments in that doctrine were held to no longer prevent the Federal government from taxing income derived from those sources in South Carolina v. Baker, 485 U.S. 505 (1988)), but with 8 justices evenly split (Justice Jackson having been ill) on certain other matters relating to Federal direct taxes, with Chief Justice Fuller generally joined by Justices Field, Gray and Brewer and Justices White, Harlan, Brown and Shiras in dissent therewith.

Majority opinion of 5 of 9 justices striking down the entirety of a Federal tax on incomes because it included improperly apportioned Federal direct taxes and was enacted as whole; written by Chief Justice Fuller, joined by Justices Field, Gray, Brewer and Shiras, dissent written by Justice White joined by Justice Harlan, further dissent written by Justice Harlan, and Justices Brown and Jackson also dissenting.

Majority opinion of 7 of 8 justices upholding a Louisiana state law that allowed for “equal but separate accommodations for the white and colored races” (until that separate but equal doctrine was effectively overturned beginning with Brown v. Board of Education of Topeka, 347 U.S. 483 (1954)); written by Associate Justice Brown, joined by Justices Fuller, Field, Gray, Shiras, White and Peckham, with a dissenting opinion by Justice Harlan and Justice Brewer having taken no part in the consideration or decision of the case.

Opinion of 8 of 8 justices upholding the constitutionality of a Federal tax on inheritances as a properly uniform Federal indirect tax; written by Associate Justice White, joined by Justices Fuller, Harlan, Gray, Brewer, Brown, Shiras, and McKenna, but with Justice Brewer dissenting from so much of the opinion as held that a progressive rate of tax could be imposed as part of a Federal indirect tax (and in other respects concurring), a further dissent written by Justice Harlan and joined by Justice McKenna relating to a matter of statutory construction (and in other respects concurring) and Justice Peckham having taken no part in the decision.

Final language, as adopted, provides:

“The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.”

Earlier draft provided:

“The Congress shall have power to lay and collect direct taxes on incomes without apportionment among the several States according to population.”  S.J. Res. 39, 61st Cong., 44 Cong. Rec. 3377 (June 17, 1909) (Emphasis added).

Memorandum from Charles Evans Hughes to the New York State Legislature expressing his view in favor of conferring upon the Federal government the power to lay and collect an income tax without apportionment among the States according to population, but objecting to the ratification of the text of what would become the Sixteenth Amendment on the basis that, if taken in its natural sense, relevant language would jeopardize New York’s finances by including in the relevant “incomes” not only incomes from ordinary real or personal property, but also incomes derived from owning State and municipal securities.

Governor Hughes subsequently received assurances that persuaded him the relevant language would not be interpreted to so jeopardize New York’s finances.

In 1913, Congress also enacted the first post-Sixteenth Amendment Federal tax on the incomes of individuals that, like the tax at issue in Pollock II, included a full deduction for state and local taxes on the wealth, and accessions to the wealth, of individuals.

Unanimous opinion of 7 justices validating the constitutionality of the first post-Sixteenth Amendment Federal tax on the incomes of individuals as a properly uniform Federal indirect tax; written by Chief Justice White, joined by Justices McKenna, Holmes, Day, Hughes (formerly Governor of the State of New York), Devanter and Pitney, and with Justice McReynolds having taken no part in the consideration or decision of the case.

Unanimous opinion of 7 justices validating the constitutionality of the first post-Sixteenth Amendment Federal tax on the incomes of corporations as a properly uniform Federal indirect tax; written by Chief Justice White, joined by Justices McKenna, Holmes, Day, Hughes, Devanter and Pitney, and with Justice McReynolds having taken no part in the consideration or decision of the case.

Unanimous opinion of 9 justices holding a particular type of stock dividend not to be subject to federal income taxation as a matter of statutory interpretation (i.e., that it was not “net income” within the meaning of the Revenue Act of 1913); written by Justice Holmes, joined by Justices White (still Chief Justice), McKenna, Day, Devanter, Pitney, McReynolds, Brandeis and Clarke, but with Justice McKenna concurring only the result (and former Justice Hughes as an attorney for the taxpayer).

Majority opinion of 5 justices holding the particular type of stock dividend at issue in Towne also not to be “income” within the meaning of the Sixteenth Amendment, and therefore that the second post-Sixteenth Amendment Federal tax on incomes, including that particular item of income, included an improperly apportioned Federal direct tax; written by Justice Pitney, joined by Justices White (still Chief Justice), McKenna, Devanter and McReynolds, with a dissent written by Justice Holmes joined by Justice Day and a separate dissent written by Justice Brandeis joined by Justice Clarke (and former Justice Hughes as an attorney for the taxpayer).

Majority opinion holding against the corporate taxpayer, but including a citation tracing back through Macomber and Brushaber to Pollock I and Pollock II to support dicta expressing the view that a Federal tax on the portion of a building occupied by the owner, or upon an imputed rental value of that space, would be a Federal direct tax that must be apportioned among the States by population; written by Justice Butler joined by Justices Hughes (now Chief Justice), Devanter, Brandeis, Sutherland, Stone, Roberts and Cardozo, but with Justice McReynolds expressing the view the decision appealed from should have instead been affirmed in favor of the taxpayer.

Majority opinion denying the government’s request to reconsider Macomber by deciding the relevant issue as a matter of statutory interpretation; written by Justice Jackson and joined by Justices Stone, Roberts, Reed and Frankfurter, with a dissent written by Justice Douglas joined by Justices Black and Murphy.