The Supreme Court decision in the Income Tax cases in 1894 a reversal of
long settled ideas. The Income Tax Amendment an example of recall of
judicial decisions. Implied limitations on federal taxing power
(compensation of federal judges, due process clause of the Constitution,
no power to tax property or governmental activities of the states).

IX. CAN CONGRESS TAX THE INCOME FROM STATE AND MUNICIPAL BONDS? 97

No express prohibition of such taxation; it lies in an implied
limitation inherent in our dual system of government. Discussion of
doctrine and its development by the Supreme Court. Effect of the Income
Tax Amendment. Present dissatisfaction with doctrine and efforts to
abolish it.

X. IS THE FEDERAL CORPORATION TAX CONSTITUTIONAL? 106

Nature of the tax. An interference with state power to grant corporate
franchises. Nature of our dual government and Supreme Court decisions on
the subject discussed. The debate in Congress.

XI. THE CORPORATION TAX DECISION 122

Importance of the decision likely to be overlooked. Criticism of the
Court's arguments. Effects of the decision.

XII. THE FEDERAL GOVERNMENT AND THE TRUSTS 129

Origin and history of Sherman Act. Its meaning now clear. Earlier
uncertainties owing chiefly to two questions--What is interstate trade
and Does the act enlarge the common-law rule as to what restraints were