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 Income Tax 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 Congress from levying any direct tax not apportioned among states according to their populations. The majority opinion held that taxes on rents from real estate, bonds interest and personal property were essentially direct taxes and thus needed to be apportioned per state population sizes - an almost impossible task at that time given data limitations - rendering such taxation unconstitutional.

In the dissenting opinion for Pollock v. Farmers' Loan and Trust Company, Justice Edward Douglass White argued that the income tax was constitutional because it did not violate any specific prohibitions in the Constitution and fell within Congress's broad power to levy taxes. He disagreed with the majority's interpretation of direct taxation, asserting that an income tax is not a direct tax but rather an excise or duty. Furthermore, he contended that even if it were considered a direct tax, it would still be constitutionally permissible as long as it was apportioned among states according to their populations. The justice also criticized his colleagues for overstepping their judicial authority by invalidating legislation enacted by elected representatives of people based on dubious constitutional grounds.