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Eisner v. Macomber, 252 U.S. 189 (1920)
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General SummaryThis case is from a collection containing the full text of over 16,000 Supreme Court cases from 1793 to the present. The body of Supreme Court decisions are, effectively, the final interpretation of the Constitution. Only an amendment to the Constitution can permanently overturn an interpretation and this has happened only four times in American history.
Eisner v. Macomber, 252 U.S. 189 (1920)
Eisner v. Macomber No. 318 Argued April 16, 1919 Restored to docket for reargument May 19, 1919 Reargued October 17, 20, 1919 Decided March 8, 1920 252 U.S. 189
ERROR TO THE DISTRICT COURT OF THE UNITED STATES
FOR THE SOUTHERN DISTRICT OF NEW YORK
Syllabus
Congress was not empowered by the Sixteenth Amendment to tax, as income of the stockholder, without apportionment, a stock dividend made lawfully and in good faith against profits accumulated by the corporation since March 1, 1913. P. 201. Towne v. Eisner, 245 U.S. 418.
The Revenue Act of September 8, 1916, c. 463, 39 Stat. 756, plainly evinces the purpose of Congress to impose such taxes, and is to that extent in conflict with Art. I, § 2, cl. 3, and Art. I, § 9, cl. 4, of the Constitution. Pp. 199, 217.
These provisions of the Constitution necessarily limit the extension, by construction, of the Sixteenth Amendment. P. 205.
What is or is not "income" within the meaning of the Amendment must be determined in each case according to truth and substance, without regard to form. P. 206.
Income may be defined as the gain derived from capital, from labor, or from both combined, including profit gained through sale or conversion of capital. P. 207.
Mere growth or increment of value in a capital investment is not income; income is essentially a gain or profit, in itself, of exchangeable value, proceeding from capital, severed from it, and derived or received by the taxpayer for his separate use, benefit, and disposal. Id.
A stock dividend, evincing merely a transfer of an accumulated surplus to the capital account of the corporation, takes nothing from the property of the corporation and adds nothing to that of the shareholder; a tax on such dividends is a tax an capital increase, and not on income, and, to be valid under the Constitution, such taxes must be apportioned according to population in the several states. P. 208.
Affirmed.
The case is stated in the opinion.
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Chicago: U.S. Supreme Court, "Syllabus," Eisner v. Macomber, 252 U.S. 189 (1920) in 252 U.S. 189 252 U.S. 190–252 U.S. 199. Original Sources, accessed November 22, 2024, http://originalsources.com/Document.aspx?DocID=ANITLT7HNX2CZI8.
MLA: U.S. Supreme Court. "Syllabus." Eisner v. Macomber, 252 U.S. 189 (1920), in 252 U.S. 189, pp. 252 U.S. 190–252 U.S. 199. Original Sources. 22 Nov. 2024. http://originalsources.com/Document.aspx?DocID=ANITLT7HNX2CZI8.
Harvard: U.S. Supreme Court, 'Syllabus' in Eisner v. Macomber, 252 U.S. 189 (1920). cited in 1920, 252 U.S. 189, pp.252 U.S. 190–252 U.S. 199. Original Sources, retrieved 22 November 2024, from http://originalsources.com/Document.aspx?DocID=ANITLT7HNX2CZI8.
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