Was Polllock V. Farmers’ Loan & Trust Co (1895) Decided Consistently with Existing Tax Principles?
Forthcoming, American Bar Association Tax Times - Summer 2021 Edition
6 Pages Posted: 13 Apr 2021
Date Written: March 29, 2021
The foundation of the modern tax system in the United States is based on the 16th Amendment passed in 1909. The Amendment was Congress’s response to the Pollock v. Farmers' Loan & Trust Company, 157 U.S. 429 (1895), affirmed on rehearing, 158 U.S. 601 (1895). Pollock held that an income tax levied on the US population based on “dividends, royalties, and rents” was unconstitutional. Because of this, Pollock v. Farmers' Loan & Trust Company was a key case in the history of taxation and tax law in the United States. Theoretically, the key question is whether a tax on property is the same as “dividends, royalties, and rents” arising from that property. Understanding the reasoning of this case illuminates key concepts in taxation, the history of taxation, and has implications on Constitutional history and interpretation.
Keywords: Pollock, tax, direct tax, constitutional law, law, tax, indirect tax, history, Hamilton
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