In the case of First National Bank of Chicago v. United States in 1930, the Supreme Court ruled on a dispute regarding tax deductions. The bank had purchased municipal bonds at a premium and later sold them at face value, resulting in an apparent financial loss. However, because interest earned from these bonds was exempt from federal income tax, the bank argued that it should be allowed to deduct this "loss" when calculating its taxable income. The government disagreed with this interpretation and sought additional taxes based on its belief that no real loss had occurred since the bank still profited overall due to not having to pay taxes on bond interest earnings. The Supreme Court sided with the government's position by ruling that only actual losses could be deducted for taxation purposes - not those merely appearing as such due to special circumstances like tax-exempt bond interest. This decision clarified how businesses can calculate their taxable incomes when dealing with investments involving unique or complex factors.

In the dissenting opinion for the case of First National Bank of Chicago v. United States, it was argued that the majority's decision to uphold a tax on bank shares disproportionately affected shareholders in national banks compared to those in state banks or other corporations. The dissenters believed this violated the constitutional principle of equal protection under law and exceeded Congress' power to tax. They contended that while Congress had broad powers to impose taxes, these powers were not unlimited and should be exercised fairly across different types of property ownership. In their view, singling out one type of property (bank shares) for taxation at a higher rate than others was unjustifiable discrimination and thus unconstitutional.