In the case of Collins v. United States in 1893, the Supreme Court examined whether a federal tax on incomes derived from real estate and municipal bonds was constitutional. The plaintiff, Charles Collins, argued that these taxes were direct taxes and thus had to be apportioned among the states according to population as required by Article I of the Constitution. However, the court ruled against him stating that such income taxes were not direct but rather excise or duty taxes which did not need to be apportioned among states based on population. Therefore, it upheld their constitutionality under Congress's broad taxing power granted by Article I Section 8 of the Constitution.

In the dissenting opinion for Collins v. United States, Justice Brewer argued that the majority's interpretation of tax laws was incorrect and overly broad. He believed that Congress did not intend to impose taxes on every possible form of income but only on those forms specifically mentioned in the law. In this case, he disagreed with taxing proceeds from life insurance policies as income because they were more akin to a return of capital than actual profit or gain. Furthermore, he pointed out inconsistencies in how different types of insurance payouts were taxed under the majority's interpretation - some being exempt while others weren't - which suggested an unintended result by Congress if their ruling stood correct.