The U.S. Supreme Court case New York Life Insurance Company v. Bowers, Executor in 1930 revolved around the issue of whether or not a state could tax insurance policies held by non-residents if the insurance company was based within that state's jurisdiction. The New York Life Insurance Company had issued policies to individuals who were not residents of Ohio but later died there, and their estates were taxed by the State of Ohio accordingly. The company argued this taxation violated due process rights under the Fourteenth Amendment because it did not have sufficient connection with these policyholders' estates for them to be subject to taxation in Ohio. However, the court ruled against New York Life Insurance Company stating that since they conducted business within Ohio and received protection from its laws, it was appropriate for them to pay taxes on all income derived from operations within that state regardless of where their policyholders resided or died.

In the dissenting opinion for New York Life Insurance Company v. Bowers, Justice Holmes argued that the tax in question should not be considered a direct tax on property but rather an excise or duty. He contended that it was imposed upon the event of death and thus could not be seen as directly taxing any specific piece of property owned by the deceased individual. The justice further noted that if this were to be viewed as a direct tax, then all taxes would have to fall under this category since they ultimately reduce one's wealth or income. This perspective contradicts previous rulings which distinguished between different types of taxes based on their nature and impact. Therefore, he disagreed with majority’s decision upholding New York State's right to impose transfer inheritance taxes on insurance policies held by non-residents who had died out-of-state.