Pollock, Macomber, and the Role of the Federal Courts in the Development of the Income Tax in the United States

Crane notes that the federal income tax is much more a lawyer's tax than either the income taxes of other jurisdictions or the several nonincome federal taxes. She locates the source of the legalistic nature of the tax in the Supreme Court's 1895 opinion in Pollock v. Farmers' Loan & Trust Co., invalidating the income tax of 1894 as a constitutionally impermissible unapportioned direct tax. She describes how the ghost of Pollock hovered over the income tax for decades after its reintroduction in 1913, inspiring Eisner v. Macomber and other judicial explorations of the constitutional meaning of income. Moreover, she argues that more good than harm came out of the Court's intense involvement in the development of the tax. She concludes that the threat of continued Supreme Court holdings insisting upon giving constitutional content to the meaning of 'income' forced the Congress and Treasury to commit to a far more consistent and coherent set of rules for defining the tax base.