Pollock v. Farmer's Loan and Trust Co.

US Supreme Court decision of 1895 dealing with the right of Congress to levy a federal income tax. The Gorman Tariff Act 1894 imposed a 2% tax on all annual incomes over $4,000. The ensuing protests, including the test case, focused on three aspects of the tax: (1) it taxed income on state and municipal bonds, an infringement on states' rights; (2) it taxed income on land and private property, making it a direct tax not apportioned among the states according to population; and (3) it exempted certain people on the basis of personal income. The Court found 5 to 4 that these constitutional violations made the tax impermissible. This decision was rendered irrelevant in 1913 by the Sixteenth Amendment, which empowered Congress to enact income taxes.