The Pollock v. Farmers' Loan and Trust Company case in 1894 was a landmark decision by the U.S Supreme Court that declared federal income taxes unconstitutional. The court ruled against the aspect of the Wilson-Gorman Tariff Act of 1894, which imposed a direct tax on the incomes of American citizens and corporations. Charles Pollock, a Massachusetts citizen who owned only ten shares in Farmer's Loan & Trust Co., challenged this act arguing it violated Article I, Section 9 of the Constitution that prohibits direct taxes unless apportioned among states according to population. The court agreed with him in a five-to-four decision stating that taxes on rents from real estate, bonds or stocks were indeed "direct" taxes and thus had to be apportioned according to representation (population). This ruling effectively made it impossible for Congress to impose an income tax without constitutional amendment leading eventually to ratification of Sixteenth Amendment in 1913.

In the dissenting opinion for Pollock v. Farmers' Loan and Trust Company, Justice Harlan argued that the majority's decision to strike down a federal income tax as unconstitutional was based on an overly narrow interpretation of the Constitution. He contended that there was no constitutional prohibition against taxing incomes from property or any other source, and he criticized his colleagues for failing to respect precedent upholding such taxes. Furthermore, he asserted that their ruling would unfairly benefit wealthy individuals at the expense of poorer citizens by exempting large amounts of wealth from taxation. In essence, Justice Harlan believed this decision undermined Congress's power to levy taxes in order to meet national needs and promoted economic inequality.