Keeping a Tax Clash from Going Out of Bounds
2nd November 2023
For the past few years, many progressives have made it a high priority to impose on the superrich an annual wealth tax that takes hold even on those whose wealth declines in a given year—or, failing that, to impose a tax on unrealized income (i.e., simple accretions of wealth by people who have not sold or otherwise disposed of their property). These proposals looked to be off the table until the decision of the Supreme Court to hear Moore v. United States (2023) put the matter into high relief.
Moore started out as a technical tax dispute when the government sought to collect $14,729 in taxes from Charles and Kathleen Moore under the mandatory repatriation tax (MRT) part of the Tax Cuts and Jobs Act (TCJA) of 2017 on income trapped in a corporation by the MRT’s regulations. But the case quickly attracted greater attention because the Moores claimed that the MRT tax was unconstitutional because gain had not been realized—that is, distributed from the corporation to the Moores.