By a vote of 7-2, the Court upheld the constitutionality of the section 965 transition tax. At oral argument on December 5, 2023, the Court seemed disinclined to invalidate the section 965 transition tax. Pollock was the impetus for the adoption of the Sixteenth Amendment. Two decades later and shortly after the Sixteenth Amendment was ratified, Macomber held that a tax on a stock dividend was not an income tax and was a direct tax required to be apportioned. In the dissent’s view, Congress may not freely choose whether to impose an income tax on a corporation or its shareholders.

Source: New York Times June 26, 2024 15:07 UTC