Moore v. United States (2024): Difference between revisions - Wikipedia
Content deleted Content added
m |
|||
| (31 intermediate revisions by 11 users not shown) | |||
Line 2: {{Use mdy dates|date=November 2022}} {{Infobox SCOTUS case
| Holding = The Mandatory Repatriation Tax (MRT) does not exceed Congress’s constitutional
authority.
| JoinMajority = Roberts, Sotomayor, Kagan, Jackson
| Concurrence2 = Barrett (in judgment)
| Dissent = Thomas
apportionment among the states. | Opinion= https://www.supremecourt.gov/opinions/23pdf/22-800_jg6o.pdf }} '''''Moore v. United States''''', == Background == Line 39 ⟶ 41: Charles and Kathleen Moore invested $40,000 in an Indian business named KisanKraft in 2005, in exchange for 11% of the company's equity. KisanKraft is a [[controlled foreign corporation]]. The company has made a profit every year of its existence, and rather than distributing its earnings to shareholders, it has reinvested profits in the business. Prior to the passage of the [[Tax Cuts and Jobs Act]] in 2017, income tax on such earnings generally did not have to be paid until they were distributed to shareholders. The 2017 law changed the corporate and [[Subpart F]] tax regime to focus on domestic profits, and imposed a one-time mandatory repatriation tax on profits held overseas. The Moores paid the $14,729 in tax owed and challenged the law in the [[United States District Court for the Western District of Washington]] as violating the [[Sixteenth Amendment to the United States Constitution|Sixteenth Amendment]]'s requirement that income be realized before it can be taxed, as set forth in ''[[Eisner v. Macomber]]'' (1920). While the plaintiffs claimed to be uninvolved with the company and only small investors, Charles Moore actually served as a director for five years and they made additional investments totaling $150,000.<ref>{{Cite news |last=Stern |first=Mark Joseph |date=2024-06-20 |title=Why Brett Kavanaugh Shot Down a Fake Case That Would Have Blown Up the Tax Code |url=https://slate.com/news-and-politics/2024/06/supreme-court-opinions-brett-kavanaugh-fake-tax-case.html |access-date=2024-06-21 |work=Slate |language=en-US |issn=1091-2339}}</ref><ref>{{Cite news |last=Marimow |first=Ann |title=This lawsuit could disrupt the U.S. tax system. Key facts are in dispute. |url=https://www.washingtonpost.com/politics/2023/11/27/supreme-court-tax-case-offshore-earnings/ |work=Washington Post}}</ref> The district court ruled for the government, and the [[United States Court of Appeals for the Ninth Circuit]] affirmed. Judge [[Patrick J. Bumatay]], joined by three other judges, dissented from the denial of rehearing [[en banc]].▼ ▲The district court ruled for the government, and the [[United States Court of Appeals for the Ninth Circuit]] affirmed. == Supreme Court == Line 47 ⟶ 51: In the summer of 2023, [[List of justices of the Supreme Court of the United States|Justice]] [[Samuel Alito]] was interviewed for ''[[The Wall Street Journal]]'' by [[David B. Rivkin]], an attorney in this case.<ref>{{Cite web |last=Schonfeld |first=Zach |date=2023-08-31 |title=Thomas, Alito go on the attack over Supreme Court ethics |url=https://thehill.com/regulation/court-battles/4181847-thomas-alito-go-on-the-attack-over-supreme-court-ethics/ |access-date=2023-12-05 |website=The Hill |language=en-US}}</ref> After publication, [[Dick Durbin|Senator Dick Durbin]] wrote to [[Chief Justice of the United States|Chief Justice]] [[John Roberts]], expressing his opinion that the court should "take appropriate steps" to ensure Alito's recusal from this case.<ref>{{Cite web |last=Schonfeld |first=Zach |date=2023-09-08 |title=Alito rejects calls to recuse from tax case after Wall Street Journal interviews |url=https://thehill.com/regulation/court-battles/4193864-alito-rejects-calls-recuse-tax-case/ |access-date=2023-09-08 |website=The Hill |language=en-US}}</ref> In an order list released on September 8, 2023,<ref>{{Cite web |title=Order List (09/08/2023) |url=https://www.supremecourt.gov/orders/courtorders/090823zor_21o2.pdf |website=Supreme Court of the United States}}</ref> Alito rejected Durbin's accusation that his verdict would be swayed by his contact with Rivkin, and he refused to recuse himself.<ref>{{Cite news |last=Chung |first=Andrew |date=2023-09-08 |title=US Supreme Court's Alito rejects recusal in tax case |language=en |work=Reuters |url=https://www.reuters.com/legal/us-supreme-courts-alito-rejects-recusal-tax-case-2023-09-08/ |access-date=2023-09-08}}</ref> Oral argument before the Supreme Court took place on December 5, 2023. ===Ruling=== Justice Kavanaugh, writing for the majority, ruled that the tax fell within the authority of Congress under the Constitution. Kavanaugh was joined by Chief Justice Roberts and Justices Kagan, Sotomayor, and Jackson. Justice Barrett wrote a concurring opinion, joined by Justice Alito.<ref>{{cite news|url=https://www.nytimes.com/2024/06/20/us/politics/supreme-court-tax-case-trump.html|title=Supreme Court Upholds Trump-Era Tax Provision|publisher=[[New York Times]]|date=June 20, 2024|first1=Abbie|first2=Jim|last1=VanSickle|last2=Tankersley}}</ref> In a dissenting opinion joined by Justice Gorsuch, Justice Thomas wrote that the Mandatory Repatriation Tax should have been struck down as unconstitutional because it taxes [[Realization (tax)|unrealized]] [[capital gains]], which is not permitted by the [[Sixteenth Amendment to the United States Constitution|16th Amendment]].<ref>{{cite news|url=https://www.cbsnews.com/news/supreme-court-tax-decision-moore-v-us/|title=Supreme Court upholds Trump-era tax on foreign earnings, skirting disruptive ruling|date=June 20, 2024|first=Melissa|last=Quinn|publisher=[[CBS News]]}}</ref> ===Analysis: relationship to wealth tax=== The Supreme Court could have used the case to rule on the wider question whether a [[wealth tax]] is constitutional. However, the majority opinion sidestepped that question by explicitly adding a footnote stating that the opinion "does not address … taxes on holdings, wealth, or net worth". However, journalist [[Ian Millhiser]] disagreed, stating that "the opinion includes a bonanza of loaded language that any competent tax lawyer can seize upon to protect their richest clients from wealth taxes."<ref>{{cite news|url=https://www.vox.com/scotus/355969/supreme-court-moore-us-wealth-tax-billionaires|title=The Supreme Court’s new tax decision is great news for billionaires|date=June 20, 2024|first=Ian| last= Millhiser|authorlink=Ian Millhiser|publisher=[[Vox (website)|Vox]]}}</ref> == References == | |||