Pollock v. Farmers' Loan & Trust Company, 157 U.S. 429 (1895), affirmed on rehearing, 158 U.S. 601 (1895), was a landmark case of the Supreme Court of the United States. In a 5–4 decision, the Supreme Court struck down the income tax imposed by the Wilson–Gorman Tariff Act for being an unapportioned direct tax. This decision was superseded in 1913 by the Sixteenth Amendment to the United States Constitution, which allows Congress to levy income taxes without apportioning them among the states.

The US Congress had introduced an income tax during the American Civil War, but the tax was repealed in 1872. In 1894, Congress passed the Wilson-Gorman Tariff Act, which lowered tariff rates and made up for some of the lost revenue by introducing taxes on income, corporate profits, gifts, and inheritances. Chief Justice Melville Fuller's majority opinion in Pollock held that a federal tax on income derived from property was unconstitutional when it was not apportioned among the states according to representation in the House of Representatives. Fuller also held that federal taxation of interest earned on certain state bonds violated the doctrine of intergovernmental tax immunity. In one dissent, Associate Justice Henry Billings Brown wrote that the majority opinion "involves nothing less than the surrender of the taxing power to the moneyed class."

The ratification of the Sixteenth Amendment essentially overturned the key holding in Pollock, and Congress established a new federal income tax in the Revenue Act of 1913. The Court's holding regarding the taxation of interest income on certain bonds was later overruled in the 1988 case of South Carolina v. Baker.

In order to help pay for its war effort in the American Civil War, Congress imposed the first federal income tax in U.S. history through passage of the Revenue Act of 1861. The act created a flat tax of three percent on incomes above $800 ($28,000 in current dollar terms). The taxation of income reflected the increasing amount of wealth held in stocks and bonds, rather than property, which the federal government had taxed in the past. Congress later further raised taxes, and by the end of the war, the income tax constituted about one fifth of the revenue of the federal government. The federal income tax remained in effect until its repeal in 1872. The constitutionality of the federal income tax was later upheld by the Supreme Court in the 1881 case of Springer v. United States.

The Socialist Labor Party advocated a graduated income tax in 1887. The Populist Party "demanded a graduated income tax" in its 1892 platform.

After winning control of Congress and the presidency in the 1892 elections, the Democratic Party made tariff reduction a key priority. President Grover Cleveland and his congressional allies proposed a bill that affected moderate downward revisions in the tariff, especially on raw materials. The shortfall in revenue was to be made up by an income tax of two percent on income above $4,000, equivalent to $140,000 today. Corporate profits, gifts, and inheritances would also be taxed at a two percent rate. The bill would restore the federal income tax for the first time since the 1870s; supporters of the income tax believed that it would help reduce income inequality and shift the burden of taxation to the wealthy.

The Democratic controlled Congress was ambivalent about the income tax but included it in the proposed bill in large part because of the efforts of Congressmen William Jennings Bryan and Benton McMillin. Despite strong conservative opposition to the income tax in the U.S. Senate, it remained a component of the final tariff bill, partly because many members of Congress believed that the US Supreme Court would eventually declare the tax to be unconstitutional. In August 1894, the bill became law as the Wilson–Gorman Tariff Act.

In compliance with the Act, the New York-based Farmers' Loan & Trust Company announced to its shareholders that it would not only pay the tax but also provide, to the collector of internal revenue in the Department of the Treasury, the names of all people for whom the company was acting and thus were liable for being taxed under the Act.