In the case of Lynch v. Hornby in 1917, the United States Supreme Court ruled on a dispute involving taxation and inheritance law. The plaintiff, Hornby, inherited stocks from his deceased wife who was an American citizen living abroad at the time of her death. The defendant, Lynch as Collector of Internal Revenue for Minnesota, sought to tax this inheritance under U.S federal law despite it being acquired overseas. Hornby argued that since he and his wife were both British subjects residing in England when she died and because all transactions related to these shares occurred outside U.S jurisdiction; therefore they should not be subject to U.S taxes. The Supreme Court disagreed with Hornby's argument ruling that while property may physically exist or transactions occur outside national boundaries; if its owner is a US citizen then it falls within reach of Congress' power to tax regardless where they live or die. This decision established precedent for taxing global income and assets owned by American citizens even if they reside abroad permanently.

In the dissenting opinion for Lynch v. Hornby, Justice Oliver Wendell Holmes Jr. argued that the majority's decision was inconsistent with previous rulings and could lead to unfair outcomes in future cases. He disagreed with their interpretation of "income," stating that it should be defined as any gain derived from capital or labor, not just regular payments like salaries or dividends. In his view, this broader definition would better reflect economic realities and ensure a fairer distribution of tax burdens among citizens. Furthermore, he criticized the majority for failing to consider international law principles when interpreting domestic statutes - an approach he believed could undermine U.S.'s credibility on global stage.