[Given the recent ethics questions about justices’ interactions
with billionaires, it’s an interesting case to take on.]
[[link removed]]

THE SUPREME COURT MAY PREEMPTIVELY BAN A FEDERAL WEALTH TAX  
[[link removed]]


 

Matt Ford
June 26, 2023
The New Republic
[[link removed]]


*
[[link removed]]
*
[[link removed]]
*
*
[[link removed]]

_ Given the recent ethics questions about justices’ interactions
with billionaires, it’s an interesting case to take on. _

, Wikipedia

 

The Supreme Court took up a case
[[link removed]] on
Monday that could make it nearly impossible for Congress to pass a
federal wealth tax, giving the justices an opportunity to torpedo a
major Democratic policy proposal before it can be enacted. The
plaintiffs who brought the case have all but urged the court to do
exactly that.

In _Moore v. United States,_ the justices will consider whether a
provision of former President Donald Trump’s tax-reform law in 2017
violated the Sixteenth Amendment, which allows Congress to collect
federal income taxes. As part of a complex restructuring of federal
corporate tax laws, the 2017 law imposed a one-time “mandatory
repatriation tax” on American taxpayers who owned more than 10
percent of a foreign corporation.

Charles and Kathleen Moore, the titular plaintiffs, owned 11 percent
of an Indian farm-equipment company when the 2017 law went into
effect. Thanks to the provision in question, they paid roughly $15,000
in additional taxes the following year. The Moores filed a lawsuit
against the federal government and argued that the tax was
unconstitutional because their partial ownership of the company did
not count as “income” under the Sixteenth Amendment.

The lower courts rejected that argument, however, and ruled that the
tax had essentially targeted years of deferred foreign income. That
prompted the couple to ask the Supreme Court to intervene. While the
case hinges on a tax passed by Trump and a Republican-led Congress,
the petition invited the justices to use it to prevent Democrats from
imposing a federal wealth tax in the future.

“This is no idle threat,” the Moores said in their petition for
review
[[link removed]],
referring to a federal wealth tax. They cited proposals by the Biden
administration and Oregon Senator Ron Wyden to tax billionaires based
on their assets, none of which have passed Congress. “There is every
reason for the Court to resolve the pivotal constitutional question of
realization now, when its judgment can inform lawmakers and stands to
head off a major constitutional clash down the line,” the couple
told the justices.

In a _Wall Street Journal_ op-ed published in 2021, two of the
Moores’ lawyers also declared unambiguously
[[link removed]] that
the lawsuit “stands to slam shut the door on a federal wealth tax
like the one Sen. Elizabeth Warren wants to enact.” They made a
direct pitch to “the courts” to hear the Moores’ case “now”
to make it easier to block a wealth tax in the future.

“If the courts confirm the Sixteenth Amendment’s limited reach
now, that would relieve them from having to do so in a politically
explosive case directly challenging a wealth tax,” the two lawyers
concluded. “The courts would do well to remind Congress at this
opportune time that its taxing power is not without limits.”

The Justice Department had urged
[[link removed]] the
justices to reject the case, noting there was no split on the issue in
the lower courts and arguing that the Ninth Circuit Court of Appeals
had correctly applied the relevant precedents. On the wealth-tax
question, the government also pointedly noted that the Supreme Court
does not have the constitutional power to issue advisory opinions
about hypothetical legislation that has not been enacted into law by
Congress.

Debates over a wealth tax’s constitutionality are not new, of
course. After Massachusetts Senator Elizabeth Warren made her proposal
to enact one as a centerpiece of her 2020 presidential campaign, more
than a few legal scholars argued
[[link removed]] that
such a tax would not fall within the Sixteenth Amendment’s
parameters. (Warren and other wealth-tax proponents disagree
[[link removed]].)
If Congress implemented such a tax in the future, a legal challenge to
it in the courts would be virtually guaranteed.

The court’s decision to hear the Moores’ case also comes at an
awkward time for the justices, to say the least. ProPublica and other
major news outlets have reported extensively
[[link removed]] on
Justice Clarence Thomas’s fruitful relationship with Harlan Crow, a
billionaire and GOP megadonor, in recent months. Last week, the
publication also reported
[[link removed]] that
Justice Samuel Alito went on a free luxury fishing trip in Alaska in
2008 with billionaire Paul Singer, who gave the justice a free ride on
his private jet to get there. Both Thomas and Alito have denied that
they acted improperly by not disclosing the billionaires’ gifts on
their annual financial-disclosure forms; Alito even took to the _Wall
Street Journal’s_ op-ed section to defend himself
[[link removed]].

Only four votes are needed for the justices to take up a particular
case. The court does not disclose how the justices vote on petitions
for review, so it is not known if Thomas or Alito voted to hear the
Moores’ lawsuit. Americans will get a clearer perspective on their
views in the case when the court hears oral arguments in the fall
term. As the justices wrestle with rapidly declining public esteem and
multiple ethics controversies, taking up a case that could protect
billionaires from wealth taxes before Congress can even pass them is
an interesting choice.

_MATT FORD is a staff writer at The New Republic._

_THE NEW REPUBLIC was founded in 1914 to bring liberalism into the
modern era. The founders understood that the challenges facing a
nation transformed by the Industrial Revolution and mass immigration
required bold new thinking._

_Today’s New Republic is wrestling with the same fundamental
questions: how to build a more inclusive and democratic civil society,
and how to fight for a fairer political economy in an age of rampaging
inequality. We also face challenges that belong entirely to this age,
from the climate crisis to Republicans hell-bent on subverting
democratic governance._

_We’re determined to continue building on our founding mission._

_Support issue-driven independent journalism. Subscribe to The New
Republic today! [[link removed]]_

* Supreme Court
[[link removed]]
* taxes
[[link removed]]
* ethics
[[link removed]]

*
[[link removed]]
*
[[link removed]]
*
*
[[link removed]]

 

 

 

INTERPRET THE WORLD AND CHANGE IT

 

 

Submit via web
[[link removed]]

Submit via email
Frequently asked questions
[[link removed]]

Manage subscription
[[link removed]]

Visit xxxxxx.org
[[link removed]]

Twitter [[link removed]]

Facebook [[link removed]]

 




[link removed]

To unsubscribe, click the following link:
[link removed]