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Pollock v. Farmers' Loan & Trust Co., 157 U.S. 429 (1895)

Why did the U.S. Supreme Court once rule that the federal income tax was unconstitutional?

How did Congress react?

Solution Preview

The landmark case wherein the Supreme Court ruled that the federal income tax was unconstitutional is Pollock v. Farmers' Loan & Trust Company, 157 U.S. 429 (1895), aff'd on reh'g, 158 U.S. 601 (1895).

Facts of the Case:

The U.S. Constitution before the Pollock decision gave states the power over direct taxation. The federal government could impost direct taxes but only if the taxes were apportioned among the states in proportion to their representation in Congress. During this period the federal statute governing national income tax was the Revenue Act of 1894.

Specifically the Revenue Act of 1894 required a tax of 2% for a period of five years of any gains, profits and incomes in excess of $4,000. To comply with this new Act, Farmer's Loan & Trust Company announced that besides paying the tax for the company, it would provide to the Department of Treasury all the names of the shareholders of Farmer's who were liable to pay taxes pursuant to this Act. Charles Pollock was one of these ...

Solution Summary

This is a 4,043 word case brief of Pollock v. Farmers' Loan & Trust Company, 157 U.S. 429 (1895), aff'd on reh'g, 158 U.S. 601 (1895), the landmark case wherein the Supreme Court ruled that the federal income tax was unconstitutional. An added section describes how Congress reacted to this ruling.

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