In the case of Mayer v. American Security & Trust Company, Executor of Mayer in 1911, the Supreme Court dealt with a dispute over an inheritance tax. The decedent was a resident and citizen of Washington D.C., but had property in Maryland at the time of his death. His will directed that all debts and funeral expenses be paid out from his estate before any distribution to beneficiaries occurred. The state law imposed an inheritance tax on personal property located within its jurisdiction regardless if it belonged to residents or non-residents alike. The executor argued that since this money was used for paying off debts and not distributed among heirs, it should not be subject to taxation by Maryland as per their laws which only taxed inheritances received by beneficiaries after payment of debt obligations. However, the court ruled against this argument stating that even though these funds were used for settling liabilities first before being passed onto heirs, they still constituted part of the overall estate left behind by deceased upon death - hence taxable under Maryland's inheritance tax laws irrespective where he resided during life or where his executors carried out administrative duties post-death.

In the dissenting opinion for Mayer v. American Security & Trust Company, it was argued that the majority's decision to uphold a tax on stock dividends as income contradicted previous rulings of the court and misinterpreted constitutional law. The dissent contended that stock dividends should not be considered taxable income because they do not increase a shareholder’s wealth or property but merely represent a change in form of their existing investment. It was further asserted that this interpretation is consistent with both common understanding and legal precedent, including prior Supreme Court decisions which had held such dividends were capital rather than income. Therefore, taxing them as such would constitute direct taxation without apportionment among states according to population, violating Article I Section 9 Clause 4 of the Constitution.