In the case of Stanton v. Baltic Mining Company, 1915, the US Supreme Court was tasked with determining whether a tax on income derived from property (in this instance, mining operations) constituted a direct tax and thus required apportionment among states according to their population as per Article I of the Constitution. The Baltic Mining Company argued that it did; however, the court disagreed. It held that an income tax is not inherently a direct tax but rather falls under excise taxes which do not require apportionment. This decision upheld Congress's power to levy federal income taxes without having to distribute them evenly across all states based on population numbers.

In the dissenting opinion for Stanton v. Baltic Mining Company, Justice Oliver Wendell Holmes Jr. argued that the tax in question should not be considered a direct tax but rather an excise tax on the privilege of doing business as a corporation. He contended that corporations are artificial entities created by state law and thus can be subjected to conditions or taxes by Congress without violating constitutional principles of apportionment among states according to population. In his view, this was not about taxing property or income per se, but about imposing a cost for enjoying corporate privileges granted by law - something within Congress's power under its broad authority to levy excise taxes.