The U.S. Supreme Court case National Paper & Type Company v. Bowers, Collector of Internal Revenue for the Second District of New York in 1924 revolved around a dispute over tax liability. The National Paper & Type Company argued that it was not liable to pay taxes on certain profits because they were derived from war contracts during World War I and thus exempt under Section 1309(a) of the Revenue Act of 1918. However, the government contended that this exemption only applied if these contracts were with the United States or any foreign government involved in WWI directly, which was not applicable here as their contract was with a private corporation even though it indirectly served wartime purposes by supplying paper to print Liberty Bonds and other war materials. The court sided with the government's interpretation ruling against National Paper & Type Company stating that exemptions should be strictly construed and cannot be extended beyond their explicit terms.

In the dissenting opinion for National Paper & Type Company v. Bowers, Justice Holmes disagreed with the majority's interpretation of tax law and its application to this case. He argued that a corporation should not be taxed on income derived from property it no longer owned at the time of taxation, even if it had received dividends from said property in previous years. In his view, taxing such income was akin to double taxation and violated principles of fairness inherent in tax law. Furthermore, he contended that there was no legal basis for treating corporations differently than individuals when it came to taxing dividend income; both entities should be treated equally under the law regardless of their status as corporate or individual taxpayers.