Eisner v. Macomber 252 U.S. 189 (1920)
EISNER v. MACOMBER 252 U.S. 189 (1920)
A 5–4 Supreme Court declared that stock dividends did not constitute income subject to taxation under the sixteenthamendment. Justice mahlon pitney agreed that dividends were a "mere readjustment of the evidence of a capital interest already owned." Justices oliver wendell holmes, william r. day, and john h. clarke joined the dissenting opinion of louis d. brandeis, who argued that the dividends represented profit (and thus income) and that the power conferred by the amendment ought to be measured by "the substance of the transaction, not its form." The Court subsequently narrowed the doctrine of Eisner through a series of exquisite distinctions.