Guest Essayist: Robert Lowry Clinton

Pollock v. Farmer’s Loan & Trust Company, 158 U. S. 601 (1895), arose when a stockholder of the company sued to prevent the company from voluntarily paying a tax on its profits. The tax had been assessed pursuant to an act of Congress that levied a tax of two percent per year on incomes over $4,000.00. The act, known as the Wilson-Gorman Tariff Act of 1894, was very broad in scope, and was initially designed to lower tariff rates in response to the Panic of 1893. Evidently many additions and exceptions were added to the bill before its final passage, and President Grover Cleveland, initially supportive of the measure, ultimately allowed the law to be passed without his signature.

Pollock contended that the provisions in the act that levied a tax on the income generated by real estate and municipal bonds held in trust by the company violated Article I, Section 9 of the Constitution, which provides that “No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census of Enumeration herein before directed to be taken.” The census “herein before directed to be taken” refers to Article I, Section 2, Clause 3 of the Constitution, which provides that “Representatives and direct Taxes shall be apportioned among the several States which may be included within this Union, according to their respective Numbers . . . .” It was uncontroversial at the time that taxes on land and things affixed to land (e.g., buildings, livestock, etc.) were “direct” taxes and were thus subject to the rule of apportionment, which meant that Congress would have to specify a sum to be raised in each state commensurate with its population. Pollock’s contention was that the income produced by real property (e.g., rent) amounted to a tax on the property itself and thus was also “direct” and subject to the rule of apportionment.

In truth, the constitutional distinction between direct and indirect taxes had never been made perfectly clear by the Supreme Court, though it had been generally thought that indirect taxes were those the burden of which may be shifted to a third party (such as the consumer in a sales transaction). Indirect taxes, such as duties, imposts and excises, are not subject to the rule of apportionment but are rather subject to the rule of uniformity provided in Article I, Section 8 of the Constitution, which requires that “all Duties, Imposts and Excises shall be uniform throughout the United States.” Pollock argued that, in case the Court ruled that the income tax was an “indirect” tax, then it was invalid because it was not applied uniformly, thus violating Article I, Section 8.

In the end, the Court ruled in a 5-4 decision that the tax on “the rents and income of the real estate of the defendant company, and of that which it holds in trust, and on the income from the municipal bonds owned or so held by it,” was an unapportioned direct tax within the meaning of Article I, Section 9 and therefore unconstitutional. Though the Court did not rule on the uniformity issue, Justice Field, who supplied the crucial fifth vote in the case, laid much stress on it in his concurring opinion. Field regarded the act as “class legislation” which singled out a particular group (those with incomes over $4,000.00) for taxation and exempting the rest. On the other side, the dissenting opinions argued that the taxing power was plenary and that the Court’s decision represented a serious intrusion on the power of Congress to determine the scope of its own authority.

The Pollock decision has often been criticized as an example of the turn-of-the-century Court’s eagerness to safeguard private wealth and constitutionalize laissez-faire capitalism. However, a careful reading of the opinions in the case suggests that this is an overly simplistic view, reflecting perhaps the biases of contemporary progressives who champion consolidation of national power at the expense of state authority and individual rights. In truth, Chief Justice Fuller’s opinion for the Court is a plausible originalist reading of founding-era attitudes on the issue of taxation. The constitutional prohibition of unapportioned direct taxes was clearly an effort by the Founders to prevent federal encroachment on state authority by protecting states with small populations and large land areas (mainly in the South) from exploitation by states with larger populations and hence with more representatives in Congress–in other words, from a particular form of taxation without representation.

Likewise, Justice Field’s concurring opinion, at least from the standpoint of a century steeped in Lockean/Jeffersonian natural law principles, constitutional originalism, and a healthy respect for state and local autonomy, is equally plausible. Taxes, according to the Constitution, are either direct or indirect. There is no middle ground. If the income tax was direct, it was unapportioned and thus violative of Article I, Section 9. If it was “indirect” and not uniformly applied, it was violative of Article I, Section 8. The modern, hypercritical view of the Court’s decision in Pollock results less from a serious encounter with the issues in the case than from an ongoing triumphalist progressive revision of our constitutional history, fueled by lust for ever-increasing national power.

In any event, the dissenters carried the day in the last analysis, as the Pollock decision was overturned in 1913 by the adoption of the Sixteenth Amendment, which provided that “The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.” Whatever one thinks of the wisdom of the People’s decision in that regard, the Pollock case should retain more than merely historical interest, in view of the subsequent exponential growth of the national government and the concomitant growth of an arguably overreaching federal taxing authority.

Pollock v. Farmer’s Loan And Trust Co. (1895) Supreme Court decision:

Robert Lowry Clinton holds B.A. and M.A. degrees from Texas Tech University and a Ph.D. in Government from the University of Texas at Austin. He is the author of Marbury v. Madison and Judicial Review and God and Man in the Law: The Foundations of Anglo-American Constitutionalism (both published by the University Press of Kansas), as well as numerous journal articles and book chapters. He is a Fellow of the Center of Science and Culture at the Discovery Institute in Seattle, Washington, and was a Fellow of the James Madison Program in American Ideals and Institutions at Princeton University in 2007-08. Dr. Clinton’s main fields of study are in Supreme Court history, constitutional jurisprudence, social and political philosophy, and political theology.


Howard Gillman, Mark A. Graber, Keith E. Whittington, eds., American Constitutionalism, Volume I: Structures of Government. New York: Oxford University Press, 2013.

Wallace Mendelson, The American Constitution and the Judicial Process. Homewood, Illinois: Dorsey Press, 1980., /157/429.html

2 replies
  1. Ralph Howarth
    Ralph Howarth says:

    Robert G Natelson compiled and summarized the meanings of the various tax terms found in the federal Constitution. When the ink was drying on the parchment before there was even any “final arbiter of the law” SCOTUS convened, these words indeed did have meaning out of tax law practice.


    The skinny is that this paper identifies that SCOTUS misclassified the Obamacare Individual Mandate tax like an excise tax power (making a tax penalty effectively a non-uniform tax picking who gets taxed by those who choose not to buy something) when it actually is a penalty, therefore it is a direct tax, which the constitution mandates to be apportioned. The reason SCOTUS upheld the penalty as a tax was because the penalty did not hold muster to the regulation of “Commerce Among the States” clause that the partisan Congress that passed it was counting on making the law stick. No matter how you slice that Obamacare tax, it is unconstitutional.

    Also, since SCOTUS classified the penalty as a tax after Congress had passed it as a statute of regulation, SCOTUS unwittingly classified the law as a “bill of raising revenue” that is required to be drawn in the House when it originated in the Senate. So the Obamacare tax is doubly unconstitutional. The only saving grace according to the article above is that SCOTUS would have to classify the penalty as a Duty and not an excise to dodge the “Bills of raising revenue” requirement for Excises and the apportionment requirement of capitation taxes that are direct on a person and not on a transaction (or lack of transaction for not buying insurance). But then it smacks of not being a uniform tax as Duties are required to be uniform for the whole country.

    What is pertinent to Pollock v. Farmer’s here is that Obamacare is riding piggyback on the income tax machinery, which came from the premise that Pollock v. Farmer’s got the direct tax definition wrong, au’contraire.

  2. Publius Senex Dassault
    Publius Senex Dassault says:

    Thank you for the essay and Ralph for your well written comment. Both are sobering.

    The 16th Amendment was a big government coup by progressives. At least they used an amendment to change the Constitutional. Today, they just look at an existing amendment and reinterpret it, reapplied it, regurgitate on the American people per their own purposes and desires.



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