The U.S. Supreme Court case Reynolds v. Cooper in 1933 revolved around the issue of taxation on gifts, specifically whether or not a gift tax could be imposed retroactively. Richard F. Cooper had given his wife a significant amount of money before Congress passed an act taxing such transactions and was later asked to pay taxes on it by the Collector of Internal Revenue, Mr. Reynolds. The court ruled in favor of Cooper, stating that imposing a tax retrospectively would violate due process rights under the Fifth Amendment as it would deprive individuals property without due process of law.

In the dissenting opinion for Reynolds v. Cooper, Justice Cardozo disagreed with the majority's decision to uphold a tax on gifts made in 1924 under a law passed in 1926. He argued that such retroactive taxation was unconstitutional and violated due process rights. According to him, it is unjust for an individual who has acted legally at one point in time to be penalized later when laws change after their action has taken place. This principle of fairness should apply even more strongly when dealing with property rights and financial transactions, which require stability and predictability from the legal system. Therefore, he believed that applying new taxes retroactively created uncertainty and undermined public confidence in the rule of law.