The Cook v. Tait case in 1923 revolved around the constitutionality of taxing U.S. citizens living abroad on their income earned outside of the United States. The plaintiff, Thomas R. Cook, was a U.S citizen residing in Mexico who challenged his obligation to pay taxes on his foreign-earned income under Section 217 of the Revenue Act of 1921 which imposed tax liability for worldwide income on all American citizens regardless of their residence location. Cook argued that this taxation violated his constitutional rights as it amounted to taking property without due process and equal protection under law as guaranteed by the Fifth Amendment. However, Justice Oliver Wendell Holmes Jr., writing for a unanimous Supreme Court, rejected these arguments stating that government by its very nature benefits its citizens even when they are living abroad; thus justifying taxation irrespective of domicile or source where income is derived from. The court held that citizenship itself could be viewed as an affiliation warranting certain obligations including paying taxes and upheld Congress's power to tax non-resident U.S citizen’s global incomes.

In the dissenting opinion for Cook v. Tait, Justice McKenna expressed his disagreement with the majority's ruling that a U.S. citizen living abroad could be taxed on their income earned outside of America. He argued that this was an overreach of governmental power and violated principles of international law and comity among nations. According to him, taxation should be limited to those who reside within or derive benefits from a country; it is unjustifiable to tax someone merely because they are a citizen if they do not enjoy any protection or advantages from said citizenship due to residing elsewhere. Furthermore, he contended that such extraterritorial application of domestic laws would lead other countries also taxing American citizens living in the United States based on their nationality alone which would result in double taxation - something he deemed unfair and inappropriate.