In Arthur, Collector v. Fox and Another, the United States Supreme Court was asked to decide whether a tax imposed by the United States on the sale of certain goods was constitutional. The tax was imposed on the sale of certain goods, such as tea, coffee, and sugar, and was collected by the Collector of Customs. The defendants, Fox and another, argued that the tax was unconstitutional because it was a direct tax and not apportioned among the states according to population. The Supreme Court held that the tax was constitutional. The Court reasoned that the tax was not a direct tax, but rather an indirect tax, and thus did not need to be apportioned among the states. The Court further held that the tax was not a burden on interstate commerce, as it was imposed on goods that were already in the state and not on goods that were being transported across state lines. The Court's decision in this case established that the federal government could impose taxes on goods that were already in the state, without having to apportion the tax among the states according to population. This decision has been cited in numerous subsequent cases, and has been used to support the federal government's power to impose taxes on goods that are already in the state.

In the case of Arthur, Collector v. Fox and Another, the dissenting opinion was that Congress had no authority to pass a law requiring citizens to pay taxes on their income from whatever source derived. The majority opinion held that Congress did have such power under its constitutional right to levy taxes in order to provide for the common defense and general welfare of all citizens. However, Justice Field argued that this interpretation would give Congress too much power over individual rights and liberties as it could be used by them as an instrument of oppression or tyranny if they chose so. He further argued that while taxation is necessary for government operations, it should not be done without limits or restrictions which are found in other parts of the Constitution; otherwise there would be no protection against arbitrary taxation imposed upon individuals at will by those in power. Furthermore he stated that since income tax was never mentioned specifically within any part of the Constitution then it should not be assumed nor implied into existence through broad interpretations given by courts or legislatures alike.