In the case of Rockefeller v. United States (1921), John D. Rockefeller, a prominent American businessman and philanthropist, sought to recover income taxes he had paid under protest for the years 1913 through 1917. He argued that certain dividends received from Standard Oil Company were not taxable as they represented a return of capital rather than income. The Supreme Court disagreed with this argument stating that these dividends were indeed taxable because they came out of earnings or profits accumulated after March 1, 1913 - when the Sixteenth Amendment was ratified allowing Congress to levy an income tax without apportioning it among states or basing it on Census results. Therefore, even if some part of those earnings might have been derived from pre-16th amendment profits which could be considered capital in nature, such distinction became irrelevant once mixed with post-amendment profits distributed as dividends.

The dissenting opinion in the case of Rockefeller v. United States argued that the government did not have a right to tax gifts as income, which was contrary to what the majority held. The dissenters believed that this interpretation of law would lead to an unfair and potentially limitless taxation system where any transfer of wealth could be considered taxable income. They contended that such a broad definition of income was not intended by Congress when it enacted the Sixteenth Amendment, nor had it been traditionally understood or applied in such a manner before. Furthermore, they expressed concerns about potential abuses and inconsistencies if every gift were subject to taxation as income because there would be no clear criteria for determining what constitutes a gift versus regular earnings or profits from investments or labor.