In the case of Goldfield Consolidated Mines Company v. Scott, the U.S Supreme Court was asked to review a decision regarding taxation on mining companies. The Goldfield Consolidated Mines Company argued that it should not be taxed for its extraction and reduction of ores because these activities were part of manufacturing process, which according to them was exempt from tax under federal law at that time. However, the court ruled against this argument stating that extracting and reducing ore is not considered manufacturing but rather a step in preparation for manufacturing or sale. Therefore, such activities are subject to taxation as they constitute income derived from property (the mines). This ruling clarified how mining operations would be treated with respect to federal income taxes.

In the dissenting opinion for Goldfield Consolidated Mines Company v. Scott, Justice Holmes disagreed with the majority's interpretation of what constitutes income under the Sixteenth Amendment. He argued that a corporation's increase in value due to retained earnings should be considered taxable income, even if it is not distributed as dividends to shareholders. According to him, this increase in value represents an economic gain or profit for the company and therefore falls within the definition of "income" as used in tax law. The fact that these profits are reinvested back into business operations rather than being paid out does not change their nature as income; they still represent a financial benefit derived from capital or labor which can be taxed by Congress without apportionment among states according to population.