In Stratton’s Independence v. Howbert, the U.S. Supreme Court defines income under the tax law as the “gain derived from capital, from labor, or from both combined,” including both the dividends paid to corporate stockholders and the profit that is gained from selling assets. That same year, the first tax form, Form 1040, appears after Congress levies a 1 percent tax on net personal incomes above $3,000 with a 6 person surtax on incomes of more than $500,000.