'
Loan and Trust Company[1495] arose under the Income Tax Act of
1894.[1496] Undertaking to correct "a century of error" the Court held,
by a vote of five-to-four, that a tax on income from property was a
direct tax within the meaning of the Constitution and hence void because
not apportioned according to the census.

Restriction of the Pollock Decision

The Pollock decision encouraged taxpayers to challenge the right of
Congress to levy by the rule of uniformity numerous taxes which had
always been reckoned to be excises. But the Court evinced a strong
reluctance to extend the doctrine to such exactions. Purporting to
distinguish taxes levied "because of ownership" or "upon property as
such" from those laid upon "privileges,"[1497] it sustained as "excises"
a tax on sales on business exchanges;[1498] a succession tax which was
construed to fall on the recipients of the property transmitted, rather
than on the estate of the decedent,[1499] and a tax on manufactured
tobacco in the hands of a dealer, after an excise tax had been paid by
the manufacturer.[1500] Again, in Thomas _v._ United States,[1501] the
validity of a stamp tax on sales of stock certificates was sustained on
the basis of a definition of "duties, imposts and excises." These terms,
according to the Chief Justice, "were used comprehensively to cover
customs and excise duties imposed on importation, consumption,
manufacture and sale of certain commodities, privileges, particular
business transactions, vocations, occupations and the like."[1502] On
the same day it ruled, in Spreckels Sugar Refining Co. _v._
McClain,[1503] that an exaction denominated a special excise tax imposed
on the business of refining sugar and measured by the gross receipts
thereof, was in truth an excise and hence properly levied by the rule of
uniformity. The lesson of Flint _v._ Stone Tracy Co.[1504] is the same.
Here what was in form an income tax was sustained as a tax on the
privilege of doing business as a corporation, the value of the privilege
being measured by the income, including income from investments.
Similarly, in Stanton _v._ Baltic Mining Co.[1505] a tax on the annual
production of mines was held to be "independently of the effect of the
operation of the Sixteenth Amendment * * * not a tax upon property as
such because of its ownership, but a true excise levied on the results
of the business of carrying on mining operations."[1506]

A convincing demonstration of