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Tags: supreme court | wealth | tax | repatriation | joe biden

Supreme Court May Soon Deal Biden Another Blow on Taxation

By    |   Wednesday, 05 July 2023 01:26 PM EDT

The Supreme Court might soon disturb President Joe Biden's proposal to levy a 25% annual tax on all gains to wealth in excess of $100 million in a given year, including unrealized capital gains which are not currently taxable, the Washington Examiner reported Wednesday.

That issue will be dealt with this fall, when the court hears Moore v. United States, which centers around taxation and the definition of the word "income."

Charles and Kathleen Moore invested some $40,000 into an Indian company in 2005 and never received any money or other payments from it, even though it made a profit every year.

Under the 2017 tax reform law, the Moores learned they were subjected to a mandatory repatriation tax of $14,729. They paid that tax but then filed suit insisting on a refund by claiming the tax violates the Constitution's apportionment clause.

The Sixteenth Amendment authorizes Congress to "lay and collect taxes on incomes, from whatever source derived, without apportionment among the several states."

That means the federal government cannot tax stock gains, which are the source of wealth for many billionaires, unless those stocks are sold, the Washington Examiner reported.

An appeals court ruled the Moores could be taxed this way, saying "there is no constitutional prohibition against Congress attributing a corporation's income pro-rata to its shareholder."

But the Supreme Court could reverse that ruling, which would make the repatriation tax and future wealth-based taxes off-limits at the federal level.

Hearings on the case are expected to start in October.

"The 16th Amendment allows the federal government to impose income taxes without apportioning them among the states," according to Cato Institute research fellow Thomas Berry.

"But courts have always limited those taxes to that word, 'income,' and said that word is meaningful. It doesn't just mean whatever the government wants it to mean."

The Cato Institute is one of several groups to file amicus briefs on behalf of the Moores, along with the Chamber of Commerce and Americans for Tax Reform. 

"You can never predict for certain," Berry admitted, but said, "I think the justices will be concerned about setting a new precedent here and opening the door to a lot of taxes that we've never seen before at the federal level."

Brian Freeman

Brian Freeman, a Newsmax writer based in Israel, has more than three decades writing and editing about culture and politics for newspapers, online and television.

© 2024 Newsmax. All rights reserved.


Politics
The Supreme Court might soon disturb President Joe Biden's proposal to levy a 25% annual tax on all gains to wealth in excess of $100 million in a given year, including unrealized capital gains which are not currently taxable, the Washington Examiner reported  Wednesday.
supreme court, wealth, tax, repatriation, joe biden
373
2023-26-05
Wednesday, 05 July 2023 01:26 PM
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