The Simpson v. United States case in 1919 revolved around a dispute over inheritance tax. The plaintiff, Simpson, was the surviving executor of Moore's estate and argued that certain bonds should not be included in the gross estate for taxation purposes because they were owned by non-residents at the time of death. These bonds had been issued under acts of Congress which stipulated that they would be exempt from all taxes imposed by any state or local authority but did not mention federal taxes explicitly. The Supreme Court ruled against Simpson, stating that while these bonds were indeed exempt from state and local taxation, this exemption did not extend to federal inheritance tax as it wasn't specifically mentioned in the issuing act's language. Therefore, these assets must be included when calculating the gross value of an estate for federal taxation purposes.

In the dissenting opinion for Simpson, Surviving Executor of Moore v. United States (1919), Justice Holmes argued that the majority's decision to tax a legacy left by a deceased person was incorrect because it violated constitutional principles. He contended that under Article I, Section 8 of the Constitution, Congress only has power to impose direct taxes in proportion to each state's population and indirect taxes uniformly throughout the country. In this case, he believed that taxing an estate as income is not uniform or proportional since it depends on individual circumstances such as wealth and death rates which vary across states. Therefore, he concluded that such taxation is unconstitutional unless apportioned among states according to their populations.