In the case of Wilson v. Snow in 1912, the U.S. Supreme Court was tasked with determining whether a tax imposed on legacies and distributive shares of personal property should be applied to funds held by an executor at the time of death or only after all debts had been paid off. The court ruled that taxes were applicable to whatever amount remained once all obligations had been met, rather than what existed at the moment of death. This decision was based on their interpretation that "net estate" referred to assets remaining after settling any outstanding financial responsibilities, not before such settlements occurred.

In the dissenting opinion for Wilson v. Snow, Justice Holmes disagreed with the majority's decision to uphold a tax on inheritance. He argued that this type of taxation was not within the federal government's constitutional power and should be left to individual states. Furthermore, he contended that an inheritance tax is essentially a direct tax on property rather than income or consumption, which would require apportionment among states according to population under Article I Section 9 of the Constitution. This interpretation differs from his colleagues who viewed it as an excise or indirect tax permissible under Congress' broad taxing powers in Article I Section 8. Thus, while acknowledging that such taxes may serve important social purposes like wealth redistribution or discouraging large concentrations of wealth, Holmes maintained they must still comply with constitutional requirements and restrictions.