Posted on 08/09/2023 11:47:18 PM PDT by RandFan
The Supreme Court has agreed to hear one of the most important tax cases in history, which could either greenlight the constitutionality of an economically disastrous wealth tax, or destroy critical parts of the U.S. tax system.
Unless the justices take a middle road and define the 16th Amendment according to the history and traditions of the U.S. tax system, the case will result in bad law and worse outcomes.
The case (Moore v. United States) concerns the constitutionality of the 2017 Tax Cut and Jobs Act (TCJA). The act imposed a mandatory repatriation tax on pre-2018 profits that companies and some U.S. shareholders stored abroad. Previously, foreign business profits went untaxed until they returned to U.S. shareholders. But under mandatory repatriation tax, passed as part of Republicans’ comprehensive international tax reform, profits were taxed even if shareholders never received the income.
The revenue from the mandatory tax helped raise an estimated $339 billion that contributed to offsetting other individual and corporate tax cuts, as well as broader international tax reform in the 2017 tax cuts.
The court faces a difficult question: Is this mandatory tax on foreign profits that shareholders never actually received constitutional under the 16th Amendment? The Supreme Court has maintained since 1920 that income must be “clearly realized” for it to be taxable. Yet the U.S. tax code is riddled with taxes on unrealized income.
(Excerpt) Read more at thehill.com ...
I don’t believe their report.
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