In the United States v. Cambridge Loan and Building Company case of 1928, the Supreme Court ruled on a dispute involving federal tax law. The Cambridge Loan and Building Company had been assessed additional income taxes for the years 1916, 1917, and 1918 by U.S. tax authorities who argued that certain dividends received by the company from Liberty Bonds should be included in its gross income for those years. The company contested this assessment claiming these dividends were exempt from taxation under Section 213(b) of Revenue Act of September 8th,1920 which stated that interest upon obligations of United States was excluded from gross income calculations. The Supreme Court sided with Cambridge Loan and Building Company ruling that while Congress could have taxed such dividends if it wished to do so explicitly; however since it did not specify this in legislation at hand (Revenue Act), they must be considered as exempted from taxation following principles laid out in prior cases like Towne v Eisner & Edwards v Cuba Railroad Co., thus affirming judgment made by lower court (Court Of Appeals For Sixth Circuit). This decision clarified interpretation around what constitutes taxable versus non-taxable income within context of federal revenue laws.

In the dissenting opinion for United States v. Cambridge Loan and Building Company, Justice Holmes argued that the government should not be able to recover taxes from a corporation if it had already collected those same taxes from individual shareholders. He believed that this constituted double taxation, which he viewed as unjust. Furthermore, he contended that corporations and their shareholders are separate entities under law; thus taxing both on the same income was inappropriate. He also expressed concern about potential abuse of power by tax authorities who could use such an approach to extract more money than they were legally entitled to collect.