Whether Glenshaw Glass expanded "income" beyond the original constitutional meaning
The question
Eisner v. Macomber, 252 U.S. 189 (1920), defined income as “the gain derived from capital, from labor, or from both combined.” This formulation has a sourcing requirement: the gain must be derived from one of the listed categories.
Commissioner v. Glenshaw Glass Co., 348 U.S. 426 (1955), restated the definition as “undeniable accessions to wealth, clearly realized, and over which the taxpayers have complete dominion.” This formulation drops the sourcing requirement and asks only whether wealth has accrued.
A genuine academic question is whether Glenshaw Glass simply restated Eisner in modern language, or expanded the constitutional meaning of “income” past what the Sixteenth Amendment originally authorized.
Why it’s unresolved
The lower courts treat Glenshaw Glass as definitive and do not engage the question. The Supreme Court has not revisited the issue directly. Academic commentary has noted the tension; Bittker acknowledged the problem without proposing a resolution.
Both readings are textually defensible. A narrow reading treats Glenshaw Glass as filling in Eisner’s “from whatever source derived” clause — windfalls, punitive damages, and similar items have a source even if it isn’t capital or labor. A broad reading treats Glenshaw Glass as a structural change that released “income” from any sourcing requirement.
Why it matters
Under the narrow reading, certain modern tax provisions — particularly those that treat phantom or imputed income as taxable — sit on shakier constitutional ground than the courts acknowledge. Under the broad reading, the Sixteenth Amendment authorizes a tax on essentially any economic event the legislature chooses to characterize as an accession to wealth.
The question is one of the most interesting in modern federal tax doctrine, and it is genuinely open.
Verdict
Unresolved. No honest verdict is possible. This is exactly the kind of question this site exists to flag — the doctrine asserts a conclusion (Glenshaw Glass is definitive) without engaging the underlying tension. Engagement is warranted; foreclosure is not.